The Only Metric that Matters!

As my inbox has filled with requests for donations and gifts to deserving organizations over the waning days of 2011, I've been reminded of a few insights from my clients and conversations this month.

My first observation was in response to a query about why we all get so many "Asks" around the Holidays. The main reason we all get so many Asks this time of year (whether by e-mail, direct mail, phone calls or other ways) is that people give this time of year.  Whether it's the "spirit of the season" or just the fact that taxable deductions for the calendar year ending force donors' hands, some charities will receive the vast majority of their donations over the last many weeks of any calendar year.  Fundraisers know not to miss a single opportunity to raise funds (particularly as their fiscal year end comes up!), so if this is giving season then you can expect to get a lot of requests!

The other observation was based on a reminder from a client conversation a few weeks ago. I was asked to give advice on which metrics were best used in marketing and communication with prospects in order to get their attention and sell the organization's value. My reply was that ideally you would want to highlight areas that were of most concern to this potential donor.  And my client's response was that this meant that all the other important measures of impact, effectiveness and efficiency weren't much good if we weren't addressing needs that were important to that prospective donor.

And that's a simple truth. If your organization if making a difference and changing lives, doing so efficiently and using every dollar well, then in the end the only metric that matters is what the donor wants done with their money.  If you are busy saving whales, and the donor wants to end hunger, you're unlikely to get their donations. So at this time of year as you get so many asks for your giving, ask yourself what impact do you want to have? In the end, so long as the recipient organization meets certain "baseline" criteria, then the only metric that matters is what you most want to see changed!

Wishing you a happy, healthy and prosperous 2012.

The Law of Unintended Consequences: Goal Setting 101

In September I wrote about the value of metrics and the importance of and processes for setting goals for organizations in both the for profit and not-for-profit worlds. However, this mindset can also have significant unintended negative consequences if the implications of the goals are not well thought out. We're all familiar with this idea in the context of the for profit world when goals or incentives are in place that inadvertently encourage short cuts or reduce safety. In the charitable world the impacts can be more insidious.

This is not to suggest that creativity in using data to set goals can't have wonderful effects. For example in sports a "re-thinking" of what makes a valuable player created new ways to manage a baseball team (as documented in Moneyball) and led to on-field successes. But in the charitable world we're often dealing with organizations that directly impact life and death - so how they're measured, funded and rewarded takes on an especially important meaning.

Consider these two examples.  Imagine you're a mental health organization and your provincial funding metrics include how quickly you "graduate" patients through your program. Sounds superficially like a good way to encourage efficiency. Or perhaps you're working with youth who have learning disabilities and you want to tout metrics with respect to successful "completion" of the entire process. You might argue that this helps keep the process moving along and encourages possible donors.

However, in both cases the leaders of these organizations may also be less likely to take on prospective patients or clients who present the most complex, most challenging and least likely to succeed characteristics.  Likely the very folks who need these services the most. This isn't to criticize those who have to make these tough decisions, but to highlight how metrics, efficiency incentives and goals need to be very carefully thought out.  Otherwise they can have the effect of leaving those who need it most out in the cold. Literally.

You Get What You Measure

With apologies to a certain rock band, you don't get what you need, you get what you measure. This expression, you get what you measure, is a favourite management maxim of mine (along with "good, fast and cheap: pick any two") and is often helpful to keep in mind.

Successful for-profit organizations like Procter & Gamble are experts at measurement, and almost as importantly, know exactly what to measure.  I was reminded of this recently when a staff member at a client proudly informed me they had 140 followers on Twitter.  My response was to congratulate her, and then ask whether this had exceeded their goal or if this was faster than she had hoped?  Her answer?  There was no goal, 140 just seemed like a lot...

And 140 followers in a couple of months may indeed be stellar, but unless you set up a goal and measure against it, you'll never actually know.  Here are some simple guidelines to help both charities and for-profit organizations set good goals and measure against them appropriately.

• Set the target(s) before the activity - setting them afterwards doesn't count
• You can adjust the target but don't discard the original - you'll want to learn from why you changed it
• Document your goal and share it - it will make you more likely to achieve it and keep you honest!
• Do some research about the goal - too stretching becomes demotivating, too easy adds little value
• Make your goals / targets "SMART"
• Specific
• Measurable
• Achievable
• Relevant
• Time-bound
• Always do a post-mortem - this debrief will be extremely helpful to avoid future mistakes and cement best practices

The final point is to be careful what you measure.  You can drown in metrics, and I first heard the phrase "analysis paralysis" at P&G for a reason.  So do be selective.  And in being selective, seek to find the most fundamental drivers to your success.  In any organization there are many things that are important, but ultimately only a few key levers that you can use to drive the whole operation.  For example, in Fundraising you may want to measure how many Prospects you have, but its often more helpful to count how many Prospect Meetings are booked per month.

So be sure to measure because it will directly influence what you get!