SuddesGroup

Measuring Outcomes vs. Inputs

June 8, 2009 | Tom Suddes

I was with a University President last week talking about his institution’s Message, Framework, Unique Selling Points, etc. He’s an incredibly well-read, experienced, really bright thought leader. He shared a story about American business, especially MANUFACTURING, as it existed 50 years ago. (These are my shorthand notes. He told the story much more eloquently.)

THE ‘INPUT’ PARADIGM:

MAKE IT. INSPECT IT. THROW OUT THE BAD. SELL THE GOOD.

The ‘OUTCOME’ PARADIGM:

MAKE IT. SELL IT.

Replaced the old model with a change in PROCESS (re-engineering around measurement and statistics, etc. Think Edward Denning and Elijah Goldratt.)

The goal was to stabilize the consistency of the PROCESS to minimize and eliminate the BAD STUFF.

Here’s where he went with that re: EDUCATION.

The old INPUT model goes back 500 years (University of Bologna, etc.) Nothing’s changed. Same pedagogy. Teacher. Student. Classroom. If you fail, you’re gone. Throw out the bad. Keep the good. Be ‘proud‘ of the number of students you don’t accept and the number of students who don’t make it.

In education, a new model of OUTCOME-BASED would look at the entire process so that everyone makes it.

INPUT VS. OUTCOME. I found it really interesting and, perhaps more importantly for For Impact leaders, social entrepreneurs, change agents and Development/Sales… think about how this applies to the way we ‘RAISE MONEY’.

The old INPUT-BASED model is all about activity, cultivation, marketing, annual fund, chasing mice.

The new OUTCOME-BASED model (certainly our For Impact model) is all about:

1. Writing ‘TRIPLE NET CHECKS’ to the organization from the Development Operation.

2. A laser-like focus on RESULTS/OUTCOME… not on activities, special events, donor acquisitions, chasing mice, etc.

3. Do only those things that have dramatic, quantum leap, transformational results. (Chase antelopes.)

P.S. A few days ago, a very, very senior development office, principle gift officer actually told our Vice President that the institution needed to “spend the next five years totally focused on building up ANNUAL FUND”.

Can you imagine doing that in ‘business’? Let’s sell a bunch of little stuff to a lot of people… so that five years from now those people can buy more and bigger stuff. We’d be out of business.

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No More Resolutions

January 29, 2009 | Tom Suddes

January, the month, is named after Janus, God of All Beginnings. In 153 B.C., January replaced March as the first month of the Roman calendar. And, some citizen of Rome came up with the first NEW YEAR’S RESOLUTION.

We’ve been setting… and then breaking… these resolutions for over 2000 years!

I read something from Michael Guld (author, speaker, radio commentator) where he pointed out that these New Year’s RESOLUTIONS almost always evoke feelings of guilt. Quit. Lose. Reduce. Eliminate. The implication is to improve, fix or repair something that’s broken. Guld said most people MAKE their resolutions on January 1st and BREAK them by February 1st.

Having owned a couple of athletic clubs in my past life, as well as belonging to athletic facilities my entire adult life, I can verify that the ‘mad rush’ of people trying to get in shape to meet their January Resolution is always over by February 1st.

I believe the simple alternative to making RESOLUTIONS is setting GOALS. It’s not just semantics or a change of words. It’s the concept.

GOALS are positive, uplifting, visible and motivating. If written down, they can become SELF-FULFILLING PROPHECIES.

It’s still JANUARY! If you haven’t set or completed your GOALS and the accompanying ACTION PLAN… do so immediately. Then make it happen.

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Binary v. Analog and STARTING a development operation

January 24, 2009 | Nick Fellers

This is an excerpt from an email I just fired off to one of last week’s boot camp attendees. Her organization has a $5M operating budget - mostly covered by government funds. They are ‘new to fundraising’. I’ve encouraged them to focus on the process of making visits — to get the funds flowing and then focus on a bigger plan for $1M/ $5M or $10M (whatever the goal is). This is in contrast to most orgs where I would encourage them to identify a funding goal and work backwards (doing the math).

Binary v. Analog. Right now your goal is to start fundraising. It’s not to generate $10Million (that’s the vision). In other words, it’s more about getting out a process and success around bringing in gifts (binary) at $10K+ than it is raising $3M v. $4M (analog).

Once you get the process going and you have some comfort, a process and some traction I would then take a step back and look (again) at the big picture and put together a funding plan for the bigger goal. Right now an organization like [ORG] doesn’t know what it can and can’t do… everything’s a guess. I’m okay with that. To your team though, it ‘feels like a guess’ — that makes it more difficult to act on.

Just like a runner would - get in the habit of running, then choose a marathon training program. Start running (binary) then get strategic and adding distance (analog).

With that in mind, in your case I would not focus on the HUGE BIG NUMBER. I would focus on your PURPOSE and the MODEL (still three buckets) and then a goal to get 100 members in the LEADERSHIP SOCIETY. The message could be around $2,500+ — the cost to deliver the model to one family. You could ask for more by asking people to underwrite X families.

I use the Binary v. Analog all the time — especially to frame a goal. For instance, some times the goal is to get a prospect IN (invested) NOW. It’s not about trying to get $100K v. $140K.

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The Magic Napkin

December 29, 2008 | Tom Suddes

I first used this concept in 1984 on an Economic Development effort in Akron, Ohio. (I still have my little cheat sheet). The leadership had been told by all the other ‘consulting firms’ that they could maybe raise $1.5 Million, at the most. My brother John and I walked into the board and asked them how much they really needed over the five years to deliver what they were promising. That number was $4.3 Million.

That became the goal (we didn’t know any better!) Then, we made a Master Prospect List. (We might have called it somehting else, but that’s what it is). Then we matched it to the funding pyramid. Then we asked everybody for their corresponding investment at the level that was required by the ‘pyramid’. If I remember correctly we ended up raising over $5 Million on the $4.3 Million goal (on what was supposed to be a $1.5 Million max). Not bad.

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Sales Nugget 3: The Importance of Personal Goals

October 30, 2008 | Tom Suddes

Re: Frank, It may seem a little weird to talk about “PERSONAL GOALS” when you’re dealing with SALES or SALES GOALS. Frank Sullivan, however, was all about writing out ALL of his goals and plans… personal, financial, business, sales, etc.

Frank was literally the first person in my “business life” (and, actually, one of the very few people) that talked about his personal life and his family and his own goals… as they related to his business and sales goals.

Frank ultimately came down with Alzheimer’s at the end of his life, but, by then, he had impacted so many people and left a huge legacy. These “personal goals” and “family first” was his GIFT to me. I am forever grateful.

***Frank’s the one who first gave me the idea of “solo time” with the kids, which I turned into BIRTHDAY BREAKFAST, where we actually went over their “favorite” books, TV, friends, food, etc…. and then did their GOALS for the upcoming year. I tried to capture all that in my journal/green book.

If you’ve never done ‘GOALS’ with a 3-year-old, you’ve really missed out!

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Sales Nugget 2: The 5 Steps on the “Critical Path to Sales Success”

October 28, 2008 | Tom Suddes

Frank Sullivan believed there were five activities that every salesman must perform, in order of importance. They were:

1. ESTABLISH GOALS.

2. GET GOOD NAMES.

3. MAKE THE APPROACH.

4. MAKE THE PRESENTATION.

5. MAKE THE CUSTOMER A CLIENT.

Frank was a master at selling life insurance, which is certainly one of the most difficult “intangible product” sales. (This is much like what we “sell”… when we’re “selling” a cause or a case or a vision or impact or solution.)

Although I have revised my “sales system” (FOR IMPACT ROADMAP (SALES PROCESS)) many, many times over the years, I can still go back to Frank’s “five steps” and tie much of what I’ve done back to those steps.

How are YOU doing re: Establishing goals? Getting good names? Making the approach? Making a presentation? And making the customer a client?

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We Get What We Measure

January 8, 2006 | Tom Suddes

“We almost always get what we measure.”

This is particularly true in nonprofit organizations, although I believe it is just as prevalent in the for-profit world.

A simple question:
How do we train, measure and reward our Development Staff, be they Income Development, DOD’s, Major Gift Officers, Planned Gift Officers, or whatever the title?

For most organizations, the measurement is activity (busy work). I have actually worked with large and very successful nonprofit organizations whose “measurement,” and I’m talking about actual evaluations, were based upon number of phone calls … number of letters sent out … number of “moves.”

Specific and personal: We just had a great young potential development superstar say, “I can’t find the time to do Major Gifts because I am measured on the number of grant proposals that I submit!”

So, what’s the answer? IF … the goal of the For Impact Development Operation is to write a net, net, net (triple net) check to the organization (to fund the vision)…

THEN … the goal and measurement of the development staff should be tied directly to that net, net, net check! If you’re a volunteer leader or senior staff/administrative leader of a nonprofit organization, you should expect results from your development team. However, you cannot give them the old “pat on the back” and “go get money” Knute Rockne half-time locker room speech!

Your Development Staff should be measured on three things:

1. Total net dollars raised
2. Number of quality ASKS
3. Number of one-on-one visits

We use these GREEN SHEETS to MEASURE sales activity/productivity. Feel free to reproduce/use/expand.

To succinctly summarize and re-emphasize the point: Your development team needs to be working directly and specifically on things that raise the most amount of money at the lowest cost!

That’s how they should be trained. That’s how they should be measured. And that’s how they should be rewarded!

Special Note: Og Mandino has a wonderful message in the Spellbinder’s Gift about busy work. In Step 6 of Patrick Donne’s Send the Instructions for Your New Life, Og through his character states very clearly: Never hide behind busy work.

“It just takes just as much energy to fail as it does to succeed. You must constantly guard against the trap of falling into a routine of remaining busy with unimportant chores that will provide you with an excuse to avoid meaningful challenges or opportunities that could change your life for the better. Your hours are your most precious possession. This day is all you have. Waste not a minute. Never hide behind your busy work!“

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