Barriers To Growth – Part 1
A year ago we reported on Adrian Sargeant’s and Jen Shang’s remarkable study — Great Fundraising — revealing steps organizations must take to increase income 2, 3 or even 4 times.
Last week, in Overcoming Barriers to Growth, I previewed the DMA Nonprofit Federation’s Leadership Summit by the same name that kicks off this Wednesday. I also asked Agitator readers to weigh in with key reasons they believe inhibit growth.
Given the response and interest in that post, Tom and I’ve decided to run a series on ‘Barriers to Growth’. We’ll not only cover the Leadership Summit, but will also share research and thought papers on the subject, plus summarize readers’ comments and insights.
Here goes, starting with two papers that deserve attention, discussion and debate.
First some research and insights that deserve your attention and discussion.
- Kevin believes “a useful analogy for the growth conversation is that of comparing foothills and mountain peaks.” Most organizations, he argues, are living in the foothills, “spending lots of time and effort to optimize with an approach to doing business that offers no sustained growth potential.”
- Only by adopting very different mindsets and methods can organizations double or even quadruple their income, argues Kevin. But, he also notes that only a relatively small part (15%) of the market is capable of or likely to undertake the necessary changes. But for this 15% the growth curve is likely to be “massive” as they move from the “foothills” to the “mountain peaks”.
- What about the other 85%? “The rest are followers to varying degrees. This reality means the majority of charities are best served selecting a ‘Head Down’ strategy — staying put in the foothills, never to reach the peak, but maintaining their lower position with greater efficiency.
I believe you’ll be fascinated by Kevin’s insights into the organizational characteristics that describe and distinguish those organizations living in “foothills” from the very few living on or climbing toward the “peaks”.
Equally, you’ll want to read the section on Metrics, which points out that “foothill” organizations focus almost exclusively on campaign metrics like response rates, average gift, and acquisition over retention. On the other hand, “mountain peak” metrics focus on retention rates, lifetime value and revenue growth at the individual donor level.
Organizations must make a choice whether they’ll dwell in the foothills or strive for the peak and Kevin offers a brief guide, “How to Make the Climb”. You can download the paper here.
The second paper I urge you to download and digest is the Sargeant/Shang inquiry into what makes for “Great Fundraising”, commissioned by Clayton-Burnett and dowloadable here.
Here are some key takeaways from the Report:
- Successful fundraising directors tend to be leaders who put the organization first and far ahead of their personal ambitions. Leaders who embed themselves holistically in their organization, creating great fundraising for a cause they are passionate about. They lead and inspire others through a combination of will and personal humility.
- These leaders devote a substantial portion of their time to appointing or developing exceptional teams with a joint focus on both communication and technical skills. What Adrian and Jen term the “Organisational Learning Culture”.
- They also develop exceptional structures and processes to optimise the impact of this talent. This includes establishing reward and recognition structures that are tied to the drivers of long term growth. This, in turn, leads to first-rate staff retention.
- The development of an organizational learning culture both within the fundraising team, but also within the organization as a whole. Such cultures legitimize occasional errors as the necessary cost of innovation.
What really made the difference between good fundraising and outstanding fundraising, however, was the quality of thinking the leader was able to engage in and, in particular, whether they were able to take a systems perspective on their organization. As Adrian and Jen note: “All leaders we interviewed were natural systems thinkers, although most would not have used this term. The level of abstraction that system thinking permits made it possible for our fundraising leaders to take a more holistic perspective on problem solving and further develop the culture of their organisations to place fundraising at the core.” [Emphasis added by Roger]
We’ll continue exploring the issues of organizational transformation and growth in future posts.
Meanwhile, please don’t hesitate to send along your thoughts, questions and point us to any additional research or thought papers you think would be helpful to other Agitator readers.
How top-of-mind in your organization is the issue of growth and what impedes it?