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Strategy – useful tools that really work Simon Burne July 2011

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Objective <ul><li>To share a set of easy to use tools to help you to make fundraising strategies that work </li></ul>

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Four key drivers

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Thinking inside the box

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80% Rule: Roughly right – not precisely wrong

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What is Strategy? <ul><li>A structure </li></ul><ul><li>A list of things to do </li></ul><ul><li>Tactics </li></ul><ul><li>A big document that decorates your shelf and gathers dust </li></ul>It is not

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Petronius Arbiter 210 BC We trained hard… but it seemed that every time we were beginning to form up into teams, we would be reorganised. I was to learn later in life that we tend to meet any new situation by reorganising and a wonderful method it can be for creating the illusion of progress, while producing confusion, inefficiency and demoralisation

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“ I always leave my strategy on the train in the hope that a competitor will pick it up and believe that’s what we’re really going to do” Denis Stevenson

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“ However beautiful the strategy, you should occasionally look at the results.” Winston Churchill

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“ Strategy without tactics is the slowest route to victory. Tactics without strategy is the noise before defeat.” Sun Tzu 500 BC

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“ A satisfied customer is the best business strategy of all.” Michael Leboeuf donor fundraising

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<ul><li>Knowing where we are now </li></ul><ul><li>Knowing where we want to get to </li></ul><ul><li>Knowing how we’re going to get there </li></ul><ul><li>It’s about </li></ul><ul><ul><li>Internal stuff </li></ul></ul><ul><ul><li>External stuff </li></ul></ul><ul><ul><li>Matching the two </li></ul></ul><ul><ul><li>Planning for success - prioritising </li></ul></ul><ul><ul><li>Monitoring the results </li></ul></ul><ul><ul><li>Being flexible </li></ul></ul>

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Where we are now Our vision Our mission Our strategy What is Strategy? External Factors <ul><li>Objectives </li></ul><ul><li>Resources </li></ul><ul><li>Plans </li></ul><ul><li>Budgets </li></ul>Monitoring

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In times of crisis… The horizon gets closer So strategies get shorter

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Too much to deal with!

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Risk Management Death by risk aversion Bright idea Risk assessment Final product Electricity – oo er Bright lights - aargh Non-recyclable Tut tut Broken glass – danger!!

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Risk Management Paralysis by analysis Strategic options Internal analysis No change

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How do we escape?

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Or… 8 things to do with a box

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1. SWOT Strengths Weaknesses Opportunities Threats

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Internal Bridges & Barriers

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Internal Bridges <ul><ul><li>Processes that work </li></ul></ul><ul><ul><li>Key allies </li></ul></ul><ul><ul><li>Core skills and competencies </li></ul></ul><ul><ul><li>Networks and contacts </li></ul></ul><ul><ul><li>Beneficiaries </li></ul></ul>

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Internal Bridges <ul><li>Recognise them </li></ul><ul><li>Celebrate them </li></ul><ul><li>Strengthen them </li></ul><ul><li>Use them </li></ul><ul><li>Learn from them </li></ul>

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Internal Barriers <ul><li>Lack of expertise </li></ul><ul><li>Finance </li></ul><ul><li>Service Staff </li></ul><ul><li>Lack of information </li></ul><ul><li>Poorly-defined need </li></ul><ul><li>Lack of strategy </li></ul><ul><li>Processes that don’t work </li></ul><ul><li>No resources </li></ul>

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Internal Barriers <ul><li>Form alliances to overcome them </li></ul><ul><li>Work around them </li></ul><ul><li>Find a way through them </li></ul><ul><li>Accept your limitations </li></ul>

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2. PEST Political Economic Social Technical

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External Market Factors <ul><li>Focus on top 3-4 key external factors which could have a genuine major impact (+/-) on fundraising success. </li></ul><ul><li>Invest resources in these areas = do a few things well. </li></ul>

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External Market Factors <ul><li>Develop scenarios for each key factor: </li></ul><ul><ul><ul><li>In-depth knowledge of factor </li></ul></ul></ul><ul><ul><ul><li>Predict range of possible outcomes </li></ul></ul></ul><ul><ul><ul><li>For each outcome: </li></ul></ul></ul><ul><ul><ul><ul><li>What would be impact on your fundraising for each? </li></ul></ul></ul></ul><ul><ul><ul><ul><li>What action would you need to take to maximise benefits/minimise problems? </li></ul></ul></ul></ul><ul><ul><ul><ul><li>What resources will you need? </li></ul></ul></ul></ul><ul><ul><ul><ul><li>How will you monitor the situation? </li></ul></ul></ul></ul><ul><ul><ul><ul><li>How will you be prepared to respond quickly? </li></ul></ul></ul></ul>

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Benchmarking <ul><li>Develop links with similar NGOs, share information, monitor position </li></ul><ul><li>Income:cost ratios of each activity </li></ul><ul><li>Comparative size of each activity </li></ul><ul><li>Comparative growth of each activity </li></ul><ul><li>Mystery shopping </li></ul>

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3a. Boston Matrix (Products)

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Product Development Cycle Need Audience Product Evaluate Innovate!

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Product Lifecycle Time Profitability R&D investment maintenance cull

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Product Lifecycle Time Profitability R&D investment maintenance cull

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Product Lifecycle Time Profitability R&D investment maintenance cull

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Building your fundraising £ Time

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CASH COWS DEAD DOGS Renewals Special Appeals Legacies and Planned Gifts Internet Upgrade Mail Acquisition Annual Giving (High Value) Major Donors Foundations Merchandising DRTV Acquisition Monthly Giving Direct Dialogue Boston Matrix PROBLEM CHILDREN

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Boston Matrix CASH COWS DEAD DOGS Renewals Special Appeals Legacies and Planned Gifts Internet Upgrade Mail Acquisition Annual Giving (HV) Major Donors Foundations Merchandising DRTV Acquisition Monthly Giving Direct Dialogue RISING STARS PROBLEM CHILDREN

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Value (ROI) vs. Volume (potential) value volume Internet Upgrade Mail Acquisition Annual Giving (HV) Major Donors 1 2 3 value 2 PROBLEM CHILDREN

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Ease of implementation vs. impact ease impact Must haves Quick wins Sinks Low-hanging fruit Internet Upgrade Mail Acquisition Annual Giving (HV) Major Donors PROBLEM CHILDREN

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3b. Boston Matrix (Problems) Mysterons Devils Sacred cows Sad sacks Level of impact + - Level of understanding + -

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3b. Boston Matrix (Problems) <ul><li>Devils </li></ul><ul><ul><li>Focus on the four biggest </li></ul></ul><ul><ul><li>Develop clear strategies for neutralising </li></ul></ul><ul><li>Mysterons </li></ul><ul><ul><li>Watch closely </li></ul></ul><ul><ul><li>Be ready to take action </li></ul></ul><ul><li>Sacred cows </li></ul><ul><ul><li>Need change at the very top </li></ul></ul><ul><ul><li>Learn to work round them </li></ul></ul><ul><li>Sad sacks </li></ul><ul><ul><li>Safely ignore </li></ul></ul>

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3c. Boston Matrix (Competitors) Rising Stars Problem Children Cash Cows Dead Dogs Potential threats Learn from mistakes Ideas to improve Best practice Ideas to copy Real threats

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Competitors What I will do with the information What I want to know The questions I need to ask How can I find this out? Develop new products New ideas or products from my competitors that I could use/adapt. Which new products are being developed or tested? How well are they performing? Speak to them, share information. Mystery shopping. Research. Be first with my appeal for xxxxx Which competitors also raise money for xxxx. Timing. What are their plans for launching an appeal for xxxx? Speak to them, share information. Improve performance of my current products Ways in which competitors are offering my products more successfully. How well are their current products performing compared to mine? What are they doing differently to me? Mystery shopping. Financial reports. Conference presentations. Research.

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market/audience current new current new offer/product existing product new products to existing supporters 4. The Ansoff Matrix taking them to new audiences ? new products for new supporters?

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market/audience current new current new offer/product Direct Dialogue New areas Older age profile New creative Upgrade Campaign action Special Appeal Text appeal ? E.G. Monthly Giving

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Different Audiences from Different Media ABC1s - traditional core supporters Face to face mail, door drop, inserts DRTV Income Age On-line Telephone

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Prioritising your investment choices

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<ul><li>How do you compare apples and oranges? EG – a new shop versus a new DM campaign? </li></ul><ul><li>ROI doesn’t work – too short-term </li></ul><ul><li>IRR is better but doesn’t tell the whole story </li></ul><ul><li>Four key factors are: </li></ul><ul><ul><li>Profitability </li></ul></ul><ul><ul><li>Level of risk/uncertainty </li></ul></ul><ul><ul><li>Market size/potential </li></ul></ul><ul><ul><li>Market understanding </li></ul></ul>

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5. Investment Sailing Boat Level of risk Net return Market potential Market understanding Good investment!

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5. Investment Sailing Boat Level of risk Net return Market potential Market understanding Very dodgy

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Goals & Objectives

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<ul><li>Important to set targets. </li></ul><ul><li>Objectives can divide as well as motivate. </li></ul><ul><li>Objectives need to be set that are cross-organisational. </li></ul><ul><li>KPIs should be few, and not all financial. </li></ul><ul><li>Remember the Rule of Four </li></ul>Goals & Objectives

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6. Balanced Scorecard Financial Processes Supporters/ Stakeholders Learning and growth Vision & Strategy <ul><li>one objective per quadrant –max 4 </li></ul><ul><li>keep the objectives SMART </li></ul>

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Objective-Setting <ul><li>SMART </li></ul><ul><li>S trategic </li></ul><ul><li>M easurable </li></ul><ul><li>A chievable </li></ul><ul><li>R ealistic </li></ul><ul><li>T ime-limited </li></ul>

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Objective-Setting <ul><li>SMART </li></ul><ul><li>S cary </li></ul><ul><li>M outhwatering </li></ul><ul><li>A mbitious </li></ul><ul><li>R are </li></ul><ul><li>T eam-building </li></ul>

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7. Brand positioning Modern Old-fashioned Conservative Innovative Where we want to be Where our supporters think we are

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7. Strategic Risk Analysis Finances Processes Culture/skills Stakeholders Impact Probability

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8. Vulnerability Index Insignificant Very important Relatively safe Very vulnerable

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Last thoughts…

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<ul><li>“ We don’t see things </li></ul><ul><li>as they are. </li></ul><ul><li>We see them as we are” </li></ul>Ref.: Anais Nin

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“ If we don’t make utter fools of ourselves from time to time, we grow smug - that is, we do not grow at all.” Ref.: Tom Peters Innovation

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<ul><li>‘ We are taught to solve problems not to recognise opportunities.’ </li></ul>

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<ul><li>“ Every act of creation </li></ul><ul><li>is first of all an act of destruction” </li></ul>Ref.: P. Picaso

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“ We’ve made a lot of mistakes. And we’ve been very lucky at times. Some of our products are things you might say we’ve just stumbled on. But you can’t stumble if you’re not in motion.” R.Carlton

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<ul><li>Words used by a boss to a new employee on their first day at work </li></ul>A culture of successful risk ‘ If you don’t screw up at least once in your first year with us, you aren’t trying hard enough.’

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<ul><li>‘ There is no formula for success. But there is a formula for failure, and that is trying to please everybody.’ </li></ul><ul><li>Nicholas Ray, Film Director </li></ul>The Formula for Failure

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The truest word… Henry Ford Whether you believe you can or whether you believe you can’t , you’re right

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Go for it!!!

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Thank you The two most important words in fundraising

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Any questions?