Team Performance (1)

I’ve just been listening to Richard Hackman on teams and team performance. His first lens for evaluating team performance is straight forward:

Delivering the goods

Did you get the job done? How well did you do it?

Who is the legitimate receiver, user, reviewer of this performance and what to they think of it? Did you serve the client first?

At a non-profit leader you might have several ‘customers’: the people you serve, donors, the team itself. If you can’t keep everyone happy, where do your priorities lie?

I listened to Andy Kaufman interviewing Richard Hackman on the People and Projects Podcast.

Bootstrapping the non-profit organisation Rule 7 (part 4)

This is the seventh-and-a-quarter post in a series applying Seth Godin’s rules of bootstrapping (see also here) to building a non-profit organisation.

Rule 7: Charge a lot (but be worth more than you charge)

A last argument for applying this rule in non-profit context is that if your clients pay, your resources go further, and you can serve a lot more people. We covered this principle in Rule 3 (see ‘Eager to pay and scaling the non-profit), but it’s worth repeating here.

I’ve just been listening to an interview with One Acre Fund‘s Andrew Youn on Rob Reid’s After On podcast where Andrew spoke about the importance of a revenue model in their work, where the farmers they serve receive credit, but ultimately pay for the services they receive:

Rob Reid: Some people might say that these folks are extremely poor, why don’t you deliver these services for free? Part of it is that there’s only so much money in your organisation, and that 98.5% payback means that you’ve got a lot more dollars put to work. What percentage of One Acre Fund’s annual budget comes back to it through repayments?

Andrew Youn: Most of One Acre Fund is core program delivering all these services… Within that core program, about 70% of our budget is covered by farmer payments, and 30% from donors.

RR: You’re literally serving three times as more as many people as you could if you were a purely charitable organisation.

AY: It makes us so much more cost effective… we can serve three, four times as many people by charging for our services. I think it also makes us a little more beholden, as an organisation, to the customer that we serve. So we use, for example, repayment as a customer service quality metric. [see Rule 1 for more on this idea]

After On Podcast, Episode 35

.

So here’s the final reformulation of Rule 7:

Rule 7 of bootstrapping the non-profit organisation: Find the right price (and be worth more than you charge)

Bootstrapping the non-profit organisation Rule 7 (part 3)

This is the seventh-and-a-third post in a series applying Seth Godin’s rules of bootstrapping (see also here) to building a non-profit organisation.

Rule 7: Charge a lot (but be worth more than you charge)

How does this rule apply to what a charity charges its clients? Is it ethical to charge your clients a lot?

Shakespeare’s Prospero said it best:

This swift business

I must uneasy make lest too light winning

Make the prize light.

The Tempest, Act 1 Scene 2

I’m not a subscriber to the argument that free things are always un- or underappreciated, but there’s truth in the sorcerer’s words: we value what is dear.

Or perhaps we should say, we value things that cost a lot as long as long as they’re worth more than we paid.

Think about the times you’ve felt frustrated by a cheap purchase that wasn’t worth it. Or the more costly, high-quality item that brought you satisfaction each and every time you used it. Rule 7 follows this logic – just as it’s possible to be cheap and still rip people off, it’s possible to charge a lot and still be generous.

In fact, charging a lot might be what gives you the space to be generous. It’s hard to give people the time and attention they require if you’re cutting corners and pinching pennies. Rule 7 asserts that it’s fine for a charity to charge its clients for its services – even to charge ‘a lot’ – as long as the client makes the most profit from the transaction.

And the fact is, even if the service that you provide to your clients costs them nothing in financial terms, they always pay something – time, attention, the effort of showing up.

When your clients pay a bit more of those things for what you provide, they think more about whether they really want it, and take it a bit more seriously. And just as if you’d charged more money for something, when people have bought in to what you’re doing, there’s a lot more that you can do, so you open up a lot of extra ways to create value for and with them.

As another poet put it,

Where your treasure is, there your heart will be also.

Bootstrapping the non-profit organisation Rule 7 (part 2)

This is the seventh-and-a-half post in a series applying Seth Godin’s rules of bootstrapping (see also here) to building a non-profit organisation.

Rule 7: Charge a lot (but be worth more than you charge)

The point here is that your organisation’s selling point – we’re still looking at things from the perspective of donors and supporters – should never be how cheap you are (your price), but how much value you create for your clients.

It doesn’t matter what your price is, as long as you’re worth it – or Seth would say, worth as long as you’re worth more.

This might be about how many people you serve and how many things you do.

Or it might just as well be about how you do what you do – the values that you bring to the table that make you special. The things that would:

Make peoplemiss youif you were gone.

Bootstrapping the non-profit organisation Rule 6: Scale is not a Reward

This is the sixth post in a series applying Seth Godin’s rules of bootstrapping (see also here) to building a non-profit organisation.

Seth says:

Scale is not its own reward. Grow when it helps you serve the people you seek to serve. That’s the only time you should grow.

.

This is another rule that follows from Rule 1: Real Work for Clients First.

Work out who you seek to serve, and serve them as well as you can in an impactful and sustainable way. In any business or non-profit, the word “sustainable” here carries a lot of baggage.

Depending on your business model, there is likely to be a sweet spot that allows you to serve enough clients (decide early how many is enough, and always start small) and to generate the income you need to be around and keep on having an impact for the long haul.

In a small business this might simply mean having enough clients to earn what you need to earn once you’ve paid yourself and covered all your costs (see, for example Profit First – this episode of Read to Lead is a good introduction – or if you’re a freelancer, this excellent podcast on the bare minimum you should be charging clients).

In a non-profit, finding the right scale can be more complicated. All other things being equal, you probably want to serve as many clients as possible, but you’ll need to grow carefully to make sure that you continue to serve your clients well.

Another complication is that your clients may pay for themselves in the same way that they should in a business. You likely depend on other income streams, and particularly donation income, and finding the right size for your organisation with respect to your donors (two-sided markets again) will depend on your particular circumstances.

If your charity implements for a particular trust or company, they may largely dictate your budget and the scale of operations.

But if you’re funded by general donations, you need to demonstrate sufficient impact in terms of both quality and quantity for people to think you’re worth supporting. You might need to reach a certain size to justify overheads and capital investment – that is, you need to spread your overheads over enough clients to be seen as good value for money. Or it might be that you need to serve clients nation-wide in order to access particular funding opportunities.

Rule 6 of bootstrapping the non-profit

Scale carefully and find the right size for you.

Bootstrapping the non-profit organisation Rule 4: Resist the urge to do average work for average people

This is the fourth post in a series applying Seth Godin’s rules of bootstrapping (see also here) to building a non-profit organisation.

Be a “meaningful specific” rather than a “wandering generality” – it’s the principle of concentration of force and energy to get work done.

Rule 4 ties into Rules 1 and 3 – “real work for real clients” who are “eager to pay” – and if you work at a non-profit organisation it has implications for how you work with both clients and donors.

Rule 4 and clients

For your clients, it means your service is for them. Not for people in general, and it might help your clients… but a specific product or service for their specific needs.

Take education in Indonesia as an example. There’s a huge need for teacher training and resourcing. This is true across the age-range (from pre-school to university level), across different types of school (private and government-run schools), across the whole archipelago, and in any subject area. Within each of these ranges are groups of people with different needs, and trying to serve them all will get you no-where. Trying to produce something for the “average” teacher will dilute your energy and make it impossible to make something meaningful for any individual – and your clients are individuals.

Far, far better to concentrate on the needs of a specific group (helping pre-school teachers at small charity schools to teach reading more effectively) and do it well. If you’re good, you might end up with something that grows and can be made more widely applicable.

Rule 4 and donors

The same principle applies to your donors. It’s hard to go to the world and persuade them that your cause is important, and that they should give you money. It’s much easier to find people who already think what you do is important, and convince them that you do it well enough to be worth supporting.

Again, be specific – who are you helping? Why those people? Why this service? What difference is it making? Tell stories of change in the lives of specific people to explain the work that you do.


Bootstrapping the non-profit organisation Rule 3: Serve Clients Eager to Pay for what you do (part 4 of 4)

This is the third-and-three-quarters post in a series applying Seth Godin’s rules of bootstrapping (see also here) to building a non-profit organisation.

Rule 3: Serve Clients Eager to Pay for what you do (part 4)

In a nutshell, Seth says that if someone isn’t eager to pay, they’re not your client. You get to pick. So work for people eager to pay.

Seth Godin on non-profits and two-sided markets… part 1

While it’s tempting to believe that non-profits are generally funded by large numbers of philanthropists giving small amounts of money, in general it’s not the case… A non-profit is almost always bootstrapped because the founder goes to two or three or four passionate individuals and says, “If we could work to solve problem X, is that the sort of thing that you’d like to support?”

And so it begins with one side of the market, which is the donor and the founder deciding to take on a problem.

Seth Godin,  Akimbo“Thrash Now (and ship early)” Q&A@22mins

.

Seth’s Q&A answer offers a different way to look at Rule 3. I’d been thinking of the non-profit organisation as the link in a two sided market, with clients on one side, donor on the other, and the organisation in the middle, which is more or less accurate…

But you have to start by looking for those donors who are eager to pay for what you do – so eager to pay, in fact, that they’re prepared to join you, so that whatever you’re doing becomes a problem that you take on together.

Bootstrapping the non-profit organisation Rule 3: Serve Clients Eager to Pay for what you do (part 3 of 4)

This is the third-and-two-thirds post in a series applying Seth Godin’s rules of bootstrapping (see also here) to building a non-profit organisation.

Rule 3: Serve Clients Eager to Pay for what you do (part 3)

In a nutshell, Seth says that if someone isn’t eager to pay, they’re not your client. You get to pick. So work for people eager to pay.

Eager to pay, donors, and two-sided markets

It’s often the case for non-profits that the people who pay for what you do aren’t the people who benefit directly from it. The client always pays, of course (see part 1), but someone else is also providing some of the cash you need to operate.

There are two risks here – the first is that you make an excellent product that your donors love, but that your clients aren’t willing to ‘buy’. This happens when you allow yourself to become accountable to donors wishes (and possibly whims) first, rather than being faithful to your clients’ needs, and what works for them. It’s easy to slip into this when you’re short of cash and start serving donors who are not-quite-eager to pay for what you do, but happy enough to pay for something different but similar – so you drift, and compromise, and end up being pulled in all directions, wasting time and money and pleasing no-one.  See also Rule 1: Real Work for Clients First.

The second risk is when donors are eager to pay for part of what you do – usually the last-mile, bit that happens on the ground part – the impact – but refuse to pay for overheads or administration – the delivery.

Yes, you are ‘selling’ your impact, and you want to be efficient – but you must sell your real work as it is, which probably involves an office. Educate potential donors about what it takes to do your work well, and to work for the long term towards significant and lasting change. Explain to donors who want cool-sounding statements about their impact (‘100% of my donation went towards food that appeared magically and for free in front of hungry children’) that of course you have administrative costs – including your crappy office – and that without them, there would be no program.

Be as clear and as real as you can about everything you do, and why, and find those donors who like you, and like your work, and trust you, and are eager to pay to be a part of it.

Bootstrapping the non-profit organisation Rule 3: Serve Clients Eager to Pay for what you do (part 2 of 4)

This is the third-and-a-half in a series applying Seth Godin’s rules of bootstrapping (see also here) to building a non-profit organisation.

Rule 3: Serve Clients Eager to Pay for what you do (part 2)

In a nutshell, Seth says that if someone isn’t eager to pay, they’re not your client. You get to pick. So work for people eager to pay.

Eager to pay and scaling the non-profit

This is where the bootstrapping mindset comes into its own in the world of non-profits and social programs. If you can find clients who are not only eager to “pay” time, attention and effort to user your product or service, but to actually pay money… you know you not only have a product that they think is valuable, but one that can cover some of its own costs – or better, cover all of its own costs. Or better, cover its own costs, with a little left over.

We’ve pretty much reached this point at the literacy non-profit I work for in Indonesia, and the potential is huge. Instead of looking at our bank balance and asking how many groups we can help, we’re looking at ourselves and asking how we can get better at what we do so that we can serve more groups – because the growth is paying for itself.

Our program is far from polished and perfect, but it seems to be working. In the old days we had a list of people waiting for our program – waiting for us to find the money to be able to train them. Now the people on the waiting list are finding their own money – and the wait is a lot shorter.

In fact, doing it this way has allowed us to serve more groups as a gift – not ‘for free’ but ‘at our expense, as a gift, because we love what you do’ – than we did back in the day when it was free.

Finding the clients who are eager to pay might well help you get your product or service to more of the people who are eager, but can’t.

Bootstrapping the non-profit organisation Rule 3: Serve Clients Eager to Pay for what you do (part 1 of 4)

This is the third in a series applying Seth Godin’s rules of bootstrapping (see also here) to building a non-profit organisation.

Rule 3: Serve Clients Eager to Pay for what you do

In a nutshell, Seth says that if someone isn’t eager to pay, they’re not your client. You get to pick. So work for people eager to pay.

Eager to ‘pay’ and non-profit work

At first glance, talk of clients ‘paying’ – and ignoring the rest – might seem like the antithesis of non-profit or community-based work. But it isn’t, and here’s why.

People always have to pay.

If they don’t pay money, they pay time, or effort, or attention – all of which they could have spent elsewhere. So even if your product is free, you have to find people who are eager to use it. And if it’s free and no-one wants to use it… well, it’s just not good enough yet.

Don’t get me wrong, you might have something technically great – but you need to think of your product or service not just as the thing itself, but as the thing plus the ‘wrapper‘ (of good communication and relationships and trust, for example) that’s necessary to get your people to buy.

I’ve seen this repeatedly at non-profits I’ve worked for: we’d make something valuable available for free – a highly qualified doctor giving free consultations, the free English lessons that everyone in a community said they wanted, a course for mothers-to-be in a poor community that exactly fit their needs and was far better than they could get anywhere else… and almost no-one came, or they came a couple of times and drifted off. There were lots of factors at work, but at the end of the day, we simply weren’t good enough, and couldn’t build an audience. Really – it’s possible to fail to build an audience for a doctor in a poor community with no healthcare. I wouldn’t believe it if I hadn’t done it.

As a wise man once said, 

If you know how to solve a problem but can’t communicate it to others in a way that actually results in it getting solved… you don’t actually have a full solution.

Driverlesscroc – rehashing an old Seth Godin blog post

And the times when we succeeded in building programs that got traction, were popular and impactful and in a couple of cases, became self-sustaining, we managed to find something small that stuck, and to grow a program that worked from there.

Start with the minimum viable product – the smallest and simplest thing you can offer that works – for the smallest possible audience, and build from there. Because if that group of people – the group most eager to pay – won’t pay, you need to go back to the drawing board.

If they will pay – then maybe you’re onto something. Now you’ve got clients, hopefully clients grateful enough and gracious enough to be patient as you work through all the implications of what you do, smooth off the rough edges and start learning to do it better. If and when it’s ready, your clients will tell their friends, and you’re off to the races.