The story of Starbucks and its founder Howard Shultz is well documented.
After he retired the first time, Shultz came back to address some growing problems within the company. And, one change he made really shook up something Starbucks had always done.
Starbucks had always reported how individual stores were performing compared to the previous quarter and year over year. It was one of the most important ways they measured success and growth.
That is until Schultz announced Starbucks would no longer report those numbers to the public. This decision was not well received because analysts used those numbers among others to make investment decisions.
So why did Schultz decide to stop sharing this key piece of information?
Because it placed too much emphasis on store managers to increase revenue above all else. As a result, stores were doing all sorts of things to increase their store’s sales. Some were selling Beanie Babies! Remember those?
What you measure and how you define success influences behavior.
How does your organization define fundraising success? Is it all about overall dollars raised? What about getting new donors?
It’s not simply what you’re measuring. It’s also how much importance you place on each element of success. Starbucks still measures individual store performance. It’s about the weight that particular measure of success had and the behavior it promoted that was causing the company to drift from its mission.
This is why every organization should be measuring overall donor retention rate among other key data points. Organizations who only go after dollars and new donors can do so at the expense of fostering relationships with existing donors. That doesn’t just mean major donors. It includes first time donors who gave smaller amounts that can become faithful larger donors over time.
Here are some questions to reflect on:
- What does success in development look like for your organization?
- How are you measuring progress for that success?
- How are those metrics influencing your decisions and behavior on a day-to-day and week to week basis?
By the way, not knowing what success looks like or how you’re measuring it still influences your decisions. You likely feel rudderless and constantly bouncing from one thing to another without any direction. That happens to be one of the leading causes of burnout for fundraising professionals.
Need to get your organization in sync with clear fundraising and marketing goals? That’s just one of the many ways we help nonprofits. Reach out to me when you’re ready to make your fundraising and marketing working for you not against you.
All the best,
Kenny Sigler, CFRE