3 Steps to Make Your Nonprofit More Data-Driven
By Scot Chisholm
CEO & Co-Founder, StayClassy
Becoming a “data-driven” organization sounds a lot easier than it actually is. The truth is, it’s really, really hard to pull off well.
I’ve experienced this first-hand as we’ve worked to create a data driven culture here at StayClassy. And although I know we still have lots to learn, I thought it would be useful to write about some of the key insights we’ve taken from our own (ongoing) transformation from a “go-with-your-gut” organization, to a more data-centric one. If your team can adopt these three best practices, you’ll be well on your way to making your nonprofit more data-driven.
1. Make Your Data Transparent & Accessible
If your goal is to create an environment where people use data every day to drive decisions and improve your organization, then you need to make sure the data is easily available to them. Seems pretty straightforward, right? It seems that way, but as with many things, the devil is in the details…
First, it’s important to realize that creating the correct level of transparency starts at the top. If you are one of the many leaders who likes to keep company data guarded from the rest of the staff (including financial information), then you need to seriously reevaluate your approach before moving on to anything else. The only way (and I mean THE ONLY WAY ) to empower your team to become more data-driven is to let them see, and take ownership of, your company’s data– that means the good, the bad and the ugly.
Tip: Something that I’ve found to be very effective at creating a sense of transparency around data is to send an internal weekly email to your staff showing progress against your key metrics. Even better, try and provide some of your own analysis on the trends you are seeing to stimulate data-driven conversations across the company.
Once you’ve gotten the hang of the transparency thing, you need to focus on making the right data accessible to each person in your organization (this is the really hard part). To start with, you need make sure that you put the right tools in the hands of the right people. For example, the person in charge of your online fundraising might use a fundraising platform, like StayClassy, to access the campaign data he or she needs to analyze past performance. Or, a Development Director might use a Constituent Relationship Management (CRM) system like Salesforce.com, to analyze and improve the way your organization interacts with donors.
Beyond making sure that each person has access to the right tools, you need to make sure that they can also draw insights from the data living in those tools and then communicate that information back to the rest of the team. One simple way you can accomplish this is by setting up an automated report directly from the tool itself and have it sent to the appropriate people within your company; however, as I mentioned above, a simple manual email works very effectively as well. Once the insights from the data are communicated back to the rest of the team, encourage them to meet, discuss the trends and hypothesize on how to improve things as a group.
2. Focus on Actionable Metrics
As your team starts to measure more and more stuff, it becomes very easy to get lost in all of the data. When this happens, it’s hard to draw meaningful conclusions that will help improve the performance of the organization. As the leader of the organization, your goal should be to keep everyone focused on only a few key metrics that provide actionable insight into the performance of the organization.
A metric is “actionable” when it provides enough context to help your organization change its behavior in an effort to improve performance. The opposite of an “actionable” metric is a “vanity metric,” which lacks the context necessary to help you change behavior and improve performance. The total number of donations your organization has received in a year is a vanity metric. The monthly percent increase (or decrease) in monthly donors is an actionable metric.
The first metric gives you no sense of relativity. Is 4,000 total donations in a year a job well done? Maybe it is if you had 2,000 donations last year…but probably not if you had 10,000. The second metric, by contrast, gives you a sense of how things are trending. Looking at the percentage increase or decrease in monthly donors will show you quickly which way things are moving. From there you can assess what’s working (or not working) and take the appropriate action.
Every single person in your organization should be responsible for 1-3 actionable metrics that they are focused on monitoring and improving over time (strive to have only one key metric per person, and set a goal around it with the person). Each person’s actionable metric(s) should feed into the organization’s main set of Key Performance Indicators (KPIs) and thus, drive the organization’s progress against its short and long-term goals. When each person takes ownership of their own actionable metrics and understands how they fit in to the larger goals, it becomes much easier for the entire organization to move in the same direction toward a common mission.
Tip: A great way to keep any meeting data-driven is to start by discussing how the topic is related to one or more of the company’s KPIs. If you can’t come up with anything, then maybe you shouldn’t be having the meeting in the first place!
3. Hire the Right People.
I heard a great quote from someone who works on the Google Analytics team one time:
“Spend 90% of your time finding people who appreciate data, and only 10% finding the right tools. “
I would tweak it slightly and say, “…finding people who appreciate data (whether they know they do or not)…”. Not everyone has had the analytical training of an engineer; but that certainly doesn’t mean that they lack the capacity to appreciate and utilize data in their own role. In fact, I’ve found that some of the most “data-driven” people I’ve encountered had “non-technical” roles. The right type of person, regardless of function, will find an appreciation for the role that data should play in any successful organization. A few traits you might look for in a person are:
- Their inquisitiveness (they question everything);
- Their detective skills (once they recognize a trend, they won’t stop until they find a root cause);
- And finally, their decisiveness (their ability to draw a conclusion and a course of action from a set of data, i.e. sales numbers, marketing analytics, etc.)
Once the right type of people are on the bus, it’s up to you to create the environment where they can develop into data-driven leaders. Here are three simple things you can do to keep data on everyone’s mind:
- Always demand some sort of quantitative analysis to back up assertions.
- Reward people for creating and testing hypotheses before jumping into something head-on.
- Don’t select each person’s key metrics for them (see #2); allow them to come up with the first-draft on their own and present them.
Creating a data-driven culture in your organization is not something that will happen overnight. It takes time, patience and a lot of reflection to figure out what is working and what isn’t. Don’t be afraid to ask your staff for feedback on how they think you’re doing; think of your culture as a product, and your staff as its customers. Start with the steps above, commit to the journey, and before long you’ll be making serious strides toward becoming a more data-driven nonprofit!
Have an Idea for a Fundraising Campaign?
Title Image: W. Edwards Deming
Post Image Credits, in order: Flickr Users subcircle, gfpeck, David Blackwell