How Small Data Can Make A Big Difference

April 5, 2012 • Blog, Measurement & Evaluation, nonprofit • by
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There’s been a lot of talk about “big data” recently. The idea that if we just collect more and more data we can find hidden correlations and exploit those for our advantage. It’s definitely an interesting field and will shape many larger organizations but you don’t need “big data” to succeed.

I am a proponent of what I call data informed decision-making. Too often we rely on instinct, our gut, or randomness when making strategic decisions. It’s not that these things are always wrong but I believe the organizations that truly succeed don’t rely completely on instinct, they move towards data informed decision-making. Integrating data informed decision-making into your organization is quite simple. The first step is to simply begin collecting data that you feel is informative in some way. This includes things like sales & profits by region and data but can move much beyond that. Especially in the social sector it is important to move from measuring activity data to outcome data.

Next, when making key strategic decisions, go back to the data. Ask yourselves can we justify this decision based upon the data in front of us? If not, can we collect some data to help support this decision? Data informed decision-making is just about adding a check in the decision-making process. It’s about checking your instinct, gut, or ideas with data. You won’t always be able to support every decision with data but this will help your organization succeed more of the time.

Purposeful Partying

March 22, 2012 • Blog, Leadership • by
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I think that more organizations need to celebrate. They need to bring out the party balloons, turn up the cheese factor, and make some silly trophy’s Dundies style.

Yesterday I had the opportunity to engage in one such celebration. It was definitely cheesy. It was definitely silly. But I think it was one of the greatest things that the leadership did to shape their organization. Celebrations are great at showing what you really care about, where you’re really going, and motivating employees to go the extra mile.

For example, the organization I had the opportunity to celebrate with is hyper-focused on financial sustainability right now. The award recipients all had made progress on that front and that was highlighted. It wasn’t the only thing that was highlighted but it was a resounding theme.

Celebrations also help you mark progress. Too many organizations get stuck in the day to day operations that they forget they are moving in any direction whatsoever. Stopping to celebrate progress is a great reminder of how far you’ve come while also setting up the vision for how far you have to go.

So stop, make some trophy’s, come up with some silly rewards, and celebrate!

Can Data Be Innovative?

March 20, 2012 • Blog, Thoughts • by
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Inherently, data is a collection of the past. It is a summation of events that have already happened. We use data to help predict the future but data is inherently about what has come before. Can data then, be innovative?

I began thinking about this question after reading a post from Fast Company Design entitled, To Innovate, You Have to Stop Being a Slave to Data. The article talked about how companies are more and more using customer data as they develop new products and since people are inherently averse to change you can’t actually create anything new. I believe it was Steve Jobs who was the mindset that you shouldn’t ask customers what they want when developing a new product but should create something that they don’t realize they want. I think that is a good idea to think about when innovating.

So how can data play a part in innovation? First, I think data helps organizations understand their current reality. They can see what is currently resonating with consumers and what is not. Second, data can help predict what tomorrow might look like, thus helping innovators know what might be around the next corner.

At the end of the day though, I think data cannot produce innovation. I think it can play a huge role in the process of innovation but it is not at the steering wheel creating the next great product, idea, or organization. It cannot be ignored but you must also understand that it is fundamentally a relic of past events which is not always a good indicator of the future.

Why I Don’t Believe Your Annual Report

February 22, 2012 • Blog, Development, nonprofit, Research • by
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I received your annual report today. You claimed that 80% of your students go to college while only 40% of those in the community do. You told me its more likely your students go to college than become incarcerated, while it’s the opposite for the neighborhood you’re in. The same for teen pregnancy.

But the thing is, I don’t believe you.

It’s not that I don’t believe your numbers. I’m sure you are reporting them as honestly as you can. I just don’t believe that it was you who caused this difference in students’ lives. You’re suffering from the selection bias.

See, the students in your program are not a random sample from the community. While you’re open to everyone, not everyone shows up, just those that choose to. So you can’t compare yourself to the average of the community. Let’s think of it this way.

In year 1 the community has 10 students, 4 graduate high school. So the number you’re comparing too is 40%.

You start your program in year 2 but can only accept 5 students. Of the 5 students who show up to your program you notice that 4 graduate high school, a full 80%. Twice as much as the previous year. What you don’t realize is that no one else graduates high school (because the students with the will to succeed will seek out opportunities like yours to help them succeed). So for the community, 40% still graduate, you haven’t made any difference.

The selection bias is everywhere. There’s really no way around it other than to force people randomly in and out of your program. So be careful when comparing your statistics to the general statistics of your community.

Tomorrow I’ll talk about how to get me to believe your numbers.

A Nonprofit Parable

January 18, 2012 • Blog, Leadership • by
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There once was a village that sat along the banks of a river. Everyday wounded bodies would float by the village, morning to night. One day a villager said, “We must take care of these people!” and began to pull the bodies out of the river, one by one, and care for their wounds. A second villager, equally moved with compassion, said, “We must not just care for these bodies, we must find out who is throwing them into the river!” and set off on an expedition up river.

Often times those people drawn to the social sector are more like the first villager. They are deeply moved by the broken and hurting in their community and they set out to care for their wounds. They run homeless shelters, food pantries, and affordable housing organizations. They are treating the symptoms of injustice or bad decision-making. It doesn’t matter. They are there to care for those that need help. These people are tremendously important to our society.

What I think we need more of is the second type of villager. We need people who seek out the root causes of poverty, violence, and injustice. We need organizations that don’t just pull bodies out of the river but stop them from being thrown in. This type of person, who thinks in systems, is not often drawn to the social sector. They don’t care so much about people but about systems. Unfortunately they are often deterred by the lack of opportunity to work in systems they see in the social sector. However, these people are tremendously important to our society.

If you are an organization that is pulling bodies out of the river, make sure you partner with someone that is up-river searching out the cause. If you are someone who enjoys dealing with systems and big, problems partner with organizations that deal with people individually. Only this partnership will truly solve our world’s needs.

For more, read True Leadership Means Wrestling Away the Wheel on the Stanford Social Innovation Review blog.

What I Learned from Foie Gras

January 6, 2012 • Blog, Business, Ideas, Leadership • by
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It’s been said that foie gras, the liver of a goose that is fattened up by having a tube stuffed down its throat, is the most abusive food to produce. Yet for many chefs, it is the most iconic and sought after delicacy in the world. Quite a predicament.

That was until Eduardo Sousa came along claiming to have found a way to produce foie gras naturally. No tubes. No abuse.

Many in the culinary world found this impossible to believe and yet when chefs tasted what his geese produced they found themselves completely surprised to find the most tasting goose livers they had ever eaten.

Eduardo Sousa raises his geese in the countryside of Spain. Here they live in a goose’s paradise with plenty of tasty and fattening things to eat. What Sousa realized is that as the weather turns cold, geese will stuff themselves, making there no need to stuff a tube down their throat. However, they will only do this if they feel they are wild. As soon as a goose felt domesticated they would not indulge in this behavior.

To that end there are no fences on Sousa’s farm. All the geese are free to leave at any point. Very few utilize this freedom though. Since Sousa has created such a paradise for them they choose to stay until their death.

What’s most amazing though, is that as flocks of geese fly over Sousa’s farm, his geese call up to them, apparently sharing how wonderful the farm is, and these completely free geese join his flock on his farm!

Let that sink in for a minute. He has created such an enticing environment that his geese that are heading to the slaughter are calling completely free geese to join their ranks.

Think about this from the perspective of an organization. Do you have the kind of organization where those working feel no desire to leave and in fact invite others to join the team? While we all know the stories of tech companies like Google that create lavish work environments, I don’t think that the average organization has taken this lesson to heart.

In today’s economic environment it is even increasingly tempting to sacrifice environment and organizational culture at the altar of austerity. Managers and executives might say to themselves, “There is a line of people outside who are more than willing to take anyone’s place who chooses to leave.”

This is certainly one model, but how much more productive would your organization be if everyone who works for you felt appreciated, served, and in an environment conducive to productivity? Your organization would attract and retain top talent far better than your competitors and even in today’s world, talent is the ultimate productivity.

So how can you follow Sousa’s lead and create a goose’s paradise?

The Importance of Randomness

November 17, 2011 • Blog, Ideas, Leadership, Measurement & Evaluation, Research • by
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Randomness plays a larger role in our lives than we would ever like to give it credit for. As humans we want to create causal connections between events. We want to extrapolate from the past, into the future. We want to feel that we can cause things to happen. We tell ourselves, “If I work hard and am honest I can make a good living.” Or “my stockbroker had a good year last year so he’ll have a good one this year.”

Yet in many situations, randomness plays a huge role in the outcome of the event. The past is a poor predictor of the future unless we account for a lot of randomness and luck.

One industry that seeks to fulfill this need for causal understanding is the business book industry. We are constantly told that successful leaders do X,Y, and Z and that if you do X,Y, and Z, you too can lead a successful business. Do business practices and leadership affect the outcomes of a business? Of course they do, just a lot less than the business literature would suggest.

For example, let’s say that the success of a business and the quality of the CEO is correlated generously at 0.30. All this means is that what makes a business successful and what makes a high-quality CEO overlaps 30% of the time. What we then must ask ourselves is this; from Daniel Kahneman‘s book Thinking Fast and Slow.

Suppose you consider many pairs of firms. The two firms in each pair are generally similar, but the CEO of one of them is better than the other. How often will you find that the firm with the stronger CEO is the more successful of the two?

In a well-ordered and predictable world, the correlation would be perfect (1), and the stronger CEO would be found to lead the more successful firm in 100% of the pairs. If the relative success of similar firms was determined entirely by factors that the CEO does not control (call them luck, if you wish), you would find the more successful firm led by the weaker CEO 50% of the time. A correlation of .30 implies that you would find the stronger CEO leading the stronger firm in about 60% of the pairs—an improvement of a mere 10 percentage points over random guessing, hardly grist for the hero worship of CEOs we so often witness.

Now this does not mean that management practices do not matter, it just tells us that identifying those best management practices is extremely difficult! When doing comparison work, such as that made famous by Jim Collins (whom I love but now question), we have to look at it much more skeptically. If the business with the better CEO performs outperforms randomness only 10% of the time, it will be very difficult to even identify those businesses that are really better by skill rather than luck.

Luck plays important roles in our lives. This can be a scary reality, or one that is somewhat freeing. It is certainly scary to realize how little we can control the outcome of our lives, but it can be freeing to have some of that weight lifted from our shoulders, and just maybe it will give us more empathy for those that are struggling.

Cause for Alarm?

October 11, 2011 • Blog, Faith, Leadership • by
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I sometimes feel like the Barna Group has made an industry out of telling pastors that young people don’t like their churches. The Huffington Post reported on Barna President, David Kinnaman’s most recent book, “You Lost Me: Why Young Christians Are Leaving Church and Rethinking Faith” and its findings on the ideas young people have about faith.

They found many young people feel judged for their mistakes at church (16%), believe the church’s doctrine on sexuality is “out of date” (40%), and that church is boring (33%). The book also reports that almost 60% of young Christians leave church permanently or for an extended period of time after age 15.

These findings are supposed to cause a general sense of alarm. The article quotes author Kinnaman:

Kinnaman called the problem of young dropouts from church “particularly urgent” since many churches are used to “traditional” young adults who leave home, get educated, find a job and start a family before age 30.

“Churches are not prepared to handle the ‘new normal,”‘ said Kinnaman. “However, the world for young adults is changing in significant ways, such as their remarkable access to the world and worldviews via technology, their alienation from various institutions, and their skepticism toward external sources of authority, including Christianity and the Bible.”

While I agree that young people are leaving the church, I don’t necessarily believe its a cause for fear. I sometimes feel like the institutionalized church is afraid of culture. I think its great that young people are free to explore other faiths because it enables them to more deeply experience the true God. I’m not afraid of that. I believe that my role as follower of Jesus is simply to share my life, my faith, my relationship with God and encourage others to explore, but ultimately it is God who calls people to Him.

And I don’t believe that people today don’t go to church because its boring or even because of its views on sexuality. I believe people don’t go to church because the church has failed to communicate God’s love and power to them. The church has failed to speak with the proper authority into the lives of its congregants. THAT is why people leave the church, because they believe God doesn’t do anything for them. And that is nothing to fear because that is something we can change.

We should not fear this world.

What Are Your Strengths?

August 26, 2011 • Blog, bloggers, Books, Leadership • by
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Leadership requires self-awareness. Great leaders are always self-aware (though not all successful “leaders” are). To be able to lead others you need to know yourself, where you are strong and where you are weak. You need to know your limits and live with a level of character that is unexpected.

One useful leadership tool is StrengthsFinder developed by people from Gallup. I first took the test 4 or 5 years ago. After answering a series of question they let you know your top 5 strengths from a list of 34 that fall into 4 broad categories: Strategic Thinking, Influencing, Relationship Building, and Executing. (Go here for an excellent description)

  • Strategic Thinking
    • Analytical
    • Context
    • Futuristic
    • Ideation
    • Intellection
    • Learner
    • Strategic
    • Input
  • Influencing
    • Maximizer
    • Self-Assurance
    • Significance
    • Woo
    • Activator
    • Command
    • Communication
    • Competition
  • Relationship Building
    • Relator
    • Positivity
    • Empathy
    • Includer
    • Harmony
    • Developer
    • Adaptability
    • Connectedness
    • Individualisation
  • Executing
    • Achiever
    • Arranger
    • Belief
    • Consistency
    • Deliberative
    • Discipline
    • Focus
    • Responsibility
    • Retorative

The premise behind discovering and identifying your strengths is that great leaders play to them, they don’t spend time trying to perfect their weaknesses, they build on their strengths. You will be at your happiest when you are in a position that will allow you to play to your strengths the majority of your day.

The StrengthsFinder exercise is also a great thing to do with a team. It will allow you to see where your team is strong and weak, where you have gaps that should be filled by your next hire. For example, I did this on a team I was on a few years ago and I had not a single relational gift while every other person on the team had at least one and often 2 or 3. (My gifts in order are 1. Futuristic 2. Strategic 3. Competition 4. Activator 5. Self-Assurance) My role on the team was thus crucial to the team’s success and they would sometimes defer to some of my thinking on strategic matters while I definitely did the same to them on relational ones.

If you are in leadership you have to know yourself. Discover your strengths. Find out your Myers Briggs. Read books. Go to conferences. Listen to feedback. You will lead better for it.

Global Leadership Summit

August 23, 2011 • Blog, Leadership • by
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I know the blog has been a little quiet lately. I was on vacation with my family last week and the week before I was at the Global Leadership Summit hosted by Willow Creek. The GLS is something I have attended for over 10 years. It is an annual leadership development event which draws some of the top leaders from business, the social sector, and the church together for 2 days. Past speakers include Bill Clinton, Jack Welch, and Bono.

This year’s Summit might be the best one yet, at least the best I can remember. A stellar line-up with Seth Godin, Michelle Rhee, and Cory Booker. There was some amazing surprises as well like Mama Maggie Gobran of Egypt and Steven Furtick of Elevation Church in Charlotte.

The emerging theme of the conference was that leaders need to take action. I think this is so applicable for leaders of non-profits. So often we can get bogged down by bureaucracy, lack of resources, or fear and yet the most important thing we can do is act, and act today.

I am a huge fan of leadership development and if you are a leader be sure to attend the 2012 Global Leadership Summit.