Driving Performance in Education
Posted September 28, 2010 2:50 PM by Ted Jackson
Uncommon Schools just announced its 2009-2010 education results. For those of you that do not know of Uncommon, they are a charter management organization that manages 24 schools with almost 5,000 students. Their schools operate in New York City, Newark, NJ, Boston, and upstate New York. They focus on creating a rigorous and joyful education environment, where the teachers can focus on teaching and most administrative functions are managed centrally. Like many charter organizations and public school reformers, they believe that all students can achieve, regardless of their background, race, or economic circumstances.
Secrets of Success: How to Improve Your Charity Ranking
Posted September 23, 2010 3:50 PM by Jeremy Sutherland
No matter what size your organization - whether you have major corporate donors or a small army of individual donors - sponsors are the ones who keep the lights on and the doors open. These sponsors expect results and one place they look is Charity Navigator. Tips about improving your ranking are continued below.Every dollar counts and your sponsors are looking to get a solid return on their charitable investments. If your non-profit can show results – and can show that you are wise stewards of the money donated to your organization – you're more likely to see steady or increased funding. Non-profits that cannot demonstrate key metrics of success are likely to lose sponsors and face drastic cuts in their services. One of the most influential ratings services for non-profits is Charity Navigator. This website evaluates thousands of non-profit organizations using financial data to point out which organizations are financially sound and which ones are less effective. If you want a way to excite your sponsors, getting favorable ratings on Charity Navigator is a good way to start. The Balanced Scorecard methodology can be helpful in improving your organization's performance in the areas that are most important to the Charity Navigator rankings. Some of the specific areas reported are detailed below. These areas do not capture your entire business model but it's worth comparing and possibly aligning your goals to maximize your online ranking. Fundraising efficiency: Charities that are efficient are able to raise substantial funding without excessive marketing costs. How does your non-profit stack up? Are you devoting too much of your budget to fundraising, or paying big fees to "for-profit" fundraising organizations? This could drive down your ratings on Charity Navigator, and could also be a sign of potential problems for your organization. Program expenses: Efficient charities are able to devote the bulk of their budget to spending on programs and services – the day to day mission that is the reason the organization exists. If a non-profit is devoting too much money to non-program expenses like conferences and auxillary expenses, it will fall in the ratings. Administrative expenses: While it's important to hire and retain good people to run the organization, non-profits need to keep their administrative expenses at a reasonable level. Charity Navigator measures the overall administrative fees as a percentage of each organization's budget, and compares this percentage to benchmarks at peer organizations. Organizational capacity: This category measures how successfully a non-profit has sustained its programs and services over time, and evaluates the organization's financial strength and prospects for continued success. In this category, slow and steady performance are ideal. Revenue growth versus program expenses growth: How fast is your non-profit growing? How much money do you have coming in each year, and how much of this new money are you spending on additional programs and services? High-capacity charities know how to grow their services in proportion to increasing funding. This measure attempts to show if an organization has the people, systems, and processes in place to successfully convert new money into expanding their mission. Working capital ratio: This is a measure of a non-profit's financial strength, calculated by dividing the organization's amount of working capital by its total annual expenses. This is a way of showing how long the charity could sustain its current programs without new revenue – it's kind of like calculating a charity's "rainy day" fund; even if no new money was raised, how long could the charity stay in business? Now that you have a better understanding of Charity Navigator and how it evaluates non-profits, you can use the Balanced Scorecard methodology to focus on the objectives and measures that motivate your organization, predict success, and excite your sponsors too! We have considerable experience helping non-profits become more aligned and effective organizations. Should you have any questions or need a trusted advisor along the way - we are just one call or email away!
Plan, Perform, Perfect
Posted September 15, 2010 8:14 AM by Ted Jackson
The city of Charlottesville, VA is in the process of rolling out a performance management and measurement initiative. This initiative is managed by the Office of Budget and Performance Management and is called P3 within the city. It stands for "Plan, Perform, Perfect."
My Balanced Scorecard and the Theory of Constraints
Posted September 9, 2010 6:55 PM by Jeremy Sutherland
"The Goal" by Dr. Eliyahu Goldratt, is a best-seller in the management sphere and directly relates to an organization's understanding of its own Balanced Scorecard. One interesting thing about "The Goal" is that it's actually a novel – you might even call it a "business thriller." Although it explores in-depth academic theories, it does so via an engaging fictional story.In the book, the main character Alex Rogo is promoted to be a plant manager and quickly given an ultimatum: improve productivity in three months, or the plant will be shut down. As the book progresses, he goes through a dramatic process of reinventing the plant, rethinking his assumptions about how the plant's work is mapped and measured, and finds ways to align previously conflicting demands. He accomplishes all this by listing the many garbled metrics he is responsible for and then begins to analyze each one for opportunities. One of the important management principles explored in Eli Goldratt's book is his idea of the "Theory of Constraints." This theory holds that within any organization, there are several key constraints preventing that organization from achieving optimal performance. In the manufacturing world, throughput and quality are key. In service organizations, throughput is still key, but people are the focus and customer service is analogous to quality. In a service oriented business, you want to find the constraints that are preventing the organization from serving more customers with an ever higher level of satisfaction. Similar to Balanced Scorecard, the Theory of Constraints also uses the idea of "mapping" to create a visual representation of the organization's tactical objectives and develop a clear course from the "present reality" to the "future reality." The Theory of Constraints helps identify the "Core Conflict" at the heart of a problem (similar to the idea of root cause analysis), and helps leaders realize ways to adapt their policies, methods and metrics to achieve the desired changes in their organizations. Ultimately, by identifying the constraints, leaders can then restructure their organizations around the constraints. Constraints are not limitations, they are road signs, showing the directions that an organization can turn and adjust. One of the biggest challenges in changing an organization is overcoming resistance to change – even if top management want to make a change, the people directly involved might have other ideas. Sometimes people like the way a certain process is done – or they fear the possible implications for their jobs. Other times, there might be leaders or peers who have conflicting agendas or competing goals, which can result in resistance to change. By incorporating the Theory of Constraints to better understand the road blocks Balanced Scorecard, and organization is much more likely to succeed. Ascendant has decades of combined experience identifying and overcoming key constraints. If your organization would like more information or help on the subjects, please feel free to contact us!