Results tagged “metrics” from Uncivil Society
A town sign provides a classic example of how numbers can add up to nothing.
In the last major interview before his death, John Lennon addressed the question of why he refused to join a proposed Beatles reunion charity concert. It's a fascinating inside look at the business of benefits circa 1980:
Here's a taste, part of a longer assessment of recent work in developing reliable statistics, more efficient management and a shift from almsgiving to enterprise. There's a direct line from this to the rhetoric of, say, Muhammad Yunus:
Almost everything about marketing is the opposite of the typical manager's approach to running a business. Marketing is illogical and definitely not analytical. Marketing is intuitive and holistic.
We're concerned, however, that this message is being ignored by the marketing community, who seem to be drifting from the right to the left -- from a right-brain approach to a left-brain approach. . .
Take leadership, for example.
Nothing about a brand is more valuable than its market leadership. If a brand loses its leadership, it loses its most significant advantage in the marketplace. That valuable position is worth protecting. And advertising is the best way to protect it. Nike in athletic shoes. Heinz in ketchup. Rolex in watches.
Suppose a leading brand spends $50 million a year on advertising. And suppose that brand's market share doesn't budge at all. Was that $50 million wasted? Not necessarily.
Advertising as insurance
Advertising is more like insurance than it is like an investment. What's your "return on investment" of a five-year term life insurance policy if you don't die?Zero.
But, of course, you don't buy an insurance policy to make money. You buy an insurance policy to protect your family in case you die.
The overall practice of marketing is not mathematically based, although subsets of the discipline may be: direct marketing, research, media selection.
Marketing is certainly not 70% mathematics. It's not even 1% mathematics. (As a math major in college, I don't think I've ever used integral calculus or differential equations or any other mathematical concept in our marketing practice.)
Marketing is a discipline that can only be learned by exposure to marketing case histories over an extensive period of time.
Mathematics is logical. Marketing is not. That's why marketing is so difficult to learn.
(Cross-posted from JustMeans)
Sean Stannard-Stockton has provided an excellent overview of The Center for Effective Philanthropy's three basic principles of, well, effective philanthropy:
1. Clear goals;
2. Coherent, well-implemented strategies;
3. Relevant performance indicators.
If you come to charity by way of the business world, this formula no doubt sounds familiar. In fact, it's the staple of many an intro entrepreneurship class--including my own--as well as the foundation of leading how-to books for start-ups.
Which isn't to say it's bad advice--quite the contrary. Whether you're running a charitable foundation or a social business funded by earned income, these three basic principles are essential for success.
However, that doesn't mean they're in themselves sufficient to succeed. As important as these principles are, the fact remains that a charitable venture can be faithful to all three and still end up a failure--not in spite of its goals, strategies and performance indicators, but because of them.
The problem isn't that these are business principles inapplicable to charity--that's a false dichotomy, as unhelpful as saying that the mundane rules of meter and rhythm are irrelevant for creating sublime poetry. Rather, the danger lies in reducing any corporate environment--whether charitable or commercial--to a set of tasks and rules.
Formulae such as this fall short of addressing the relation between part and whole. On one level, they tend to frame a social issue in such a way as to isolate it from its broader social context. In so doing they create micro-solutions that can actually exacerbate macro-problems, if not fail to reach the target goal itself.
Marshall McLuhan was wont to say that the specialist is someone who never makes small mistakes while moving toward the grand fallacy, and we tend to see a similar phenomenon in charity. As I've said elsewhere, it's like telling ourselves that we'll be happy if we reach our target weight--we can reduce philanthropy to a clear goal with coherent strategies and relevant metrics, and yet at the end of our diet find ourselves twice as unhappy as when we began.
This brings me to a deeper problem with such principles--namely, their insufficiency for creating an environment that relates to us as human beings. We consist of an array of transactional rules, from blood flow to heartbeat to language norms to systems of exchange. At the same time we are all more than that, from the collectives we inhabit to our inner sense of self. A business with a sterile mechanistic culture breeds dissatisfaction and in so doing generates systemic inefficiencies; a charity even more so, given its stronger transformative valence.
This, in short, is the irony of our present models of effective charity: the more we reduce charity to efficient transaction-based problem-solving, the less efficient charity is likely to become. For such principles to function as we'd like, we need to understand how they work together to create something more.
As has long been the case with comics, a charity benefit plays a central role in the Adam West & Burt Ward bio-pic Return to the Batcave. In the set-up, Adam West receives a last minute invite to a charity event and offers an apt reflection that, apropos of his Batman tv series, works on multiple levels.
The more you buy, the more you believe--Macy's offers a mercantile symbol of metrics and meaning.
Bruce Nussbaum offers a useful lesson for social entrepreneurs who think innovation & metrics are inherently successful. Key excerpts:
Please read the testimony of ex-Federal Reserve Chairman before Congress on why the financial innovation of recent years, which he championed, failed so utterly. It is important to understand this failure of metrics, this failure of modeling. . . .
Greenspan: " . . . A Nobel Prize was awarded for the discovery of the pricing model that underpins much of the advance in derivates markets. This modern risk management paradigm held sway for decades. The whole intellectual edifice, however, collapsed in the summer of last year because the data inputted into the risk management models generally covered only the past two decades, a period of euphoria. Had instead the models been fitted more appropriately to historic periods of stress, capital requirements would have been much higher and the financial world would be in far better shape today, in my judgment.â€
Got that? [T]he products of financial innovation weren’t stress tested in the real world properly. It was bad innovation methodology.
It's a big reason I get torqued when SE-types criticize me for calling attention to the movement's weak points--if you don't factor in the negatives you are on your way to destruction.
The KLD Blog offers this insightful post on what names reveal--and obscure--about contemporary business, including social enterprise. There's a bit of fun with companies that really should have a better grasp on the significance of such words as Harbinger, Tosca and Cerberus, but the real kicker comes with the social investors:
The Children’s Investment Funds: Its name reflects its commitment to give some of its profits to charities aiding children. Its recent, successful battle for board seats at the American freight railroad CSX showed not a hint of children’s games. The issue appeared to be whether current management is putting too much into capital improvements and too little into its shareholders’ pockets.
Over the coming months, we’ll learn whether maximizing CSX’s value to shareholders, and the resulting charitable donations, will outweigh the consequences for those depending on rail service in America’s southeast – and the children of CSX’s stakeholders.
“Activist Shareholdersâ€
Many articles refer to The Children’s Investment Funds and their share value-maximizing peers as “activist shareholders.â€
How long ago it seems when that phrase applied only to environmentalists, Ralph Nader organizations and the Interfaith Center on Corporate Responsibility. Twenty years ago “activists†were shareholders who used the proxy process to raise issues such as South Africa and global warming. Those shareholders continue to play leading roles in corporate accountability.
Twenty years ago, funds engaging in hostile efforts to replace directors were called “corporate raiders.†But yesterday’s raiders are today’s activists.
Social enterprise is at a crossroads. One path leads to an all too common fate for elements in a mimetic cascade, from slang and viral video to civil society and settlement houses—mass diffusion followed by collapse. Yes, the social enterprise movement will persist to varying degrees, from a cadre of adherents to traces of its characteristic language. It’s also possible that certain policy goals embraced by the movement may thrive due to factors largely outside the movement itself, such as the effect of rising oil prices on funding for alternative fuels. However, the movement defined by remaking the nonprofit and for-profit worlds in the image of social ventures will perhaps dramatically recede, a twenty-first century heir to hippies, Beats and Fourierites.
But this is not inevitable. The core weakness of the movement to hybridize is not that it strives to emulate sustainable systems, but that it does not provide a coherent reason to integrate seemingly disparate values. Infusing nonprofit rhetoric with the language of for-profit business—“metrics,†“ROI,†“capital marketsâ€â€”threatens to betray the very essence of the nonprofit as a space apart from commerce. At the same time, grafting a charitable ethic onto for-profit corporate enterprise seems inconsistent with the law and logic of free market capitalism, in which social good emerges from the pursuit of selfish ends.
Rather than dismissing so-called traditional organizations as obsolete, the social enterprise movement would have a sustainable long-term impact by highlighting the ethical complexity of existing corporate constructs—in short, every enterprise is a social enterprise, just in different ways. In this regard social enterprise is a revolution, just not in the sense of being wholly new. Rather, it is a returning—the literal translation of the Latin revolvere—to the dynamic of corporate life itself.
To understand why, we need to change how we think about corporate form. Capra’s reductionistic image of corporate formalities—the soulless rules of corporate governance and asset allocation—unites all parties in the social enterprise debate, even as they differ on the value of infusing this dead letter with a social spirit. What no one realizes is that the programmatic code of both nonprofit and for-profit corporate identity functions as a hybridizing algorithm.
- Back to the table of contents
- Complete article: Is social enterprise sustainable?
Social enterprise is charity’s Web 2.0—a would-be revolution as open to interpretation as a Rorschach blot. If commentators agree on anything in regard to social entrepreneurship, it’s the lack of a consensus as to what the concept means.
For example, Oxford’s Alex Nicholls notes that “the definition of social entrepreneurship is often seen as contested and unclear,†although he adeptly reframes this as a “dynamic flexibility†that is the “basis of [the movement’s] extraordinary impact (10). Professor Marthe Nyssens similarly observes that social enterprise “remains a very broad and often quite vague concept,†particularly in the U.S.. While her European research group had distilled its own preferred definition—citizen-initiated community benefit with a limits on material benefit to investors—she expressly disclaims any effort to impose “prescriptive criteria.†Instead, the definition is at best an attempt to describe an “ideal-type†within a “galaxy†of groups (10).
It is tempting to assume that the concept’s vagueness is a feature, not a bug, but as a programmatic strategy this is not without its risks. As NYU’s Paul Light has observed, the lack of an agreed-upon definition of social enterprise is likely to hurt the movement’s chances of long-term success. At the very least, he argues, measurement of the growth and impact of social enterprise will be impossible without a shared understanding of precisely what we’re supposed to measuring—an ironic situation for a field that exhorts nonprofits to use quantifiable metrics.
- Back to the table of contents
- Complete article: Is social enterprise sustainable?
Via Radar Online's Secrets of a Hipster Hooker:
One of the guys took a seat next to Heather and, after some small talk, disclosed that he had just left his wife. "I'm looking to spend my money," he said. He was fiddling with a cash clip stuffed with $100 bills. She accepted his business card and later Googled him. The man turned out to be a honcho at a major investment firm; the New York Times had profiled a charity he had started.
The next morning she called his office. "I got shaky when he answered," she recalls, "but when he figured out it was me, it was better." That night she went to his apartment in Trump Tower. "It was pretty straightforward. He offered me $3,000 to let him fuck me. I almost leaped on him."
Read the whole article for a rather colorful analogy to charitable fundraisers and a blurb for sex worker charity.
Grant McCracken offers a must-read look at the tribalistic schizophrenia of mainstream corporate analytics. Some folks are redoubling behind quantitative metrics; others abandoning them for qualitative assessment. Key exchange:
I was talking to a guy who does marketing research for a big brand. He said, dismissively, "
"We no longer collect any numbers. Things change too fast. We don't know what to measure. We do ethnographies and stuff...to find out what's going on out there."
Last night I was talking to a graduate of the Sloan business school at MIT. He doesn't think about something unless he's got the numbers.
It's weird. It's seems to me that the corporation is becoming more quantitative and more qualitative.
It ties into a recurring problem in social enterprise--a hyper-simplified idealization of how business actually works.
The Darwinian marketplace reigns supreme at the otherwise tranquil Kripalu Center for Yoga and Health, as programmers look to material ROI in determining which spiritual teachers to hire:
The course listings can seem almost like a collection of randomly combined buzzwords: “path,†“wellness,†“Rumi,†“goddess,†“awakening.†But deciding what goes into those catalogs is a process that leaves little to chance or flow. With one hand firmly on the bottom line and the other grasping for the spiritual firmament, the people who run Kripalu are engaged in a sort of permanent yoga stretch.
“We’re constantly re-examining,†said Kripalu’s president, Ila Sarley. “What are the needs? What are the needs of the market, and what are the needs of society?†In the end, everything comes down to what will bring bodies in the door. “What we’re looking at,†Ms. Sarley said, “is what will someone pay to take a vacation to do.â€
The sure thing: celebrities.
Not so good a bet: do-goodery.
A program on “Conscious Kitchens†featuring the cookbook author and food activist Francis Moore Lappé was poorly attended. “Some of our more socially conscious programs tend not to draw as well,†Ms. Sarley said. “Probably we should have focused more on foodies and gourmet.â€
It's an important lesson to keep in mind--far more people will say they'll buy a socially conscious product or service than will actually lay down the cash.
Just like baby boomers think they discovered sex, today's do-gooder revolutionaries believe that they're first to revolutionize charity by making it more business-like. But if you do a little historical digging, you soon realize that social enterprise is just the latest variation on a recurring theme.
Case in point: this article from Mad #72, available on this essential DVD set from NYC's own GIT Corp. The article is response to the then-current trend of remaking charity in the image of commercial business, complete with outcome metrics, efficiency-maximizing strategy and Madison Avenue marketing campaigns.
The earlier movement's most notable effect: the enactment of the public charity/private foundation legal so-called reforms that are the bane of today's social enterprise start-ups. We're headed in a similar direction today, but we could still avoid it--and the the best place to start is by taking humor more seriously as a cultural barometer.
From today's LA Times, old news to al Qaeda watchers but an instructive reminder nevertheless:
Like newly arrived fighters in Iraq today, recruits in the 1990s filled out applications that were kept in meticulous rosters. The shaggy, battle-scarred holy warriors of Afghanistan were micromanagers. They scrupulously documented logistical details -- one memo accounts for a mislaid Kalashnikov rifle and 125 rounds of ammunition.
"I was very upset by what you did," Atef wrote. "I obtained 75,000 rupees for you and your family's trip to Egypt. I learned that you did not submit the voucher to the accountant, and that you made reservations for 40,000 rupees and kept the remainder claiming you have a right to do so. . . . Also with respect to the air-conditioning unit, . . . furniture used by brothers in Al Qaeda is not considered private property. . . . I would like to remind you and myself of the punishment for any violation."
A stern Egyptian bean-counter set the austere policies. Mustafa Ahmed Al Yahzid, a 52-year-old trained as an accountant, ran the network's finance committee between 1995 and 2007, said Rohan Gunaratna, author of "Inside Al Qaeda."
Although Al Qaeda has endured thanks to a loose and flexible structure, its internal culture has nonetheless been surprisingly bureaucratic . . .
The documents . . . depict an organization obsessed with paperwork and penny-pinching . . .
"He is known as being a very stringent administrator, who keeps tight control of Al Qaeda's finances," Gunaratna said.
Accountability, metrics, efficient mission-centered budgeting--hey, what's not to like?
Cultural anthropologist Grant McCracken saw this sign on MetroNorth and meditates on why it doesn't work:
Accountant as super hero. Really? I mean, really? If there is a creature in the universe less like a super hero, it's an accountant. Or so the stereotypes tell us. Totally unfair, of course. And for all we know some accountants live lives of real adventure. Enron accountants, do you think?
So it's wrong to generalize this way, but it is also probably wrong to advertise...this way. Part of the problem is that this ad is trying too hard. A good ad is an act of metaphor. It transfers meaning from a world we know to a world we don't. In this case, it invites us to transfer what we know about superheroes to what we know about accountants. (This is straight out of Aristotle.) But some acts of transfer are more possible than others.
But perhaps I am missing the "premise." In the strange world that is Metro North, a new physics may apply. In this world, superheros are just little less heroic. Accountants a lot more grand. And the two are close enough, transfer is possible.
To see this transference played out in the real world, one need only look to the sandbox in which I play every day: social entrepreneurship. We tell people exhilarating stories of how they can create transcendent personal meaning and disruptive social change . . .
By amping up ROI and implementing rigorous metrics.
Now these things have their place, but the core mythology of social enterprise is, pardon the pun, unsustainable. It makes about as much sense in the long term as a flying CPA.
Update: Speaking of accountancy . . .
Bummed out by the corporatization of charitable culture? Perhaps the antidote lies in music and dancing puppets.
White Courtesy Telephone nails it. Once I get past the current daily grind, I'll have more re my own thoughts on "a proper scientific and philosophical grounding" for metrics and social enterprise.
The number of people practicing evaluation without a license and without a proper scientific and philosophical grounding in the subject is, in my view, a scandal. Worries about evaluation, engendered in part by logic models the length of whale intestines, have become the math anxiety of the philanthropic world.
My general thesis—if I could call it that—is that from the perspective of somebody like Mr. Walker whose organization has been commissioned to conduct lucrative, large-scale evaluations of social programs (lucrative by nonprofit standards), the Impact Revolution might seem like a good thing. But from the ground, from the perspective of many people working in community-based organizations, this so-called revolution has brought with it new sources of irritation, new ways of adding meaningless make-work to already overburdened nonprofit staff members.
It has not been a people’s revolution, in other words, but rather one championed by elites—like myself, I’m afraid— unable to see far enough beyond our own measuring sticks to understand the limitations of formal evaluation techniques, and the trade-offs in staff time and other resources that these formal techniques require.
