What Tools Do You Use?

The Bridgespan Group has just released the results of a new study, “Nonprofit Management Tools and Trends 2014,” which it plans to update every two years.  Patterned after research that Bain & Company has been doing on the for-profit sector since 1993, this work looks at how nonprofit leaders are using, and anticipate using, 25 different management “tools” to enable their organizations to do a better job at fulfilling their mission promises and how the tools mesh with 21 management trends.

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The 25 tools assessed in this research, defined as a “well-defined” process, framework or product that meets a specific need and has been accepted into nonprofit vocabulary, fall into one of five categories:

• strategy and goals, which included tools such as strategic and scenario planning and theory of change;
• effective organization, with such tools as succession and talent assessment and development;
• understanding the environment, including “big-data analytics” and constituent engagement;
• seizing new opportunities, involving social media and partnerships and collaborations; and
• measuring and “extending” success, with program evaluation and donor relationship management among its tools.

Truthfully, the report doesn’t reveal any surprises, but that doesn’t discredit the value of the research.  Without question, it is always better to have hard data to direct our behavior than relying on anecdotal information and what “my friend’s” organization does.   Some of the “duhs” from this research are:

• Organizations use an average of 9-14 tools a year, with a direct relationship between the size (based on budget) of an organization and the average number of tools used; nonprofits also anticipate using more tools in 2015, with the average increasing to a range of 18-21, with the smallest nonprofits thinking they will double the number of tools used to maximize management success. (The study authors point out that what organizations anticipate doing and what they actually end up doing are, typically, two different things, and point to the Bain study that has found a negative difference in the number of tools for-profits actually use compared to what they report they will).
• The top five tools, in descending order, used by 2/3 of respondents across all organizations, regardless of size: partnerships and collaborations; social media programs; strategic planning; program evaluation; and performance measurement and improvement.
• Respondents report that the tools are not quick fixes, but take time to find the right fit, develop the best implementation for their particular organization, learn how to interpret results, and reap benefits. But there is consensus that it is worth the effort: overall, respondents report high satisfaction with management tools and their results, with greatest gratification coming from the four tools identified that help organizations gain clarity about their work:  strategic planning, mission and vision statements, theory of change, and scenario and contingency planning.
• And, finally, the data show that the greater the work put into using the tools, the higher the satisfaction. Why this is the case could be the result of any number of reasons:  cognitive dissonance, a Hawthorne-type effect or a true result that greater effort produces greater results which leads to greater satisfaction at work, or other things at work.

It is important to note that these findings are based on the 481 completed surveys Bridgespan received, a mere 10% of the 50,000 surveys distributed.  And the 481 are not at all representative of the sector as a whole, with almost 60% of respondents having budgets of $3M or more and 10% having budgets greater than $50 M (compared to the sector which has a bit more than 80% of nonprofits with budgets under $1M.)   And whereas educational nonprofits make up about 40% of the general US nonprofit sector and international organizations only about 5%, the survey sample is about 20% educational but 10% international, to mention a few of key differences.

Yes, this report has some drawbacks:  the results are potentially skewed as the sample is not at all reflective of the actual sector; none of the results, even those not recounted here, are earth shattering.  But smart leaders would be remiss to ignore this report and its future iterations, if for no other reason than to see what the “hot” management tools are that colleagues are using to (great) advantage and what are the staples that have been in tool kits for decades and, therefore, shouldn’t be discarded.  Ten to 15 years ago, the sector was not talking about mega-data analytics, social media programs or design thinking but were talking about scenario planning and collaboration.   Nor back then did most nonprofits think that running an effective organization included succession plans for senior leaders and  that it mattered how the board was performing.   Now, these are among the 21 management trends driving what management tools to use.  This may just be one of the easiest ways to stay abreast.