information

Fake it til you make it?

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Are people basically divided into two broad camps – the ‘fake it til you make it’ (the marketers & promoters) and the ‘keeping it real’ camp’?

‘Fake it til you make it’ is about projecting confidence, whether real or illusionary. It’s downside is arguably in making our social groups less cohesive and less real. ‘Fake it til you make it’ can be spectacularly successful – politicians, singers/rappers and A-list movie actors being examples of this. Ironically though, politicians campaign to solve real problems, rappers rap about their gritty own life struggle to success, whilst successful actors choose to star in movies that often have themes of real strength from overcoming adversity of some kind.

Some pioneering cultures have a phrase about ‘keeping it real’. Others talk about ‘keeping your feet firmly on the ground’ (unless you work for the weather service, the airlines, the navy, NASA or Virgin Galactic).The ‘keeping it real’ camp includes support groups, social workers, therapists, counsellors, teachers, coaches, trainers and assessors of all kinds. This camp arguably advocates that ‘struggling to succeed is simply walking the journey’ is what life is about and that being honest about this struggle helps us to build important bridges with fellow human beings. In the world of entertainment, reality shows are in theory about ‘keeping it real’, although programme directors inevitably choose hyping the truth over the reality, if if means improving the viewer ratings in a competitive industry.

What about in the field of design – which camp do designers fall into? Steve jobs said ‘Design is not just what it looks like and feels like. Design is how it works.’ In product design, great and successful designers don’t tolerate fake. They are obsessed with building amazing, perfection and excellence. In contrast, fine artists can excell at illusion in their art, folling the viewer’s eye into almost believing the two dimensional is actually the three dimensional. Or that the World shown within their art reveals a far more beautiful perspective on the World outside. Musical artists and actors generally want to create real. It’s the marketing staff of their companies that want auto-tune, edit and airbrush.

Whichever of the two camps a person falls into, perhaps real performance is still the key goal and ambition the driving force. Oscar Wilde famously said ‘all of us are in the gutter, but some of us are looking up at the stars.’ Life arguably isn’t about ‘suffer in silence’, ‘know your place’ and ‘mustn’t grumble’. It is about ‘be the best that you can be’, ‘dare to dream’, ‘give yourself a break’, ‘learn from your mistakes’, ‘recognise the perfect parent does not exist’,  ‘respect yourself’ and ‘strength through adversity.’

Lastly, somewhere along the line, as we switched from selling the products of our labour to selling the services of ourselves, the ‘fake it til you make it’ mantra started to dominate, in business, in our romantic lives (as singles) and increasingly, everywhere else. How do we jolt ourselves out of that mantra?

Charities, Impact & Leverage

I recently read an interesting interview on the New Philanthropy Capital website (www.thinknpc.org), with David McCulloch, the Chief Executive of the Royal Voluntary Service, talking about charity impact and some future trends for UK charity funding.

http://www.thinknpc.org/blog/the-time-is-now/?utm_medium=email&utm_source=New+Philanthropy+Capital&utm_campaign=4722080_3nd+eshot+Annual+Conference+Oct+2014-+September&dm_i=UL9,2T7KW,5JWQUY,A7PDC,1

Mr McCulloch said that ‘the challenge (of charities measuring and evaluating the effectiveness of what they do) is really what to measure and how.’ My own take on this is that impact is a three legged stool – impact outputs, impact outcomes and impact communication. Charities who want to be effective, therefore need to report not only impact outputs, but stretch to reporting impact outcomes as well. And unless they are able to communicate impact back to donors and to potential donors, as well as their own staff & other stakeholders, then a significant portion of the value of impact measurement is lost. It follows that a charity won’t be perceived by donors/potential donors to be as effective (as it could be), if it manages what it cannot measure, if it prioritises what it cannot measure and if it bases its goals & strategies on something it cannot confidently measure. Perhaps some future charities will design their scope around being impact-led, but only where impact can be confidently measured.

Arguably, impact communication, like political speeches, is as much about reaching heads as reaching hearts.  Impact communication and impact outcome-reporting also needs to overcome two challenges. Firstly, of an extended value chain (where the charity donor or ‘principal’ providing the funding, perceives themselves as being too many steps removed from beneficiary results in the field). And secondly, of a concurrent value chain (in a disaster-relief setting, where multiple charities provide different forms of aid to the same beneficiaries, with multiple charities jointly saving lives and rebuild societies, but making discrete impact measurement more problematic).

New Philanthropy Capital, in the same interview stated that ‘charities have to work out ways that are proportionate to their size and resources.’ Mr McCullock’s response was that ‘it’s about measuring the thing that will best demonstrate your impact’ and that ‘new services are sometimes the best place to start.’  My take on this is that perhaps charities need to use leverage more routinely to avoid the constraints of their size and resources, to achieve the impact they seek. Does enough time get spent by charity senior management examining what and how leverage can be used to achieve charity goals? Furthermore, for an established charity, rather than measure impact on new services as they are developed, why not re-define all services in the context of what impact can be measured, since arguably impact is to charities what share price is to companies.

For substance-abuse charities, one aspect of leverage is examining how existing sufferers can help beneficiaries, since their credibility (deterrence and rehabilitation) is probably higher than for charity workers. Can sufferers help other sufferers, can early-onset sufferers help late-stage sufferers, can rehabilitated sufferers help early-onset sufferers? Perhaps impact is increased by using leverage, since rehabilitated and early-onset sufferers can gain new skills and strengthen their own lives as they help those less fortunate. The role for charity workers in the same scenario? Act as leaders and guides, supplying information and logistical help to the rehabilitated and early-onset sufferers helping others.

What about leverage in fundraising? Are charity resources best used by employing ‘chuggers’ to randomly collect small change from people on the streets? Why not instead invest on online business models to profile and solicit funding from wealthy individuals instead, linked to impact measurement and compelling storylines that target both head and heart?

What about exploiting charity leverage using a different business model – should small charities switch to mimicking SME start up business models and digital start up models, with light governance structures, global reach, low to medium upfront fixed costs and very low variable costs?

Lastly, what about exploiting charity leverage by revisiting incentive theory (principal-agent contracts)? Fundraising perhaps needs to create innovative contracts that recognise moral hazard (hidden action) and adverse selection (hidden information) issues for donors and potential donors. Such contracts could explicitly include impact reporting in the terms of the contract, in ways that reassure donors and increase total donor funding. In designing such contracts, charities would have to give more thought to which contracts are one-off or repeat game, which principals are risk adverse (and how), and what additional funding they could get from donors as information disclosure rents.