Monthly Archives: March 2013

Measuring what matters: a guide to calculating social return on investment (SROI)

measuring_success-300x214In a previous blog post, I introduced the concept of Social Return on Investment, or SROI. Developed by the New Economics Foundation (NEF), SROI is a tool that helps non-profits measure the impact of their programs and services in economic terms. Below I’ve created a fictional case study that illustrates how a non-profit called The Toronto Literacy Foundation determined its SROI. Please note that I based this case study on the NEF article Measuring social impact: the foundation of social return on investment (SROI).

Case Study: The Toronto Literacy Foundation

Founded in 2003, The Toronto Literacy Foundation (TLF) is a small non-profit that delivers literacy programs to elementary school students in Toronto, Ontario. In response to a major government research study linking high school illiteracy to high school drop-out rates, criminal activity and unemployment, the Board decided to create a three-year pilot program for high school students. Board members initially raised $146,000 for the pilot program from four donors: two private philanthropists, one corporation and one foundation.

The organization developed what the NEF calls a theory of change, which is a statement about the big picture impact the program will have. TLF’s theory of change was:

High school students with strong literacy skills graduate high school and contribute socially and economically to their communities.

Stakeholder Analysis

Once funding was secured, the TLF undertook a stakeholder analysis that helped the organization gain key insights into how they were going to define success and communicate it to their various stakeholders. The stakeholder analysis asked the following questions:

  1. Who are the people that matter to us and what are their objectives?
  2. How should we prioritize our stakeholders?
  3. What do our stakeholders determine as “success”?
  4. What metrics can we use to measure success?
  5. Are our current internal and external communications efforts targeting the right stakeholders with the right messages via the proper channels?

Developing Key Performance Indicators

Guided by the stakeholder analysis and benchmarking data gathered from comparable organizations or programs, the TLF identified short and long-term key performance indicators (KPI’s). Short term or “tangible results” included things like the number of students enrolled in the program. Long-term indicators looked at the impact of achieving these goals over time, such as an increase in literacy that had a positive effect on learning outcomes or employment opportunities.

Key Performance indicators, March 24, 2013

Once the TLF identified their KPI’s, they adjusted the outcomes to take into account what would have happened irrespective of the program (such as students who would have graduated or a found a job regardless).

The tool below helped the TLF estimate that by year three, 8,272 students will have gone through program – which works out to a financial investment of just over $17 per student – little more than the price of a movie.

SROI tool March 24, 2013

To calculate their SROI, the organization looked at the economic impact of the program on outcomes like the increase in student’s incomes as they succeeded in finding employment, a reduction in government social assistance and crime related costs. Their research was informed by government statistics, surveys and the help of a public policy consultant.

These tools helped the TLF improve ongoing program management and evaluation and communicate the value of the program to their stakeholders in a relevant, useful and transparent way.

Conclusion

From the outset of the new high school literacy program, the TLF identified the KPI’s that would be a priority for their internal and external stakeholders. They created a ”theory of change” that they could substantiate with their SROI evaluation.  As a result, the TLF was able to communicate powerful, transparent and relevant stories about the program and its social and economic impact on the community.

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Interested in learning more about measuring SROI?  Here are some links to some great resources:

London Business School and the New Economics Foundation. (2004) Measuring social impact: the foundation of social return on investment (SROI). http://sroi.london.edu/Measuring-Social-Impact.pdf

Delta Project. (2008) Calculating Cost-return on investments in student success. http://www.deltacostproject.org/resources/pdf/ISS_cost_return_report.pdf

Lessons learned from the Yahoo! employee memo

On February 22, disgruntled Yahoo! employees leaked a staff memo that ironically began with “YAHOO! PROPRIETARY AND CONFIDENTIAL INFORMATION — DO NOT FORWARD” to Kara Swisher, Co-Executive Editor of AllThingsD.com (owned by Dow Jones).  The memo explained that executive management was bringing an end to Yahoo’s work-from-home policies because they “want everyone to participate in our culture and contribute to the positive momentum…and that starts with physically being together.”

The memo quickly went viral and caused an uproar on social and news media sites. There are a few reasons why it caused such a stir. The first is its dictatorial, condescending tone, which is at odds with the values and philosophy Yahoo! is trying to promote, resulting in a “do what I say, not what I do” approach to employee communications. Another is its lack of empathy for the employees effected by this change in policy.

The result is a revealing gap in trust between management and employees. A comment on AllThingsD by Angus Swan explains the memo speaks to “a tension and distrust between management and rank-and-file”:

Angus Swan Comment AllThingsD.com re Yahoo

Further compounding the problem is that Yahoo! has remained strangely quiet about the issue, leading to further speculation and opinion from mommy bloggers accusing Yahoo! CEO Marissa Mayers of setting women back 20 years, to business writers speculating that employees are being called in to be examined pre-layoffs, to Richard Branson’s comment on the Virgin company blog that stated: “To successfully work with other people, you have to trust each other. A big part of this is trusting people to get their work done wherever they are, without supervision. “

D’Aprix and Fagan-Smith write in Open Communication Cultures: Best Practices In A Changing World, “Internal communication is the top factor in determining a CEO’s reputation, which in turn is critical to shareholder value (Burson-Marstellar). The reaction to this memo poses a significant reputational threat with potential consequences for Yahoo!’s bottom line. Rather than remaining silent, Yahoo! should have immediately gained control of the discourse by employing the following approaches:

1. Empathise and reassure those affected: recognise that employees who are affected by this change in policy may need additional supports. Ensure them that their jobs are safe and that executive management see them as key to Yahoo!’s success.

2. Acknowledge responsibility: the dictatorial tone of the memo is not congruent with Yahoo!’s values of collaboration and innovation. Admit the disconnect here and assure employees that Yahoo! will learn from its mistakes and do better next time.

3. Open the communication channels: As Sarah Perry writes in her article Internal Crisis Communications, a company’s employees are “perhaps your most important ‘stakeholders’ during a crisis. Poor internal crisis communications can undermine all your efforts to manage a crisis externally, and the lack of trust, low morale, employee turnover and poor customer relations that result can compound the issues you face.” Creating a more open communication culture and encouraging feedback from staff about the work-from-home policy and other HR issues could help create a foundation of trust that Yahoo! can lean on when a true crisis hits.

After all, employee trust is not something that can be bought with an iPhone5 or free food; trust is earned.

What do you think of the memo and the resulting fallout? How do you think Yahoo! should have responded?

workban comic xlrg

Towards an “optimized” state of mind

In his new book Optimize: How to Attract and Engage More Customers by Integrating SEO, Social Media, and Content Marketing, Lee Odden, CEO of TopRank Online Marketing offers a practical approach for companies and business leaders to “integrate search and social media optimization with content to boost their relevance and visibility for potential customers” (Lee Odden, Optimize).

The book is organized into three parts or phases:

Phase 1: Explores changing customer preferences and behaviors with search, social media and content and what that means for your online marketing strategy.

Phase 2: Explains online content marketing tactics including developing buyer personas, social networking, content marketing and measurement.

Phase 3: Focuses on scale and the processes and training you’ll need to grow and maintain an integrated social media, SEO and content marketing strategy.

Each part of the book is structured to help business leaders build a foundation for a strong and integrated SEO, social media and content marketing strategy. Statistics and case-studies help illustrate Odden’s points, and he refers to media tools such as Radian6, wordtracker and Up Close and Persona that can help businesses reach their goals.

The strength of the book is in the emphasis it places on the importance of content as the basis of search. Odden explains that in order to attract, engage and inspire customers to buy, marketers must understand how customers like to discover, consume and act on information – at all stages of the buying process. He advocates strongly for “knowing thy customers” and developing “customer personas.”

A concept originally developed in 1994 by Angus Jenkinson, personas are “fictional characters from different segments of your market” (Lee Odden, Optimize). Odden makes a very clear and strong case for why personas, as opposed to keywords, should guide your content creation and optimization efforts. After all, “keywords don’t buy products and services—customers do” (Lee Odden, Optimize).

I also like Odden’s philosophical approach to the topic.  He begins the book with a personal story about wanting to take his public speaking skills to another level, and realizing he could apply the same principles found in Optimize to improve his public speaking skills.  He explains that this experience taught him that anything can be optimized for better performance, and that optimization is as much a state of mind as an approach to integrated search, social and content marketing.

On the more critical side, despite being written for “the masses”, I found the content a little complex and the area covered quite vast. I felt that I lacked some of the conceptual framework for the material that would have led to a fuller learning experience.

This leads me to the main issue I had with Optimize: one of writing style. Optimize reads as if it has been optimized for search, perhaps because some content was originally written for online audiences on the TopRank Marketing blog. The result is writing that is at times mechanical and lacking in a more human touch. To an extent, Optimize isn’t fully “optimized” for print audiences.

Despite this, the book is full of gold nuggets of information. I would recommend it and will return to it again to uncover more of those nuggets.

Zappos: an open communication culture that inspires employee engagement

Tony Hsieh, CEO Zappos

Tony Hsieh, CEO Zappos
Source: http://www.businessinnovationfactory

I recently read an article by internal communication gurus Roger D’Aprix and Barbara Fagan-Smith called Open Communication Cultures In A Changing World. In a nutshell, the authors look at the positive effect of open communication on bottom line business results. They define an open communication culture as one “in which non-confidential and non-proprietary information is actively and freely shared with both employees and interested stakeholders with the leadership’s blessing and proactive participation.”

This made me think about what companies like Zappos are doing right with regards to internal communication. Established in 1999 and bought by Amazon in 2009 for $1.2 billion, Zappos is a $1 billion online retail business with 1,400 employees. Despite its impressive growth, Zappos maintains an open communication culture that inspires employee engagement. For example, Zappos publishes an annual “Culture Book” that’s “a collage of unedited submissions from employees within the Zappos Family of companies sharing what the Zappos culture means to them…it reflects the true feelings, thoughts and opinions of the employees.” Zappos also encourages employees to get involved on the company’s social networks, and hosts a micro-twitter site for staff. Zappos CEO Tony Hsieh actually posts some of his correspondence to employees on Twitter. It can’t get more transparent than that.

Do you think that open communication cultures have a positive influence on bottom line results? Are open communication cultures more effective at handling the various crises and challenges that come their way? How can closed communication cultures become more open?