Demand Better: A New Quality Framework for Nonprofits

What is Quality?

Before proceeding to answer the question, ‘What does managing quality mean’, it is important to develop the concept ‘quality’ for a TSO. It is also important to define the scope of the inquiry; in this essay the focus will be on establishing quality of an organisation, rather than the quality of individual process say quality HR, communications, or services. Starting from the position that any approach that seeks to construct a rigid framework encompassing the operations of a charity with a ‘high granularity’ would be needlessly complex and unfeasible, an attempt will instead be made define the hallmarks of a quality organisation.

The distinction between quality for a private enterprise and quality for a TSO is an important one since as Reeves and Bednar [1994 p419] argue
“the definition of quality has yielded inconsistent results…the concept has had multiple and often muddled definitions”, and the third sector lacks some of the more immediate feedback mechanisms for judging quality: companies that produce poor quality products, in the absence of a monopoly, are punished by the market and forced to improve or fail through competition.

However the definitions of competition for the private and third sectors differ, and many TSOs do exist as monopoly or subsisdised suppliers to particular beneficiaries. By drawing out what quality means and setting this definition against the concepts and axioms of the third sector we can discover how a charity can be more effective.

What is ‘Quality’ for the Third Sector?

Howarth and Gibson [2006] offer a useful précis of some differing views, which can be distilled into two, more fundamental, concepts of quality: a subject’s (product, person, organisation) performance with respect to tangible standards (objective), or the collective perceptions of how the subject satisfies various needs or aspirations (broadly subjective) [Howarth and Gibson 2006].

Zhang’s [2001] ‘map of quality perspectives’ builds on Garvin’s [1986] Five Classifications of Quality Definitions, however only four of Garvin’s Five classifications can be seen to usefully relate to the Voluntary Sector:

• Transcendental definition of quality –a view of quality that comes from an individual perspective based on abstract properties

• Product-based definition – a view that comes from how a subject performs against desired attributes

• User-based definition – how the customer’s needs or wants are satisfied by the subject

• Value-based definition –is the subject perceived to be ‘value for money’

The fifth defitnition, manufacturing-based definition has little scope for translation in this framework.

These definitions are also broader than the narrow constraints of Total Quality Management, a fashionable and widespread quality management framework that started as a technical set of descriptions of quality management, but has conflated to be much more of a ‘cult’ whose followers preach that TQM can solve any and all of a companies ills, but are founded on the fundamental axiom that the customer is king. Reasons for rejecting TQM for the third sector only start with the difficulties and unease at defining stakeholders, funders, or beneficiaries as customers.

Transposing these definitions into language of the voluntary sector, and doing the same with Zhang’s map produces a new way of defining the ‘quality’ that a TSO should be seeking to manage in order to be more effective, based on their frameworks. But this is not a verbatim translation; rather it seeks to reflect an understanding of the differences between sectors. A ‘vanilla’ use of the tools developed for the private sector implicitly accepts a ‘genericist’ approach to Management Theory which can ignore key sectoral differences (Paton and Conforth 1991; Osborne 1996) and can give rise to a “danger of adopting practises that may clash with the values and culture [of a third sector organisation]” (Paton 2003, p10)

• Transcendental definition becomes a Vision-Driven definition – a quality organisation in this sense becomes one, which is perceived to deliver on its vision for its beneficiaries

• The Product definition becomes an Impact definition – quality is derived from the measurable impact the organisation has on its beneficiaries

• The User definition becomes an Engagement Definition – how external stakeholders value their engagement with the organisation as a measure of quality

• The Value definition becomes the Efficient Definition – is the organisation judged to be a good social investment, i.e. it makes use of funds and assets wisely

The change from internal/external focus to Beneficiary/stakeholder is not trivial, the expectations and demands of beneficiaries should be focus of an organisation, balanced against the ability to deliver this based on the fiat of stakeholders, through funding or partnerships for example.

The choice of perceived/judged as a way of reframing the objective/subjective axis comes from the above discussions, in that Impact and efficiency can be judged according to measurable outcomes, whereas the extent to which relationships are valued and an organisation’s drive is felt are perceptions. It is not incidental that these names correspond to the MBTI axis since they are both the basis for decision making according to the Myers-Briggs system.

What is Quality Management?

With these definitions in hand, therefore, we can now construct a useful understanding of what managing quality is for a TSO. It is the ongoing process designed to ensure that: the organisation has valued relationships with stakeholders and funders, the organisation squeezes the most out of the resources and assets it has, that it is totally committed to delivering on its vision for its beneficiaries, and that all of this has a meaningful impact on them.

However, much like the McKinsey 7S Framework, and it’s more third sector orientated derivatives, an effective organisation is clearly one that manages these four streams of quality in such a way that none becomes the small focus of an organisations efforts. The avoidance of rigid criteria for success avoids the problems associated with treating the management of quality as a Principal Agent problem, which can be solved by the construction and administration of a platonically ‘perfect’ set of measurement criteria. Rather by learning the lessons from Complexity theory and taking a realist approach, it is clear that defining these four goalposts but nothing more, they can be made to work for more organisations, at a lower cost and complexity.

Does Quality beget Efficacy? A Contrapositve Proof

By imagining an organisation that exemplifies in caricature the polar opposite of the four definitions of quality above, and by showing that this organisation cannot in any way deemed to be effective, it can be shown that an organisation that ensures it’s quality is ensuring it’s effectiveness.

• Efficiency – an organisation that is wasteful with it’s resources, by it assets, people, or reputation, is clearly not an organisation that is sustainable, nor one that will appeal to donors or funders. Without a source of funding no organisation can survive nor output anything that benefits the public good. An organisation with poor quality management of it’s efficiency can’t be effective if it can get funding

• Engagement – an organisation that is seen to be an unengaged, unvalued partner, will find itself like a person devoid of any social skills; sure it can survive, but it will fail to navigate the ‘real world’ that is driven and dominated by social interaction. An organisation with poor quality management of it’s engagement will be ineffective at working with stakeholders

• Impact – it would be difficult for an organisation to justify it’s existence, let alone any funding, without measurable impact on it’s beneficiaries. Even if the organisation was a brilliant partner and appeared to be efficient with it’s users cannot long hide the fact that it does not public good, especially since the assumption of benefit has been removed. An organisation with poor quality management of it’s impact cannot be judged to be effective if it appears to do nothing

• Vision – an organisation that lacks a vision lacks a powerful force to enact and inspire change, and the tacit assumption that all charities adhere to is that the status quo does not deliver without our intervention, as well as a unifying ideal on around which the organisation is based. An organisation with poor quality management of it’s drive to deliver for it’s beneficiaries fails to be charitable, and risks loosing motivated individuals.

By the contrapositive method we can see that an organisation that has good quality management is one that is constantly working to be more effective at it’s chosen role.

ProjectCrimson welcomes your comments, and offers low cost consultancy on a wide range of issues facing nonprofits.

Risking Blindness

Two years ago when i went to my first Trustee conference, I was amazed by many things. I was amazed that so many attendees looked the same: old, white, retired/semi-retired professionals. I was amazed that so many people in workshops complained about how difficult it was to replace ageing board members with bright young things and how they’d jump at the chance to enliven and invigorate their boards.

I was amazed that when I stood up at the end of the day in front of the 200 or so people and offered myself as a young Trustee looking to find new organisations and challanges in which to become committed, i got a few cheers but not a single person came up to me afterwards to take my details.

Some months later as I went on some Chair training at the Cass Centre for Charity Effectiveness I was taught all about the importance of a balanced board, and developing the right ’skill set’ through judicious appointment of Trustees. I was given models and frameworks to help me ‘frame’ my thoughts and decisions, and to arrive at some kind of Platonic ‘Perfect Board’ as mandated by theory. I suddenly realised why all boards are alike, because everyone is reading the same hymn sheet and singing the same tunes.

Accordingly, the ‘Perfect Board’ should contain:

• An accountant
• A lawyer
• Someone with HR background
• Someone with a marketing background

Time and time again whilst scouring postings for Trustee positions the same ‘requirements’ came up.  The same skills audit had been applied to every board and every board realised they needed one of the four above and duly advertised. No wonder then that everyone at the Trustee conferences were silver-haired professionals with the ‘experiences necessary’ for the role of a Trustee, but I ask:

Does this blinkered vision stagnate boards and produce blind spots in their thinking?

Boards clearly face dilemmas. They are confronted with the playoff between diversity and risk, and risk almost always wins. Sure some boards feel it necessary to chuck a few people on the board for diversities sake, but they don’t truly accept that diversity should have a place at the heart of the organisation and the board.

The most engaged and lively boards I have ever seen have been those with the widest range of participants and viewpoints. One board had a retired accountant and a 19 year old university student, a HR lecturer and a high-flying marketing executive,and a card carrying communist and a Tory activist. With true diversity on this board the discussions were wide ranging and animated, however the final settled position was reached after more nooks and crannies were excavated. The resulting decisions showed that even this eclectic bunch of people could work together in thinking about a better future for their charity, and see opportunities and risks that a narrower board would have missed.

What do boards look for?

In my experience boards aren’t always great at knowing what they want, nor thinking differently about recurring problems, an experience shared by many.

“I think organisations over-emphasise stacking the board with wealthy, well-connected people, but those folks aren’t automatically passionate about the mission, they aren’t always good storytellers.” Says Naomi Leapheart.

“I think the best boards are  those that are able to think systematically and look at strategy from multiple perspectives. I think most boards are uncomfortable with asking or answering the hardest questions about diversity on the board, so no, I don’t think they take enough risk.”

When I asked PeopleUnlimited through twitter about their experinces in recruiting trustees, they mentioned ‘pertinent skill set’ as one of the constant criteria set by organisations. Where does innovation or inexperince sit against that?

If every board looks for the same thing, and values conformity to monolithic board-types, where will the innovation for the sector come from? If the boards are showing new thinking in their leadership through the forthcoming funding turmoil how many charities will fail?

If charities can learn one thing from business it is to look at the fortunes of GM a. GM has an almost sainted board, full of old men in suits, all of them laywers, accountants, former politicians, retired bankers. This leaderhsip set the tone from top to bottom. Same old same old sameness. Innovation came their none and when the market changes, the ideas desert kills GM.

How many charities will take the risk on the outside persepctive, the perspective unburdened with collective ideas of ‘what can be done’ and what can’t, the perspective that brings a paradigm shift in thinking?

Project Crimson welcomes your comments or

Scaleable Twitter-based System for more Efficient Markets for a Charity Shop Network

-mashing up the ideals of freecycle and the infrastructure of twitter for the benefit of small charity networks. This idea is released by Project Crimson under a creative commons licence, details at the bottom

The fishermen off the coast in Kerela in 1997 showed how access to new forms of communication and the knowledge transfer it produces, can lead to more efficient markets and more profitable selling. But what does this mean for the third sector?

Well it can be argued that the pre-mobile phone fisherman of the coast of Kerela was in a similar state of information asymmetry as a present day branch of a charity shop. The charity shop’s ‘catch’ is it’s weekly donations from the local public, and much like the old fisherman, it’s market is often restricted, mostly to the same shop the good are donated. However as the fishermen learnt, better knowledge of the supply and demand in other markets led to better and more reliable profits all round.

Grounding this idea more firmly in our example of the Charity shop we will walk through a example of where this idea of communication breeding market efficiency can be put in place for a network of charity shops.

Charity X is a medium sized charity that runs a hospice in city of smalltropolis, and funds this through four branches of it’s own brand charity shop. These shops are at the compass points in the city, and each of the areas have different demographic make-ups, resulting in different types of donations predominating at different branches.

Branch	Info
Branch N	Has too much	Clothes
	Has too little	Books
	Specialises in	Books
Branch E	Has too much	Bric a Brac
	Has too little	Clothes
	Specialises in	Clothes
Branch S	Has too much	Bric a Brac
	Has too little	Books
	Specialises in	Books
Branch W	Has too much	Books, Clothes Bric a Brac
	Has too little	nothing
	Specialises in	Bric a Brac

Branch N is situated in the gentrifying area of Northden and gets large donations of clothes weekly from the many local church groups. It specialises in old and rare books

Branch E is situated in the now trendy Eastditch area and has become a hotspot for students looking for ‘retro/vintage’ clothing, but doesn’t have many locals donating. It specialises in clothing

Branch S is a small shop in Southham which gets sporadic laods of attic clearance stuff. It specialises in popular books

Branch W is in leafy Westmond where locals pride themselves on their do-gooding by donating ‘last years’ fashions as well as anything else. It specialises in Bric a Brac.

Problems with the system of shops receiving and then selling on the same goods:

• What a store receives is evidently the stuff the local community doesn’t want, and may not be what will command a high price.
• Some stores may be excellent for selling some goods, but don’t have the local community donating the right kind of goods to sell.
• Some branches may have to give shelf safe to items that don’t tend to shift.

Solution:

Through the use of Twitter and a bespoke Twitter Application, better use of donated goods can be achieved, and a better return on the donated goods received, allowing the charity to maximise it’s assets and do more charitable work.

How?

• Each shop sets up a Twitter account and follows each other, will all feeds protected.
• Branch W receives a big load of goods on a Sunday, the branch manager looks at what has come in and realises that it has got too much of X, that will not sell well or for a good price.
• Branch W tweets: Have excess X
• All other branches in network see tweet in their feed
• Branch E knows that it needs more clothes and replies: @BranchW need X
• The manager at Branch W can then get the goods sent over or vice versa.

This solution will work well for small scale networks of charities, and doesn’t really require any other applications. It should still see more efficient stock dispersal and allow managers to see patterns in supply and demand across their network.But the model becomes more exciting if we look at a larger scale version.

Charity Y is a large overseas aid charity with a national network of branches. In Bigtropolis it has twenty branches. Each store still knows what it tends to sell the most of, or what it tends to sell for a good price. Each branch is thankfully named by its position on the compass, meaning we have Branch N1, N2, N3, N4, N5, E1….W5.

• Each branch sets up a Twitter account but does not follow all the other branches, and it’s feeds are protected.
• Each branch only follows CharityY-HQ, an account controlled by a Twitter Application (TA).
• Branch N1 realises it has too much of Y, and tweets: Have excess X for pickup
• CharityY-HQ then simply retweets this to the other 19 branches
• In this case Branches N3, E1, W2 and S4 all reply: Need X
• The TA then looks at each branch’s distance from the offering branch and looks at it’s speciality, eg, shop N3 is nearest but shop E1 sells significantly more clothes at a higher price.
• The TA then replies to shop E1: X offered for pickup from N1
• Branch manager at E1 figures that the need is not so great that they can arrange pickup and so declines by simply replying: No
• The TA then re-offers the goods to the next branch in it’s ordered list, which happens to be N3, who accepts.
• TA then tweets Shop N1 that the donation will be picked up from branch N3

Further comments on this model

• The algorithm can be tweaked to favour distance over specialisation in order to prioritise local networks over city wide networks, building links between neighbouring branches
• The Algorithm can be tweaked to offer more goods to branches that often tweet need but rarely get offered the goods.
• The protected feeds keep all this data protected from the public
• The twitter infrastructure allows for the tweets to be pushed to email or SMS allowing real time interactions between branch managers

Benefits

• Better return on donations
• More efficient stock movement
• Complete scability if more branches are added or close

Further embellishments

By creating a public feed called Wheretoget, the TA can daily/weekly tweet as to the best location to track down certain types of goods, for example some charity shops tend to get wedding dresses at various times of the year and then best practise is to concentrate that supply in one store. The TA can then be used to direct interested people to the appropriate store.

Overall this model would see charities maximising their donations and reducing the overheads associated with storing lots of stock. The Charity could also connect to it’s customers in a more meaningful way by informing them of the best place to get hold of bargains or the type of good they are particularly interested in.

This document is released under the Creative Commons Licence Attribution-NonCommercial

Project Crimson

Project Crimson is an effort to give smaller charities and third sector organisations the tools, ideas, and insights that they need to grow and develop in an increasingly competetive sector.

Project Crimson offers an exchange between small organisations and individuals who want to gain expereince applying their expereince to the third sector through consulting.

Project Crimson seeks to provide subsidized consultancy to any organisation in need of the kind of advice normally reserved for those larger organisations that can afford it. Advice is offered on strategy, governence and board development,  change managment, public policy,  volunteer engagement, branding, marketing and ditigal communications.

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email to crimsonassociates@gmail.com or