Managing Change with Kaizen

My first session this morning is Creating and Managing Change by Jennifer McCormack from the University of Washington. You'll notice that none of the sessions I'm going to are actually about prospect research or prospect management, which is appropriate since I'm no longer directly responsible for doing research or prospect management. I miss it sometimes, but the opportunity to be a change-maker in many aspects of advancement services makes up for it.

Jennifer's presentation is focused on kaizen, or incremental change. Jennifer manages 8 people, and she enjoys "channeling the energy" of her team to create change. Kaizen is a Japanese philosophy of small and continuous improvements, embracing the belief that a process can always be improved, even when it seems perfect. Kaizen doesn't end with a single decision, but rather involves constant analysis, feedback and change. Jennifer says this process makes a team "limber." It is important that kaizen be embraced by an entire group -- it cannot be practiced by a single person in a team environment. Finally, kaizen requires rigorous feedback and incremental change, which can identify small problems before they become big ones.

Kaizen was made famous by Toyota, and involved the idea that workers are closest to the manufacturing process, and have the best vantage point for identifying problems. Kaizen is also customer-centered: in a fundraising shop, there are internal customers (development officers who request reports from report writers) as well as external customers (donors). On my team, we call development officers our clients, so we maintain our focus on customer service.

Jennifer recommends process mapping to identify wasted steps or problems in a process.

Kaizen seeks to get at a root cause. A problem-solving method to get at this is the "5 Whys." This is a process of asking why something isn't working, and then continuing to ask why. Jennifer's example is really great, so I will just repeat it here:

New leads are not being qualified by fundraisers.
Why? Fundraisers are not keeping track of updates to the prospect pool.
Why? Fundraisers are not reviewing the quarterly new leads report.
Why? Fundraisers are not opening the email with the report attachment.
Why? Most emails sent to listservs are ignored.
Why? The email is not perceived as important if it's not directly addressed to them.

The change: send reports directly to fundraisers with new leads highlighted and follow up with email or a phone call as appropriate.

Jennifer says the "aha moment" generally does come with the 5th "why?," though it can take more or less. One attendee commented that this is very much like the thinking of a 2-year-old. Why? Why? Why?

A more complicated approach is to use a fishbone diagram, which evaluates people, technology, the environment or culture, and materials. I'll post a link to an illustration of this concept. This method overcomes a weakness of the 5 Whys, which is that it can be easy to miss things. Since the fishbone focuses on specific facets of a problem (e.g. materials), it can help to suss out issues.

Kaizen also assumes that each member of your team is an expert, and that ideas are equally valued at all levels. The idea is to "look for wisdom from 10 people rather than one."

Jennifer just mentioned the book "Switch," by Chip and Dan Heath. It is a great book about change! I gave it to my team as a holiday present last year.

Kaizen involves having "kaizen events." Gather the team; identify issues or needs; analyze (5 whys); define the change; take immediate action (if this is not possible, then don't make this part of your plan); evaluate through the feedback cycle (does this work, can we improve it?, what other issues arise). Rinse; repeat.

Sidebar: Kaizen is big on cleaning your desk to free yourself of clutter. This is a really big component of the Getting Things Done method, about which I shall post at some point.

Ask specific questions -- describe what is wrong, not why it's wrong.

Jennifer is talking about the Virginia Mason Foundation in Seattle. A couple of years ago, I saw their chief fundraiser present on their use of kaizen. It was really exciting! The entire organization implemented kaizen. The fundraising team used this to analyze whether it truly takes 18 months to close a major gift. They mapped the process of cultivation, and found that most of the 18 months was actually wait time. In kaizen, time is waste.

Virginia Mason changed their process, using a "pull system," which let the prospect control the pace of the next step. They employed "visual control" methods to see individual prospects' movement through the cycle. They were able to reduce their time from identification to solicitation from 18 months to 5.7 months. They also discovered that the type of prospect (research-identified, board-identified, and physician referral) made a huge difference in lead time and average gift amount. Physician-referred prospects made the largest gifts (average $455,000) and took the shortest lead time (2.9 months).

Jennifer points out that you can implement kaizen on a small scale. It need not be an organization-wide program, like it was at Virginia Mason. But if you are going to try to make change with a team, they must all embrace the kaizen method.

Jennifer brought kaizen to the University of Washington to identify opportunities for improvement in a between-campaign period. (Because as soon as you finish one campaign, you are preparing for the next one.) They looked at the new leads issue above. Jennifer split her team into three working groups to look at financial analysis (do fundraisers trust our ratings?), proactive/prospect identification (do we build a convincing case for new leads?), communication (do we communicate our work to fundraisers in a way that builds confidence in new leads?).

These teams talked to fundraisers to get feedback, and also talked to peers. As an example, the financial analysis group uncovered multiple concerns from fundraisers, including the age-old concern with ratings based on real estate. Based on this, they developed several "improvement commitments," including asking fundraisers for additional wealth information that would help to focus the rating. The proactive research group uncovered that the explanations accompanying new leads were often not sufficient, e.g. "alum with $1 million home." They addressed this by providing more thorough explanations, identifying what the ideal prospect for each school looked like so that they could measure each new lead against the ideal, and providing strategy tips, e.g. "This prospect would probably be interested in the Sustainability Lecture."

Jennifer is wrapping up with ten tips for implementing kaizen. My favorite: don't worry about being perfect -- start now.