Showing posts with label return on investment. Show all posts
Showing posts with label return on investment. Show all posts

December 22, 2011

The Toilet: A Parable (Part 1)

Suppose your business is a bathroom. At the heart of the operation is the toilet. It's old (established) but works fine, looks fine. When the toilet was made, the industry standard held that 3.5 gallons per flush would ensure satisfactory performance under normal operating conditions. And it did. Your people and your customers use it without complaint. It's simple to use and they know what to expect. They hardly think about it. So you focus on other things – the faucet, the shower head, the tiles, the lighting.

Twenty years pass. Now the bathroom market prizes efficiency. Productivity gains define success. Fear of water scarcity, a fashionable conservation ethic and responsive design innovations change the industry standard to 1.6 gallons per flush. Less than half the water your old reliable toilet uses.

Even so, this new standard isn't top of mind for your customers. Nor are you required to change your toilet. You're grandfathered in. Your operation is a grandfather. Very sexy.

You start reading about next-gen toilets that are totally outperforming yours in profits and customer sat. Your brother-in-law gets one of these new toilets and of course will not let you hear the end of it. Your no-complaints, taken-for-granted toilet has become a competitive disadvantage. Unfairly or not, it casts you as a water glutton. And you're literally flushing away your bottom line. What an embarrassment!

The top-end water-saving toilets that get media attention cost more than your first car. The purchase price would cancel the promised operational savings for years. Sure, you can get a new toilet that's adequate and relatively affordable. But your friendly old toilet still feels adequate. The cost of its obsolescence is hidden from your customers, who are anyways clamoring for a heated floor.

What to do? Well, for a few years you weigh a costly replacement against no replacement. Then one day you're at a home show. You're batting away yet another product rep who wants to sell you the latest-greatest toilet when a plumber steps into the conversation. He says that, while it makes sense for large public bathrooms to have the newest toilets, a smaller bathroom like yours could capture nearly the whole upside with an inexpensive retrofit kit. Your old toilet would flush to the new standard. You'd save on your water bill, you'd save the world, and you'd out-green your brother-in-law and his thousand dollar toilet!

Next Saturday the plumber's at work in your bathroom. It's exciting seeing the grungy fill valve and flapper coming out of the tank and their shiny, state-of-the-art replacemens going in. But it turns out that your old toilet is such an oddball that the retrofit kit won't install on it the normal way. The plumber has to modify it, and that'll take an extra day of labor. The next day being Sunday, he'd have to charge you double time. Wait until Monday and your bathroom will be out of commission during business hours.

This certainly dulls the luster of the the golden mean you've purchased. But you know from operating a bathroom that shit happens, and you agree to the change.

First thing Monday you arrive at your bathroom and hear tremendous banging noises. Rushing in, you find the plumber on his knees, his butt crack sticking proudly in the air. He's pounding on a part of the new kit with a hammer. Modification, he says sheepishly. You wonder: Is this what high-tech innovation looks like?

You spend the morning asking customers to excuse the inconvenience and hold their business just a little longer. Relief comes at last with the exit of the plumber. He's hitched up his jeans and put things back in order, more or less. He greets the crowded waiting room with a bow and a flourish, whispering in your ear that you'll want to straighten up the bathroom just a bit before you let customers in. You send in your assistant with mop and brush. As she pulls on the yellow rubber gloves she lets you know you hired her to do many things, and cleaning toilets wasn't one of them. Her other assignments will now be delayed. Oh, joy. Soon the bathroom sparkles. You note with satisfaction that this is the end of a long quandary. You decide to celebrate by christening the re-engineered toilet yourself.

At first you're thrilled. It's when you try to flush that you begin your descent into the change curve. The ordinary accounts of water-saving toilets had by no means prepared you for what you see. Your mental picture of toilets generally, your long experience with this toilet in particular, cannot impart the faintest conception either of the magnificence, or of the horror of the scene – or of the wild bewildering sense of the novel which now confounds you.

In place of the accustomed flush handle obtrudes a new button – no: two buttons, two buttons in one. Gripped by apoplexy, your usual process interrupted so close to the cortex of muscle memory, you wonder at the disorder and disruption you've provoked by attempting to solve this toilet deficiency on your own, supposedly crafty terms. Two buttons!

In desperation, and quite unhygenically, you fish your cell phone from your pocket and call the plumber. Maybe because you're so upset, maybe because he's in a septic tank, he's having trouble following you. He can't understand why you're confused. He suggests you try reframing the situation. Oh, now he understands. Yes, no more flush handle. That was the point all along. Now you're dual-flush. You've got your No. 1 button and your No. 2 button. A smarter, more specialized management system. The plumber concedes that a training might have been in order, but he withheld it from his proposal because you'd expressed interest in keeping cost to a minimum.

In time you, your people and your customers adapt to the added complexity. Most of them easily accept, even cheer, the change. They're willing to put up with minor inconvenience to realize a societal goal. To a barnacled minority, your installing the new flush system is just another excuse for a price hike and further confirmation that the lords of commerce are reordering our lives in satisfaction of a greater, no doubt malevolent, agenda.

Though the process of change wasn't pain-free, you are indeed saving money. You are no longer obligated to worry about your toilet. Your operation is keeping up with the times. And you were able to avoid a big expense that other, less shrewd bathroom executives will incur. You remain a bit leery of silver-tongued plumbers but would never again think of making a major bathroom remodel without one.




September 2, 2009

Nonprofits and brand

Got into an interesting LinkedIn conversation, excerpted here. If you are in non-profit leadership, this is good reading. The question, posed by brand strategist Colin Dowling, is this: "What's your thoughts on the importance of branding for non-profit organizations?"

Well, the "Brand Gurus" group had a lot of thoughts. Among them:
"The term Not for Profit has no meaning in the world of business, only in the world of taxation. Each and every NFP is competing for the recognition and the pocket of a consumer, just like any other brand would do. And therefore, branding is essential in the NFP world, especially when many similar causes are represented by so many different organization." – Ilan Geva

"Branding is essential in the world of Non-profit. But, the two greatest impediments to branding in the NFP world are budget (which tends to be non-existent) and discomfort with the concept of branding itself. Many folks enter the world of non-profit with a desire to escape the negative aspects of the for-profit world, of which they perceive branding to be a part." – Phil Granoff

"Branding should be viewed as an essential aspect of reaching your audience, not as a trick of the corporate world. If you do not have a brand image, how do hope to stay in the minds of the people you hope to serve and the people you hope will fund your efforts?" – Michelle Johnston

"For the NFPs I've worked with - I am on the board of one now - branding has traditionally been viewed as an expensive nice-to-have. In my work, I try to explain that building a brand need not be expensive. In fact, it already exists - the choice is not whether or not to brand the organization, but rather whether to try to control/enhance the brand image or not. The investment of time spent thinking through the brand fundamentals pays back enormous dividends." – Peter Sonenstein

"When done well branding can be a key difference and core asset for a not for profit organization . . . . increased donor support and loyalty, enhanced volunteer and board recruitment and greater awareness to name but a few." – Stephen McGill
Underlying the consensus here on the value of branding for NFPs is a related need my company is now discussing with foundations: the need to be a lot more clear about goals, metrics and outcomes.

Many endowments have taken a significant hit in the fiscal crisis and will be slow to recover. Among foundations, the funding engine for most NFPs, the new chatter is "How do we get more impact from our resources?" I see this as a cultural change: the foundation as investor rather than as funding provider. Meaning, "How do we do better with return on investment?"

Returning to the underlying need, foundations tend to think and communicate in terms of intentions. But they're soft on describing the outcomes they're seeking. And if they've not defined expected outcomes for themselves, so how can they enforce accountability on the nonprofits they fund? This is a vicious cycle in the NFP world. Research, metrics, efficiencies? From what I've seen, most program officers are too busy managing grant requests to tackle these challenges in a substantial way.

Clarity on outcomes will help foundations tighten their brands. Among other virtues, tighter brands can lower the volume of applicants, freeing foundation resources to focus on efficiency and accountability.