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Stage 3 - What you need to do

to get there

Strategy & Planning tools

How Resilient is your Business? Strategic Group Mapping Strategic Options

Business Planning

Business Plan Readiness Assessment Plan Cruncher

Business case development

Developing a Robust Business Case

Fundraising

Fundraising Readiness Funding Models

Change Management

Agreement/Certainty model Change Quadrants

Investment Readiness

Are you investment ready?

Partnership/collaboration

Levels of Joint Working Compete, Collaborate, Compliment Strategic Alliances

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Marketing and Communications

Portfolio Analysis - where do you make your money? Areas of Business Growth - Ansoff's Matrix Social Media Checklist CRM Maturity Checklist

Creative Problem Solving

Gordon/Little Technique Problem Reversal Attribute Listing Association Problem Solving Pattern Language Assumption Reversal

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How resilient is your business?

“Resilience is the organisational capability to anticipate key events from emerging

trends, constantly adapt to change, and rapidly bounce back from disaster.” Javier

Marcos

The big idea

Increasingly we are faced with a wide variety of changes on many fronts: from the

economy to familiar infrastructures, financial services, entertainment and media.

Rapid changes in science and technology mean we are embracing new ways of

engaging and linking up and we are adapting the way we consume. Often we are so

challenged in finding the time to keep up with our changing environment that it is

difficult to ensure that our business practices can withstand the pressures and be

resilient to change.

Purpose

The purpose of this tool is to encourage you to think about how resilient your

business is: how your business capitalises on emerging trends, adapts to change and

could withstand any sudden shocks or crises. It provides a framework for you to

consider some core elements of your business so you can consider the future, rapidly

adapt to change and bounce back from any nasty surprises.

The tool

The tool consists of a checklist of questions with a focus on the characteristics of a

resilient business (adapted from Marcos, 2008). Read and reflect on each of the

questions in the seven areas, in Table 1, making notes of the areas that you could

improve on. Now consider:

• Which of the areas can you address immediately to make your business more resilient?

• What do you need to address in the next three months?

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• What do you need to address in six months?

Take the next step

How able are you to maintain these practices and ensure that your business is not

becoming static? What mechanisms can you use to ensure that you reflect on these

key areas regularly? Have you considered any of these issues before? Can you think

of a business that you would describe as resilient?

Top tips

• It may help you to undertake this with a colleague or friend • Write down as many answers as possible under each question and make a note

of where you could improve • Once you’ve attempted this activity, you may wish to revisit it pushing the

boundaries of your first answers

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Environment

scanning

What are the long-term trends that may impact on your

business? (See the PESTLE tool under the ‘Where are you now’

stage)

What industry and business publications and websites do you

regularly read?

What newsletters and email alerts do you regularly subscribe

to?

How often do you scan the horizon for new opportunities and

consider how you could respond to them?

Staying

linked in

What professional and membership bodies are you part of?

What are your formal and informal networks?

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What range of sources do you get your information from?

How frequently do you stay in touch?

What do you offer the networks that you have?

How could you add value to your networks?

Systems and

processes

Do you have joined-up decentralised systems?

Do you have effective processes for capturing, sharing and

using information?

Scenario

planning

Who are your stakeholders and what are the future driving

forces for change?

What are the key uncertainties and potential areas of impact on

your business?

What would be the impact of these changes to your business if

they happened?

How do you take account of these likely scenarios and impacts

in your business planning and decision-making processes?

How can you anticipate and exploit emerging opportunities in

your strategic planning process?

Exploiting

resources

What resources, knowledge or skills do you have to exploit?

What is your strategy for building on your resources, knowledge

and skills?

What resources could you make more of?

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Which of your resources are difficult to replicate?

What new ideas are you developing and testing?

What range of different income streams do you have?

Reinforce

connections

How can you reinforce the connections you have either by

joining up on projects or on working groups?

How can you build a shared sense of mission?

How can you work together to identify and share crucial tasks?

How can you be more interactive in your planning processes?

Responding

to customers

How do you collect information from your customers?

How responsive are you to changes in your customers’ needs?

How can you ensure that you build trust and respect from your

customers?

References

Marcos, J. (2008). Organisational Resilience: the Key to Anticipation, Adaptation and

Recovery: Cranfield School of Management.

Royce S. (2010) Business Models in the Visual Arts Arts Council and Turning Point

London

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Strategic group mapping

“We could learn a lot from crayons: some are sharp, some are pretty, some are dull,

while others are bright, some have weird names, but we have to learn to live in the

same box." Anonymous

The big idea

Strategic group mapping is a mechanism for considering your position in your sector,

field or market. Hunt coined the term ‘strategic group’ in 1972 when he noticed sub-

groups of businesses with similar characteristics in the same market. Michael Porter

then expanded the concept in the 1980s. There are a number of benefits to strategic

group mapping:

• It can help you identify who your direct and indirect competitors (or possible partners) are

• It can illustrate how easy it might be to move from one strategic group to another • It may help identify future opportunities or strategic problems • It ensures you take your customers’ or beneficiaries’ views into account when

developing or assessing your strategy

Purpose

The purpose of strategic group mapping is to ensure you take the needs or wants of

your customers/beneficiaries into account. It encourages you to ask different

questions about your future strategy, relationships with other businesses in your

sector and your understanding of the people who ultimately benefit from your

products or services.

The tool

To use the strategic mapping approach, you need to follow a number of steps:

1. List the top five other players working in your field or sector

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2. Complete the following table (adapted from Bruce et al., 2008)

Player 1 Player 2 Player 3 Player 4 Player 5

What services do they provide?

What products do they offer?

Which beneficiary or customer group do they work with?

What is their impact?

What might be their plans for the future?

How might you create greater impact by reconsidering your relationship with them?

3. Now think about the beneficiaries or customers for your services/products. What do you think are the two most important aspects of what you do from their perspective? It could be a personalised service, easy access, low cost and so on

4. Now using the two customer wants/needs you have determined above, draw a 2x2 matrix. Plot your business and the five other players you have considered above onto the matrix. For example a games designer might create the following map:

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High

Quality of graphics

Low Interactivity High

5. Once you have mapped the various players in your field as well as your own position, consider the following: • Where are the gaps in provision? • Why are the gaps there? • Who should be filling them?

P2

P1

P3

P4

Your business

P5

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• What potential is there for developing new services or products? • How might you work with the other players to meet customer needs or wants? • Where are the overlaps in provision? • What are your options? • What further research do you need to do? • What factors will affect your response to beneficiary needs or wants?

6. Develop a competitive or collaborative strategy to ensure you are meeting beneficiary needs and building a strong position within your strategic group

Take the next step

When you did your analysis of the other players, how much did you already know

about them? How much of this was based on assumption and how much did you

have hard evidence for? Were there any surprises?

Top tips

• To get an in-depth overview of your competitive and/or collaborative environment, use this tool alongside a SWOT, PESTLE and Five Forces analysis (these tools are also included in the toolkit)

• Think about how you might stay up to date with other key players in your sector or market

• Once you have mapped the other players, draw arrows from each player to show the direction you think they are moving in

References

Bruce, I., Coperman, C., Forrest, A., Lesirge, R., Palmer, P., & Patel, A. (2008). Tools for Tomorrow: A Practical Guide to Strategic Planning for Voluntary Organisations. London: Cass Business School/NCVO.

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Strategic options

’Cheshire Puss ... Would you tell me, please, which way I ought to go from here?’

‘That depends a good deal on where you want to get to,’ said the Cat. ‘I don't much

care where –’ said Alice. ‘Then it doesn't matter which way you go,’ said the Cat. ‘–so

long as I get SOMEWHERE,’ Alice added as an explanation. ‘Oh, you're sure to do

that,’ said the Cat, ‘if you only walk long enough.’ (Carroll, 1865: 89)

The big idea

For a business to succeed, it is vital that the right strategic choices are made. A

strategy is about giving the business a clear direction and purpose. It has been

proposed by Henry Mintzberg that strategy can take different forms. It can be a:

• Plan: some sort of planned course of action • Ploy: it outlines a manoeuvre to outwit a competitor • Pattern: it is about putting the plan into action and recognising the behaviours

that result. Be aware that not all outcomes are intended, or ‘planned’, and that there is an emergent aspect to strategy

• Position: it locates a business in a particular environment at a specific point in time. It is externally focused

• Perspective: it is about the viewpoint of those running the business. It is internally derived and shows the personality of the business

On this basis, a good strategy gives a clear sense of direction but is flexible. It

recognises the position of the business within its external environment. It moves

people to action and reflects the intentions and viewpoints of its creators.

Purpose

This tool is designed to help you explore all the strategic options available to your

business. It encourages you to make a rigorous assessment of where your business

is now and what options might be available in the short, medium and longer term. It

offers a spectrum of options from reduction to growth and asks you to consider what

is feasible in terms of future direction. It deliberately includes some tough options,

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like closure, to ensure you consider the full range of possibilities. This may not be an

exhaustive list of options for your circumstances: do feel free to add others.

The tool

This tool includes two stages of strategic planning. Firstly, it is a framework for

reviewing different strategic options. Secondly, the ‘options grid’ offers criteria for

analysing the relative benefits of the different options that you might be considering.

Table 1 Strategic options (adapted from Bruce et al., 2008; Courtney, 2002)

Reduction Improve/exploit current Growth

Retrench

Reduce or close programmes, services or product lines

Status quo

Continue programmes/

services/activities as they are

Piggybacking

Develop fee-earning activities to cross-subsidise other activity

Expand boundary

Extend users/customer groups, amount of service or geographical spread

Quantitative expansion

Increase the number of users/customers or extent of services/products

Reduce costs

Reduce costs of production, programmes, administration or other activities

Improve quality

Improve the quality of programmes/ services or products

New related strategy

Switch activities/products to a related group of customers or area

Experiment

Pilot new services or existing activities to new audiences/

customers

Unrelated expansion

Expand to add activities to unrelated areas, customers or audiences

Winding up

Your work is complete so agree a dignified exit

Outsource/ sub-contract

Find other providers who can take over some of your activities at a lower cost

Joint working/ collaborating

Develop a closer partnership with another business

Switch strategy

A radical change to switch services/ activities/

customers completely

Acquisition/merger

Take over other businesses or join with another organisation of similar or larger scale

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Use the criteria in Table 2 to complete the grid for the strategic options you have

selected.

Table 2 Options analysis grid

Option

Criteria

Option 1 Option 2 Option 3 Option 4 Option 5

Strategic attractiveness

Cultural fit

Financial attractiveness

Implementation difficulty

Uncertainty and risk

Acceptability to stakeholders

Level of support for the option

Breakeven point

Take the next step

Think about another business. It might be a competitor or a partner. See if you can determine which of the above strategies they are following. What are the clues that lead you to your conclusions? What might you learn from them?

Top tips

• “There are three types of businesses: those that make things happen; those that watch things happen; and those that wonder what happened!” (Anonymous)

• Consider which option would be your worst nightmare and what you would do about it. If you can confront your fears, it may give you some new alternatives

• Consider where the drivers for your strategy are coming from as they will have an impact on how you respond

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References

Bruce, I., Coperman, C., Forrest, A., Lesirge, R., Palmer, P., & Patel, A. (2008). Tools

for Tomorrow: A Practical Guide to Strategic Planning for Voluntary Organisations.

London: Cass Business School/NCVO.

Carroll, L. (1865). Alice's Adventures in Wonderland (1994 ed.). London: Penguin

Books.

Courtney, R. (2002). Strategic Management for Voluntary Non-Profit Organisations. London: Routledge.

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Business plan readiness assessment

“Planning is an unnatural process; it is much more fun to do something. The nicest

thing about not planning is that failure comes as a complete surprise, rather than

being preceded by a period of worry and depression.” Sir John Harvey-Jones

The big idea

Such is the effort that often goes into the preparation of a business plan that, once it

is produced, the last and most crucial stage is neglected. It is at this point that you

are well advised to do a thorough critique, reading it as far as possible, with the eyes

of an outsider. It is an opportunity to assess its strengths and weaknesses and

determine if there are any gaps you need to address. This evaluation phase should

consider four elements:

• The written business plan itself: timelines and targets should be carefully reviewed and all the fundamental questions must be answered

• The manner of presentation: is it clear and concise, with a logical progression?

• Realistic approach: does it present a realistic perspective on how the business will evolve? That is not to say that it can’t be ambitious but there should be a clear argument behind your proposals

• The viability of the business: does the business plan present a business strategy with a strong and sustainable model at its core? Does the business have the management capability and financial competence to deliver its strategy?

Purpose

The purpose of this tool is to provide you with a checklist against which you can self-

assess your current plan. It could also be used as guidance criteria for revising your

current plan or for writing a new plan.

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The tool

A business plan normally consists of a number of core sections. Use the following

questions to assess the readiness of your plan. You can use the criteria as you write

each section to ensure you have completed it as comprehensively as possible or you

can assess the plan as a whole once it is all written. You may need to adapt the

sections to make it appropriate to your business.

Answer the questions for each element and then use the rating scale at the end to

assess each section.

1. Executive summary

Key elements Yes No Is the answer complete?

Have you provided succinct highlights of the plan?

Does the executive summary stand alone? (If someone reads nothing else, does it make sense?)

Have you kept it to no more than two pages?

2. Background/context

Key elements Have you covered this in the plan?

Is the answer clear?

Is the answer complete?

How has your business developed over time?

What have been your key successes to date?

What issues might you want to address going forward?

3. Vision, mission, values

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Key elements Have you covered this in the plan?

Is the answer clear?

Is the answer complete?

What type of business are you in?

What is your purpose or long-term vision?

What do you do, who for and where?

What are the underlying beliefs or values that drive your business?

How are you distinctive?

4. Delivery aims and objectives

Key elements Have you covered this in the plan?

Is the answer clear?

Is the answer complete?

What are the key areas of your business activity?

What are your artistic activities and how will they be developed?

What are your education or outreach activities and how will they be developed?

What products do you offer and how will they be developed?

What services do you offer and how will they be developed?

What do you offer that is distinctive?

What targets have been set for each area of your activity?

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5. Marketing

Key elements Have you covered this in the plan?

Is the answer clear?

Is the answer complete?

Who will be your customers/beneficiaries?

How big is your market, segment, sector or the field you work in?

Who are your competitors – direct and indirect?

How successful are they?

Do you have a pricing strategy?

Do you have clear routes to market?

What is your marketing strategy?

What is your audience development strategy (where appropriate)?

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6. Organisational capacity and capability

Key elements Have you covered this in the plan?

Is the answer clear?

Is the answer complete?

Who manages the business?

How do you develop people involved with your business?

What are your core issues and challenges in running the business?

What skills and experience do you need going forward?

How is your business governed?

How will you develop your structure and processes going forward?

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7. Finance and resources management

Key elements Have you covered this in the plan?

Is the answer clear?

Is the answer complete?

What is your financial model?

What is your expected monthly cashflow for the first year?

What is your break-even point?

How do you see your income and expenditure working over the next three years?

How do your various activities contribute financially to the business?

What are your total financial needs?

What are your funding sources?

What assets does your business own?

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8. Monitoring and evaluation

Key elements Have you covered this in the plan?

Is the answer clear?

Is the answer complete?

How do you monitor your progress?

How do you know if you have achieved your targets?

What changes do you want your business to make?

How does monitoring inform your decision making?

9. Risk assessment

Key elements Have you covered this in the plan?

Is the answer clear?

Is the answer complete?

What potential problems have you identified?

Have you calculated the risks?

How will you mitigate those risks?

What alternative courses of action exist?

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10. Appendices

Key elements Have you covered this in the plan?

Is the answer clear?

Is the answer complete?

Have you included any additional documents, agreements or visuals to support the plan?

Do you have formal evidence or external advice to support your plan?

Are there any other relevant supporting documents?

Now rate each section based on the answers you have given above:

Section 1 2 3 4

Executive summary

Background and context

Vision, mission and values

Delivery aim and objectives

Marketing

Organisational capacity and capability

Finance and resources management

Monitoring and evaluation

Risk assessment

Appendices

Total points

4 = very good, 3 = good, 2 = fair, 1 = poor

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Scoring:

• 40 points: outstanding. Looks like a great plan! • 24-39 points: looking good. The plan is well on its way • 13-23 points: some areas may be covered in detail but others need developing • Below 12 points: the plan needs a lot more research and development

Take the next step

A number of business plans are publicly available on the internet. Find one that

interests you. Use the criteria to review and critique it. Looking at your critique, how

would you improve it? Who do you think the audience is for the plan?

Top tips

• Remember that your business plan should be a living document. You are its first audience

• Consider who else has an interest in your business and the criteria they might use to evaluate your plan

• Leave yourself time during the plan-writing process to review it and use the assessment criteria

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The plan cruncher

“Creativity involves breaking out of established patterns in order to look at things in a

different way.” Edward de Bono

“We do not know how long this crisis will last and how deep it will become. But when

it is over, those who have invested in creativity and innovation will find themselves

well ahead of the pack.” Jan Figel, EU Commissioner for Education, Training, Culture

and Multilingualism.

The big idea

Plan Cruncher was created by Lunatech Ventures, an IT investment company looking

for young and talented entrepreneurs who want to build remarkable companies.

Lunatech Ventures are seed investors who focus on internet and interactive media

technologies. The big idea is that you should be able to succinctly describe any

venture you are planning and, using the visual icons, you can quickly establish an

overview of your plan:

Example – you are working on something that is going to be great

A revolutionary new idea that you are building yourself… You have a team that can

build it… You have a prototype you can demo… You are gathering users… and need

an investment to develop the product to the point where you charge them for the

service.

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Example – a lot of hot air and a totally unrealistic valuation

The idea is all you have, so you want us to sign a non-disclosure agreement … You

do not know how you are going make money … You want to use someone else’s

money to build it … So basically you have nothing, but have somehow come up with

a valuation where 10% is the funding you need.

Purpose

Plan Cruncher icons are based around some of the key questions you should be

asking yourself about your business:

• Are you ambitious? Can you build a new (or grow an existing) business? • Do you have the skills to build the product or service? • Do you have a track record and can you demonstrate your new idea? • Have you worked out how to fund the product and/or service? • How much investment capital do you need? • Do you have a financial forecast? • How long will it take to reach profitability or gain the necessary income?

If your plan’s executive summary is good, it can answer these questions in less than

30 seconds.

The tool

There are two approaches you can take to using this tool. You can either use the

downloadable icons or you can go online and use the interactive Plan Cruncher site

to upload your information. The Plan Cruncher site is more focused on for-profit

businesses and attracting investment so it may not suit all creative and cultural

businesses.

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If you are using the icons1 feel free to add new ones that are more appropriate to your

context.

Think about the status of your idea, the people who will make it happen, the funding

you already have available, the funding you will need, will you go it alone or do you

need other investors/funders and so on.

See below for an example of a ‘crunched’ plan for sliced bread 2.0!

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Take the next step

Think of an idea you may have been pondering for some time, however improbable it

may seem. Lay the icons out on a table and, using your idea, see how many of the

questions you can answer. How does it feel to imagine someone else investing in

your idea? Who might that be?

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Top tips

• Use the icons quickly to answer the key questions • Take notes as you go to capture moments of insight or further research you need

to do • If you develop the icons, it might be a good way to involve artists, designers or

other practitioners in your planning

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Developing a robust business case

“No business case will sell social software to a firm that doesn’t already value

collaboration in its culture …//... If the ROI is needed to convince an organisation that

collaboration is a good thing – then ROI is the least of your problems …” Larry Hawes,

Gilbane Group

The big idea

A business case is a means of providing evidence that a project is a good investment

for your business and/or an external investor. It differs from a business plan in that it

focuses on a specific project or programme rather than the whole business. It is

effectively an investment tool that sells a particular idea or concept.

Purpose

The reason for preparing a business case is to identify a future opportunity that is

supported by robust analysis of the benefits, risks and costs involved. It should

achieve four purposes:

• Helping you to think through the project in a systematic manner • Explaining to stakeholders, internally and externally (as appropriate), why the

project should proceed • Helping potential investors (both public and/or private) understand the economic

value of the project • Providing a clear framework for delivering the project to ensure it is completed on

time and on budget

A good business case covers:

• The purpose of the project, the opportunity it addresses and its benefits • The strategic fit with your business • Risks • Affordability • Value for money

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The tool

Building an effective business case that sells your idea requires you to follow a

number of steps:

1. Outline the problem or opportunity it addresses 2. Describe your solution 3. Define your approach 4. Estimate costs and benefits 5. Assess the risks 6. Sign off the case through whatever approval system you use 7. Present the case

You can use the following template to help you build your case:

Background: context, environmental factors, trends, forecasts, benchmarks

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The opportunity: why this project, why now, why are you best placed to deliver

it? Describe the scale, scope, aims and objectives. Clearly demonstrate the

need and what will be achieved

The proposed solution: what is the solution and how will it be achieved? Why is

this the solution and how are you best placed to deliver it?

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How you will implement the project: describe the process or steps you will take

to deliver the project. This may include details of delivery structure, partners

and monitoring

Estimated costs: this should include one-off and ongoing costs. Cashflow

requirements and any legacy commitments that the project creates

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Estimated benefits: this should include financial as well as other measures.

Include one-off and likely future benefits. Demonstrate how the benefits will be

tracked and measured

Risks: illustrate the key risks and how you intend to mitigate them. You should

include risks that might affect time, cost, cashflow, quality and levels of benefit

achieved. This section should also cover impact, probability and containment of

the risks

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Milestone plan: this provides the breakdown of how the project will be

implemented. To start with, there will probably be a small number of high-level

milestones which you can then add to as the project is implemented. You

should clearly identify who is responsible for what if you are working with a

team

Appendices: in some cases you may include appendices, depending on who

you are seeking funding from. These may include evidence underlying some of

your conclusions and claims, financial statements, business documents

(constitutional, policies etc) and so on

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Take the next step

Consider a recent project proposal you have made. Does it include the elements

listed above? How might you have improved your case? What additional research

could you have done to build your argument?

Top tips

• Presenting and communicating the business case happens throughout the life of the project. It is not a one-off event at the beginning

• You are trying to present a clear and compelling case for your project that can be easily understood by everyone – keep your language clear and simple

• Clearly identify all your assumptions • Be honest and realistic about the likely outcomes • The business case should be treated as a live project document, not a one-off

funding application

References

This guidance was adapted in part from the Arts Council’s Grants for the Arts, OD

Thrive! toolkit, which was prepared by The Change Works

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Fundraising readiness check

“Donors don't give to institutions. They invest in ideas and people in whom they

believe.” G.T. Smith

The big idea

Key to any successful fundraising campaign, whether for a large project or capital

development, is preparedness. Much of the work should happen in advance so that

by the point that it becomes a ‘public’ campaign all of the groundwork is done and a

large proportion of the funds is already raised.

Purpose

This tool provides a checklist to enable you to assess your business’ readiness to

undertake a fundraising campaign.

The tool

Consider the following indicators and rate your business against them from 1 to 10

(where one is low) in each case:

Indicator Rate 1 - 10

A clear business mission

A strategic plan that outlines what you intend to achieve as a business

A comprehensive fundraising case, which includes the problem or opportunity you are addressing, how you are addressing it and why your organisation is best placed to deliver it

A clear action plan for running the campaign, including timelines and milestones

Identified and willing major donors who can give substantial lead gifts

Well-informed key participants (including volunteers) who can represent the case and organisation

The involvement and commitment of the whole business to actively fundraise and to

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Indicator Rate 1 - 10

integrate fundraising into all activities

Commitments of time and support from all relevant participants

Additional external expertise where appropriate

A fundraising budget

Adequate working capital to conduct necessary research or development activities

Management information systems capable of managing the fundraising data and monitoring the campaign, such as donor lists, activities etc

Total score Implications

80+ The campaign is well positioned and you are ready to go ahead

60-79 There is still some preparation to do but you are on the way to being ready

Less than 60 The campaign is not ready and you need to strengthen your planning further

Take the next step

Think about your role in the fundraising process. Is it something you are comfortable

with? What impact do you think the current economic environment will have on your

fundraising campaign? How might you mitigate some of that impact?

Top tips

• Never ask a stranger for money. People give to people because of people • Use different cultivation approaches to help people get to know you and allow you

to get to know them • Think of the wants and needs of the donor. They will be interested in the benefits

you are providing, not the fact you need funding • Ask for support for what you need. Don’t be side tracked by sources of funds that

will take you in another direction • Aim for something you know you can achieve and don’t overreach yourself

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Funding models

“When a non-profit finds a way to create value for a beneficiary ... it has not identified

its economic engine. That is a separate step.” Landes Foster et al. (2009)

The big idea

The idea of this approach is to look specifically at your funding model. Often creative

and cultural leaders are very adept at creating their programmes but are fuzzier about

the nature of their funding model. This sometimes leaves stakeholders unsure about

the impact of their support. Unlike commercial models, a non-profit organisation has

to be mindful of both its beneficiaries and its funders. This tool illustrates ten funding

models which highlight the source of funds, the types of decision makers involved

and their motivations.

Purpose

This tool should enable you to identify the funding model/s your business operates.

You can then consider the strengths and weaknesses of each approach. During

these turbulent economic times, it is important to be able to identify your model and

be disciplined about the way you raise your money. This should ensure that you are

not blown off course by chasing any available funds.

The tool

Consider the characteristics of the ten funding models (Table 1) that Landes Foster et

al. have identified. Decide where your organisation might be positioned.

Now review the following questions that relate to each model:

1. The heartfelt connector: a. Have a large cross-section of people already demonstrated that they will

fund your type of cause/s? b. Can you communicate a compelling case for your business?

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c. Is there an existing channel for attracting and involving large numbers of volunteers?

d. Do you have, or can you develop, the necessary outreach required? 2. The beneficiary builder:

a. Does your mission support the creation of both individual and social benefit?

b. Does your organisation build a very loyal beneficiary base? c. Are you able to reach out to your beneficiaries and maintain long-term

relationships? d. Are those relationships scalable?

3. The member motivator: a. Are you able to provide individual benefit at the same time as collective

benefit? b. Do you have the ability to engage and manage your members in

fundraising activities? c. Can you commit to maintaining your core membership even if that limits

your fundraising or programming, meaning your main focus is your members?

4. The big bettor: a. Can you solve a major problem in an identifiable timeframe? b. Can you clearly articulate how you will use a small number of large-scale

donations to achieve your goals? c. Are any high net worth individuals or trusts and foundations already

interested in your approach or issue? 5. The public provider:

a. Is your organisation a good match for one or more pre-existing public funding programmes?

b. Can you demonstrate how your organisation will do a better job than your competitors?

c. Do you have the time to enter into contractual relationships as well as securing contracts on a rolling basis?

6. The policy innovator: a. Do you provide an innovative approach? b. Is your approach compelling enough to attract funders who tend to

gravitate towards traditional solutions? c. Can you provide evidence that your approach works?

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d. Are you willing to cultivate strong relationships with public decision makers who will advocate change?

e. Are there sufficient pressures on public funders at this point in time to overturn the status quo?

7. The beneficiary broker: a. Can you demonstrate to public funders your unique ability to connect

beneficiaries with benefits, such as successful placement rates or customer satisfaction feedback?

b. Can you develop supplemental services that add value to the benefit? c. Can you manage the regulations and requirements needed to be a provider

of these benefits? d. Can you find ways to raise additional money to the fees received from the

benefits programme? 8. The resource recycler:

a. Are the products you distribute likely to be donated on an ongoing basis? b. Can you develop the expertise to stay abreast of trends in the industries

that donate products? c. Can you prepare for fluctuations in donations? d. Do you have a strategy for attracting funding needed to run the operations

and overheads? 9. The market maker:

a. Is there a group of funders with an interest in supporting your work? b. Are there legal or ethical reasons why this service or product is better

delivered by your organisation? c. Do you have a trusted programme and brand?

10. The local nationaliser: a. Does your cause address an issue that local leaders see as important? b. Is this issue compelling in communities across the country? c. Does expanding your work into other communities fulfil your mission? d. Can you replicate your model elsewhere? e. Are you committed to attracting and developing strong leaders to run local

branches of your organisation?

Having thought about these questions, can you identify a new funding model that you

might pursue? What are its implications for your business? Who else might move into

your area?

4

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Take the next step

Think about some of your competitors or partners. Which model do you think they

are operating? How might you find the necessary information to check your

conclusions? Having identified your core model or models, what might be your

second and third options?

Top tips

• In reviewing your funding model, consider how well it reflects your mission • Involve stakeholders by asking for their perceptions of which model you are

operating • In the light of the current financial challenges, consider how viable your model is

over the next three years • If you are planning a switch in model, be really clear about the implications and

the time it takes to establish credibility in new sectors

Table 1 Funding models (Landes Foster et al., 2009)

Model Characteristics Tactical tools

The heartfelt connector

Funding source: individual

Funding decision maker: multitude of individuals

Funding motivation: altruism

The mission has broad appeal

The benefits often touch the lives of the funder’s family and friends

Funders are connected to the cause through volunteering or other means

Special events

Direct mail

Corporate sponsorship

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Model Characteristics Tactical tools

The beneficiary builder

Funding source: individual

Funding decision maker: multitude of individuals

Funding motivation: self-interest followed by altruism

The mission initially attracts people pursuing individual benefits

Mission creates a strong individual connection through the delivery of the benefit

Benefits created are viewed as having important social benefit

Fees

Major gifts

The member motivator

Funding source: individual

Funding decision maker: multitude of individuals

Funding motivation: collective interest

Most of the benefits have a group orientation

Uses richest mix of tactical tools to raise money

Membership

Fees

Special events

Major gifts

Direct mail

The big bettor

Funding source: individual or foundation

Funding decision maker: few individuals

Funding motivation: altruism

Builds majority of support from a small number of individuals or family foundations

Mission may be fulfilled within a limited time period (that is, finding a cure)

Major gifts

The public provider

Funding source: public sector

Funding decision maker: Administrators

Funding motivation: collective interest

Provides services that are perceived as state responsibility

Clear definitions exist of the services and products that the non-profit must provide

Public sector contracts

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Model Characteristics Tactical tools

The policy innovator

Funding source: public sector bodies

Funding decision maker: policy makers

Funding motivation: collective interest

Secures public funding for a significant new approach to a problem or to address a problem not currently seen as state responsibility

Requires a high-level public sector champion

Generally succeeds when there is pressure on Government as a result of financial or media crisis

Legislative appropriation or ring-fencing

Executive ring-fencing

Government/public sector pilot project

The beneficiary broker

Funding source: public sector bodies

Funding decision maker: multitude of individuals

Funding motivation: self-interest

Individual beneficiaries decide how to spend Government funds

Must navigate and influence public decision makers for eligibility, compliance and reimbursement

Requires individual-based marketing capabilities

Government/public sector reimbursement

The resource recycler

Funding source: individual

Funding decision maker: multitude of individuals

Funding motivation: altruism

Non-profit uses goods created by the private sector where there are inefficiencies that create surpluses or where the marginal costs to produce are low

In-kind giving

The market maker

Funding source: mixed

Funding decision maker: mass of individuals or a few individuals

Funding motivation: altruism or self-interest

A funder with some degree of self-interest and the ability to pay exists

Often one of the parties involved is motivated by altruism (for example, blood donors)

Fees

Major gifts

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Model Characteristics Tactical tools

The local nationaliser

Funding source: mixed

Funding decision maker: few individuals

Funding motivation: altruism

The issue is one of a few or the top priority for a locality

The issue is common enough to exist in various locations

The level of funding available in a single geographic locality is usually limited

Major gifts

Special events

References

Landes Foster, W., Kim, P., & Christiansen, B. (2009). Ten Nonprofit Funding Models. Stanford Social Innovation Review, Spring 2009.

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The agreement/certainty matrix

“In other words, given that we do not know with any certainty what it happening, we

certainly know about what we are doing to enable us to live in uncertainty.” (Stacey,

2010: 2)

The big idea

The idea was originated by Ralph Stacey as a result of his ongoing concern with

complexity and how organisations change over time. The model, sometimes referred

to as the Stacey Matrix, considers organisational management from the perspectives

of levels of agreement and levels of certainty.

Certainty is driven by the quality of available information that supports management

and decision making. Agreement recognises that enterprises are socially-based and

dependent on negotiation for their activities.

Purpose

The matrix encourages you to reflect on the relative levels of certainty and agreement

in your enterprise, activities or in a particular project. Using the matrix can support:

• Decision making • Stakeholder management • Communicating why particular approaches are being used • Encouraging creativity and considering different perspectives

The tool

The approach involves plotting your projects, decisions or activities on the

certainty/agreement axes (Figure 1). Depending on where the projects or activities are

placed, a different response is needed in terms of management and decision making.

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To assess your business’ levels of complexity and agreement, work through the

following steps:

1. Map your projects, activities or ideas onto the matrix (Figure 1)

2. Consider the following questions in relation to each of the management/decision-making dimensions.

Telling

a. How do you know things are this certain? b. How do you know what you know? c. Have you considered all the necessary variables? d. What have you done to ensure that everyone shares a common

perspective? e. Are you sure there is a common perspective? f. What have you done to ensure that you are not blinded by your own vision? g. What approaches have you used to assess different perspectives?

Selling

a. Are you ready to change the people involved if they don’t all agree? Would this even be feasible?

b. How good are you at managing disagreement? c. How will you go about selling the project or approach? d. How good are your powers of persuasion? e. Have you got the time and resources to invest in selling the idea?

Consulting

a. How will your field or sector evolve? b. How can you best respond? c. How are you forming your judgements about the future? d. Which political decisions will influence your future? e. What other environmental factors might be an issue? f. Are you open to the levels of research needed?

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Far from

certainty

4. Co-creating methods

and approaches –

Complex decision making

Close to

certainty

Clo

se t

o

agre

emen

t F

ar f

rom

ag

reem

ent 5. Chaos and

anarchy or

avoidance

Edge of

chaos

3. Consulting –

judgemental

decision making

1. Telling –

rational decision

making

2. Selling –

political

decision

making

Co-creating

a. How well are you connected with your stakeholders? b. How comfortable are you with change being the norm? c. How open and flexible is your business model? d. What opportunities do you provide for co-creation? e. Are your management practices as creative and innovative as your work? f. Are you confident to work intuitively?

Chaos

a. Are you ready for the collapse of what you have created? b. Are you avoiding the very real challenges your business is facing? c. Are you ready to let go of any form of certainty?

Figure 1 Stacey's agreement and certainty matrix

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3. Having mapped your work onto the matrix, are there any particular patterns? Have they clustered in particular zones?

4. Having considered the previous questions, think about any actions you might take with regard to your activities or business

Take the next step

Think about a project you have recently completed. Looking back, did you have a

strong sense of certainty about what was needed? What management approaches

did you use? What might you do differently next time, thinking about the levels of

uncertainty and agreement?

Top tips

• Don’t be put off by uncertainty; try and find different ways of working with it • Be aware of when you are managing from a rational, decision-making perspective • There are a range of additional techniques to support each level of decision

making. Experiment with different approaches – participatory risk analysis, real time strategic change, future search and so on

References

Stacey, R. (2010). Complexity and Organizational Reality: The Need to Rethink Management after the Collapse of Investment Capitalism. Abingdon, Oxon: Routledge.

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Change quadrants

“It is not the strongest of the species that survive, nor the most intelligent, but the

ones most responsive to change.” Clarence Darrow

The big idea

The change quadrants model (ten Have et al., 2003) is a framework for helping you to

take account of the culture of your business during a change process. The idea

behind the model is that your approach to a particular change or initiative will depend

on the nature of your organisation, whether it is warm or cold and whether the

change is warm or cold.

A cold organisation is one that has a command and control approach, systems,

procedures and structures which drive the direction of the organisation to ensure it

achieves its goals. A warm organisation operates on the basis of shared values; it is

reliant on a shared commitment to the direction of the business.

A cold change is based on a clearly identifiable situation or crisis such as a drop in

revenue, downturn in customers or audiences, or near insolvency. A warm change,

however, is generally internally driven by personal and professional ambitions and

aspirations.

Purpose

Thinking about change in terms of organisational culture encourages you to take

account of the kind of business you are running. In doing so you can look at the

types of change initiative that are most likely to be effective. You can also use it as a

mechanism following a change project to understand what worked and why or,

conversely, why you encountered some of the challenges you did.

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Based on your assessment of the temperature of your organisation and the change,

there are four possible strategies:

• Intervene: change systems to respond to a clear, identifiable problem or issue • Transform: change direction of commitment in response to an identifiable issue • Innovate: change focus of commitment in response to a possible opportunity • Implement: change systems and procedures in response to a possible

opportunity

The tool

To consider your business in relation to the change quadrants, complete the

following steps:

1. Consider the following scales and mark on the line where you would place your organisation and the change you are considering

Cold

!"#$%

&'()%

&'()

%

Intervene

Transform

Implement

Innovate

Type of organisation

*+,-%".%/0'12-%

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Change

Externally driven Internal

momentum

Urgent

Time to consider

Responds to an

opportunity/issue

Recurring, i.e.

seasonal

Reactive

Proactive

Organisation

Focused on

goals and targets

Guided by

norms and

values

People do as

they are told

People act

independently

Senior people

expected to take

responsibility

Everyone takes

responsibility

Resistance is

mainly based on

barriers

Energy directed

into resistance

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Focused on

processes

and/or structures

Adapts as

required

2. If your scores are mainly to the right, you are considering a warm change and a warm organisational culture. If your scores are mainly to the left, it will be a cold change and a cold culture

3. If your scores are on different sides for change and organisation, you are thinking about a change that may not sit comfortably with the way your organisation works. It might be worth rethinking your change strategy

4. In the light of the above, consider which form of change strategy you are adopting and how it will be implemented

Take the next step

Think about a change initiative you have experienced. Would you say it was a warm

or cold change? How well did it work for the business? What did it feel like for you?

Looking back what would you do differently?

Top tips

• A cold change is easier to plan and communicate than a warm one • Many organisations believe they are warmer than they actually are. Be honest in

your assessment of how your business works • You might want to consider the possibility of warming up or cooling down,

depending on the nature of the change • The warm and cold metaphors are not value judgements: they are a mechanism

for thinking about change in relation to your organisation. They both have a value and will depend in part on the wider context in which you are operating, for example you can imagine that a regional theatre will have a different culture to an accountancy practice

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References

ten Have, S., ten Have, W., Stevens, F., & van der Elst, M. (2003). Key Management

Models. London: Prentice Hall.

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Are you investment ready?

“Understanding how to be a good investor makes you a better business manager and

vice versa.” Charlie Munger

“Many of the biggest and most far-reaching investments we make in our lives are

investments that have little or nothing to do with money.” Daniel Quinn

The big idea

Investment readiness means that you are in a strong position to present your

business to different investors and meet their requirements. You may have a

particular project to put forward or you may feel that your business is ready for rapid

growth. On this basis you might consider approaching different sources of funding,

such as:

• Business angels • Venture capitalists • Banks • Other funders such as high net worth individuals

Purpose

Seeking external support to allow your business to grow involves both ensuring you

have a credible case to present and making a series of personal decisions to make

sure you are comfortable with the direction you are taking the business in. The

purpose of this tool is to help you think about some of the issues that might arise

during this process so you are more likely to meet the needs of the investors and to

succeed.

You are unlikely to be investment ready if:

• You are unwilling to give up a stake in the business • You have an inadequate business plan

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• You are not looking for fast growth. Can you provide a growth level of eight to ten times within five years?

• You do not have a proven need for your product or services • You lack knowledge of your market • You lack knowledge of the investment process • You are unable to pitch your business effectively or credibly

The tool

This tool consists of a questionnaire that takes you through some of the key

questions you need to consider to work towards investment readiness. To use the

tool take the following steps:

1. Complete the following questionnaire 2. Ensure you have evidence to support your answers 3. Record any issues or further questions that arise as you complete the

questionnaire 4. If you decide not to proceed with seeking external funding, consider what that

means for the future of your business. Is this a final decision or will you revisit it at a later date?

5. If you decide to proceed, consider: a. Any actions you need to take to improve your investment readiness b. Are you looking for national or international growth? c. What further advice you might seek to prepare your case d. Whether you need training in this area

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Yes No

The market

Are you operating in a high growth industry/sector?

Do you have a first-to-market advantage?

Do you have innovative products or services?

Do you have a unique selling proposition?

Is there a global market for your products or services?

Is there clear evidence of a market need for your products or services?

Have you undertaken any formal market research?

Do you have both primary and secondary sources of information about the market?

Are you able to list all your potential domestic and/or international market segments?

Do you have a clear indication of the market size?

Have you completed a competitor analysis?

Your business

Do you have a comprehensive business plan?

Have you identified your strengths and weaknesses? And how you intend to deal with them?

Do you own your intellectual property? Have you protected your intellectual property and can you show a strategy for protecting future developments?

Is the legal structure of your company clear and appropriate?

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Yes No

Is the company compliant with current legislation and regulatory requirements?

Are you able to supply a copy of your company registration documents?

Is there a shareholder’s agreement?

Are you facing any litigation – current, pending or potential?

Does the business have appropriate insurance coverage?

Your finances

Have you identified the level of funding required?

Have you identified the type of funding required? (business angel or venture capital etc)

Are you able to supply audited accounts?

Are you able to supply projected operational and financial statements?

Are you able to supply projected earnings and cashflow forecasts?

Are you able to provide details of types of shares and share distributions to potential investors?

Are the business’ accounting policies in accordance with accounting standards?

Are your personal and business affairs clearly separated in the operation of the business?

Are the director’s credit cards or holidays funded by the business?

Your people

Do you have an effective management team (where one exists)?

Do the people involved in your business have a diverse range of skills?

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Yes No

Where you are working on your own or with a small team, do you have access to a wider range of advisers and skills?

Are the shareholders realistic about the business’ market value?

Are current employee contracts in place for all staff (where appropriate)?

Does the business have a properly constituted board that meets at regular intervals?

Your business case

Are you able to clearly demonstrate the opportunity you are intending to address?

Have you clearly identified the level of benefits arising from the opportunity?

Have you undertaken a risk analysis?

Do you have realistic cost projections?

About you

Do you understand the investment process – timescales, due diligence, legal requirements, key documents, handling investor requirements etc?

Are you ready to accept equity?

Can you clearly identify the characteristics of your ideal investor?

Have you perfected your pitches/presentations to investors?

Are you ready to undergo the due diligence process?

Are you ready to work with new stakeholders?

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Take the next step

How does it feel to think about your business growing in this way? Do you know of

other people who have followed a similar path, consider approaching them to learn

more about their experiences. Which aspect of this process concerns you most?

Which aspect excites you the most?

Top tips

• Practise, practise, practise – work through your pitch and presentation • Get support. There is a range of small business advisers, like Social Innovator,

UnLtd Advantage and Business Link to name a few, who can help you prepare your case

• Be realistic about your business model • Be honest about whether this form of funding is really for you

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Levels of joint working “Some of the brightest ideas for social change grow in the spaces between

organizations and sectors. Yet few organizations have systems to make collaboration

happen.” Satish Nambisan (2009)

The big idea

Inter-organisational working, collaboration, partnership … Call it what you will, the

drivers for businesses coming together to deliver activities are growing. However, in

building a joint working initiative the participants do not always consider the nature of

the group they are building. This is important in shaping the success factors and

outcomes that the group may be striving for. It can help avoid disappointment and

frustration around what is achieved.

Joint working is usually good for: • Addressing complex problems • Improving efficiencies and gaining economies of scale • Leveraging new resources • Providing a larger and more diverse skills base • Accessing specialist expertise, which can support capacity and capability building • Improving outcomes through working towards common or related goals

Purpose

The purpose of this tool is to help you plan the nature of your joint working group

from the outset, to determine your purpose, processes and structure according to the

joint working model that is right for you. It should also help you manage the

expectations of the group.

The tool

This tool is based on a framework (Figure 1) that outlines various levels of joint

interaction. This can be used to determine the most appropriate level of collective

working for your business and/or project. You will need to undertake the following:

1. Define the issue you are hoping to address

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2. Undertake a review of the key issues you need to consider 3. Review the joint working framework levels (Figure 1) 4. Determine the level that you feel fits your purpose, context, partners and

beneficiaries 5. Set goals and benchmarks 6. Identify partner roles 7. Decide how to approach the issue or opportunity 8. Establish timelines 9. Determine the resources needed – not just what is already in place 10. Decide what type of evaluation is needed 11. Agree direction with prospective partners 12. Agree relevant documents with partners 13. Establish an action plan

Take the next step

Consider other joint working projects you have been a part of. Using the levels

framework, how would you characterise that collective approach? Is that what was

agreed at the outset or did it evolve over time? How might you have organised it

differently?

Top tips

• Often joint working projects start out with the aim of leaping straight to ‘collaboration’. Be clear about the context, purpose and histories of the group to determine he right level to work at

• There is nothing to stop a joint working group moving from one level to another if that is appropriate

• There is sometimes a tendency for joint working groups to focus on tasks. Pay attention to process and structure as much as tasks and purpose

References

Hogue, T. (1994). Community Based Collaboration: Community Wellness Multiplied. Retrieved June 2008, 2008, from http://crs.uvm.edu/nnco/collab/framework.html

Nambisan, S. (2009). Platforms for Collaboration. Stanford Social Innovation Review, 43-49.

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igu

re 1 Join

t wo

rking

framew

ork (H

og

ue, 1994)

Level o

f join

t w

orkin

g

Pu

rpo

se S

tructu

re P

rocess

Netw

orkin

g

Dialogue

Sharing und

erstanding

Information d

istribution

A b

ase of supp

ort

Non-hierarchical

Loose/flexible links

Roles loosely d

efined

Com

munication is the p

rimary link b

etween m

emb

ers

Low-key lead

ership

Minim

al decision m

aking

Informal com

munication

Little conflict or resistance

Co

-op

eration

or

alliance

Match need

s and p

rovide co

-ordination

Limit d

uplication of services

Ensure tasks are d

one

Central b

ody of p

eople w

ho act as a comm

unication hub

Sem

i-formal links

Roles som

ewhat d

efined

Links are advisory

Little or no new resources

Facilitative leaders

Com

plex d

ecision making

S

ome conflict

Formal com

munication w

ithin the central group

Co

-ord

inatio

n

or p

artnersh

ip

Work to a com

mon goal

Share resources to ad

dress com

mon

issues M

erge resource base to create som

ething new

Central b

ody of p

eople w

ho are decision m

akers R

oles defined

Links form

alised

Group

develop

s new resources and

joint bud

get

Autonom

ous leadership

but focus is on the

comm

on issue G

roup d

ecision making in central and

sub-

groups

Com

munication is freq

uent and clear

Co

alition

S

hare ideas and

be w

illing to pull resources

from existing system

s D

evelop com

mitm

ent for a minim

um of

three years

All m

emb

ers involved in d

ecision making

Roles and

time d

efined

Links are formal w

ith a written agreem

ent G

roup d

evelops new

resources and a joint b

udget

Shared

leadership

D

ecision making is form

al, involving all mem

bers

Com

munication is regular and

prioritised

Co

llabo

ration

A

ccomp

lish a shared vision and

imp

act b

enchmarks

Build

interdep

endent system

to add

ress issues and

opp

ortunities

Consensus used

in shared d

ecision making

R

oles, time and

evaluation formalised

Links are form

al with w

ritten agreements and

work

schedules

Leadership

is high, trust levels high, prod

uctivity high Id

eas and d

ecisions are equally shared

H

ighly develop

ed com

munication system

s

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Compete, collaborate, complement

“A merchant who approaches business with the idea of serving the public well has

nothing to fear from the competition.” James Cash Penney

The big idea

Once you have undertaken an environmental analysis (see the PESTLE tool under the

‘Where are you now’ stage) and considered who else is operating in your area or

market, you need to assess the relationship between your respective businesses. If

you have a sound awareness of your own business and know the strengths and

weaknesses of the other players in your field, you can determine the kind of

relationship you want to have with them. This is particularly crucial at a time when

funders or investors are likely to be looking for efficiencies and new business models.

Purpose

Consider the other businesses in your field and think about the different relationships

you could have with them (you can use other tools such as ‘Strategic group mapping’

in this stage to help identify who they are). There are a number of options you could

pursue depending on your respective missions, customer bases and business

models. These range from direct competition to collaboration or co-operation.

The tool

To consider your options in relation to others in your market or field take the following

steps:

1. Determine who you would define as the other key players operating in your market or field

2. Record how much you know about each of the other players. What are their:

a. Objectives: what drives their business? This may be their mission, financial success, market share etc

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b. Assumptions: beliefs they hold about themselves, their past behaviour and experiences, industry trends, assumptions they may make about you etc

c. Strategy: what the player says (annual reports etc) and what it does (cashflows, recruitment, research and development, public relations etc)

d. Resources and capabilities: SWOT, capacity to increase capabilities, ability to react to change, financial analysis

3. In the light of what you have found above, think about your relationship with each of the players. Will your response be to compete, collaborate or complement?

4. Complete the options analysis template (Table 1) with regard to your approaches

5. Prepare an action plan

6. Look at some other tools that could help you determine the appropriate strategy

There is another possible option, which is to do nothing, but this is a high-risk

strategy particularly in such a changing environment. Even if that is your short-term

decision, you need to keep a close eye on what is happening in your wider

environment.

Take the next step

Think of an organisation that you have regular dealings with (it need not be in your

sector, it could be where you do your shopping). What do you think are their

objectives, strategies and resources? If you were a business operating in their field,

how would you respond?

Top tips

• When considering co-operation and collaboration, be clear about what you want and what’s in it for you

• Constantly re-assess any form of joint working and have a clear exit strategy • If you are going to invest resources in the relationship, carry out a cost-benefit

analysis and ensure there is a clear business case • Remember that relationships are between people and as such you need to be

comfortable that your businesses are compatible if you want to work together

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• Competition has tended to be a dirty word, particularly in the non-profit creative and cultural industries. Nonetheless, in a time of high potential demand and diminishing public resources, it will become an increasingly important aspect of your environment

References

Bruce, I., Coperman, C., Forrest, A., Lesirge, R., Palmer, P., & Patel, A. (2008). Tools

for Tomorrow: A Practical Guide to Strategic Planning for Voluntary Organisations.

London: Cass Business School/NCVO.

Table 1: Options analysis template

Relationship Approach Which players would you include?

What you know about them

Your strategy for managing/working with the other players

Compete Take action to succeed at the expense of other players

For example improve quality, distinctiveness or compete on cost ...

Collaborate Establish formal relationships for mutual benefit

For example legal agreement, shared resources, joint venture etc ...

Co-operate/ complement

Establish informal relationships to mutual benefit

For example share information, resources, expertise etc ...

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Strategic alliances – mergers and acquisitions “This really is a merger of equals. I wouldn't have come back to work for anything less

than this fantastic opportunity. This lets me combine my two great loves – technology

and biscuits.” Lou Gerstner

“Mergers are difficult enough when they are strategic and well-evaluated. They are all

the harder when they are reactive and involve at least one distressed entity.” Cortez

The big idea

Mergers and acquisitions (M&A) have always been an option for all kinds of business

from commercial to non-profit. But the current economic downturn has put them

centre stage. M&As are sometimes seen as a rescue option for those needing to

shore up their finances but they can also be seen positively as a chance to

strengthen effectiveness and impact. The key question for any organisation looking at

an M&A option is not whether it should be pursued but “How best do we fulfil our

business’ mission and is M&A a better option than other alternatives?” (Cortez 2009)

Purpose

When two or more businesses are thinking of coming together as a merger or

acquisition, there is a wide range of issues that need to be considered and they are

likely to be viewed from very different perspectives. Different company forms may

have different legal requirements in relation to such a process and this tool is no

substitute for formal legal advice. There are various forms that the merged entity

could take:

• A holding company is established and the existing businesses continue as subsidiaries

• A new company is created and the activities, assets and liabilities are transferred to the new business

• One of the existing enterprises transfers its activities, assets and liabilities to the other

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• One of the existing businesses becomes a subsidiary of the other

Each approach has different costs and benefits and it will depend where you are in

the M&A as to how you perceive them.

The tool

This tool covers two aspects of the pre-M&A consideration, based on the following

two questions:

• What are the key drivers of this M&A? • How might you evaluate the attractiveness of an M&A partner?

Consider the following drivers and select the ones that you think apply to you:

Environmental forces Programme/activity forces

Managerial forces Financial forces

Rapid growth of your sector

Increasing competition for resources

Increasing competition between businesses in your field

Real or perceived threat of being the target of an M&A

Pressures from partners or other stakeholders

Increasing need for advocacy around a particular cause

A desire to:

Diversify or expand product/service mix

Create a stronger market niche

Improve quality

Improve reputation or brand

Assure survival of an important service

Strengthening the leadership of the organisation

Using resources more effectively

Obtaining intellectual capital

Providing better opportunities for specialisation

Obtaining state-of-the-art technologies

Establishing or strengthening strategic position

Energising the governing body

Overcoming scandal

Increasing visibility

A desire to:

Increase, stabilise or diversify funding streams

Gain access to capital

Improve the bottom line

Reduce costs and/or achieve economies of scale

Maximise resources

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If a large number of the drivers apply to your current situation, you may want to

consider pursuing an M&A. If you have a potential partner or partners in mind,

consider the following checklist:

• Do you have a history of working together? • Are your missions and values compatible? • Do you share a consistent vision of future direction to be achieved through the

M&A? • How receptive is either of you to giving up a degree of autonomy? What if one of

you were the one being acquired? • What are the strengths and weaknesses of your respective activities? • Are there significant differences in scale between you? • How complementary are your organisational cultures? • How compatible are the members of your governing bodies? • What are the implications for the management and leadership of your business? • Are there complexities around integrating staff (TUPE, pensions liabilities etc)? • Is there genuine potential for operational efficiencies? • What is their financial status? • What is the likelihood of long-term viability? • Are the funders supportive of the M&A? • What are stakeholders’/beneficiaries’ perceptions of the merger? • Are there any special issues to consider?

Take the next step

Look on the internet or in the press for recent M&A stories. What sort of picture do

they paint. Look up case studies and consider the lessons they may have to offer.

Imagine that the M&A has happened and you are five years down the line. What do

you think the business will be like?

Top tips

• The more work you can do at this stage the more likely you are to make an informed decision

• Ensure you obtain as much data as possible. Don’t rely on assumptions or verbal assurances

• Seek specialist advice early if you are considering proceeding

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• Communicate, communicate, communicate. This can be a tricky process and anxieties build quickly

• There are some very good publicly available resources in this area. Make use of them – National Council for Voluntary Organisations (NCVO), Sayer Vincent etc

References

Cortez, A., Foster, W., & Smith MIlway, K. (2009). Nonprofit Mergers and Acquisitions:

More Than a Tool for Tough Times. Retrieved 12/2/11, from

http://www.bridgespan.org/Nonprofit-M-and-A.aspx

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Portfolio analysis – where do you make your money?

“in the non-profit sector financial information and information about mission impact

are seldom discussed in an integrated way.” (Bell et al., 2010: 3)

The big idea

This tool offers two approaches to portfolio analysis. Portfolio analysis means looking

at your mix of programming and/or products and/or services and the money they

make for you or not!

The first approach was created by the Boston Consulting Group (often known as the

BCG or Boston Matrix). It suggests that, to ensure long-term success, a business

needs high growth products or services that have potential but are in need of

investment as well as established products or services that generate income. The

portfolio is divided into four categories: stars, cash cows, question marks (or problem

child) and dogs, depending on market share and contribution. The tool assumes that

long-term income generation is the main driver and relationships with existing

customers are secondary.

An alternative approach is based on the Matrix Map (Bell et al., 2010), which looks at

the portfolio from the basis of contribution to mission and financial impact. This is for

creative and cultural organisations that do not work in immediately identifiable or

homogeneous markets and for whom mission delivery is paramount.

Purpose

This tool helps you look at your portfolio of activities – programming, products,

services and so on – to determine the relative contribution each activity makes. The

purpose of the analysis is to determine where best to invest resources in future.

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The tool

In determining your portfolio mix, you need to take the following steps:

1. For each product or service in your portfolio, determine expected relative market growth

2. Determine the relative size of the various markets that are relevant to your product and services

3. Plot your products and services on the matrix 4. Determine your actions in relation to the overall portfolio:

a. Cash cow – invest significant resources and defend at all costs b. Stars – invest as heavily as possible c. Problem child – if your market share is low, you are most likely looking to

exit d. Dogs – exit or reduce costs or raise income to ensure they are less of a

drain on resources

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Minor player in a high

growth market

Stars

Market leader in new

high growth markets

Dog

Minor player in a static

market

Cash cow

Market leader in a large

but fairly static market

?

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An alternative view

Not all creative and cultural organisations can easily determine the nature and scale

of their respective ‘markets’. Or the areas in which they operate may be mediated by

a third party, such as a funder, which manages the market in a particular direction.

You can still look at your portfolio of activities but this time in terms of their relative

cost and the contribution they make to your mission.

This approach is based on recognising the ‘dual bottom’ line that many creative and

cultural organisations have to operate, namely being mission driven and having to

generate a financial return.

For this approach, you need to take similar steps to the Boston Matrix but with a

focus on mission and financial return instead of market share/growth:

1. Consider each area of activity and rate it from 1 to 4 in terms of impact (not much impact, some, very strong, exceptional). You can also develop a more robust evaluation scheme based on the following criteria:

a. Alignment with core mission

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Heart

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STOP

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Low mission impactLow profitabilityClose or give away

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Low mission impactHigh profitabilityWater, harvest and increase impact

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b. Excellence in delivery

c. Scale or volume

d. Depth

e. Filling an important gap

f. Community building

g. Leverage

2. Now consider each area in terms of the financial contribution it makes. To do this you will need to calculate direct costs plus appropriate administrative costs and deduct that figure from income generated by that activity

3. Now map the activity portfolio onto the matrix

4. Determine your actions in relation to the portfolio:

a. Money tree – invest some resources and monitor (money trees can move into the stop area but the belief remains that it is a money tree if it has not been monitored)

b. Stars – invest as heavily as possible

c. Heart – monitor carefully and consider other funding possibilities

d. Stop – this area is not contributing and you should seriously consider why it is part of the portfolio

Take the next step

Identify one or two of your recent ‘pet’ projects. Where would they be positioned on

either matrix (whichever is relevant)? What does that tell you about how you decide

which projects to do? Will you make different decisions in future? Is your map as you

expected? Have you honestly analysed where activities are positioned?

Top tips

• Use in combination with other assessment tools to determine if your business is spreading itself too thinly

• The Boston Matrix assumes markets can be clearly defined, which is not necessarily the case for many creative and cultural organisations. It provides a useful starting point for portfolio analysis but should not be the only tool you use

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• Either matrix is a useful tool to use before you decide to introduce new products or services

References

Bell, J., Masaoka, J., & Zimmerman, S. (2010). Nonprofit Sustainability: Making

Strategic Decisions for Sustainability. San Francisco: Jossey Bass.

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Business growth options – Ansoff’s Matrix

“The mass market has split into ever-multiplying, ever-changing sets of micro markets

that demand a continually expanding range of options.” Alvin Toffler, 1928

The big idea

Ansoff’s Matrix is a well-established marketing tool that was first published in 1957. It

is sometimes known as the Product/Market Expansion Grid and is used as a tool to

consider areas of business growth. It assesses four strategies for growth: market

penetration, market development, diversification and product development.

Purpose

The purpose of the tool is to help you identify the full range of options available for

developing your business activities with a focus on customers and markets.

New

m

arke

ts Market development

(Expanding through existing products and/or services into new markets)

Diversification

(Expanding through new products into new markets)

Exi

stin

g m

arke

ts Market penetration

(Expanding through existing products and/or services into existing markets

Product development

(Expanding through new products and/or services into existing markets)

Existing products and/or services New products and/or services

The matrix helps you assess each option in terms of its opportunities, benefits, costs

and risks.

• Penetration is the lowest risk option because you are selling more of what you know in a market you know

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• Market development is more risky because you are moving into new market areas • Product/service development adds more risk still because you are trying to offer

something different to your existing markets • Diversification is the riskiest strategy of all because you are moving into

something new on two fronts

The tool

To consider your product/services and market options, you need to:

1. Identify all your current offerings 2. Identify your current markets and list their characteristics 3. List your future options for expansion 4. Against each option assess the opportunities, costs, benefits and risks 5. Determine your future growth strategy including an appropriate timeline. The

following table shows some of the actions you might take

Market development Diversification

Target different geographical areas

Target different interest groups

Use different sales channels

Target different lifestyle groups

Recruit different expertise

Create a separate trading company (if currently non-profit)

Merge, acquire or work with a new partner

Market penetration Product development

Advertise/promote to existing customers to encourage them to purchase more

Introduce a loyalty scheme

Launch price or other promotions

Work with a partner

Produce variants on existing products and/or services

Repackage existing offers

Develop related products and/or services, for example a jeweller might offer a cleaning or polishing service

Shorten the time it takes to get to market or improve customer service

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Take the next step

Look at your business achievements over the last 12 months. Do you have a

preference for development in a particular area (many creative and cultural

enterprises have a tendency to focus on innovation)? If you could take a really

innovative move and there were no risks, what would you do?

Top tips

• Consider expanding the matrix to include nine boxes, which allows for some mid-ground between the new and existing markets/products and/or services

• Don’t be too put off by risk. It should be managed not avoided • Use the matrix to supplement other forms of analysis such as a SWOT or strategic

options matrix

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Getting social – a social media checklist

“Social computing is not a fad. Nor is it something that will pass you or your company

by. Gradually, social computing will impact almost every role, at every kind of

company, in all parts of the world.” !"##$%&$#'($%$)#*+,'-"*.)/'0"123&.45'

6the Internet is now playing a much broader role in arts engagement … A significant

minority use it not only to consume and share artistic content, but also to create it;

and over half use social networking sites regularly. These latest findings from a major

survey of 2,000 adult Internet users appear to ‘confirm that engaging with the arts

through digital media is now a mainstream activity’.” Arts Professional magazine, 2010

The big idea

Social media has increasingly become part of the marketing and programming

toolkits of many creative and cultural businesses. It is not necessarily a given that it is

right for your business but it may be something that you want to give serious

consideration. Social media consists of a number of online media which share some

or all of the following (Mayfield, 2008):

• Participation: social media encourages contributions and feedback from everyone who is interested. It blurs the line between media and audience

• Openness: most social media services are open to feedback and participation. They encourage voting, comments and the sharing of information. There are rarely any barriers to accessing and making use of content – password-protected content is frowned on

• Conversation: whereas traditional media is about ‘broadcast’ (content transmitted or distributed to an audience) social media is better seen as a two-way conversation

• Community: social media allows communities to form quickly and communicate effectively. Communities share common interests, such as a love of photography, a political issue or a favourite TV show

• Connectedness: most kinds of social media thrive on their connectedness, making use of links to other sites, resources and people

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There are currently a number of key types of social media, but these are developing

all the time:

• Social networks: these sites allow people to build personal web pages and then connect with friends to share content and communication. The biggest social networks are MySpace, Facebook and Bebo

• Blogs: perhaps the best-known form of social media, blogs are online journals, with entries appearing with the most recent first

• Wikis: these websites allow people to add content to or edit the information on them, acting as a communal document or database. The best-known wiki is Wikipedia, the online encyclopaedia which has over two million English language articles

• Podcasts: audio and video files that are available by subscription, through services like Apple iTunes

• Forums: areas for online discussion, often around specific topics and interests. Forums came about before the term ‘social media’ appeared, and are a powerful and popular element of online communities

• Content communities: communities that organise and share particular kinds of content. The most popular content communities tend to form around photos (Flickr), bookmarked links (del.icio.us) and videos (YouTube)

• Microblogging: social networking combined with bite-sized blogging, where small amounts of content (‘updates’) are distributed online and through the mobile phone network. Twitter is the clear leader in this field

Purpose

The purpose of this tool is to help you review your position regarding social media

and whether it is the right approach for you. It encourages you to consider what you

want to achieve, whether it is right for your customers or audiences and how you

might go about a social media campaign. Like any project, you need to consider the

business case for adopting social media and whether it is right to dedicate scarce

resources to this approach.

The tool

This tool comprises ten key questions with a number of prompts (adapted from

Mayfield, 2008 and Carton, 2009) to help you make decisions about your social

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media strategy. Work through the following questions to determine the approach that

is right for you.

Key questions Prompts

What is your goal – what are you trying to achieve?

Do you want to:

Extend your artistic practice?

Generate income?

Build brand awareness?

Improve customer care?

Increase engagement?

Build strong relationships?

Why use social media? Is it appropriate for your customer base/audiences/partners?

Is there an audience or community willing to be engaged?

Will it allow you to connect with hard-to-reach audiences or customers?

Do you understand the people you are trying to reach?

Is social media the best method?

Will it deliver an appropriate return on your investment?

Are you prepared to relinquish control?

Are you ready to be genuinely open in your approach?

Are you prepared for any impact this might have on your brand or reputation?

Does everyone connected with your business feel the same about being social?

Are you ready for your audiences/customers to express their views and play a more active role?

What kinds of social media are right for you?

Are you clear about what you want to do and where you will place it?

Do you understand the characteristics of the different social media forms?

How well do those characteristics fit with what you are trying to achieve?

Will you be using blogs, virtual worlds, networking sites, real-time

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Key questions Prompts

updates etc.?

What sorts of content can you commit to?

How will you encourage participation and grow your community?

How will you drive people towards your social media presence?

Do you have a sense of how quickly you will gain a community?

Do you have the resources to build a community?

Who will maintain your social media presence?

Do you have something to say?

Who will say it for you on a regular basis?

Are you ready to commit time and energy to your social media?

Do you have the resources to maintain your profile or will it be a short campaign?

Are you clear whether this is a one-off (perhaps for an event or conference) or ongoing approach?

Are you prepared to commit resources over the longer term if it is an ongoing approach?

Do you have the technology needed to ensure your presence is consistent and reliable?

How will your social media strategy integrate with the rest of your marketing?

What are you trying to do through your other marketing and communication channels?

How does social media fit with your other activities?

How will you ensure all your channels support each other?

How will you measure success? What will failure look like?

What measurements will you use to monitor and evaluate your social media presence – views, followers, comments etc.?

What are your targets?

What actions will you take if you do not meet your targets?

What will you do less of if you are committing resources to social media?

As you are likely to have limited resources, what will you stop doing to engage with social media?

How will you be sure that it is delivering your goals more effectively than other approaches?

How will your other goals be affected by dedicating resources to social media?

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Take the next step

Are you a member of Facebook, do you ‘tweet’, are you a member of any other

groups? How often do you get involved? Do you just watch the community or do you

actively participate? If you are actively involved, what do you contribute and how

much commitment does it take? If you just watch, think about why that is.

Top tips

• Establish your goals clearly up front • Consider involving specialist advice to help you get things started • Consider how you will deal with issues of abuse and set up a community protocol • Look at other successful social media projects in your field or market sector. Try

and analyse what has made their campaign or approach work

References

Mayfield, A (2008) What is Social Media? An e-book from i-Crossing [accessed:

21/2/11]

Carton, S (2009) A Social Media Strategy Checklist, online article [accessed: 21/2/11)

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Customer relationship management – a maturity checklist

“If Franz Kafka were alive today he'd be writing about customer service.” Jonathan

Alter

The big idea

How well do you treat your customers? Do you have a strategy for customer loyalty?

In their research in 2001, Gartners found that less than 10% of the businesses they

reviewed had a single, integrated view of their customers. Not having this customer-

centric approach can be costly in terms of customer loyalty and profitability,

particularly as customer expectations grow.

Purpose

The purpose of the customer relationship management (CRM) maturity checklist is to

enable you to consider where your business is located in terms of having a customer-

centric strategy. It is primarily aimed at SME to larger organisations. If you are a

micro-business or sole trader, you can adapt the various headings to make them

more appropriate to your circumstances. CRM is crucial whatever scale and

whatever sector you operate in. The maturity model looks at three interrelated areas:

• Process – marketing, sales and support • People – who is involved and how they are organised • Technology – infrastructure and applications

The tool

The steps involved with using this tool are based on the CRM maturity template

(Table 1):

1. Assess your current strategy. How ready are you for fully integrated CRM?

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2. Assess your CRM profile by filling in the template. Place a tick in each box on the scale depending on where you place your business from fully product/service-focused to fully customer-focused

3. Analyse your response and determine which areas need immediate attention. Which are a medium-term priority and which are working well (from which you can build)

4. Create a CRM strategy based on the above prioritisation

Take the next step

Remember the last time you had to complain as a customer. How well were you dealt

with? Do you think the business concerned had an integrated approach to CRM?

What might they have done differently to improve your experience? Have you bought

anything from them since?

Top tips

• Think about involving some of your key customers in assessing your CRM approach

• Feel free to adapt the template to add other areas that are important to you • Find exemplars of customer-centric practice and try to analyse why they are so

good at what they do

References

Shostak, B, (2002) Bridging the Gap – A Maturity Model for CRM, Presentation to the

Ottawa SPIN, CGI Group

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Gordon/Little technique “One of the biggest blocks to creativity is being too close to the problem you are

trying to solve. This can make it impossible to see the woods for the trees, and tends

to generate only trite and obvious ideas.” (Jay, 2000: 96)

The big idea

The idea behind this problem-solving technique is to encourage you to step as far

away from a particular problem as possible. Developed by William Gordon (of Arthur

D Little Consulting) in the 1960s, it involves a process of progressively more detailed

revelation, to avoid defining the problem too soon and limiting possible solutions. He

built this approach in response to a problem he witnessed with classical

brainstorming whereby people begin the process by giving what they regard as ideal

or obvious solutions and then their creativity trails away.

Purpose

The purpose of the technique is to bring you out of the immediate detail of a

particular problem. For example, instead of asking, “How to we get our audiences to

spend another £2 each per visit,” you might ask:

• “How do we make our audiences happy?” • After exploring this question in a little more detail you might ask, “How can we

provide good customer service?” • Once answers to that question have finished you would get more specific still,

“What do our audiences want from our programme/activities?” • Finishing with your original question, “How to we get our audiences to spend

another £2 each per visit?”

It is mainly a tool for group discussion to ensure you get as wide a range of

perspectives as possible, but you could try using it on your own with post-its and

large sheets of paper for doodling your answers. (You would have to suspend your

knowledge of the final question though!)

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The tool

Set up a group and, giving yourselves enough time to work through the various layers

of the problem, probably two to three hours, work through the following steps:

1. Explain to everyone involved what is going to happen – that there will be a series of increasingly detailed questions asked and you want them to brainstorm answers. It is worth being clear that you have a final detailed question in mind but that will not be the starting point, in other words it won’t be revealed until later

2. The problem is then presented at its highest possible level 3. Generate ideas in relation to the problem as it is currently stated 4. Repeat steps 2 and 3, moving on to the next cycle when the ideas slow down.

Each time you go through the cycle, the question should become slightly more detailed

5. Reveal the original problem and review the range of possible solutions that have been generated through the various discussions

Take the next step

Think of a current problem you have been wrestling with and try and write down at

least four related versions of the statement that are increasingly broad. Now write

down some answers starting with the most abstract statement first. What do you

notice by the time you get back to your original problem statement?

Top tips

• Ensure you give the participants some background to the approach before you begin, to avoid them feeling like they are being manipulated

• Start from the highest level of abstraction you can. Make sure you leave enough space to work from the outside of the problem in

• You may want to use a facilitator for the process to ensure you can contribute to and be able to pull yourself back from the original problem statement

• If you are working with a group, they need to be open, flexible and tolerant of ambiguity

• You can use the technique to redefine problems as well as solve them

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References

Jay, R. (2000). The Ultimate Book of Business Creativity. Oxford, UK: Capstone Publishing Ltd.

1

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Problem reversal

“We can't solve problems by using the same kind of thinking we used when we

created them.” Albert Einstein

“Creativity suffuses business. It‘s the entrepreneurial spark that finds a solution to a

problem, meets a need or fills a gap in the lives of people.” Creative & Cultural

Skills/Counterpoint, 2009, After the Crunch

The big idea

Problem reversal focuses on solving an identified problem by turning it on its head

and encouraging you to think about it differently. One well-known example of a

practical problem reversal is the police ‘sting’ operation. In a ‘sting’, known criminals

are selected and told they have won a prize, and are then personally invited to an

event to collect their ‘prize’. Once the unsuspecting guests arrive, they are duly

arrested. Instead of defining the problem in terms of how to go and catch offenders,

the police asked how might they get the offenders to come to them.

Purpose

In many cases, the problem definition is what limits our ability to generate new ideas.

The meaning of the words or their order can put blocks on our thinking. Taking a

problem and reframing it in terms of its opposite can change the direction of your

thought and generate new solutions. It can throw people slightly off balance and into

the unexpected, getting the creative juices flowing.

In his Key to Dreams, Magritte causes us to ask new questions: some of the labels

and their associations we recognise but others are disconcerting. He has caused us

to consider again what we are looking at and what it means.

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The tool

The following are the basic steps for using the reversal technique:

1. State the problem as originally defined 2. Reverse the direction of the problem in any way possible. The nature of the

reversal is not as important as rearranging the information about the problem 3. State the new problem and explore its implications 4. Continue reversing the problem until an agreed solution is found

To give an example, your problem might be how to improve customer satisfaction.

The reversed problem would be how to really put customers off.

Ideas on how to upset customers could be:

• Open at inconvenient times • Don’t provide any information on your products or services

Key to Dreams, Rene Magritte (1935)

In his Key to Dreams, Magritte causes us

to ask new questions: some of the labels

and their associations we recognise but

others are disconcerting. He has caused

us to consider again what we are looking

at and what it means.

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• Don’t answer the telephones • Employ rude and disinterested staff

Now you can reverse some of the answers and see what they offer you in terms of

possible solutions. You might decide to introduce new working times to make

yourself more convenient than your competitors.

Take the next step

Think of a recent problem you have solved. Try the reversal technique on it now.

Does it support your solution or does it suggest some new ideas?

Top tips

• Try the most outrageous reversal you can think of • Open up your thinking as much as you can and try not to censor yourself or

others • If the first reversal does not produce a practical solution, try a different slant

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Attribute listing

“Each time we take a step we do it by changing an attribute or a quality of something

else, or else by applying the same quality to some other thing. The pattern of great

pieces of creation may involve hundreds of successive changes. The creative step is

the same, but it is repeated many times with many variations.” (Crawford, 1964: 96)

“A camel makes an elephant feel like a jet plane.” Jackie Kennedy

The big idea

Attribute listing was pioneered in 1931 by Robert Platt Crawford in his course on

creative thinking. The technique takes an attribute or idea from one thing and applies

it to another. The task of creating the ideas is more than just the process of

combining things; an essential element of the process is the Attribute Listing Matrix

(ALM) where the features, attributes and ideas are listed.

The Bahco Ergo Screwdriver was developed through a focus on the attributes of its

handle both in terms of safety (preventing repetitive strain injury) and that at some

point most people want to use a screwdriver with both hands, which meant the

handle had to be redesigned.

Purpose

Attribute listing is a means of getting you to focus on as many attributes of a product

or problem as possible. In breaking down the elements of a problem or object, you

can look at each in turn and generate new ideas. The technique is particularly useful

for considering complex products or processes in that it allows you to consider each

feature or stage and look at the associated attributes in detail. You can also specify

the criteria by which you want to examine an attribute, for example it could be quality,

cost or speed of production. You can also look at the attributes from a range of

perspectives:

• Physical attributes: shape, form, colour, texture • Social attributes: responsibilities, taboos, roles, power

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• Process attributes: selling, marketing, production • Psychological attributes: needs, motivation, emotions • Price attributes: cost to the customer, manufacturer, supplier

The tool

Attribute listing involves four steps:

1. Select a problem, product, or process 2. Break it into key attributes or stages or parts 3. Look at each attribute in turn and identify ways for improving it 4. Design or create a solution by manipulating and recombining the variables

(structured synthesis)

Here is a simple ALM example for improving a torch:

Feature Attribute Ideas

Casing Metal Plastic, recycled plastic, rubber, recycled tyres,

carbon fibre, glass fibre

Switch On/off On/off/low/high

Battery Finite power Rechargeable, wind-up

Bulb Glass Plastic, neon, no bulb

Weight Heavy Light

As the torch has a range of features, these have been broken down to look at the

attributes of each. You could break each feature down further. For example, with

regard to the metal casing, it might also be hard, cold, slippery, round etc.

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Take the next step

Think about a product you have used at some point today and create an attribute list

for it. Now analyse those attributes and see what ideas emerge. How would you

redesign or improve the product?

Top tips

• You can use free association in conjunction with attribute listing. Once you have a list of attributes, freely associate five to ten words alongside each to build your ideas

• Try working with a group of people to bring in different perspectives on the attributes

• Try not to get focused on one or two attributes too early. Create a full list first before you move into generating ideas

• Combine it with other creative techniques like mind mapping, analogies and metaphors or sensory images

References

Crawford, R., P. (1964). The Techniques of Creative Thinking: How to Use your Idea to Achieve Success. Virginia, USA: Fraser Publishing Co.

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Association problem solving

“If free association can lead to interpretation, interpretation makes for more free

associations.” Deborah Britzman

The big idea

Free association is perhaps most commonly known as the therapeutic technique

developed by Sigmund Freud but it is also used as a creative problem-solving

method. It won’t give you a specific answer to your problem but it will help you

explore different approaches to it. Association can help spark ideas to lead you to a

solution.

Your mind will make connections between words by using one of three principles:

• Contiguity: this is based on an object or idea being near to the one mentioned, so for example zoo might lead to lion

• Similarity: which is based on an association that is very like the word stated, for example leek leads to onion

• Contrast: where the first word stated prompts a response that is distant or opposite from it, for example hard leads to soft

Campbell’s Soups used word association as part of their product development

process. They started with the word handle, which generated utensil and then fork.

Someone then joked about eating soup with a fork. They then reflected on the fact

that you could only eat soup with a fork if it had large lumps of meat or vegetable in

it. And so emerged Campbell’s Chunky Soups.

Purpose

In allowing your mind to associate freely with the words, you can generate new ideas;

the technique helps create the spark rather than the solution. You are aiming to

create a list of words, which might help you to look at the problem or issue

differently.

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The tool!

Structured free association attempts to increase the relevance of ideas to the

problem you are exploring. Here are the steps involved:

1. Write down a symbol (number, word, object etc) that is related to the problem or issue you are trying to address or some aspect of it

2. Write down whatever is suggested by the first step, ignoring all concerns for its relevance. Don’t censor your responses to the problem. Develop at least 20 associations

3. Review the list of associations and select those that seem to have special implications for the problem

4. Using the above selected associations, develop ideas that seem capable of solving the problem

5. If none of the ideas seem useful, go back to step 1 and repeat the process, using a new symbol

This approach can be used either individually or in groups. Another group approach

to using this problem-solving technique is to write on coloured cards. The problem

statement is written up and discussed within the group to make sure it is clear. Each

group member then silently and independently writes ideas on each of the coloured

cards and, when they are done with, each then passes it on to the person next to

them.

After 20 to 30 minutes the facilitator draws the process to an end. The cards are then

categorised through group discussion. Once the categories are agreed, write them

up on post-its and place them around the room as headings for different columns.

Each column/colour then represents a category of ideas.

Take the next step

Think about where you would like your business to go next. Associate freely for at

least ten minutes and create a list of words. What possibilities do the associations

suggest to you?

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Top tips

• Keep a notebook with you so you can use free association whenever the need arises

• Practise making free association lists • Notice when you are trying to make meaning or relevance during free association.

Try and clear your mind and just let the associations flow

References

Britzman, D (2003). Five Excursions into Free Association, or Just Take the A Train.

Journal of the Canadian Association for Curriculum Studies 1(1): pp. 25-37

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Pattern language

“As the artist picks his [her] way along, rejecting and accepting as he [she] goes,

certain patterns of enquiry emerge.” Bridget Riley

“Connectivity and constant advances in information and communication technologies,

led to new business models which are changing the overall pattern of cultural

consumption ...” Creative & Cultural Skills/Counterpoint, 2009, After the Crunch: 25

The big idea

Pattern language was originated by Alexander, Ishikawa and Silverstein, three

architects who wanted to look at how to generate new building design ideas. The

basis of the approach is straightforward: instead of expressing the elements of a

problem in writing or verbally, you use symbols and patterns to spark new ideas. The

act of drawing is used as a means for letting go of your assumptions and opening up

your more intuitive responses.

Purpose

The purpose of the technique is to free you from the constraints of verbal or written

language by taking a problem or issue and mapping it visually using a series of

abstract symbols. It forces your mind to look at problems in a whole new way. Once

you have produced a series of symbols, you can start to look for any visual patterns

that emerge and what they suggest to you about the problem.

The tool

The technique involves a number of steps:

1. Identify the problem or topic you want to address 2. List all the attributes you can think of for your problem or topic 3. Now draw a symbol of each attribute on a series of index cards or post-its. Just

draw whatever comes to mind and feels appropriate to you

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4. Spread out all the cards with the symbols face up. Move them around, mix and match, pair some up, focus on one or two in particular. Just allow yourself to play with them intuitively. Don’t try and force anything, just move them around. If your ideas dry up, try adding new symbols or combining other techniques like free association

5. Record your ideas and decide on any actions you want to take

Take the next step

Think about a problem that has been irritating you for a while. Use pattern language

to map out the elements of the problem. What new observations emerge? In what

way were you able to look at the problem differently?

Top tips

• Don’t be put off by having to draw. It really doesn’t matter whether you can draw or not

• Don’t worry if the symbols don’t make sense to anyone else. The technique is for your benefit, not theirs!

• Don’t spend too much time thinking about the symbols. Try and draw them quickly and intuitively

• Be as open to inspiration as you can be. Don’t worry about where the ideas come from as long as they come

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Assumption reversal

“We simply assume that the way we see things is the way they really are or the way

they should be. And our attitudes and behaviours grow out of these assumptions.”

Stephen Covey

The big idea

Assumption reversal was developed by Stephen Grossman, a creativity consultant

who wanted to find a way to overcome the paradoxes that are often inherent in many

problems. So, for example, as many cultural organisations are experiencing at the

moment, you may be required to cut budgets at the same time as delivering more

programming. The apparent contradiction of delivering more with less can serve as a

significant block to problem solving and decision making.

The reversal technique encourages you to alter an aspect of the problem or your

assumptions about it. By turning your assumptions on their head and creating a

mirror image view, you can generate new ways of approaching problems and issues.

Your original assumptions are not necessarily wrong but in reversing them you can

generate new approaches. There is also the possibility that you may be harbouring

false assumptions. If so, this technique will also help you to discover that this is the

case and avoid the limitations that this can cause.

Purpose

The purpose of this technique is to deliberately question your underlying assumptions

about a problem to help spark new ideas for addressing it. The assumption reversal

approach helps you escape from your usual ways of addressing issues. The

technique is most commonly used for problem solving and decision making,

overcoming obstacles or barriers and dealing with general problems. Grossman uses

the example of the problem of improving restaurants.

Basic assumptions: restaurants serve food, are located outside the home, people

pay for the food and the food is prepared by the restaurant

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Reversals: restaurants give food away, they don’t serve people and they don’t

prepare food

Possible solutions: people cook their own food, serving pets and not people,

restaurant is run by a local co-operative etc

The tool

Using assumption reversal involves a number of steps:

1. State your problem clearly and simply. Describe the problem in detail and if

you are working with a group answer any immediate questions

2. List your assumptions and the issues related to the problem you are

addressing

3. Reverse your assumptions and the direction of the problem statement. It does

not have to be an absolute reversal; it could be any change in the original

problem or issue. Record the opposite statement for all of the assumptions

you have generated

4. For example, your original problem statement might be: ‘How do we improve

communication within the team?’ The reverse would be: ‘How do we make

communication worse within the team?’ Then list a whole range of ideas as to

how you could make communication worse

5. Use each reversal as a starting point for new ideas. Once the ideas have been

generated, agree the actions you will take

Take the next step

Think about how you manage your time. What assumptions do you hold about how

you should work and what it means to be productive. Use the assumption reversal

technique to see if there are some creative solutions to dealing with your workload.

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Top tips

• Prepare the problem definition and statement before you start using the technique • It is not a technique for finding one correct answer. It helps you look differently at

existing information • Assumptions can be very fundamental and taken for granted so don’t be

surprised if it takes a while to change them • Don’t stop at the reversal of the problem. Use this to stimulate new ideas