By Damian O’Broin
In his book Good to Great – Why Some Companies Make the Leap… And Others Don’t (Random House Business Books, 2001), Jim Collins tells a story about a hedgehog and a fox. Actually, it’s Isaiah Berlin’s story, but here’s how Collins tells it:
‘The fox is a cunning creature, able to devise a myriad of complex strategies for sneak attacks upon the hedgehog. Day in and day out, the fox circles around the hedgehog’s den, waiting for the perfect moment to pounce. Fast, sleek, beautiful, fleet of foot and crafty – the fox looks like the sure winner. The hedgehog, on the other hand, is a dowdier creature, looking like a genetic mix-up between a porcupine and a small armadillo. He waddles along, going about his simple day, searching for lunch and taking care of his home.
The fox waits in cunning silence at the juncture in the trail. The hedgehog, minding his own business, wanders right into the path of the fox. ‘Aha, I’ve got you now!’ thinks the fox. He leaps out, bounding across the ground, lightning fast. The little hedgehog, sensing danger, looks up and thinks, ‘Here we go again. Will he ever learn?’ Rolling up into a perfect little ball, the hedgehog becomes a sphere of sharp spikes, pointing outward in all directions. The fox, bounding toward his prey, sees the hedgehog defence and calls off the attack. Retreating back to the forest, the fox begins to calculate a new line of attack. Each day, some version of this battle between the hedgehog and the fox takes place, and despite the greater cunning of the fox, the hedgehog always wins.’
People are similarly divided into foxes and hedgehogs. But it is the hedgehogs that make the biggest impression because they simplify the complex into a single, simple unifying idea. Think of Karl Marx and class struggle, Charles Darwin and natural selection, Ken Burnett and relationship fundraising. These are people who have looked at a complex world and found a way of simplifying it. They are hedgehogs.
Collins goes on to argue that all the great companies have a ‘hedgehog concept’, a simple, clear idea that drives everything that they do. For the US pharmacy chain Walgreens it was this: ‘To run the best, most convenient drugstores (pharmacies), with high profit per customer visit’. Once they identified this as their hedgehog concept, they implemented it with fanatical consistency, replacing inconvenient stores with more convenient ones, even closing good stores if the opportunity arose to replace them with potentially great ones. As a result, Walgreens’ stock performance outperformed the rest of the market by a factor of 15 between 1975 and 2000, leaving the likes of Intel and Coca-Cola trailing far behind.
But a hedgehog concept isn’t a goal or a strategy. It’s an understanding of what it is that you can be best in the world at. More specifically, your hedgehog concept can be found where the answers to these three questions overlap.
What can you be best in the world at?
What are you deeply passionate about?
What drives your economic engine?
So what does this have to do with fundraising? Well, I think there’s one, simple thing that most charities could realistically aim to be best in the world at. And it’s something that would definitely drive your economic engine: donor care. The question is, are you deeply passionate about it?
Whether you’re a big charity or a small one, in whatever sector or country, you could be the best charity in the world at donor care. All it needs is the passion to do it and the determination to make it happen.
The small Canadian political party Animal Alliance Environment Voters Party of Canada (AAEVPC) is hardly a household name, even in Canada, or a widely recognised cause, but they seem determined to become the best nonprofit in the world at donor care. You can read about how they retain 70 per cent of new donors in this recent post on The Agitator.
Just to put that retention figure in context, in The Agitator’s donor retention survey nearly two-thirds of charities reported that less than 40 per cent of donors ever make a second gift.
And the rate of second gifts is as good an indicator of long-term donor retention as you’re going to get. If you can maximise the number of second gifts you get, you’ll see a major increase in donor retention and a consequent growth in the lifetime value of your donors.
So here’s a free hedgehog concept for you to adopt for your charity:
We will be the best charity in the world at caring for and retaining our donors resulting in a high lifetime value per donor.
Take that to heart, make it the basis of everything you do, and riches will follow. Guaranteed.