It is budgeting season for many nonprofit organizations and the meetings are in full swing. Everyone is vying for attention to stand out from the rest of the herd. Spreadsheets are sharpened. PowerPoint slides are at the ready. This is the annual ritual to determine which priorities get funded and what projects will be put out to pasture.
Decisions need to be made and sound judgement must be exercised. There is a lot at stake if the group is to thrive. Otherwise it is likely to spend another fiscal year just getting by. Goals needs to be set and risk tolerance must be clearly stated. Facts need to be carefully separated from fiction.
In these situations there is one creature who has come to dominate the decision making landscape. The HiPPO — also known as the Highest Paid Person's Opinion. The HiPPO wants 15% growth in annual giving next year. The HiPPO wants the gala event to be double the size of last year, but at the same cost. The HiPPO wants more investment in getting Millennials to give. The HiPPO wants more use of the color blue. Oh, no! It’s a HiPPO attack.
Unfortunately, the data at this nonprofit would show that annual giving has never surpassed 7% in growth in any of the last five years. The data from multiple gala events would show that growing average gift amounts would produce better results than simply doubling the number of event attendees. The data would recommend proportional investment in different generations relative to their giving. Maybe more blue is better, but let’s see what the testing data shows. What we have here is a HiPPO problem.
THE STRUGGLE IS REAL
Both corporations and nonprofits struggle with the HiPPO problem. Former Netscape CEO Jim Barksdale is known for saying, “If we have data, let’s look at data. If all we have are opinions, let’s go with mine.” Given the choice between only using opinions to make decisions or allowing data to have a say – let’s look at the data.
This is not to say that experience or seniority do not have a role to play here. But consider for a moment the impact this has on staff across the organization. In several nonprofit industry surveys, we continue to see how lack of empowerment and trust from leadership leads to staff turnover. That revolving door of talent ultimately impacts performance, programs, and mission. The struggle is real and has measurable impact on an organization.
TAMING THE HIPPO
You might be reading this and work for the HiPPO. You might be reading this and you are the HiPPO. Someone you know and love might be a HiPPO too. This is not to say that the wayward opinions of highly incentivized leaders come from ill will or malice. The HiPPO means you no harm, but can still do a lot of it.
To tame the HiPPO: Speak softly and bring data. If all you have are your own opinions, then get ready to lose to the HiPPO. But if you have data, information, and evidence, then at least you have a chance to influence them. You might say: “It’s helpful to know that you want us to set an ambitious fundraising goal for next year. Can we take a moment to review current and prior performance? Perhaps another input to this decision can be some benchmarking data we have from similar organizations.”
We are acknowledging that the HiPPO has their perspective on a particular goal. Then we use data and insights to drive towards an informed decision. The point here is that we’re not being dismissive of aims that may be directionally correct. Instead, we are trying to get leaders to encourage the use of data in decision making across the organization.
What we want to do is to change the Highest Paid Person’s Opinion into a Data Informed Person’s Opinion. Let’s focus on transforming the HiPPO into a DIPPO. This is going to take patience and practice. It also means shifting away from the use of anecdotes and relying on information. Before you know it there will be a lot more data driven decision making taking place at your organization.