Category: organizational effectiveness

Being in Vegas was a vivid reminder that the further someone is away from actual cash, the more likely they are to spend. The only place cash was accepted in Sin City was to buy poker chips. It’s far easier to toss one of those on the table than a $10 bill, and more likely that you’ll forget it’s real money you are playing with.

The same principle applies to credit cards — it doesn’t feel as real to swipe as it would to pull bills out of a wallet. It’s true for credit cards, too — which in part is why retailers push them. Buying with either type of card is less painful (in the short term) and more likely to encourage purchasing. Even writing a check is one step removed from cash and often makes big payments like taxes or a mortgage more palatable than handing over a stack of real bills.

There are many ways to encourage spending or giving. Move away from cash and accept electronic payments. Create a longer time horizon between payments, such as offering annual plans. Consider subscriptions, automatic renewals, or automatic monthly payments. Allow people to buy “points” to use instead of currency. Combine services into a package so your customer only has to make a single money decision.

Design your financial transactions like poker chips to make this behavioral phenomenon work on your behalf.

Striving for efficiency is a good idea — until it takes over the mission. If efficiency becomes the main goal, rather than supporting it, you have gone too far.

Nonprofits know “No money, no mission,” but if everything is cut in the name of productivity, the ability to deliver the organization’s purpose can become a casualty and keep you from being who you are.

Too much of anything is usually too much, and the quest for efficiency is no exception. Don’t trade your purpose for ROI and leave your mission behind.

Thanks, Mike!

After it snows, if you don’t shovel quickly and thoroughly, a slippery layer may form on the sidewalks. If that happens, some people put out salt pellets to melt the ice. While a little bit usually gets the job done, one house on my block went crazy with the salt. Weeks after the last snow, it still covers the sidewalk, degrading the concrete and serving as a nemesis to dogs’ paws.

They took the easy way out by letting the chemicals do the work instead of doing it themselves.

The same pattern occurs in organizations when people only consider the short-term ease instead of the long-term consequences. It’s faster to shove all the papers in a drawer, but it makes it harder to find them later. It’s quicker to do something yourself the first time, but then the other person never learns the process, and you have to do it forever. You can let AI do your writing, but you may pay the price on the back end if you don’t fact-check or edit.

Don’t make the front end the easy part of the process. Do the work initially and benefit from a positive residual effect.

Every year, drivers in Iowa receive a new renewal sticker for their license plates that lists the month and year it was issued. Drivers in Wisconsin have a permanent “month” sticker, and receive a renewal that just includes the year.

This may not seem like much of a distinction, but consider the unnecessary complexity the Iowa system creates. The state must produce and purchase 12 different stickers (one for each month) and distribute them to the 99 county courthouses. There is invariably waste each month, as there is no way to predict the exact number required.

On the other hand, Wisconsin benefits from bulk ordering (only one version with the year) and can reduce costs through a single annual distribution process.

The outcome is the same, but I suspect that the time and money to get there are significantly different. Be like Wisconsin and don’t stick yourself with unnecessary complexity.