Feedback: A nonprofit learns to listen to the customer.

feedback

Listen to the customer.

Businesses do it, albeit imperfectly.

So do nonprofits.

But the question for nonprofits is, who's the customer? Most nonprofits listen to their donors. Those that raise money from individuals test their fundraising messages, and act on what they learn. Those that rely on foundations pay heed to what major philanthropies have to say.

But the practice of listening carefully to those who nonprofits aim to serve--their clients, constituents or beneficiaries--is less common.

This is a missed opportunity for nonprofits that want to improve their performance.

Consider, as an example, the story of the Center for Employment Opportunities, a New York-based nonprofit that helps men and women coming out of jail or prison enter the workforce. CEO, as it's known, does its job well by most accounts, including a pair of thorough evaluations conducted by MDRC, a foundation-funded research organization. Funded mostly by governments and foundations, CEO has an annual budget of about $29 million this year; during the past decade, CEO says it has helped about 25,000 ex-offenders find and keep jobs.

But CEO wanted to do better. So, for the past couple of years, it has been learning how to ask the right questions of those formerly incarcerated people, how to get answers that are reliable and actionable, and how to respond in ways that improve its programs.As it happens, CEO has long understood the power of feedback. Supervisors or job coaches deliver feedback daily to returning citizens, as they're sometimes called, as they transition to work. Clients get rated on a scale of 1 to 3 on seven questions, and their scores are recorded in a booklet called the Passport to Success. Among the questions:

Was this person consistently on-time?

Did this person present themselves professionally for the job at hand?

Did this person put forth effort and remain engaged at work?

Did this person follow directions, job protocols, and safety procedures?

Was this person respectful of leadership?

Did the participant work well with the team?

“Our model is all about giving feedback,” says Brad Dudding, the chief operating officer of CEO.

And yet. For a long time, CEO did a half-hearted job, by its own account, of seeking feedback from these returning citizens. Interesting, no? Especially for a nonprofit that pays attention to data and evidence.

“We’re really good at delivering feedback," Dudding told me. "We had to get good at receiving it.”

A grant to support listening

To launch a systematic effort to listen to clients, CEO sought and received a grant from the Fund for Shared Insight, a collaboration of three dozen foundations that is intended to improve the performance of nonprofits and the practice of philanthropy. The Fund for Shared Insight promotes feedback loops through an initiative called Listen for Good. It awarded $300,000 to CEO two years ago, and recently made a followup grant of $305,000 to enable CEO to expand its feedback loops nationally.

CEO found that getting honest feedback from clients isn't easy. It began by sending them text messages, asking clients to rate their job coaches or workplaces. Because CEO wanted to rectify problems that surfaced, the ratings could be traced back to individual clients.

That didn't work. The feedback was distorted by what's called "courtesy bias," which is the tendency of people to downplay their gripes because they don't want to offend the organization taking the survey.

This was especially true of CEO's clients, explains Dudding: “They’re not paying us. They are incredibly thankful. They don’t want to make anyone look bad or get anyone into trouble.”

Since then, CEO has made the surveys confidential, and refined the questions. It also convenes focus groups so returning citizens can describe their experiences in detail. Among the questions:

How prepared do you feel to begin work? 

How often do staff at CEO treat you with respect?

What could CEO do better?

What is one reason someone might part ways with CEO?

If CEO could change one thing, what should it be?

Who at CEO has had the biggest effect on you? How so?

Not surprisingly, CEO now knows far more than it used to about how clients feel about its work, and it has adapted, accordingly.

One simple change: Its programs used to begin at 7 a.m. "for no particular reason," says Dudding. Clients who rely on public transport struggled to arrive on time. Now they report at 8.

Another change: Because clients work at a variety of sites, sometimes moving to new workplaces from week to week, CEO strives to communicate more effectively about their assignments, sending directions by text message.

Participants have issues with its scheduling system, CEO has found. "That's our number one pain point," Dudding says. "We're still working on it. It's a long fix."

CEO will track its performance over time by using the Net Promoter System developed for business by Bain & Co. to assess its work. (See my 2015 blogpost, The Disruptive Power of Feedback.)  As more charities track their net promoter scores, they will be able to measure themselves against peers.

A culture change

Perhaps the biggest change at CEO is cultural, Dudding tells me. “It’s making us aware of how little decision-making (power) participants have in our organization," he says. "When you think about the concept of voice....they haven’t had a lot of voice.” CEO is now considering adding an ex-offender to its board of directors.

Melinda Tuan, the project manager for the Fund for Shared Insight, praises CEO's  work. “They are the best example we’ve come across of a new organization that has really embraced this,” she says. Next month in Washington, D.C., CEO's work will be showcased at a two-day event called the Feedback Summit, organized by Feedback Labs, an informal collaboration of nonprofit groups "committed to the belief that regular people— whether we call them beneficiaries, constituents, or citizens— should be driving the policies and programs that affect them." Advocates of feedback loops like to say the listening to those regular people isn't just the right thing to do; it's also the smart thing to do.