Federation Wide Resource Mobilization Strategy

7/24/2019 Federation Wide Resource Mobilization Strategy

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Federation-Wide Resource

Mobilization Strategy Resourcing our shared future

www.ifrc.org

Saving lives, changing minds.



© International Federation of Red Cross and Red Crescent Societies, Geneva, 2011.

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Executive summary

Working individually and together, we, the Red Cross and Red Crescent (RCRC)National Societies (NS) around the world can maximize resource mobilizationopportunities to realize the strategic aims of Strategy 2020 for the InternationalFederation of Red Cross and Red Crescent Societies (IFRC).

Drawn from the enabling actions of Strategy 2020, the goals of the Federation-

Wide Resource Mobilization Strategy (the Strategy) are to:

1. maintain leadership in resource mobilization for emergencies

2. grow non-emergency income for international and domestic work

3. increase resource mobilization capacity of National Societies (NSs).

Achieving these goals will enable the International Federation of Red Crossand Red Crescent Societies (National Societies and their secretariat) to main-tain its position as the world’s largest humanitarian network, ensuring theavailability of resources to do more, do better and reach further.

It is worth noting that this Strategy would be not be needed if the present

resource mobilisation methods of the National Societies and their secretariatwere all working effectively. In several cases they are, with some NationalSocieties implementing best practices in their fundraising and resource mobil-

isation strategies. But in other cases, it is apparent that we are falling short ofthis benchmark and by extension our potential.

The Strategy will help us build on our strengths and competitive advantagesin resource mobilisation, while eliminating practices that undermine ournational and global resource mobilisation capacities and objectives. To dothis it is paramount that the National Societies are competitive in their mar-kets and that the IFRC adopts an integrated (Federation-Wide) approach. Onlythrough an integrated approach, where National Societies and their secretariat

are governed by a collective understanding of mutual roles and responsibili-

ties, can we hope to achieve the goals outlined above.

In the absence of integrated action, we will not achieve our resource mobili-zation potential and risk failing to meet the expanding needs of the world’smost vulnerable.

The Strategy is driven by five critical challenges that the IFRC must addressto remain the world’s leading humanitarian network.

n Increased competition for emergency income – While the IFRC globallyreceives the greatest amount of income to support emergency responseefforts, a number of competing agencies - including United Nations agencies

and International Non-Governmental Organizations (INGOs) - have movedinto this space and are investing heavily to secure increased income.

International Federation of Red Cross and Red Crescent Societies

Federation-Wide Resource Mobilization Strategy Resourcing our shared future



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1 Executive summary

n Low growth in non-emergency income – Excluding emergency income, theIFRC has a poor 2 per cent income growth rate over the last three years.In some markets, National Societies have flat or declining income growthagainst an INGO average of 6 per cent. Meanwhile some high performing

INGO competitors such as World Vision are growing at 14 per cent.n Domestic income challenges – National Societies are often the largest

humanitarian actor in their domestic markets with domestic governmentincome being the primary source of income for many. However the grow-ing number of non governmental organisations is resulting in increasedcompetition. Failure to address this threat could undermine the primarysource of income for many National Societies.

n Working in partnerships – Donor needs and preferences are changing, alter-ing the way they want to work with the RCRC. We need to proactively engage

with donors to inform and shape these preferences, but also react quicklyto changes we cannot shape if we are to maximize funding opportunitiesfrom the decentralization of international governments, multilateral insti-

tutions, the European Union and foundations. Further we must adapt ourworking models to respond effectively to corporations that wish to work inpartnership with the RCRC across many countries, especially in employee-giving, to realize our potential.

n Weak capacity building – Many National Societies are not achieving their

resource mobilisation potential. Other international agencies are investingheavily in developing markets such as Brazil, India and China. They have

more sophisticated systems for developing the resource mobilisation capaci-

ties and competencies of their local affiliates - from knowledge management

to investment funds to training programmes. These investments are payingdividends in income growth and expanding market share.

Guiding principlesConsidering the challenges outlined above and our goals, the Strategy isinformed by the following guiding principles:

1. maximize unrestricted income but not at the expense of growingoverall income

2. take donor interests into account and provide effective stewardship

3. make concrete one Red Cross and Red Crescent to maximize funding potential

4. ‘best-placed person/organisation’ makes approach on donor

5. use evidence-based decision making: globally and locally in resourcemobilisation and fundraising

6. establish measurable resource mobilisation performance targets

7. measure expenditure related to cost of resource mobilisation activ-ity and maintain the return on investment (ROI) within acceptableindustry standards.



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Strategy mapThe Strategy, summarised as a Strategy Map1 of ten interlinked, high-levelobjectives is as follows:

Strategy 2020

Goals

DonorsWhat must we

deliver for donors to

achieve 2020 goals ?

CapacitiesWhat process must

we excel in to deliver

for donors?

LearningWhere do we need to

develop to excel in

our capacities?

Resources

What do we need toinvest in to underpin

the learning?

Maintain leadershipin resource

mobilization foremergencies

Grow nonemergency income

for internationaland domestic work

Increase resourcemobilization

capacityof NS

1. Engage donors as‘one’ RCRC,

matching theirinterests with our

needs

2. Deliver best inclass donorstewardship

underpinned byquality programmes

3. Coordinate andpartner where

increasedincome

opportunities exist

4. NS understandown market

potential andmaximize funding

opportunities

5. Leadershipenable, leverand facilitate

resourcemobilisation

6. Recruit, developand retain resource

mobilisationtalent – staff and

volunteers

7. Share resourcemobilisation

expertise,knowledge and

innovations

8. Create andsustain a cultureof accountability

for resourcemobilisation results

9. Invest in key markets,initiatives, donor researchand technologies

10. Measure and

benchmarkresource mobilisa-tion performanceagainst best in

class

Engage donors

Lever capabilities

Manage knowkedge

Focus investment

This strategic approach is complemented by:

n An implementation plan including a balanced scorecard detailing how to turn theobjectives into action and how the results will be achieved and measured.

n A resource mobilization toolbox that will offer National Society leaders, resource

mobilization practitioners and volunteers throughout the IFRC ideas, insightand inspiration.

1 A Strategy Map is a dynamic way of exploring how different elements link to deliver results.

The Strategy Map methodology is described in detail in Appendix 1.



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Global challenges for resource mobilization

The Federation-Wide Resource Mobilization Strategy (FWRMS or the Strategy)is the product of a ten month review of resource mobilization trends, research,benchmarking, competitor assessment and internal performance analysissupported by senior leadership and resource mobilisation specialists fromboth within NS and outside. It also builds on previous strategy developmentprocesses during which more than 70 NS were consulted.

The increasing demands for humanitarian support and the growth aspirationsdetailed in the Strategic Aims of Strategy 2020 requires a resource mobilization(RM) strategy that is focused on achieving net income growth. It is estimatedthat the total annual revenue of the IFRC across all NSs and the secretariat,but excluding ICRC, is USD 20 billion. This research confirms that the RCRCcurrently has the leading resource mobilization position in many countriesand in a number of key income streams, with the potential to further expandthis success to meet the increasing demands for its services. But despite beinga global leader in RM, this is still not enough to deliver on the IFRC’s humani-tarian goals and many NSs are struggling to raise the resources they requireto meet the expanding needs in their communities.

Research on the growth and income patterns of a sample dataset of NSs andcomparative International Non-Governmental Organizations (INGOs) suggeststhat, despite the global recession, the RM market worldwide is growing andwill continue to grow in most key income streams.

However, this research identified key changes in the RM market that demandRCRC action to ensure our relevance to donors and re-position ourselves tobenefit from evolving trends. These changes are synthesized into internal and

external drivers.

External drivers are those which demand that the RCRC reviews how it engageswith external stakeholders as a result of changes in the environment:

Analysis from research External Drivers

Many donors- institutional and individual-are changing in terms who and where theyare and what their concerns are. Researchsuggests that many donors want to engagewith RCRC as one organization.

RCRC needs to respond to donors and theirchanging interests by investing in innovativeapproaches in communication, engagementand stewardship.

Many UN agencies and INGOs – forexample, UNICEF and Save the Children –are working in an integrated way globally– making them attractive for donors keen towork at scale and align with a global brand.

RCRC leadership –volunteer and staff- needto engage in and support the RM processat every level to ensure opportunities areseized domestically and globally.



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Analysis from research External Drivers

The number of competitors in the RCRCemergency ‘space’ is increasing - and inthe non-emergency space too. Many are

investing heavily in RM innovation and keymarkets to grow more quickly, e.g. World Vision is growing at 14% in compared toRCRC at 2% for non-emergency income.

RCRC must invest in developing markets,emerging issues, and new technologies tomaximize opportunities and maintain its

leadership in emergency income and signifi-cantly grow non-emergency income.

Internal drivers are those which demand that the RCRC re-engineer its policiesand processes to be more effective and efficient in resource mobilization.

Analysis from research Internal Drivers

The current processes and protocols on joint working and partnerships limit our abil-ity to create effective and flexible resourcemobilization partnerships at an NS andinternational level.

RCRC needs to establish revised partner-ship principles in RM to respond to donorconcerns and find new ways of working tomaximize returns for humanitarian work.

Not all NSs are able to take advantage ofthe RM opportunities in their own market. And other NSs or the secretariat are notalways able to help effectively with adviceor investment.

RCRC needs to establish a culture of joint accountability and flexible develop-ment mechanisms to ensure that everyNS achieves its full resource mobilizationpotential.

RCRC has significant social capital andbrand value worldwide but lags behindother INGOs in RM knowledge manage-ment, people development and skill sharing.

RCRC needs to invest in clarifying and shar-ing its

RM expertise among NS at different devel-opmental to grow stages to grow long-termincome at NS level and

globally.



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Key objectives

As illustrated in the Strategy Map, the FWRMS prioritizes ten key objectivesresulting from the drivers above. These objectives are organized along thefour perspectives (see Appendix 1 for explanation of the methodology )

Strategy 2020

Goals

DonorsWhat must we

deliver for donors to

achieve 2020 goals ?

CapacitiesWhat process must

we excel in to deliver

for donors?

LearningWhere do we need to

develop to excel in

our capacities?

ResourcesWhat do we need to

invest in to underpin

the learning?

Maintain leadershipin resource

mobilization foremergencies

Grow nonemergency income

for internationaland domestic work

Increase resourcemobilization

capacityof NS

1. Engage donors as‘one’ RCRC,

matching theirinterests with our

needs

2. Deliver best inclass donorstewardship

underpinned byquality programmes

3. Coordinate andpartner where

increasedincome

opportunities exist

4. NS understandown marketpotential and

maximize funding

opportunities

5. Leadershipenable, leverand facilitate

resource

mobilisation

6. Recruit, developand retain resource

mobilisationtalent – staff and

volunteers

7. Share resourcemobilisation

expertise,knowledge and

innovations

8. Create andsustain a cultureof accountability

for resourcemobilisation results

9. Invest in key markets,initiatives, donor research

and technologies

10. Measure andbenchmark

resource mobilisa-tion performance

against best in

class

Engage donors

Lever capabilities

Manage knowkedge

Focus investment

These perspectives, the linked objectives, associated actions and expectedoutcomes, are outlined below.





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3 Key objectives

Objective Action Outcomes

L e a r n i n g

5. Leadership enable,lever and facilitateresource mobilization

To 4, leadershippush to deliverpotential

Professional and volunteer leadership are more involved in RM, especially indonor engagement, and in supporting other NSs to achieve their potential and towork in partnership

RCRC governance and management understand how RM works in order toeffectively lead in this area

NSs and secretariat leadership adopt a long-term view of RM investment toensure it yields the greatest growth and returns

6. Recruit, develop andretain resource mobili-sation talent - staff andvolunteers

To 4, so NSs havehuman resources

NSs unlock the talent of their staff, volunteers and members to maximize RMpotential

NSs and secretariat provide development opportunities globally and locally

7. Share resourcemobilisation expertise,knowledge and innova-tions

To 4 building onRCRC expertise

Implement a world class knowledge management system to collect and shareRM expertise

Create RM forums at a global, regional and income stream level to facilitate

sharing expertise

NSs learn from and adopt other relevant NS and external RM innovations

8. Create and sustaina culture of account-ability for resourcemobilisation results

To 4 ensuring NSslive up to potential

NSs agree to the FWRMS and the principles underpinning it, committing tocooperation in order to deliver growth opportunities

Mechanisms are developed to oversee the implementation of the FWRMS

NSs hold themselves and each other accountable for maximizing the Federa-tion-wide RM potential

Objective Action Outcomes

R e s o u r c e s

9. Invest in key mar-

kets, initiatives, donorresearch and technolo-gies

To 6 creating the

context for talent

To 7 ensuringinvestment isshared

RCRC is at the forefront of developing and utilizing RM-related technologies

RCRC increases investments to grow income in high potential markets

RCRC invests in systematically analyzing and researching donors, their needsand market opportunities

10. Measure andbenchmark resourcemobilisation perfor-mance against best inclass

To 8 guarantee-ing results areconcrete

RCRC measures NS and secretariat performance more accurately and system-atically

The RCRC establishes national and global RM targets based on benchmarkingof peer organizations and better assessments of market potential

The RCRC undertakes regular performance management reviews so NSs under-stand their own potential for growth



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Matching different capabilities –

unlocking different potential

Regardless of the specific market conditions, research suggests that the greatmajority of NSs could secure significantly more resources with appropriatesupport. However at the center of the strategy is the acceptance that NSs areat different stages of development and their markets present different levelsof potential in terms of resource mobilization, thus requiring different typesof support to grow.

The strategy research involved an assessment of a diverse set of NSs. Based oninterviews with their leadership, a detailed three year review of their resourcemobilization performance, and an assessment of their market potential, NSscan be grouped into one of the following four-quadrant typologies:

Each quadrant represents different stages of resource mobilization develop-ment with a view to the market a National Society finds itself in. The Strategyoutlines below how capacity might be strengthened and maintained with

different levels of support. The implementation plan details how this mightbe done, highlighting the income streams with the greatest potential. It isimportant to note that National Societies will find that there are significant

differences between each quadrant as well as within any given quadrant.There is no single answer for all National Societies; many different routesto growing financial resources can be successful. Self-assessment tools willbe developed as part of the resource mobilization toolkit to help NationalSocieties categorize themselves.

Below is a summary of the proposals to help strengthen resource mobilizationcapacity for National Societies.





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4 Matching different capabilities – unlocking different potential

Key Elements to Strengthen capacity

Achievers

NS working in a developed/high potential

market with high RM performance

Peer exchanges and networking with NS RMpractitioners in different income streams

Aim to be best in class in selected incomestreams- adopt best practice from else-where- NS and “competitors”

Identify where the highest growth potentialis or any under developed income streamsand invest. Growth likely in regular giving

Developers

NS working in a developed/high potentialmarket with weak RM performance

Identify and adopt best practice from othersimilar NS or local high performing “com-petitors”

Access investment funds to grow share andcapacity in income areas with the greatestgrowth potential

Agree a coaching/development relation-ships with appropriate NSs who have high

performance

Strugglers

NS working in an under developed/lowpotential market with weak RM perfor-mance

Identify income streams likely to offer lowrisk income – explore earned income oppor-tunities

Build on current support from other NSsthrough demonstrating delivery of qualityprogrammes from funding received

Access appropriate knowledge and skillsfrom other NSs and through a shared Fed-eration knowledge management system

Pioneers

NS working in an undeveloped/low potentialmarket with high RM performance

Seek learning from other local market ‘bestin class’ performers and share techniquesfor high achievement with other NSs

Build on current successes through carefulinvestment

Continue to excel at managing income sup-port from other NSs and their governmentsand donors



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Leadership commitment to

resource mobilization

The Strategy recognizes that NSs will require different levels of supportdepending on their market and current resource mobilization capacity. Itoffers different levels of assistance to support all NSs in their growth so thatwe can collectively deliver on the strategic aims in Strategy 2020. The Strategyrecognizes the independence and autonomy of National Societies. Yet it alsoresponds to the wishes of the National Societies, as the research found, towork more closely together to improve performance and maximize revenue.

To deliver results and growth requires the implementation of change and thecommitment of the RCRC senior leadership in the following areas:

Senior leadership at National Societies n commitment to working more closely together with other National Societies

and with the secretariat to engage existing and new donors n exploring innovative ways to ensure investment in high payoff resourcemobilization areas and secure long-term income returns

n taking an active and informed role in leading resource mobilization effortsin their own country such as engaging systematically in high level policy

dialogue with government donors and working in partnership with othersto maximize funding opportunities

n undertaking robust analyses of current performance and committing todelivering growth in key income streams

n contributing knowledge and expertise in support of themselves and othersthrough peer-to-peer support and via communities of practice and refer-ence centres.

Senior leadership at the secretariat

n commitment to work closely together with member National Societies n create frameworks to make the strategy possible n enter into new external partnerships where the secretariat can uniquely add value

n create and sustain a knowledge management strategy to exploit andexchange RM skills and competencies that exist at a Federation-wide level

n Support the creation of communities of practice and reference centreswhich can act as hubs for best practice in resource mobilization





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Principles of cooperation

Central to the success of the Strategy are new ways of working together:National Societies with National Societies, the secretariat with NationalSocieties, and National Societies and the secretariat with donors. The prin-ciples of cooperation are meant to support levering the latent capacities within

the Red Cross Red Crescent in order to realize the goals of the Strategy. Assuch, these principles build on the existing General Assembly decisions, andare viewed as necessary to enable success in a number of the proposed incomegrowth strategies in specific income streams.

Underlying principles n Humanitarian imperative drives decisions to maximise resource mobilisa-tion opportunities.

n Interests and expectations of donors need to also be taken into accountwhen making decisions.

n National Society is best placed to manage relationships with donors in itsown country.

Models of cooperation n If a National Society or the secretariat is approached by a donor (govern-ment, company, foundation, HNWI etc.) which is based in another country,or, where the global relationship is managed by another National Society,

then it has a duty to inform that National Society and agree together on thebest way to manage the opportunity (with a view to maximising incomefor the Red Cross Red Crescent).

n If a National Society or the secretariat identifies a funding opportunity froma donor based in another country then:

n The National Society in the country of the donor has first right ofrefusal to apply for the opportunity and/or participate in programmeimplementation.

n If consent is obtained from the National Society based in the countryof the donor, then the negotiating National Society and/or secretariatmust share details of the negotiations and the final agreement. The

negotiating National Society and/or secretariat must also be responsible

for all programming and reporting. n If consent is not obtained, then the National Society shall fully explain

the reasoning behind this unlikely decision to the affected NationalSociety/secretariat.



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n National Societies managing a global relationship shall:

n inform other National Societies and the secretariat of discussionsrelated to its funding agreements

n

encourage and facilitate others to access increased funding opportuni-ties at a local level.



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Key income stream opportunities

In developing the Strategy, nine key income streams were reviewed to identify

their growth potential. This review was coordinated by leading RCRC expertsand senior leadership drawn from a worldwide selection of National Societiessupported by the secretariat, engaging peers from across the IFRC as well asexternal INGOs to secure insights.

The review suggests that growth will come from the following three broadincome portfolios: 1) private, 2) government and multilateral institutions, and3) other income.

The review of resource mobilization trends, research, benchmarking, andcompetitor assessments included an internal performance analysis of 20 ofthe largest National Societies (it is worth noting that the Strategy highlightsthe need for National Societies and the secretariat to more accurately andsystematically measure performance). Using this analysis, the consolidatednon-emergency income levels and growth rates across the income streamsin these National Societies are shown below:

Other51%

Other MovementPartners

3%

Multilateral funding1%

Own Governmentinternational programmes

3%

Own Governmentdomestic programmes25%

All individuals25%

Trusts & Foundations2%Events

1%

Corporate gifts in kind0%

Corporate – cash0%



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–8%

12%

23%

10%

–14%

–2%

–27%

12%

–100%96%

26%1%

–2%

125%

34%

27%

–6%

153%

–34%0%

44%

2%

Non-emergency CAGR Emergency CAGR

-100% -50% 0 50% 100% 150% 200%

From other Movement Partners

Multilateral funding

Own Government – international programmes

Own Government– domestic programmes

Corporate – cash

Corporate – gifts in cash

All individuals

Trusts & Foundations

Events

Other income

Total

Privaten Individual giving: Currently the largest private income stream and identi-

fied as the largest private growth opportunity for National Societies. It isimportant to highlight that donations outside of emergencies are generallyun-earmarked and it is often the largest source of un-earmarked donationsacross all income streams. The RCRC needs to lever relationships cultivatedduring emergency donations, identifying new one-time donors who can beconverted into committed regular givers. Opportunities for income growthfrom using new technologies must also continue to be explored.

n Foundations: While foundation giving is not prominent in many countries,the RCRC must better organize to tap into this medium growth incomestream effectively. Many INGOs present integrated proposals to the larg-est foundations. The RCRC should also build its competency in foundationfundraising for domestic and international programs.

n Corporations: Today the importance of corporate giving varies widely within

the RCRC. This income stream has potential to grow since the corporate

sector is investing in Corporate Social Responsibility programs and is seek-ing strong organizations and brands to partner. However the trend is thatcompanies are keen to not only provide money, but also share expertise,give gifts in kind and encourage staff to volunteer. The RCRC has potentialto grow in this area because partnership opportunities satisfying theseparameters can be created for virtually all topics and target groups on adomestic, national and international level. However National Societies must

build capacity and coordinate their efforts more effectively to benefit fromthe potential in the corporate sector.

n High Net Worth Individuals (HNWI): There are increasing numbers ofHNWIs worldwide who can and want to support the RCRC creating a highgrowth stream. The RCRC is however starting from a very low base with

0.01 per cent of current income coming from HNWI donors. Research on



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7 Key income stream opportunities

‘best in class’ agencies suggests that to do this successfully will mean scal-able or transformational propositions, and a new way of working closelywith these often demanding donors which will require strong involvement

from leadership.

n Events: This is not currently a major source of income for many NSs andhas limited potential to grow. There are opportunities to share knowledgeand skills between NSs to help boost returns and reduce risk.

Governments and multilateral institutionsn Government - domestic funding: As an auxiliary to government, National

Societies are uniquely positioned in many countries to secure resourcesfrom domestic governments for domestic programming purposes. The keyfocus is to maintain this market lead through leadership engagement withgovernments and continued provision of value-added services.

n

Government - international funding: The RCRC receives significant sup-port from some governments for international humanitarian work and weshould work to maintain this leadership. There are opportunities for growth

in accessing government funding in a number of countries. In addition,the RCRC has not yet been successful in accessing long term developmentfunding from governments. The development of relationships at all levelswith governments and good coordination is critical for the RCRC to growits market potential in this income area.

n European Union (EU): The EU provides complex but considerable fundinggrowth opportunities for the RCRC to support international work and intra-community (within EU) programmes where significant EU funding is avail-able. Existing coordination mechanisms should be reinforced to ensure thatRCRC is aware of EU priorities, helps to shape future EU priorities through

policy and programming dialogue and links our work to them. n Multilateral institutions: Similar to EU, there is considerable untappedgrowth potential from multilateral agencies including the Global Fund toFight AIDS, Tuberculosis and Malaria and the Global Alliance for Vaccinesand Immunization. There may be additional resource mobilization oppor-tunities in terms of grant financing from the Multilateral DevelopmentBanks (i.e. the World Bank and four Regional Development Banks). In allcases, these funds are best accessed through specialist skills and thematicpropositions linked to these agencies’ priorities.

Other incomen This includes earned income from sources such as blood services, hospitals

and clinics, ambulance services, rentals and currently represents the RCRC’s

largest income stream, though is has flat growth. This is an importantincome stream but it was not covered in depth in this strategy process anda separate project is necessary to explore growth opportunities within thiscomplex income stream.

The growth potential of these income streams will vary depending on aNational Society’s resource mobilization typology. A more detailed overviewof these income streams and the potential for different National Societies is

to be detailed in the implementation plan.



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Summary

The Strategy highlights the critical challenges that we, the Red Cross RedCrescent, must address to remain the world’s leading humanitarian networkand realize the strategic aims of Strategy 2020. In addition, the Strategy outlines

the resource mobilization opportunities and potential that exists for the RedCross Red Crescent.

Rising to the challenges and opportunities that face the Red Cross Red Crescentrequires a Federation-Wide Resource Mobilization Strategy that is focused onachieving net income growth. The Strategy Map illustrates the ten key objec-tives which must be achieved to deliver on the Strategy and the desired out-comes are described. Further detail on how these objectives will be achievedis contained in the implementation plan. Failure to take integrated action willresult in not achieving our resource mobilization potential and not meetingthe expanding needs of the world’s most vulnerable.





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Appendix One Strategy Map Methodology

The Federation Wide Resource Mobilization Strategy (FWRMS) is expressed asa linked strategy map and balanced scorecard. This approach creates a two-page systems diagram outlining the fundamental logic of the strategy andimplications for internal and external stakeholders. A number of NS includingKenya and Denmark use this approach.

This appendix outlines how this strategy was developed and how strategy maps work.

How the FWRMS map was developedThe map was created after months defining the strategic issues and the con-text in which RCRC at an NS and Federation level will have to work. For this

we used a range of tools such as PEST, SWOT, Porter’s Five Forces, competitoranalysis, benchmarking etc.

From this work was developed a set of drivers- key internal and external issues

that the strategy should address. These drivers help to define the objectives

on the strategy map.

What Is The Balanced

Scorecard Strategy Map?Strategy maps complement the classic plan approach- a written plan withhierarchical analysis, aims, objectives etc. Increasingly this is not seen as



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flexible enough to deal with volatile situations such as the current globalfundraising market.

Two U.S. academics Kaplan and Norton, originally developed the methodol-

ogy in the 1990s. The methodology has moved through a number of iterationsand formats and the strategy map is the most contemporary approach. A keybenefit of this approach is that it doesn’t just help formulate a strategy- it helpsput it into practice and track its impact.

Creating a strategy map is essentially straightforward - analysis helps cre-ate a set of drivers or key internal and external concerns. These drivers helpcreate a number of objectives, organized around a linked set of perspectives.Then you set one or two indicators for each objective and establish linkedtargets for each of the indicators. Finally, you identify a set of initiatives thatwill help deliver the objectives.

A Commercial Example: South West AirlinesThe map below is one of the earliest developed- for South West Airlines (SWA) in

the USA. They invented the ‘low-cost airline’ business model now used world-wide and one indicator their map’s power is that it has been borrowed so often.

Down the left hand side the four perspectives show a hierarchical logic: tomake money- finance- you need to satisfy customer needs, which you doby having strong internal processes, and to do that you need a learning andgrowth to engage and develop staff.

The objectives- bubbles on the right - show what activity must take place in

each perspective to deliver the overall profitability goal. The objectives are a

way of addressing drivers. They follow a logic- with the down path answering‘how?’ and the up path ‘why?’

This simple model contains quite profound insights into how to run a suc-cessful low cost airline. This simplicity is a key feature of a successful map .

Financial

Customer

Internalprocess

Learning& Growth

Ground crew aligned with company goals

Fast ground turnaround

On-time flights Lowest prices

ProfitabilityLower costsIncreasedrevenue



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Appendix One Strategy Map Methodology

The map from the top perspective down

should explain how the strategy works and

this is how maps are normally created:

“How will we succeed in our strategy?” By meeting our financial objectives.

“How will we meet the financial objectives?” By delivering to our customers.

“How will we be sure to deliver to our cus-tomers?”

By excelling in key internal processes.

“How can we ensure we are excellent inprocesses?”

By learning and improving.

Reading the map from the bottom to the top, it should explain why you havechosen the objectives in each perspective, as shown below:

“Why are we learning and growing in thisway?

In order to excel in our internal processes.

“Why are we focusing on those processes? To deliver high-quality service to our cus-tomers.

“Why do we need to deliver this service tocustomers?”

To ensure we achieve our financial objec-tives.

“Why do we need to achieve the financialobjectives?”

To move towards our vision.

A complementary element to the map is the scorecard with objectives as the link.

There are four main scorecard components which answer different questions:

Objectives Indicators Targets Initiatives

What do we need toachieve?

How will we measuresuccess?

How much do weneed to improve?

What do we need todo to get there?

Below is the SWA scorecard, which shows how the simplicity of the map logicabove is expanded and implemented. Notice some key elements here such asthe importance of engaging employees through a stock option plan.

F i n a n c e

C u s t o m e r

C a p a c i t i e s

L e a r n i n g

ProfitabilityMarket value

Seat revenue

Plane least cost

FAA on-timearrival rate

Customer ranking(market survey)

% ground crewshareholders

% ground crewtrained

Ground crew alignedwith company goals

Fast ground turnaround

Profitability

Qualitymanagement

Customer-loyaltyprogramme

Qualitymanagement

Ground crewtraining

Cycle-timeoptimisation

program

Year 1: 70%

Year 2: 90%

Year 3: 100%

30% CAGR

20% CAGR

No. 1

No 1.

On-timeflights

Lowestprices

Increased revenueLowestcosts

30 minutes

90%

Time on ground

On-time departure

5% CAGR

Indicators Targets InitiativesObjectives



21



IndicatorsIndicators are an important part of performance management and the FWRMS

map has indicators built in. Kaplan and Norton argue only one or two indica-

tors should be set for each objective to ensure focus.

There are two types of indicator: lead and lag.n A lead indicator is to determine if you are heading in the right direction

n A lag indicator measures if you have achieved the objective

Lead indicator Cycle time Lag indicator

number of donors signed upto monthly giving throughFace to Face

12 months retention/attrition level at theend of 12 months

number of donors indicat-ing they’ve left a bequestfollowing adverts

5 years time to a bequest pro-gramme maturing anddelivering net results

number of foundation pro-posals written

6 months number of successful pro-posals

number of joint EU projectssubmitted

24 months grants programmes agreed

TargetsA target sets the degree of improvement required to achieve the objective.Each indicator will have a target. In order to set the target, you need to knowthe current level of performance – or ‘baseline’ - against each indicator.





Humanity / The International Red Cross and Red Crescent

Movement, born of a desire to bring assistance without dis-

crimination to the wounded on the battlefield, endeavours,

in its international and national capacity, to prevent and alle-

viate human suffering wherever it may be found. Its purposeis to protect life and health and to ensure respect for the hu-

man being. It promotes mutual understanding, friendship,

cooperation and lasting peace amongst all peoples.

Impartiality / It makes no discrimination as to nation-

ality, race, religious beliefs, class or political opinions. It

endeavours to relieve the suffering of individuals, being

guided solely by their needs, and to give priority to the

most urgent cases of distress.

Neutrality / In order to enjoy the confidence of all, the

Movement may not take sides in hostilities or engage at

any time in controversies of a political, racial, religious or

ideological nature.

Independence / The Movement is independent. The

National Societies, while auxiliaries in the humanitarian

services of their governments and subject to the laws

of their respective countries, must always maintain their

autonomy so that they may be able at all times to act inaccordance with the principles of the Movement.

Voluntary service / It is a voluntary relief movement not

prompted in any manner by desire for gain.

Unity / There can be only one Red Cross or Red Cres-

cent Society in any one country. It must be open to all.

It must carry on its humanitarian work throughout its ter-

ritory.

Universality / The International Red Cross and Red

Crescent Movement, in which all societies have equal

status and share equal responsibilities and duties in help-

ing each other, is worldwide.

The Fundamental Principles of the International

Red Cross and Red Crescent Movement



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www.ifrc.org Saving lives, changing minds.

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Federation Wide Resource Mobilization Strategy

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