Zilch - Bootleg Betty

Montreal Gazette
How to do plenty with ‘zilch’
Stop throwing money at every problem
BY RICK SPENCE, FINANCIAL POST
JULY 20, 2010 10:21 AM

Actress Bette Midler sends personal letters to everyone who contributes to her project dedicated to revitalizing New York City parks and community gardens. Â Photograph by: Lucas Jackson/Reuters

For years, business leaders have talked up the virtues of “doing more with less.” Usually, that’s a euphemism for “we’re cutting your budget 2%, but your targets are up 5%.”

Now, New York entrepreneur Nancy Lublin, founder of Dress for Success, a not-for-profit organization that supplies professional work attire to disadvantaged women, has taken “less” to the next level. To her, the secret of business success is doing more with nothing. Nada. Zip.

Her new book Zilch: The Power of Zero in Business, looks at the freedom, power and unexpected potential of working with minimal resources. The book starts in the boardroom of a multinational corporation, where the marketing team is moping over the latest budget cut — and wondering how they’ll get anything done with only US$2-million. (The mood brightened when the group decided to fund their work by looting the travel budget.)

Lublin, who was used to working with zilch, suggested they look at leveraging distribution partnerships, or free channels such as Twitter. “They looked at me silently, as if I had three eyes and six arms,” Lublin writes. “Who is this weird creature…. How did she get past security?”

After years of hearing how non-profits should run more like real businesses, Lublin realized today’s budget-conscious businesses can learn from non-profits. She says, without the burden of throwing money at every problem, non-profits grow through alliances rather than acquisitions; hire and promote based on people’s passion, not experience; and create brands based on relevance, not focus groups.

Lublin cites examples from many non-profits, from Lincoln Center and Wikipedia to an organization that builds playgrounds in underprivileged areas. As we head toward budget season, their advice is worth heeding:

-Integrate your programs and marketing for maximum success. Share Our Strength, which battles child hunger, coordinates a “Great American Dine-Out,” in which supporters patronize restaurants that have pledged a portion of proceeds to Share Our Strength.

-Do more with external people. Former employees, suppliers and even customers can be goodwill ambassadors for your company or products.

Teach for America recruits recent graduates to teach for two years in low-income communities. It stays in touch with those teachers forever, soliciting their help and turning them into evangelists. When TFA realized many of its graduates were running for office, it set up an institute to train them for political life.

Lublin’s current project, DoSomething. org, uses online media to encourage teens to do volunteer work. When it organizes gala fund-raising events, it invites former interns to attend.

“They are smart, ambitious people who know us well. Someday, some of them might want to come back and work for us. Many more [I hope] will be quite rich and want to give us piles of their money,” she says.

She suggests retailers embrace this principle by offering employees 5% discounts for life: “It would create loyal customers and have a ripple effect on their friends and families, who will no doubt try to exploit that discount.” What’s better for business than a gaggle of friends making a collective shopping trip to share a negligible discount?

-Make your customers part of a cause they care about. Ka-BOOM!, the playspace-building organization, creates goodwill and community ownership by involving children and families in planning and building local playgrounds.

The Christopher and Dana Reeve Foundation runs an online community where people with spinal injures (and their families, friends and care-givers) support each other through information, stories and shared resources. While those stakeholders benefit, potential donors get a clearer picture of the difference their contributions make.

-Welcome newcomers to the “club.” Actress Bette Midler sends personal letters to everyone who contributes to her project dedicated to revitalizing New York City parks and community gardens.

-Tell your story. Non-profits know success stories build understanding and goodwill. John Lilly, chief executive of Mozilla, the non-profit that produces the Firefox browser, likes to tell a story about the Mongolian expat who localized Mozilla’s open-source tools so other Mongolians could use them more easily. People may forget your product’s name, its features, or how it works, but they’ll remember how it helps people.

-Cut costs as if you lived in a glass house. To receive favour-able tax status, non-profits must report expenses line-byline; not lump them into buckets such as “Selling, General and Administrative Costs.”

Lublin says such transparency forces everyone “to think long and hard about how every dollar is allocated.” If your itemized expenses were available to anyone who asked, how would your organization change the way it spends?

Lublin once met Donald Trump. When he found out she worked at a not-for-profit, he asked, “You don’t find that boring?”

Having no money, she says, is never boring: “It’s a cocktail that drives creativity and fresh ideas.”

Is it time to slash a few budgets in your business?

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– Rick Spence is a writer, consultant and speaker specializing in entrepreneurship. His column appears weekly in the Financial Post. He can be reached at rick@rickspence.ca