Playgrounds and Performance: Results Management at KaBOOM! (A) We do this work because we want to make a difference in the world; how can we go further faster? - Darell Hammond, CEO and co-founder, KaBOOM! Darell Hammond stepped onto the elementary school playground and took a long, slow look around. It was 8 a.m. on an unusually warm fall day in 2002 and the playground was deserted, but Hammond knew the children would start arriving soon to admire their new playground. Dotted with purple, blue and orange swings, slides and seesaws, the playground had been built just the day before by an army of volunteers dispatched by The Home Depot, the national hardware retailer, together with parents and community volunteers. Hammond thought it would be the best place for him to collect his thoughts for his early morning board of directors meeting. This wasn't the way a CEO typically prepared for a board meeting, but KaBOOM!, the not-for- profit Hammond founded in 1995 with partner Dawn Hutchison, wasn't a typical company. KaBOOM! was a splashy, high-profile social enterprise, often featured in local and national news stories for its work-namely, building playgrounds in "kid rich, playground poor" neighborhoods around the country. The organization had overseen the construction of 441 playgrounds (see Exhibit 1 for construction by year) and was working hard to keep up with demand. The board was pleased with the organization's growth and accomplishments but lately was showing signs of being overloaded by the deluge of information it was receiving from management-everything from playground build reports to piles of press clippings. The board wanted to assess the organization's performance without being overwhelmed with data. Hammond knew they needed to develop performance measurement system but how would they get there? Hammond glanced at his watch and realized that the meeting was about to start. He closed the playground gate behind him and headed for the boardroom Building KaBOOM! KaBOOM! was born of a tragedy. After reading a newspaper article about two children who suffocated in a hot car after climbing in to play, Hammond and Hutchison began their quest to fight for each child's right to have a safe and fun place to play. They envisioned that if KaBOOM! was successful, all children in America would have fun and healthy play opportunities through the support of their communities. Although there were approximately 250,000 playgrounds in the United States located on public and private school grounds, in child day care facilities, in municipal and state parks and in other private and public recreation spaces only 65,000 were deemed fit for use; 75% of playgrounds had fallen into disrepair, leaving too few playgrounds to serve the 52 million U.S. children between the ages of 2 and 121. "If children are our future, why are we allowing them to play in garbage-strewn lots, abandoned cars, bushes riddled with crack vials and needles, and boarded up buildings? It is unacceptable for children to grow up without a safe place to play," said Hammond? With $25,000 in start-up money, Hammond and Hutchison launched KaBOOM! and fashioned a new model for building playgrounds, creating partnerships with a host of FORTUNE 500 corporations, which funded playground and skatepark construction called "builds"-on a fee-for- service basis. KaBOOM! matched its funding partners with community partners (the recipients of the playgrounds) that recruited children from their community to design their dream playground. (See Exhibit 2 for images of children playing on a KaBOOM! playground.) After eight weeks of collaborative planning, 175 volunteers (half from each partner) would transform an empty lot into a playground in 6 hours. Hammond noted that one important aspect of the organization's theory of change that individuals and groups can and want to make a differencerelied on tapping leadership from within the local community. "By focusing on building a discrete project on a discrete timeline, we activate hundreds of volunteers to get involved in their communities many for the first time," said Hammond. KaBOOM! hoped that by stimulating civic involvement, more playspaces would be built at a faster rate. Community partners paid for 15% of the cost of their playground while funding partners, who viewed their relationship with KaBOOM! as an opportunity to contribute to their communities while building their brands, developing their human resources and enhancing their public relations efforts, paid 85%. (See Exhibit 3 for KaBOOM! income statements.) The organization's 2002 operating revenue of $5.8 million was comprised almost entirely of earned income and project fees collected from its largest fundersThe Home Depot, Nike, Target, Computer Associates and Sprint-and a network of other corporate, foundation, and association funding partners. By 2003, KaBOOM! would become the largest producer of community-built playgrounds in the United States, leading 25,000 volunteers annually in the construction of playgrounds and skateparks mostly in low-income and urban areas. The organization, headquartered in Washington, D.C., with satellite offices in Atlanta, Chicago and San Francisco, employed 21 full- time staff members. KaBOOM! was pursuing a three-pronged strategy it referred to as "Lead, Seed and Rally." The Lead prong of the strategy called for KaBOOM! to lead by examplebuilding playgrounds by providing planning expertise, matching funding partners to communities and managing the playground builds directly. While this model gave KaBOOM! control over build schedules, quality 1 Playing it Sate: The Sixth Nationwide Safety Survey of Public Playgrounds." The Consumer Federation of America and U.S. Public Interest Research Group Education Fund, June 2002, available from the US. Public Interest Research Group website, http://uspirg.org/uspirg.asp?id=7219&id3=USPIRG&/, accessed August 4, 2005. 2 "Mayors to build west side playground in Chicago for the U.S. conference of mayors, city leaders to build a KaBOOM! playground in Chicago," PR Newswire, April 23, 1998, available through Factiva, http://www.factiva.com, accessed August 8, 2005. CASE 2-Survey Mast... MBA Group 2: Case. W CASE 2-Survey Mast... E Playgrounds and Performance: Results Management at KaBOOM! (A) 306-031 and event publicity, it was a time-intensive process as each project manager could complete an average of just 18 playground builds annually at a cost of about $60,000 each. Early on, Hammond's team realized that it could not reach its vision by building playgrounds on its own; the human resource and equipment costs as well as the finite financial resources of its funding partners would limit its growth. "We deliberately chose NOT to open additional offices," explained Hammond. "Instead, we took our cue from the 14,000 requests we received for technical assistance on building playgrounds and developed our Seed strategy." The Seed prong of the KaBOOM! strategy called for the organization to provide support, planning tools and encouragement to community groups, but removed KaBOOM! from the role of project planner and builder. "The Seed strategy placed a higher level of responsibility on the community group to do it themselves," said Hammond. KaBOOM! provided just enough support to ensure that the community could successfully complete a build. The organization published free information on all aspects of its community-build model and encouraged communities to adapt the model to meet their individual needs. KaBOOM! provided do-it-yourself handbooks, training programs, technical assistance, challenge grants and online tools, including a Project Planner. KaBOOM! also planned to track builds which resulted from its Seed strategy but knew these were going to be more difficult to easure since, for example, not everyone who attended a training session would successfully complete a build. Further, since the Seed activities built a pipeline of potential community partners for Lead builds, there was overlap between the Lead and Seed prongs of the strategy. The third prong of the KaBOOM! strategy was an advocacy program which would later become known as "Rally." Planned for implementation by 2006, Rally called for KaBOOM! to partner with individuals it called "Playmakers" who would go beyond one-time volunteering to serve as community or national advocates for increasing the number of playspaces. These Playmakers would form local mayoral-recognized "Play Board" that would take responsibility for increasing play in their cities and towns. Each city or town would then apply to KaBOOM! for recognition as one of America's "Most Playful Cities." The Rally strategy was a sophisticated public relations program which KaBOOM! hoped would help "ripple out" its message from local neighborhoods to the city and national level-ultimately generating more playspaces. Though the advocacy strategy had not yet launched, KaBOOM! wasn't lacking for attention. In 2001 it received the Chairman's Commendation from the U.S. Consumer Product Safety Commission for its achievements in playground safety and in 2002, KaBOOM! was named one of America's 100 best charities by Worth magazine. The company even persuaded Ben & Jerry's Homemade, Inc., a Vermont-based ice cream maker, to name an ice cream flavor (strawberry and blueberry ice cream with white fudge-covered crackling candy and a blueberry swirl) after it: KaBerry KaBOOM!. The board members realized that the strategy was a moving target and struggled with the question of whether a measurement system should reflect or drive the strategy and underlying vision Playgrounds and Performance: Results Management at KaBOOM! (A) 306-031 and mission (see Exhibit 7 for the organization's guiding principles). "It's a constant evolution," remarked Deifell, noting that the exercise of developing a measurement system was causing the board to simultaneously re-evaluate its strategy and hone its vision and mission. Hammond pointed out that the KaBOOM! measurement system would also need to be aligned with its growth strategy so it would need to be flexible and forward thinking, as well as help shape the advocacy program that formed the final piece of its three-pronged strategy. "We need to design a measurement system that will help us realize the KaBOOM! we want to build, not just measure the organization we already have," he said. Hammond's goal was to create a substantial, professional measurement tool which could be used to improve organizational performance rather than simply to "prove" success to external audiences. Rosenzweig explained: KaBOOM! wants to be best-in-class on the cutting edge of the non-profit sector. The organization has a for-profit bias, probably because of its social enterprise focus. Many of our managers and board members are MBAs. We're headed by a CEO, not an Executive Director, because Darell wants to model KaBOOM! after the for-profits. It's taking us out of the old paradigm of charity and moving us into social enterprise. We do business WITH businesses. Yes, we look for grants to fund education and advocacy, but in the social enterprise model, our partnerships are with industry. Darell meets with top CEOs and wants to be able to speak their language. Hammond elaborated: "I want our measures to be internally driven, not funder driven. I want a measurement system that is supported by the organizational culture so that the board, myself and our staff 'own' the data from the outset." The board also emphasized that it would require the financial indicators to be presented in the context of a financial analysis, or, better yet, a formal framework. "We knew we would need to provide more than a series of gauges to look at; we would need to give some guidance as to the implications of the measures," said Deifell, who noted that he had been considering adapting the DuPont Formula, a system of analysis used widely among for- profit corporations. The Formula looked at the interrelationship between operating management, asset management and capital structure management, the underlying meaning of which Deifell believed was relevant to a social enterprise. Rosenzweig noted that the board wanted the data and analysis to be presented on an annual or semi-annual basis and hoped that the system could serve as a signaling system for the board. "Its power will be in its ability to keep the organization focused on its mission and strategy and hold managers accountable to measures being on or off target," she said. Deifell and Hutchison formed a new board taskforce to work with Hammond on a solution. They met to discuss next steps and decided they needed to brainstorm a list of performance measures as well as a schema for interpreting them essentially creating a draft performance measurement system. "Without some sort of framework to provide a rationale for organizing metrics, every measure can seem important viewed out of context," Deifell pointed out. They set to work, determined to be ready to present their work at the February board meeting Exhibit 1 KaBOOM! Playground Builds by Year n 1998 115 1999 64 2000 63 2001 90 2002 109 Playgrounds Exhibit 2 Children at a KaBOOM! Playground Exhibit 4 KaBOOM! Board of Directors, 2002 Year Joined Board Director Title Organization Suzanne Apple Bruce Bowman Michael Brown Peter D'Amelio Tony Deifell Kim Dixona Helen Doria The Home Depot Wild Oats Community Markets City Year The Cheesecake Factory Ballistic Entertainment Sprint, Great Lakes Area Chicago Park District 1997 2002 2002 2000 1996 2002 1996 Vice President of Community Affairs Vice President of Operations President President and COO Vice President of Business Development Vice President Special Assistant to the General Superintendent Vice President, Business Development Co-Executive Director Co-Founder and CEO Co-Founder, KaBOOM!, Consultant President and CEO CEO Director of Communications and Extemal Affairs Vice President of Marketing President Chairman Peter Farnsworth Ken Grouf Darell Hammond Dawn Hutchison Erin Patton Rey Ramsey Jonathan Rosemana National Basketball Association City Year New York KaBOOM! 2001 1997 1996 1996 2001 2001 2002 The Mastermind Group LLC One Economy Corporation The Home Depot Nancy Rosenzweig David Wofford Christopher Zorich Zipcar Wofford Consulting, Inc. The Christopher Zorich Foundation 2000 2001 2000 Exhibit 5 "Vital Sign" Data Presented to the Board, Managers, and External Constituents, 1999 Administration and Operations Project Management Balance of cash flow Growth in reserve funds Employee ratio to projects; capacity for new projects Level of vendor involvement Diversity in vendors Lead time required for planning a build Lead time required for ordering equipment for a build Margin per project Margin per employee Project Management Number of projects completed by year Projects completed versus planned Level, amount of community fundraising Outcome of Playground Projects Community impact and satisfaction Number of referrals from community partners Number of new partnerships formed Growth of Club KaBOOM! database Retention of Funding Partners Renewal rate Increase in support Diversity of support (in-kind versus cash) Number of referrals Staff Development and Retention Retention rate Promotions rate Completion of performance evaluations Assessment of performance evaluation ratings Employee morale Exhibit 6 Examples of Operational Data Collected by KaBOOM! Staff, 2000 Measure 63 12,600 $1,261,260 63,000 279 3282 5% 109 53 Operational Data Playground builds Volunteers Value of volunteers' service Children impacted Calls to the KaBOOM! Outreach Hotline Getting Started Kits shared with community groups Getting Started Kit responses received by KaBOOM! New Business proposals sent Builds resulting from new business proposals New sponsors Value of donations from individual donors Special event funds raised Project sponsors Sponsor retention rate Publicity impressions Increase in publicity over FY1999 Print, broadcast and internet stories about KaBOOM! New marketing materials developed Staff count Playground challenge grants Number of people attending training events Number of e-mails requesting support 26 $54,560 $22,330 100% 26,473,580 66% 224 9 14 151 1,202 Exhibit 7 KaBOOM! Guiding Principles Mission: Every child through the participation of their communities should have healthy play opportunities. Vision: Our vision is to help develop a country in which all children have, within their communities, access to equitable, fun and healthy play opportunities, with the participation and support of their families and peers. Core Values: Play-Fundamental to children's healthy development Access to play opportunities-equity is vital for all children Community action and participationthe process is as important as the product Family involvement-in playground, training, education and advocacy is key Read the case and consider the following issues: 1. What are the key strategic issues that the KaBoom Board of Directors need to monitor to ensure that the organization prospers? 2. As a Board member, what measures would you want to see? How would you want them to be presented? How often would you want them to be collected and reporte 3. Choose, and be prepared to defend, a reasonably well-defined strategy - meaning a rough distribution of effort and attention across Lead, Seed, and Rally. Could Lead continue to grow? How much effort would you devote to rapidly expanding Seed? To what extent would you try to build KaBoom's future through Rally