Revenue Diversification 2012

Since the state budget cuts began to bite EI2 in earnest a few years ago, one of our responses has been to look for new sources of revenue. We launched our first revenue diversification (RD) effort in January 2010, led by David Bridges and Charles Ross. The second program, led by Joy Hymel and Lynne Henkiel, launched in January 2011.

Together, the two programs have involved 82 EI2 personnel (as RD team members, lead generators, business case team members, and mentors). The two RD teams reviewed hundreds of new revenue ideas generated by a very large majority of the organization.

To date, we have invested or committed $869K into RD projects, and have collected or invoiced $1,679K in new revenue (two thirds from Bill Meffert), with more to come. It’s working! In fact, since state funding has dropped from 45% of EI2’s budget to 33% today, revenue diversification has been a necessity, not a luxury. Both new proposals and new contract awards are up significantly. EI2 has never been static, but RD has helped us adapt to the changing funding environment. In fact, it’s been integrated into everyone’s annual performance evaluations!

Beyond the obvious revenue numbers… intentionally, the revenue diversification teams (and the subsequent business case teams and mentors) are drawn from every department in EI2. In fact, it’s one of the few activities where working across organization boundaries becomes routine. This interaction spun off the EI2 “Transformation Team,” which has launched several team-building initiatives, including our quarterly meetings, the monthly newsletter, periodic internal brown bag lunches, and this summer’s return of the long-lost annual picnic!

We decided not to launch the third RD initiative in January, since there’s nothing particularly magical about an annual cycle. We’ve spent the first part of 2012 continuing to invest in the first two sets of projects. But state funding isn’t going up anytime soon, so it’s time to do it again.

On July 1, we’ll start the third Revenue Diversification program. Logically, it should be called “RD3.” But last year, as a geeky joke, I started using “R2D2” instead of “RD2″… and, somewhat to my surprise, people seemed to like it! So, this year, in defiance of my better judgement, we’re going to have “C3PO”: “Comprehensive 3rd Pursuit of Opportunities”. (Compliments and/or insults on the name should be flung towards Don Betts!)

Dana King Brewer and Johanna Kaiser have volunteered to lead this year’s program. They’ll be selecting their team over the next few weeks… if you’re interested in helping out, please let one of them know. Once again, I want a mix of newbies and old hands from all levels of the organization.

I’ve asked David and Charles — our elder statesmen of revenue diversification — to conduct interviews of participants from the previous programs soon after July 1. They’ll ask where we got their best ideas, how we could improve the process, and solicit suggestions on improving the implementation of the selected projects. Based on that review, Dana and Johanna may choose to reproduce the process we used in 2010 and 2011, or develop a streamlined version, or do something completely different. And I’m pretty sure they’re going to recommend changes to the informal “seed” program that I’ve talked about at the last couple of quarterly meetings.

Given other obligations, full implementation of C3PO won’t start until September 1, but we’ll still try to have the winning business cases selected by the end of the year. Once again, I’m counting on everyone in EI2 — whether on the committee or not! — to make suggestions and provide constructive criticism. Thanks for all your help and support!