The increased focus in the nonprofit world on measurable parameters to show performance won't be going away anytime soon. An indicator of this ongoing trend is the recent introduction of the GuideStar “Platinum” transparency rating, which is awarded to organizations who share their metrics. And of course you know that grantors have been requesting evidence of the effectiveness of the money they spend for many years.
Nevertheless many nonprofits still struggle to use metrics to their own advantage; not just as a way to show performance to others but as a way to improve it. This is unfortunate since metrics can be powerful tools to align the organization and make it better. Here are 5 strategies to help you get there:
1. Start with the end in mind
Metrics are never a goal in itself. In management processes they are best used to facilitate decision making on priorities, resources and specific approaches. So think about the following questions: “What do we need to know to decide where to spend time or money?” as well as “What could make us change our minds?” Then go after this information.
2. Define and measure excellence
How would you characterize excellence in your work? And what would an ineffective organization look like? It is helpful to think of 2 overarching parameters in your activities here: Quality and Efficiency. For both it is worthwhile to look at trends and benchmarks.
3. Talk about your metrics
Reviews, formal or not, are essential in conveying to the organization the sense that your metrics really matter and it’s worth the work to improve them as well as the effort to collect them. The frequency of reviews also determines how often a metric should be updated.
4. Don’t forget the soft stuff
When metrics are used, “what gets measured, gets done”. But the converse is often also true: when there is no metric, the priority falls. This can be a problem for topics that are important, yet cannot be easily quantified. Often this can be resolved by introducing a “placeholder metric”: an indicator that can be set to reflect the need to talk about it. Where this can be useful is for instance in assessing the health of key relationships.
5. It doesn’t have to be perfect
Getting started is the hardest part. Once the initial framework is set up, it becomes straightforward to change it. Experimenting with different styles and representations can help you find the best way to take advantage of this useful management tool. So you get better at doing good.