Two new books on measurement and analytics came to my attention this week. One is about nonprofit performance assessment and written for an audience of nonprofits, especially those that manage social service programs. The other is about using data to make decisions, but for the start up audience. They have some ideas in common – including finding the “One Metric that Matters.” Here’s a quick review of both books.
While I was working “Measuring the Networked Nonprofit” with KD Paine several people said I had to read Mario Morino’s Leap of Reason which is about how nonprofits can manage to outcomes. Many of the ideas resonated and Mario Morino was one of the peer reviewers for our manuscript and helped make connections about how to link measurement of social media and networks to nonprofit social change results. He has just released the companion to his first book, Working Hard – and Working Well written by Dr. David E.K. Hunter who shares his approach to working with top nonprofits organizations to embrace performance management. His work has sparked transformation for many of the country’s top nonprofit organizations.
There has been a couple of studies and workbooks that speak to the growing need for nonprofits to embrace the use of performance measurement data as a management tool. The recently published study from Center for Effective Philanthropy, called “Room for Improvement” looked at foundation’s support of performance assessment. There is a lot of pressure for nonprofits to “demonstrate impact” and performance assessment is one method. The study aimed to get the nonprofit perspective on these two important questions: How important do nonprofits believe performance assessment is to demonstrating impact? And if understanding nonprofit performance matters so much to foundations, just how much help are they offering to nonprofits to assess performance?
Reading the study made me wonder about the different methods for performance assessment and use of data as a management tool and I went on a search for resources that share case studies and explain in plain language that wouldn’t make it seem scary or worse – boring. In this free book, Working Well, Working Hard, the author “decodes and defangs performance management” by giving us the history, context, and practical recommendations for those organizations who want their programs to get better results. The author has over three decades of experience working with nonprofits to help them embrace performance assessment and experience as director of assessment and knowledge development at the Edna McConnell Clark Foundation.
Why does performance assessment/management have such a bad reputation? The books explains:
For many nonprofit leaders, “performance management” conjures up the most dehumanizing practices of the corporate sector and reeks of rampant data gathering run amok. This unfortunate association is understandable, given how the concept has emerged and been applied over the last couple of decades ….
One of the reasons why performance management has failed to excite the social sector is that since its introduction early in the twentieth century it has been used mostly in a top-down, command-and-control approach in order to ensure that whatever work the authorities decreed should get done actually would get done. Thus, performance management was a way to drive activities, not results. This phase in the history of performance management can be thought of as “compliance management”—and the phase is not merely a thing of the past, as it continues to thrive in the often 1excessive metrics used by funders to hold the organizations they support accountable.Eventually, however, people began to ask themselves to what purpose an organization’s activities were being delivered, and thus began to focus on results. This was a major step forward in theory. In practice, though, the idea that social service providers should be able to demonstrate outcomes for program participants has often been used by funders to bludgeon agencies rather than help them improve. Very few funders appreciate what outcomes monitoring and management entails, much less how to help the organizations they support develop the competencies and capacities to adopt such practices.
The book goes on to layout a method for designing a system, developing a theory of change, and talks about some of the culture issues required to work this way. The insight that I got from book is that he makes a distinction between “tactical” performance management that can be used to collect real time to improve services and programs – much like we use listening on social media platforms to improve what we’re doing. He also talks about the strategic use of performance management – data that helps an organization understand impact.
There is a free webinar on March 7 with the author to discuss the ideas in the book and how to put them into practice.
My colleague and friend Alistair Croll has just co-written a measurement book with Ben Yoskovitz called Lean Analytics Use Data to Build a Better Startup Faster. The book is a analytics how-to based on the idea of “Lean Start Ups,” a concept and movement lead by Eric Ries. The Lean Start Up combines customer development, Agile software development methodologies, and Lean manufacturing practices into a framework for developing products and businesses quickly and efficiently.
The Lean Start up is now being used by organizations of all sizes to disrupt and innovate. Lean is about being cheap or small, it’s about eliminating waste and moving quickly,which is good for organizations of any size – including nonprofits and those with a social mission. One of Lean Startup’s core concepts is build>measure>learn—the process by which you do everything. The book Lean Analytics focuses on the measure stage. The faster your organization iterate through the cycle, the more quickly you’ll find success. If you measure better, you’re more likely to succeed. While the book is geared for start ups, the advice is certainly applicable to nonprofits.
My favorite snippet in the book is “The One Metric That Matters” which encourages an to focus on that one key important metric that determines success. Interestingly, this idea is also presented in the Hunter’s book about nonprofit performance assessment! Here’s why it is important according to the Lean Analytics:
- It answers the most important question you have. At any given time,you’ll be trying to answer a hundred different questions and juggling a million things. You need to identify the riskiest areas of your businessas quickly as possible, and that’s where the most important question lies. When you know what the right question is, you’ll know what metric to track in order to answer that question. That’s the OMTM.
- It forces you to draw a line in the sand and have clear goals. After you’ve identified the key problem on which you want to focus, you need to set goals. You need a way of defining success.
- It focuses the entire company. Avinash Kaushik has a name for trying to report too many things: data puking. Nobody likes puke. Use the OMTM as a way of focusing your entire company. Display your OMTM prominently through web dashboards, on TV screens, or in regular emails.
- It inspires a culture of experimentation. By now you should appreciate the importance of experimentation. It’s critical to move through the build>measure>learn cycle as quickly and as frequently as possible.To succeed at that, you need to actively encourage experimentation.It will lead to small-f failures, but you can’t punish that. Quite the opposite: failure that comes from planned, methodical testing is simply how you learn. It moves things forward in the end. It’s how you avoid big-F Failure. Everyone in your organization should be inspired and encouraged to experiment. When everyone rallies around the OMTM and is given the opportunity to experiment independently to improve it, it’s a powerful force.
The does not look at how this concept might translate for nonprofits, but I know Alistair Croll has some ideas, perhaps an e-book or blog post is coming.
You can purchase a copy of Lean Analytics Use Data to Build a Better Startup Faster online. Working Well, Working Hard is available as a free download and There is a free webinar on March 7 with the author to discuss the ideas in the book and how to put them into practice.
What is the one metric that matters for your organization?
