In his popular book, The Power of Social Innovation, Stephen Goldsmith devotes a whole chapter to measuring results of Social Innovation. Why is measuring important and what should we keep in mind when creating performance indicators?
Non-profits, social businesses and for-profits enterprises wishing to address social issues, must work to measure and report their good work. Funding is scarce and ideas abound. The power to attract and sustain public or private funding depends on an ability to deliver better outcomes. Goldsmith is advocating “evidence-based” social programs and shifting money and resources from “ineffective incumbents” toward “providers better suited to the needs you are trying to serve”.
I once worked for a large nursing organizations that was well known and respected for the quality of their care. After over 100 years of selfless service, they had gone from a quasi-monopolistic position to almost disappearing from the map due to a failure to recognize the needs of funders and demonstrate, in objective ways, the effectiveness of their care. The lesson was harsh: it is not enough to do good works and feel good about it you have to be able to prove that you can deliver superior health outcomes in a more cost effective way. This national health care provider has learned its lesson and is now investing heavily in its IT capacity to improve its performance and reporting capacity.
In a previous blog post, I talked about the importance of having the right performance indicators. I would now like to suggest 4 conditions for effective indicators:
1. They are established with the beneficiaries in mind: Businesses talk about putting the “customer first”, being “customer centered”. In the social field, we should ensure the people we are ultimately trying to help are top of mind.
2. They incorporate the input of key stakeholders: Performance indicators cannot be developed in isolation. They should take into account donors, beneficiaries, staff, communities, governments. Academics can play a key role as well. They are often involved in doing independent assessment of programs in a retrospective fashion. Soliciting their input to identify key metric worthy of measurement can greatly facilitate future work. For example, the Red Cross movement is involved in massive malaria bed net distribution campaigns. These are made possible by the generous donation of thousands of individuals and large government grants. Government agencies and large private foundations are constantly re-evaluating the best way to make an impact. The Red Cross works closely with these agencies and academic institutions upfront and throughout the delivery of the programs to collect meaningful data that will help justify funding for future campaigns.
3. They measure hard and soft data: Good indicators measure financial performance, operational effectiveness, social impact and sustainability. Not everything that is meaningful and important can be measured with hard data. Health improvement, happiness and quality of life can be very complex and expensive to measure as compared to hard data like program costs. This is an area were much creativity is needed!
4. They are relatively simple: Most social innovators do not have the resources to embark in costly outcomes tracking. I support Goldsmith’s call for “pragmatic performance contracting, using varying levels of rigor as appropriate and affordable”. Do not let the perfect be the enemy of the good!
How are you addressing your measurement challenges?