Measuring performance is the key to performance excellence
| July 20, 2016
A question that should always be asked at the board table is, "Why are we discussing an initiative if we can't measure it?" Measuring performance is the key to performance excellence.
The basis or starting point may be the mission and strategic plan. The plan outlines goals and strategies for several years. Use it to build a set of key evaluation metrics to monitor progress and maintain a competitive advantage.
Consider building measures around five key areas similar to those used by the Malcolm Baldrige Performance Excellence Program — a national standard in quality and organizational performance:
1. Member satisfaction
Focus on satisfaction levels as perceived by members around programs, benefits and services. Awareness of satisfaction is essential to making adjustments to programs, benefits and services to ensure high levels of satisfaction.
Member satisfaction numbers also provide a business approach to making critical changes. Eliminating a program, benefit or service can become an emotional situation, but with data it becomes a business decision.
2. Product and service performance
In the books "Race for Relevance" and "Road to Relevance," Harrison Coerver, CAE, and Mary Byers, CAE, speak to focusing on the strength of programs, benefits and services.
Understanding impact and true costs will allow an organization to a) improve programs and services and b) determine the effectiveness and need for those programs and services.
3. Financial and marketplace performance
Measuring a nonprofit's financial effectiveness is commonplace. Measuring financial trends against other organizations is not so typical. Make it a mandatory practice to compare your organization's results against others while evaluating market share in order to operate with a global view and not in a vacuum.
4. HR results
An organization's human resources are rooted in the staff leadership and other volunteers that serve. An understanding of the resources available, the allocation of those resources and their impact is important in ensuring the organization is properly staffed to achieve its strategic goals.
5. Operational performance
In delivering a set of programs, benefits and services, an organization needs to assess its own metrics to meet the needs of its members. Measuring operational effectiveness allows it to make "just in time" changes to its operation to meet the needs of its members.
The key to tracking performance is good data. Good data comes with an investment in technology and its proper use.
Here are some typical items that can be measured:
- Finance — budget
- Return on program investment
- People performance — growth
- Board performance — percent increase in board survey results
- Strategic plan achievements — percent of plan achieved year over year
- Committees and outcomes — percent effectiveness
- Risk management — number of safeguards
- Societal benefits — measured outcomes
- Fundraising — percent increase
Dashboards are critical to the success of any organization.
There are three important reasons to put in place dashboards:
- It keeps staff on track and focused on the strategic priorities set by the board of directors.
- It quickly provides volunteer leaders with an way to view what is in progress and what is an issue through an easy-to-read dashboard.
- It provides the board with a tool to be nimble and quickly make decisions to address issues and take advantage of opportunities.
The dashboard can be an effective management decision-making tool if it is easy to read, short and to the point with a good visual representation of where the organization is at any point in time.
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