“… leadership is defined by results, not attributes.” — words by the famed Peter Drucker who is described rightly so by The Drucker Institute as being a person focused on relationships among human beings, rather than focusing on number crunching. He also focused on how organizations can bring out the best in people.

Drucker though wouldn’t toss number crunching to the wayside. Numbers are needed to know results, to guide staff, make decisions about program direction, and determine improvements. Nearly every non-profit organization seeks to do “outcome tracking” to “show impact” and has “performance measurements” to produce numbers in order to understand organizational results. Such numbers also help organizations tell their story to aid fundraising efforts.

Performance management – got to have the right measures
Performance management depends on the existence and use of performance measures. A performance measure is a mechanism for knowing how well the organization is doing. According to the Results-Based Accountability method, outlined in the book Trying Hard is Not Good Enough, a performance measure (or it can be called a “performance metric”) uses these questions as a foundation for developing different types of performance measures:

A few months ago I discovered that the Annie E. Casey Foundation is using Results-Based Accountability. It is certainly a practical and easily understandable approach, and is a method that people at all levels of the organization can connect and relate to.

Some precautions when looking at performance management software systems
There are performance management software systems in the form of constituent relationship management software and case management software that do “outcome tracking”. This is excellent! However, one must be careful to look closely and see if the outcome tracking features gives your organization the ability to track performance measures the way you want to.

For a cornerstone, if we use the Result-Based Accountability definitions for performance measures, “How much did we do?” is easy to track in such systems and is almost always in the reports and/or dashboard section of the system. If you want to know quality of service – “How well did we do it?” – and especially “Is anyone better off?”, these are not always as evident in these systems and require closer inspection. You may see wonderful charts and graphics in the demonstration of the system, and descriptions of various scales, however it is important to take a closer look.

More importantly, a business decision needs to be made – do we have the system dictate our performance management method? Or do we decide the performance management method, and we use the system to give us what we need? You could also take an approach to have one inform the other. Neither is more superior, it is just important to make a clear decision on this rather than end up one way wishing you had taken the other.

A related topic is the common jumbling of terms in the sector: “results”, “outcomes”, “measures” are used interchangeably. The best advice I have heard from Karen Finn, a Partner at Results Leadership Group, is: establish your own internal definitions and have discipline on using the terms consistently. When your funders use various terms, then you will have more clarity on what you are giving them, and can provide them your equivalent definitions to truly communicate impact.

Community IT Innovators’ team of Sr. Consultants has expertise in selecting software that helps nonprofit organizations solve their business challenges, including selecting performance management solutions. If you would like to have a conversation about your performance management vision (or struggles), contact us.