4 Performance Measurement Mistakes You Don't Want to Make

Performance management can be a tricky beast — hugely important, but difficult to get right. Here are four common mistakes my team and I see made by social, government, and nonprofit organizations trying to measure their impact, and tips on how to avoid them:

1. Measuring too much. By far the most common problem we see is that most organizations try to measure too much. Every additional measure you track uses up precious staff time for collection, aggregation, and analysis. In some cases, tracking too many measures is as almost as bad as not tracking at all. One client we served had a list of more than eight measures it was trying to track. Managers and the board were so overwhelmed by the huge amount of information that their eyes tended to glaze over when the data was presented, and little or nothing happened as a result. We helped them whittle the list down to just a few outcome measures for each client group, and that enabled them to focus their energy, track their efforts in a meaningful way, and improve their outcomes.

2. Underutilizing what you have. Many organizations are so busy worrying about measurement that they don't realize what a trove of information they may already be sitting on. One national nonprofit I know had been working on putting together a measurement system for three years, engaging external consultants, and doing a lot of hand-wringing about their lack of a large-scale control study. Its senior leaders, like those at many other organizations, found themselves overwhelmed by choices, confused by terminology, and with little to show for their hard work. Yet in the background, the organization had been collecting all kinds of information. With an infusion of new energy, leadership took stock and found that simply by undertaking an audit and tidying up the organization's data they were able to tell a compelling story to current and potential funders. The moral of the story? Before you do anything else, investigate what you have at hand. What information are you already collecting that measures outcomes for your clients?

3. Over-thinking it. Most organizations feel like they have to build a system from scratch and get so ambitious that the effort invariably stalls. Fortunately, yours is not the only organization that needs to track and measure information. As funder pressure on social sector organizations to get better at measurement has increased, whole industries have sprung up with pre-developed surveys and data sets from comparison groups. That means your organization may be able to purchase one of the many off-the-shelf tools to track its information and compare the results with results for other population groups. Not only does such an approach make it easier to measure your own results, it also allows you to see how your clients compare to those who don't receive your services  — just the kind of information your organization can use to understand its impact, improve its performance, and tell a compelling story to potential supporters.

4. Poor presentation. After working hard to gather relevant data, many organizations squander that effort by not going the extra mile to ensure that it's easy to understand. One large child-welfare nonprofit we work with collected a lot of interesting information but presented it in a tiny font on newspaper-sized spreadsheets. Neither management nor board members could make heads or tails of it. We worked with them to pull out the key takeaways from the data and showed them how to present it in high-impact, easy-to-understand charts. This simple change to how the information was presented had a huge impact. The board and managers were finally able to make sense of the information and could see the areas of under-performance, information gaps, and differences in the outcomes produced by different programs. As a result, they are making better decisions with fewer arguments and improving their outcomes.

Performance management can be complicated, but it doesn't have to be. To learn more about how to make sense of performance management, join me and Foundation Center for a special webinar, "How to Start Measuring Your Organization's Impact," on May 19 from 2:00-3:30 p.m. ET.

Liana Downey is an experienced strategic advisor, author and speaker. As executive director of Downey & Associates, Downey and her team serve social enterprises, governments, and nonprofits globally. Downey, who previously led the social sector practice at McKinsey & Company, Australia, also is the author of Mission Control: How Nonprofits and Governments Can Focus, Achieve More and Change the World (Bibliomotion, May 2016) and lectures at NYU’s Wagner Graduate School of Public Service.