Why picking the right KPI is so important

In a recent post on SSIR,  Christina Triantaphyllis and Matthew Forti talk about the problem with focussing on the overhead vs. impact ratio when assessing charitable work. For me, this is just another step along the chain (donor -> charity -> local NGO) where the use of incorrect KPIs leads to exactly the opposite of the desired behaviour.

During my time working in rural India I was struck by the extent to which NGOs tailored their activities not to those actions that had the highest impact, but that would tick the most funding boxes. During the course of the year I came to understand the problem - funding is so difficult to come by that NGOs have to fight tooth and nail in order to secure finances. They cannot be picky about the sources of that income, nor can they afford to let an opportunity pass, therefore if a donor organisation says a particular report / action is required, that is what the NGO provides.

In the extreme, this results in very peculiar behaviour. NGOs recording the number of attendees of workshops, but not the results of any learning. Photographic evidence being required of meetings, rather than documented minutes / actions.

The source of this insanity? The laziness of the funding organisations. Measuring true impact takes effort. It costs money. It may show that your initial approach was wrong. That money has been badly spent. That the hypothesis was wrong.

If an analogy is needed, here is my best attempt: You start in London and need to travel to Manchester. You research before hand and learn that it is 200 miles. You can travel at 50mph, so you know you need to travel for 4 hrs. You set off in what you think is the right direction and, without checking a map, GPS or roadsigns, travel for 4 hrs, with the only monitoring being a regular check that you are, in fact, travelling at 50 mph. You assume that as long as you continue taking this action you will arrive at your destination.

The flaw in this argument is obvious. You need continuous assessment (measurement) that you are travelling in the right direction. Taking action does not automatically result in the right result. While there is some truth in the maxim "some action is better than none", it is not true that any action is always the best one.

Measuring charities on their overhead vs programmes spend is the wrong thing to measure. In the same way that measuring the number of workshops run is not the right KPI for field work. However, in a competitive market, the only action open to organisations looking for funding is to fall in line and do the best they can.

The only way this changes is with the first step in the chain...

Assessing personal qualities in reviews - a good thing?

In my former life I worked for IBM (I'm supposed to go back eventually, so I probably shouldn't use the past tense here....). We have the sort of labour-intensive, rigorous review system beloved by giant corporations. I thought I had seen everything I was ever likely to see in terms of review criteria.

Then I got to India. My organisation is a small NGO. They showed me their previous attempt at a performance evaluation system. I checked my diary, when was April 1st again? Some of the categories I didn't even really understand, let alone comprehend how a score of 1-10 could be applied to them ("transparency" anyone? How about "money mis-management"? - You only steal from the cookie jar - 3; you're using company funds to drain your moat - 10). Others were down-right bizarre - "Reads newspapers"!!!

Even better, there were none that actually applied to someone having done a good job. They were all personal qualities. Timeliness, good manners, respectfulness. Turn up to work, be a good person, don't offend anyone, get a good review!

Cynicism aside, I was intrigued. I spoke to my organisation's founders. They expressed the view that their employees were not "professionals" and so they felt it was unfair to assess them against those kind of attributes. They felt the attributes they used instead were ones where people could succeed and that this was more important.

It's an interesting idea - fit the evaluation to the skills of your employees. Of course, it completely misses the point of performance evaluation - to help the employee to develop. That has to be the number one priority. To help identify the things they are doing well and build on those, whilst identifying areas for improvements and discussing strategies for progressing them.

We've ended up compromising on the final evaluation. There is a lot more focus on development needs and actually assessing performance (I don't subscribe to the idea that NGOs can't be performance-focussed), while we have retained some of the personal attribute assessments. I personally hope to show them that these items should simply become part of a person's overall review, not specifically detailed as areas for assessment, but we'll see how it goes.

I think it's an interesting idea though - how much should personal qualities be included in reviews. Can you possibly leave them out? Is this just an attempt to quantify what those personal qualities are? Interested to know peoples thoughts - get involved....

Social Entrepreneurs – driving the next wave of Not-For-Profits?

I've been working on a number of proposals for new projects recently. The organisation I'm on secondment to are working overtime at the moment on trying to secure funding for a whole range of different schemes and I've been right in the middle of it.

I've been amazed at how unstructured the process is here. I'm not sure whether this is a cultural thing, or whether it is an NGO thing, or if it's completely singular to the organisation I'm working with, but the approach is completely back to front at the moment. The good thing is that they're very open to new ideas and I'm already seeing some good new behaviours from the leadership team in terms of taking on board my ideas.

It's made me think about this whole issue though...does the social development sector as a whole suffer from a lack of skills in this area. It wouldn't surprise me – what makes someone a good fund-raiser and able to develop social strategies does not necessarily make that same person a good project manager.

I'm sure that there are people who spend their whole life in NGOs and the Charitable Sector who have never been given training on running a project, creating a budget or writing a proposal. And why should they have? I'm not saying that Big Corporations are the only ones who know how to do that – they're not. Unfortunately though, more often than not, it's someone from a Big Corp. or similar who's holding the purse strings, so being able to put something in front of them that they understand is vital in order to get access to funding – the life blood of any charitable organisation.

Which brings me to a term I heard today for the first time – social entrepreneur. I think it's a fantastic thought. The idea that there are entrepreneurs out there, business people, who understand how to make things happen, working to improve society. Yes, you might not find yourself amassing a personal fortune of $7bn like Mark Zuckerberg, but let's face it, if you're reading this post, chances are that's not your aim anyway!

So, social entrepreneurs – let's have more of them please. Let's take the lessons we've learnt as graduates of Big Corp. Plc. and apply them to the problems facing society today. Let's start our own Not-For-Profits and run them like businesses. Let's make them the best NFPs they can be and in the process maybe, just maybe, we'll make the world a better place at the same time.