Guest post by Gretchen Van der Veer, Ph.D., Director, Leadership Development and Training at the Corporation for National and Community Service

Gretchen Van der Veer, Ph.D., Director, Leadership Development and Training at the Corporation for National and Community Service

I want to applaud the NGen Fellows for selecting the goal of "understanding data as a next generation leadership skill" as a focus for the year. Unpacking the application of that leadership skill necessitates a discussion of what it means to be a "data-driven organization." It seems like every conference I go to includes multiple sessions on measuring impact. It’s clear that funders want grantees to measure and report results, and most people understand the value of being able to communicate and share data as evidence that an intervention is changing lives and/or communities.

However, often missing from the dialogue is the importance of using data as an internal management tool, and not just for external communication.

Why is this important? Every organization needs a framework and a yardstick. A framework includes a vision, mission, goals, and objectives, and how those translate into annual work plans. While most nonprofit organizations probably engage in planning on an annual basis, the planning often stops prior to the identification of milestones and measurement practices. If this is what we say we’re going to do, how will we know if the task is accomplished? How will we collect the data and how often? How will we use the data? What do we want or expect to learn? And, how will we apply the learning to improve operations or services?

Most corporate organizations have software that does all this. If you are in a sales position with almost any company, you spend about the same amount of time logging contacts made and deals sealed into the company system as you do building the relationships that resulted in the sales. At the end of each month the figures roll up and you know exactly where you stand in relation to your peers and how the overall sales figures will affect company profits. And your bonus is based on the annual tally.

Social change work just isn't like that. We may know how many clients we serve and what services they are accessing. We may assess client satisfaction with our services. We may know how many partners we have and how many funds we raise. Some of us even know when there has been a change in our clients' situation as a result of our intervention. However, most of us are less likely to know which specific actions or interventions contributed to the beneficiary outcome.

So what does it mean to become a data-driven social change organization? Data-driven management (also known as performance management) is the integration of regular systems of data collection into the business practices of your organization. What data you choose to collect and analyze will differ by organization depending on mission and operations. However, the bottom line is that employees are expected to collect, analyze, and learn from data on a regular basis. Data is shared and used for planning and reporting purposes along with internal monitoring against goals and objectives for telling your story. Why is it useful? Because it assures that you are making decisions based on evidence and not on instinct, assumptions, or perceptions which can be biased. You will be able to identify trends over time which can inform effective practices, help you become awareness of issues, and illuminate possible innovations or solutions. 

Data can also provide a benchmark for staff to connect specific actions to organization results, revealing opportunities for improvement. Performance appraisals can then be based on measurable accomplishments and managers are able to see how well the whole organization is doing and where there may be pockets of strengths and weaknesses. A critical success factor for becoming a data-driven organization, however, is establishing a culture of learning and continuous improvement. Instead of punishing weaknesses, managers should target them for technical assistance and support.

In the last several years, a number of vendors and consultants have developed and marketed automated performance management systems for nonprofit or social change organizations. Independent Sector, along with GuideStar and the BBB Wise Giving Alliance, has recently launched "Charting Impact," a simple framework that can serve as a starting point for any organization on the kinds of question they should be asking on a regular basis. A wise place to start is to read up on these available resources and ask your peers how they may be going about this.

Just to be clear, data-driven or performance management is not performance measurement. Performance measurement is an important process within performance management involving systematically and regularly collecting data on the outputs and outcomes for program beneficiaries. Performance management connects those outputs and outcomes back to your overall mission, strategic plan, organizational strategy, and individual employee and volunteer efforts. Performance management provides an indication of your organization's performance and that good things are happening to the beneficiaries you serve. However, performance management will not establish a causal relationship between your interventions and your program outcomes. That requires additional resources devoted to using scientifically-based research methods known as program evaluation. That discussion, however, needs to be the subject of an entirely new blog post!