3 Things Every Nonprofit Needs Before Performance Management Can Really Work

On Monday I gave a workshop on Measuring and Managing Performance in Nonprofits at Fuqua School of Business to the students in the Fuqua on Board program; there were a few representatives from area nonprofits in the group as well.  As you might expect, folks had a lot of questions and most of these were focused on the issue of how or where to start with performance management.  
 

I've been thinking about that question over the past couple of days  So I came up with a list of the three basic things that I think are necessary preconditions for performance management to be successful in community-based organizations and I wanted to share them (of course any feedback or suggestions have will be most welcome).

#1: A clear strategy. 

When considering performance management you might be tempted to take the easy route.  You could measure what’s already been measured in the past for a funder, an evaluation, etc.  You could measure the things that are simple to measure.  But how will you know if you’re measuring what matters?

All performance management should be driven by the strategic direction and priorities for the organization.  Only measure what you should, can and will do something about - in other words what you can manage.  If you shouldn't manage it, can't manage it or won't manage it, then don't bother measuring it if your goal is performance improvement.

#2: Performance management champions.

No performance measurement project ever gets real traction just by saying it’s important.  It needs to be given serious priority.  When you have a Board and Executive Director who believe that measuring what matters is essential to excellence and are willing to be clear and consistent in the message that measuring what matters is essential to excellence, you are off to a good start.  To stay on the right track provide support, encouragement and incentives to staff for measuring what matters.

#3: Buy-in.

For a lot of people, performance management sounds like a dirty word (ok, a dirty term).  They may have a negative reaction and as a result they won't trust you when you say that performance management will be good for them, good for the organization and ultimately good for your clients.  They'll argue about lack of data availability, or that it will take too much time away from real priorities, or that it's not appropriate to their unique situation

But what if you start off with a conversation about why the result will be worth the effort?  What will be the ultimate incredible outcomes of having these great measures you're about to develop?  Beginning with the end, organizational performance improvement, in mind will build trust, focus, and motivation.