Many people across the globe either confuse or choose to disregard the difference between survival and performance. Do you know that many organisations survive and open their doors every day, but do not perform? You must be wondering why at the effectiveness-lab, we interest ourselves with such words as survival and performance, which are after-all ordinary in Her-Majesty’s lexicon. Well, let us try and put meaning to the two words. Surviving in layman’s speak is ‘continuing in existence’ while performance is the ‘effectiveness and efficiency with which we fulfil intended purpose‘. Please note the application of both effectiveness and efficiency in the definition of performance, after-all, an organisation may prove itself effective but not efficient
Those of you in the private sector will point out that in current times of practically zero government subsidy to industries, an organisation that won’t perform cannot survive for long. True indeed, but do we need to pause and ask how performance is measured and if we all mean the same thing whenever we talk performance. In the private sector, performance factor number one is profitability. Therefore, for a business to survive, it must return revenue over and above its expenditure. Performance is understood and commonly measured and many times, missing out on it equals trouble.
Sadly, things aren’t always clear in other global industry sectors when it comes to understanding and measuring performance. Let us use an example that is very close to my heart – the development industry and the charity sector in particular. All charities would agree with our definition that to survive is to continue in existence, and believe me, survival is a big deal for charities. At charities, at least those that are serious about what they do, CEO jobs are kept or not, on ones’ ability to mobilise resources.
However, I doubt whether charities have a common understanding of how they want their performance measured, as they do survival. Would it be far-fetched to assume that charities want to survive but on their terms?
How should performance be measured in an industry that is not designed for profit? Would the effectiveness-lab and its well-wishers be out-of-order to suggest that some bottom line metric to measure performance, and common to all charities, be determined? The common metric would make the determination of the effective and efficient amongst charity-friends easy. Once again, let us all be reminded that in the effectiveness-lab, good and sustainable performance is both effective and efficient.
Performance measurement at charities – an external view
A few weeks back, during one of my Nairobi weekend errands, I met a very senior development practitioner. As the case is always with those I chat with about such subject matter; I engaged the gentleman in a conversation about the efficacy of development and how development can change for the better. I shared my thinking about the possible solutions as well as tangible action I have taken to address this challenge in my past work.
The answer from my development friend was interesting: ‘Development practitioners like you (myself) asking questions about the efficacy of development are not focused on their work, but that of the politicians’. According to my development friend: ‘if politicians who should audit development intervention effectiveness aren’t doing so, why should we development practitioners bother?’ He went on to add: ‘I know that if challenged, we may struggle to prove that development interventions work, but why would I want to invite trouble?’ This boggles the mind!
If you do not mind, let me assign you a very simple task. Identify an experienced development professional, and ask ‘if and how’ they measure performance at their organisation. If you have done this already, please share the answer with us all at the effectiveness-lab. Those that will at a later point ask others the question, please remember to share with us all at the effectiveness-lab – curious to know what others think.
Can charities have a common bottom-line metric?
Development practitioners have for long grappled with the idea of how to measure the performance of charities. In all fairness, If the waters are still murky, it is not for their lack of trying. Development powerhouses like DfID and ICAI have designed complex value for money frameworks in an attempt to address the performance measurement enigma at charities across the globe.
While the frameworks may not directly use the word performance measurement or profit, we all have to applaud their effort at addressing a very complex problem – i.e. how to measure performance at a ‘bottomlineless’ entity.
I will let you read the DfID and ICAI frameworks as referenced above. For now, I would like to ask whether it is at all difficult to measure value creation at charities in a transparent, objective, and robust manner? Could it be that charities are simply scared of exposing their non-performance, whichever way we define performance?
Upon reflection on the above two questions, it occurs to me that not having the will and right attitude towards performance measurement is not the same as performance being impossible to define and measure. It appears to me that the above discourse talks more to a cultural disposition in the charity sector, than practical challenges related to performance definition and measurement.
Our peers in the private sector know what they will be measured against and it is a matter of life and death for them. Because those in the private sector work in a survive or die environment, they have been forced more than charities, to address the fundamentals that bring value-creation to an organisation. These fundamentals are: a clear identity; strategic intent; value addition choices; and a viable structure/design that will deliver value
Instead, the charity sector condones a culture of ’survival as long as your heart is in the right place’, ahead of clear ‘organisational identity and strategic intent’, that would bring about effectiveness and efficiency. It is our view at the effectiveness-lab that the charity sector should condone the mindset that treats the ‘heart being in the right place’ as a mere basic factor for being charity; but seamlessly ask questions about its identity, strategic intent, value addition, and the architecture that delivers effectiveness and efficiency
Asking charities to define and apply performance measurement, in the above situation of role/relevance confusion is a waste of time. Stop wasting time preaching performance definition and measurement to charities. Why do you want to climb a mountain from the top? Address first things first
My takeaway: organisations that are agile, charity or private sector, seek to understand as a matter of habit their identity, strategic intent, how to create value, and the architecture to do so. They have no reason for running away from those that want to measure their performance. There must be something wrong with the identity and intent of charities and only charities can correct this.