This week on Marketing Smarts I had the opportunity to discuss performance metrics and nonprofits with Beth Kanter and Katie Delahaye (KD) Paine, authors of Measuring the Networked Nonprofit: Using Data to Change the World.

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What Gets in the Way of Performance Measurement

I started out our conversation by asking them why they had written the book and by pointing out that, in many ways, it seemed to be focused on selling the benefits of performance measurement to leaders of not-for-profit organizations. They agreed that was so and then went on to explain that the reason many nonprofits are not enthusiastically focused on metrics is threefold. 

First, metrics for nonprofits can seem relatively straightforward and thus not a big deal. 

"If you are trying to raise money," KD said, "there's a link on your page to 'donate now' and you measure that. Or if you want more membership, that's your metric."

The second issue involves skills. Beth, a well-known and widely recognized leader in the nonprofit world, describes thinking of measurement as "the business equivalent of Darth Vader running after her with a radioactive light saber," an image that had her avoiding measurement as if it were, well, a cybernetic super-villain with a deadly weapon.

KD candidly put it this way, "People don't go into nonprofits because they love Excel or statistical analysis."

The "skills problem" is compounded by the fact that the people running nonprofits are often unsure where, in Beth's words, to "find a volunteer or a professional who can help with this."

Finally, Beth said, "Certain funders require certain pieces of data to be collected, and it doesn't necessarily coincide with the data that can help a nonprofit…improve what they're doing."

To illustrate, KD mentioned that although many large companies fund "corporate social responsibility" efforts, they generally treat them as a PR expense, and thus look at the results in terms of exposure, rather than in terms of the nonprofit's actually fulfilling its mission. 

Data-Driven vs. Data-Informed

Which is not to say that Beth and KD believe that nonprofits should become, as many for-profits fancy themselves, "data driven." Rather, they believe that nonprofits need to focus on their chosen mission but do so in a way that is "data-informed." 

When I asked them what that meant, Beth pointed out that one could be data-driven but, in fact, "driven by the wrong data."

By contrast, "data-informed" means, "We bring our whole wisdom to the data and really relate it to making decisions, not necessarily [simply] justifying what we've done."

"It's not just a matter of showing numbers," she went on to say, "but really thinking about what that means in terms of our program and how we can get better results. Its not just a social media person sitting in the corner with their spreadsheet or even a data geek. It's actually working in partnership with the program people and the communication people to really apply and use that data."

Being data-informed, in other words, means starting with the data to make informed decisions, rather than "making a decision and then going to get the data back up your decisions or [worse], doing it based on your gut."

Changing the "Gold Star" Mindset

KD and Beth also made it clear that if you are collecting data merely to trumpet your successes (and downplay your failures), then you are doing it wrong. 

"Everybody wants to get a gold star," KD said, "but in reality you don't learn anything from getting a gold star because you've already gotten kudos and applause and you know about the gold star. What you want to know is what didn't work so that you can move resources away from that stuff…and toward the stuff that does."

In Beth's view, making such moves involves a mindset change.

"There are two different mindsets we can have," she said, "a fixed mindset were we are driven or motivated by external praise—'Wow! You got an A+!'—or a growth mindset…where you're motivated by the internal drive to improve what you're doing—'You know, I got a C+ but, wow, what do I need to change to get an A?'"

And, frankly, whether in the nonprofit or for-profit worlds, it's the latter mindset that will lead to improvement, innovation, and positive change, both within the organization and in the world at large.

If you would like to hear my entire conversation with Beth and KD, you may listen above or download the mp3 and listen at your convenience.

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