This post was originally published June 16th, 2015 on Inside Management, a blog maintained by the New York Community Trust Nonprofit Excellence Awards, where I serve as a selection committee member.
One of the primary reasons nonprofits collect data is to report back to their funders. In fact, it is probably the only reason that many nonprofits collect data at all. But this is equivalent to stashing your money under your mattress – sure you are saving money, but you are missing out on much better ways of accomplishing your financial goals. One axiom of personal finance is to not merely work for your money, but instead to make your money work for you. The same goes for your data.
If your organization is already collecting data you are only three steps away from making your data work for you (assuming you collect the right data).
But first, I highly recommend you read the following, all available for free at http://leapofreason.org/, which are all quickly becoming must-reads for nonprofit leaders:
- Leap of Reason by Mario Morino
- Working Hard Working Well by David Hunter
- The Performance Imperative
Step 1) Turn Data into Information
This is where math comes in, and generally requires someone with basic technical and analytical skills – but it doesn’t have to be complicated statistical analysis; basic arithmetic (sums, averages, ratios, differences, etc.) and Microsoft Excel skills are often sufficient. The premise here is that you are turning piles of raw data into something that normal people can understand. This can take the form of summary reports, dashboards, charts, tables, data visualizations, etc. But once you have something that you and your team can look at and understand, you are ready for the next step. If you need more help figuring this part out, check out these resources, or just google it!
Step 2) Turn Information into Knowledge
Reading through piles of reports is not my idea of a good time, and there are more exciting ways to breathe life into data and get your organization talking about how to become excellent.
My favorite way of doing this is what I call “Performance Workshops” where I bring people from many perspectives together to discuss the trends they see in the data, the possible causes of those trends (either good or bad), and ideas about how to improve performance. The key is to create a safe space where people feel encouraged to openly discuss their challenges and successes. What you want is to leave with a greater shared understanding of how we are doing and how we might act upon that new knowledge. For examples on how some organizations have done this before, read some of the case studies in Good Stories Aren’t Enough, an oldie-but-goodie on this topic.
Step 3) Turn Knowledge into Action
Now comes the hard part – using that information to make decisions and take action. Data does not replace decision making – it makes it better. Having performance data helps you ask better questions and focus your limited resources on the right things at the right time. Data won’t tell you what the best course of action is, but it will give you a better sense of whether you are doing the right things and if you are doing them well. It is then up to you and your team to redirect your energies in the right ways. If you’ve been following the New York Community Trust Nonprofit Excellence Awards – or have applied – this should sound familiar. Using data to measure results is one of the keys to management excellence.
There is no shortage of advice on how to be a good manager or leader, but as you read other material on the topic, the main lesson to learn is that being an excellent organization requires a relentless focus on results, a commitment to learning and improvement, and courageous leaders and managers who are willing to push themselves and their organizations to higher levels of performance. Don’t waste your energies collecting data that then sits on a shelf – put that data to work.