Eastside Primetimers consultant Rosie Chadwick writes about social impact and how the not-for-profit sector can make better use of data to measure it.
Popular US blogger and technology consultant Beth Kanter talks about the ‘Five Stages of Measurement Acceptance’ commonly experienced by not-for-profits. These range from denial (stage one) to fear, confusion and delight to the giddy heights of being data informed (stage five). Ask many in the UK social sector which of these stages they were at and I doubt you’d find many in the upper echelons.
The barriers to making more effective use of data, including data on social impact, have been well-rehearsed. As NPC colleagues highlight in their paper on The Power of Data, common challenges include a lack of capability: not having someone – or having too few people – who understand how data can help improve performance and have the necessary skills in data analysis and interpretation.
Some ventures may look to bridge this gap by recruiting specialist data analysts or seeking volunteer support, for example via DataKind. However, there is another route I think we could be making much more use of. Finance teams are naturally skilled at interpreting rich and complex data, identifying key drivers of financial results, and distilling complex information into a simple narrative. Applying these natural skills to improvement of operational performance can unlock significant value.
Making better use of financial information and finance skills in data interpretation to drive performance improvement has its own challenges. It takes leadership: the finance and operational communities both need to see the potential from bringing the two communities together. It involves risk taking. For finance professionals it means stepping into uncomfortable areas where accounting standards mean little, and for operational professionals it means being challenged by new ways of looking at performance. But when finance professionals love operational data as much as they do double-entry; and operational professionals recognise that financial skills can help them deliver more outcomes for less, ventures will be that much closer to the fifth (data informed) stage of measurement acceptance.