WHAT’S MORE IMPORTANT – FINANCIAL STABILITY OR POSITIVE IMPACT?
I guess depending on your upbringing, your educational background, or the role you play in an organisation – you may pick one option more easily over the other.
Obviously I feel more strongly about the impact you or your organisation has. What does it matter if you’re in a good position financially if you’re not achieving great things?
But, the converse is also not ideal – achieving great things, but with the very real likelihood that you’ll lose great staff because of poor job security, or needing to let people go because you simply cannot fit them into the budget. Before too long, this starts impacting the quality and reach of your programs… and then all of a sudden, you’re not achieving great things anymore. You really can’t have one without the other.
Unsurprisingly, the title of this post is purposefully misleading, as both these areas of your business are critically important and deserve dedicated attention to ensure their success… but it struck me recently that the foundations for both areas are not the same. It’s much easier to reach a shared understanding, and therefore have meaningful conversations about our financial position, than it is for us to reach a shared understanding about our impact.
Think of regular reporting to Boards as an example. It’s pretty commonplace to have a dedicated section of the Board report that details the organisation’s financial position. Skilled staff within organisations prepare complex reports which speak to the solvency, liquidity, and cashflow of the organisation, and Boards usually have a director or two with similar skillsets who speak the same language. When complex tables, charts and ratios are presented to the Board – they know what it means. They can quickly form a judgement about whether things are good, or whether there is cause for concern. The transition from the ‘what?’ to the ‘so what?’ happens pretty seamlessly.
For some reason, the same situation doesn’t exist for our impact reports. I absolutely acknowledge that some organisations prepare meaningful impact reports for their Executive and Boards, but lots don’t, and of those that do, there doesn’t seem to be the same common language spoken. In financial nomenclature, solvency and liquidity ratios have a specific and objective meaning. The same can’t be said about effectiveness, efficiency, impact and reach. It also certainly isn’t as commonplace for there to be Board members with particular skillsets in the performance monitoring or evaluation space. This generally results in less questions being asked about performance in terms of impact, and a less than concrete awareness of how the organisation is performing when it comes to the impact on the people and communities they are funded to serve. The translation of the ‘what?’ to the ‘so what?’ is not as easy.
The nebulous space that performance assessment occupies is often complex and subjective – but it doesn’t need to be.
Organisations can certainly progress work to agree on what success looks like regarding the impact of their various programs. They don’t need to bite off more than they can chew at their first bite either – it can be a staged process.
My experience has been that Board Directors enjoy the increased awareness they have about performance, and are genuinely excited by the prospect of learning more about the great things that are being achieved. The same could be said about most people really – in that most of us enjoy knowing and learning more about something than we did previously.
So… how can we remedy this? What can we do to make conversations about performance more mainstream? How can we normalise a language that people understand and aren’t afraid to use? How do we create an environment where the skilled staff who understand and champion better performance in both these areas of our businesses, can flourish, and can increase awareness and excitement in others?
