Robert Penna, author of The Nonprofit Outcomes Toolbox, talks to the Queensland Council of Social Service about measuring and articulating outcomes, examples of co-design practices and the importance of developing a shared language around outcome measurement.
Text: What do you think are the greatest benefits for service providers in being able to measure and articulate the outcomes of their work?
Robert Penna: First off as I've said a million times, the world is changing, the idea that we can any longer get by primarily pointing to the problem and saying woo there's a problem give us money, or talk about how busy we are and how much we care, and expecting the investor community to continue to support us, it's a fallacy. It's changed, the world has changed.
The outcomes movement at least in the states started twenty years ago. It is spreading around the world I don't think very many organizations are going to be immune. So answer number one is because this is what the investor community is moving towards requiring. Number two, the second benefit is connected to number one - those organizations that can do this, that can speak this language, will have a better chance of surviving than organizations that can't. There are several examples in history we can point you where a language officially changed, those people that learned the language, the new language, were able to prosper, those who couldn't and stuck to the old language, sooner or later were either marginalized or in some other way made inconsequential.
So the truth of the matter is that if you are an organization that is poorly resourced, under resourced or marginally resourced, that's going to get worse because the organizations that are well resourced or ahead of the curve and are early adapters, they are going to gain an advantage, and we're already seeing this in the United States, there's already a cadre of big boys that are sucking up most of the resources. In the United States approximately 94% of the money in the non-profit space goes to only about 6 percent of the non-profits. That gap is going to get bigger, so it is incumbent upon these organizations to learn the language.
The last thing is that our sector, irrespective of whether you're talking the UK, Canada, US, Australia, it's full of well-meaning people by and large, virtually everyone truly wants to do a better job. This is an opportunity to understand whether in fact you are doing the job that you said you were doing and if not how to change what you're doing, change the description of what you think you're doing and get to the point where you actually are having a beneficial impact on those you exist to serve.
Text: What do you see as the greatest challenges for organisations who are starting out on their journey towards measuring outcomes?
Robert Penna: I think number one is getting their heads around the concept. We have in the English-speaking world, we have a tradition of going back at least to the 1840's, and possibly earlier than that, of focusing on the problem and pointing to the problem as a justification of our existence, and for the justification for the support we seek. We also have at least at this point, this is 2014, we have at least a forty year, forty-five year history of looking at activity and assuming that it's a proxy for some sort of impact. It isn't.
Activity is a proxy for merely activity, you fund activity, activity is usually all you're going to get, so I think the biggest problem for most organizations is to divorce themselves from the traditional thinking and move to this new kind of thinking, that the accent is no longer just on making services available, it's on change, what kind of change, that activity no longer suffices.
The biggest one is to stop thinking about the sources of our support as funders, they are not funders this is not manna from heaven, this is an investment, they are investors and as investors they are due a return. A lot of people in our sector don't like the terminology, because they associate it with Wall Street - it has nothing to do with Wall Street. It has to do with the fact that this money is given to us in trust. It is somebody showing faith in our vision of a better situation, whatever the space we're working in. This is not a gift, the root of the word 'donate', is Latin for gift and give, it's the wrong word. The word funder implies number one, no reciprocity, number two implies that the source has no interest in what's done with it. Those are all wrong. These are investors, and we have to start thinking of them as investors, these are the biggest challenges
Text: And how can organisations overcome these challenges?
Robert Penna: Training. I mean it's not going to happen overnight, it's not going to happen by magic, it can't happen by executive field, the executive director or the president can't just say from now on think differently. I mean that just doesn't happen - people need to be taught, and we need to make investments in the training. Not only in what's the thinking but also what is the application, and I don't know about Australia but I can tell you that this is one of the big giant gaps in the States, more and more the investor community is requesting outcomes, requiring outcomes, demanding outcomes. But they are supplying virtually no resources to allow people to understand what this means, to understand what it means for them to implement it, or to be able to actually do it and use it. So there's a lot of floundering around.
Text: Can you talk about your philosophy towards developing outcomes “from the ground up”?
Robert Penna: This has to be something seminal. That an organization, a non-profit entity that's doing certain work, has to really start with the most basic things. It's all fine and good to have a mission statement on the wall and a vision statement on the wall. But where the rubber meets the road, where the implementation is taking place it's very, very important to make certain that the most basic questions are answered, and one of those questions is in fact do our outcomes lead to the realization of what we've written in the mission statement and the vision statement. I don't believe that any particular program is basic enough that it should escape this.
Another thing is that this outcomes business, this outcomes approach, it's not about reporting. It's not about measuring it's about doing better and learning. Within that context, it is also not merely about the programs, there are ways to apply an outcomes basis to your hiring, there are ways to apply an outcomes basis to your communications, there are ways to approach outcomes, or apply outcomes to a variety of things. I use the example of General Electric, for example General Electric is a company that's adopted Six Sigma, which is the single most powerful outcomes management system in the world. There's virtually nothing you can do at GE anymore, that you shouldn't do according to them, according to Six Sigma principles. I don't care whether you are ordering paper clips, they want to see it done according to Six Sigma principles. That is true infiltration. That's the kind of thing we need to do here.
Outcomes are not just about measuring, it's not just about reporting, it's about doing things differently, but ultimately doing everything differently. Why would you want to do your programs based upon an outcomes basis but still your hiring and your annual reviews of people on an activity basis? Once you learn how to do this you can do it with anything.
Text: How can organisations link their program outcomes with their strategic plan or vision and mission?
Robert Penna: Ok those are three different things. Strategic plan is quite different, I believe, than mission and vision. Strategic plan generally focuses on where does the organisation want to be after a certain period of time, three years, five years. In the corporate world it has to do with such things as market share, it has to do with such things as positioning in the field. I don't think that this is vastly different to the non-profit space. I have not worked with an awful lot of non-profits on strategic plans, because that's not what I do. But what I know of them has to do with where do we want to be positioned as an organisation in three years, most of them will say a piece of it will have to do with our fiscal situation, are we financially sound, do we have more money, have we diversified our funding sources, this is usually part of a strategic plan.
Where do we want to be positioned in the marketplace, in the community and again, a lot of non-profits don't think of themselves as being in a marketplace but they are, and first and foremost the physical geographic community in which they operate is their market. If people don't generally know about you it's hard for them to support you. If people don't know what you're doing it's hard for them to support what you're doing. It's not enough for you to be known merely to your traditional investors.
It's particularly dangerous if your traditional investor maybe is government. What if a new party comes in? What if there's a new executive that gee that's not as important as it was anymore. You need to be able to call upon, rely upon support, you've used the word stakeholders. The thing that - and again remember I work with a vast, vast array of non-profits, they're not all in human services. Some are in community development, some are in housing, some are in historical preservation, a particular love of mine, some are cultural organizations, some are the local orchestra, the local public radio station. A big problem that non-profit entities have, in the United States anyway, is they are most often known best by those who are their income sources, not by the rest of their constituents, not by the rest of the community. They have to get known by them, and so I think that in terms of getting to, tying this in the strategic plan, this is how you realise the benefits of a strategic plan, I feel, by utilising an outcomes approach.