This blog originally appeared on the Stanford Social Innovation Review website.
A nonprofit executive recently told me about the dismal state of her organization’s performance management data system. Despite carefully selecting a vendor and spending significant resources, staff compliance with data entry is low, senior leaders rarely view the system’s auto-generated reports, and adding new fields and queries requires moving mountains.
She’s not alone in her struggles. The more than 150 nonprofit leaders who have taken Bridgespan’s Performance Measurement Diagnostic, a survey that encompasses 10 elements of measurement, gave the lowest marks—by far—to their data systems. The challenge is particularly acute for organizations with budgets greater than $25 million; they are roughly twice as likely to rate their data system as a weakness compared to organizations with budgets less than $5 million.
What’s going wrong here? In our view, too many nonprofits are falling into the “data system trap”—that is, they are building or buying their performance management data system before they are really ready and have laid the essential groundwork.
Here are five strategies to keep you out of that trap:
Using these five strategies will greatly increase the odds that you are developing your performance management data system on a strong foundation. And if you get to the point of choosing a vendor, don’t just rely on what they tell you. Talk to nonprofits in your field that have experience with each of the leading contenders. Just make sure you probe during these reference checks, because often the root cause of unhappiness with a data system is less about the vendor they selected, and more about their inability to have laid the right groundwork upfront.
What items am I missing on my list? What do you wish you had done before setting up your current system?