How to measure Organizational Success? : An Important Tool
Updated: Jul 14, 2020
An organization can function effectively only as long as its wheels run smoothly. If it wants to make progress, it has to have a goal and a mission on achieving that goal. Whether it be a for-profit or a non-profit, its organizational success depends upon its ability to turn its vision into reality. In order to do that, its needs to know how to achieve it.
Why is measuring organizational success important?
How can the company decide whether it is on the right track of achieving its mission or not? How can it know if it needs to change some parameters or change the entire approach completely? In order to answer these questions, there is a mechanism of judging the factors and analyzing and evaluating the results.
Two of the major organizational structures, nonprofits and for-profits, have different missions, target audiences, and problem-solving strategies. And therefore, their evaluation becomes even more critical in terms measuring their success. The tools for evaluating both the structures are similar but with different criteria.
As the Houston Chronicle's James Green writes, "While the aim of for-profit organizations is to maximize profits and forward these profits to the company's owners and shareholders, nonprofit organizations aim to provide society's needs.
Different measurement tools for success
There are many things we can measure to determine the success for your organization, but which things should we measure? And which should we report? The simple answer is that we should report the measures and metrics that provide value to the organization.
What is not defined, cannot be measured.
What is not measured, cannot be controlled.
What is not controlled, cannot be improved.
What cannot be improved, cannot continue to provide value.
Hence it is very important to select and measure the company’s parameters and determine what needs to be measured.
One of the most popular mechanism for selecting and reporting metrics is the balanced scorecard, introduced by Kaplan and Norton. The balanced scorecard advises us to look at the organization’s performance from multiple angles. Typical balanced scorecards report on the achievement of goals in four areas. Most scorecards include a financial area, customer area, operational excellence and the future orientation area. While these are four common areas, the balanced scorecard should be developed to holistically address the needs and concerns of your organization.
In terms of Non profits, the Balance scorecard can be used to report the achievements related to its mission. Whether the program has reached its intended audiences or not, if they reached the number of volunteers they had targeted, or they raised funds for a certain event or they achieved in serving the public purpose for the community. All this metrics can be evaluated using the balance sore card.
The balanced scorecard gives us a mechanism for selecting a variety of metrics to help describe progress toward success. But we must define what that success looks like for the organization. Using the metrics tree, we can select the appropriate metrics to show that we are progressing toward the CSFs that directly support the mission and vision of the organization. However, to achieve that, it can be a long road ahead in consistently delivering and improving the strategies and adapting itself with the upcoming trends and keeping ahead with the current times.
Apart from the BSC, there are other frameworks that can be used. Some are as follows:
360 degree feedback
This tool is all about answering the question, “How well are our people performing in the eyes of those who have a stake in their performance?” It provides individuals with a broad assessment of their performance based on the views of those around them.
Management by objectives (MBO)
MBO is the process of defining specific objectives and then setting out how to achieve each individual objective.
Key performance indicators (KPIs) and metrics
KPIs and metrics provide a way to measure how well companies, business units, projects or individuals are performing in relation to their strategic goals and objectives. Well-designed KPIs are vital navigational instruments, giving a clear picture of current levels of performance and whether the business is where it needs to be.
Whether the measure is leading or lagging, the measure is kind (quantitative or qualitative), is category (compliance, quality, performance, or value), or is type (technology, process, or service), non profits and for-profits use this criteria for measuring their respective successes. The difference is the metrics they decide to focus upon.
The Class Consulting group uses specific tools to help NGO’s and other organizations achieve their goals. It also does Need Assessment to determine the underlying needs, challenges and gaps between the current and desired state of non profit organizations. The assessment involves Strategic Audit, Workshop and Recommendations to analyze your non-profit organizations internal and external environment to identify the road maps to achieve your desired results.
So to ensure that you get the maximum output for your efforts, It is important to know what exactly are you trying to achieve and how can you get resources to give you maximal returns.
Having said that, it is important for both corporate and non profit organizations to learn for one another. Nonprofits should be more business like in measuring KPIs while focusing on Social Return on Investment. It should not exist just to fulfill needs through others sympathy and charity but also work like corporate organization to achieve its mission. Similarly a corporate’s only goal should not be just to make profits. Corporations also have an obligation to focus on social responsibilities along with making profits.
Who can help you achieve your goal?
The solution is simple. Look out for companies that are willing to make the effort. See which organization can best fit your need and how they can help.
Why Class Consulting Group?
The main mission of Class is identifying the nonprofit leaders realize their vision and create tangible and intangible value for community. The core expertise is in providing solutions in strategy, marketing, human resources, finance & technology.
How does Class do it?
By encouraging Community Leadership: Fostering community-based leadership among volunteer professionals by helping them transform into business solution providers.
Supplementing Managerial Capacity: Augmenting managerial capacity in the Nonprofit sector by providing them with solutions for their business problems, thereby helping them better serve their respective constituencies. Building Partnerships: Forging partnerships with corporate and academic institutions to tap into and utilize their pool of human capital by actively involving them in community development initiatives.
Inspiring enterprising and imaginative professionals to lead community projects
Impact of The Class Consulting Group:
Class strongly believes that the benefits for our communities will accrue if all constituents come and work together. CLASS delivers a powerful and productive network of NPOs, Volunteer Professionals, Corporations and Universities thereby increasing the Social Capital available to the NPOs. This network effect helps NPOs get more work done efficiently and have access to more resources than is possible were they to act in isolation.
Look where your target audience is. Work around your goals and create strategies around it. And the most important thing: Don’t forget to enjoy and have FUN while working on it.
About The CLASS Consulting Group:
The CLASS Consulting Group is a trusted advisor to the Board of Directors and Senior Leadership of Nonprofits. It is a boutique management consulting firm headquartered in San Francisco Bay Area that provides consulting services to senior management and Board of Directors of nonprofit organizations and offers offers community leadership opportunities to professionals.
Since 2002 CLASS’s volunteers have been assisting nonprofit organizations in the SF Bay area and supporting the communities in which, we all live and work.
Interested? Simply Request A Meeting and we’ll get in touch to tell you all about this opportunity and how our volunteer-run teams are helping nonprofits make the bay area a better place; one community at a time.