Jul 28, 2011

Measuring Success: "How Do You Create a Data Driven Culture? Step 1: Framing the Issue"

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How Do You Create a Data Driven Culture? Step 1: Framing the Issue

Recognizing the value of data is an important first step, but how can nonprofits move beyond this to teach employees at all levels of their organizations to make data-driven decisions, not anecdotal, emotional or knee jerk decisions? 

Last month we introduced you to the 7 Steps to Data Driven Decision Making. Here, we will share detailed insight into the critical first step, Framing the Issue, using examples from our clients' experiences with the process.

Framing the Issue

Nonprofit employees do not need to be statisticians to effectively analyze data and make data-driven decisions. In fact, most of the organizations we work with find the actual analysis of the data to be the most straightforward part of the process. The biggest challenge organizations face is really taking enough time to clearly identify the issues they are trying to understand.

When organizations do not adequately frame the problem, they usually collect the wrong data or incomplete sets of data. This leaves them confused as they try to make sense of their analysis and draw conclusions to enable decision making.

Many concerns pass by the desks of nonprofit professionals each week and there are many potential projects and analyses that they can choose to undertake. When a concern arises, how do leaders know which ones need to be studied and which to devote their limited resources toward understanding better?

We suggest leaders ask the following questions to assign a priority to the issues and to understand what work will be involved in exploring them further:
• How did this issue come to my attention?
• How many people does it impact?
• What proof do I have that this problem exists?
• What else do I need to know in order to evaluate this issue?

Case Study 1: Foundation

Sarah works as a Program Manager for a capacity-building foundation that gives grants to nonprofit organizations. The nonprofits that receive the grants create volunteer engagement in community service projects. Her foundation's mission is to increase the number of volunteers engaged in community service and maximize the percentage of volunteers retained from one year to the next.

How did this issue come to Sarah's attention?
Based on conversations with grantees and anecdotal evidence gathered while visiting offices, Sarah's team felt that its grants were effectively increasing the number of people engaged in service across the state. The team knew that some of the nonprofits that received grants were more successful with volunteer engagement than others. They used volunteer retention to evaluate the effectiveness of their grants. However, Sarah did not understand what factors drove increases or decreases in retention.

The foundation had been collecting a wide range of data related to its grants, but had never analyzed it to understand trends and relationships between the metrics. As the foundation experienced external pressure to report its impact more quantitatively, Sarah was asked to evaluate the portfolio of grants so that the foundation could measure its long-term impact. 

How many people are impacted?
If the foundation disbursed funds to the most effective nonprofits, the number of volunteers serving in the state would increase. The foundation indirectly served over 30,000 clients through its grants at the time and hoped to increase this number. In addition to clients served, hundreds of volunteers worked in the grantee organizations across the state.

What proof is there that this issue exists?
Sarah's data showed that some organizations had low volunteer retention rates. Several of these organizations had been receiving funds from the foundation for years and continued to have low retention rates. 

What else does Sarah need to evaluate this issue?
Sarah collected information contained in the annual grant reports that would help her see which metrics contributed to low retention rates. She hoped that this would help her understand why some grants performed better than others. 

Case Study 2: Private school
John is the principal of an independent school that teaches students from kindergarten through 8th grade. His school seeks to equip its students intellectually and socially for success in high school and beyond. 

How did this issue come to John's attention?
John heard a few complaints from parents that the math program in his school was weak and did not equip the students with the knowledge they needed to be top performers in high school. He did not know if this was just the perception of a few parents or a bigger issue that needed to be addressed. 

How many people are impacted?
The complaints came from parents whose children were students in the middle school, grades 5 through 8. Parents of elementary school students had not complained.

What proof is there that this issue exists?
In addition to parent comments, middle school standardized test scores were lower than the average compared to other independent schools. 

What else does John need to evaluate this issue?
John needed to collect information from all the parents in his middle school to understand the perceptions of more than just those who complained. 

Why Frame the Issue?
By asking these questions, nonprofit leaders can effectively prioritize the many issues they could potentially explore. This pattern of inquiry also clarifies the nature of each issue and the data that will be required to fully understand them. Framing the Issue sets the foundation for the remainder of the 7 Steps: Hypothesis Development, Data Collection, Data Analysis, Interpretation, Decision-Making and Communication. 

Be sure to check out our newsletter next month, when we will delve into Step 2: Hypothesis Development. 

If you have further questions about this approach or are interested in the Building Data Competency program for your organization, email info@measuring-success.com.

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