A measure is a small part of a piece of music that helps musicians maintain a consistent rhythm. It’s also a tool for tracking data and providing insights to improve performance.
The best way to use measures depends on your business needs and the types of information you’re aiming to track. Choosing the right metrics or benchmarks is key.
Choosing the Right Metrics or Benchmarks
Coming up with the right metrics for a project can be hard. Often the number of potential metrics is endless, making it difficult to choose just a few key ones. This is especially true when choosing metrics that focus on outcomes. In this context, there are a growing number of catalogues for different outcome domains, negating the need to create them from scratch. Tools like Socialsuite even offer a library of templates for various types of measurement.
Metrics and benchmarks are important for providing information that drives action. However, they should be viewed through the lens of a holistic business strategy. Otherwise, narrowly defined results can have unintended consequences, for example if a new product is proving popular but it’s also cannibalizing existing sales (as in the case of razor blade manufacturers), this could be counterproductive. The best metric is one that is actionable, aligned with the company’s goals and enables continuous improvement. In order to achieve this, it’s vital that the right assumptions are made around data collection and calculations – these should be tested by peer review and sensitivity analysis.
Measuring Processes
Measurement theory is a broad field that includes the study of how to represent properties through numbers. This field has various systems of axioms, or basic rules and assumptions that govern the representation and comparison of quantities.
Process measures are a type of metric that focuses on the actions performed within an organization. They can be used to track performance over time, such as the number of times a test was conducted for a particular patient or group. Process metrics can also be used to identify gaps in care, such as the number of diabetics who did not receive blood pressure testing.
Process metrics can be combined with outcome measures to create a composite measurement that captures both inputs and outputs. Payers can use these measurements to understand if they are achieving desired outcomes, such as a reduction in polio cases. This can help them to determine which strategies are working and devise new ways to increase preventive services in a cost-efficient manner.
Measuring Outcomes
Outcomes are often more akin to the “big picture” impact of a project, such as client growth over time that can be directly linked to your projects (such as increasing website traffic or margins). While these are much broader in scope than the outputs measured by process measures, these outcomes still need to have quantifiable data attached.
This data helps to assess how well a project is performing, and whether its efforts are making progress towards an outcome goal or not. It’s important to choose an appropriate measure and target for each outcome.
As with process measures, it’s important to avoid perverse incentives or uncontrolled external factors when setting outcome targets. It’s also good to test the achievability of any stretch targets with service providers or social investors (if they are part of an outcomes-based contract such as an impact bond). The pricing outcomes guide provides useful advice on this. This is particularly important for any outcomes-based contracts that will be used to pay for services.
Measuring Performance
A good performance measurement system provides data that allows you to make informed decisions, identify opportunities for improvement and hold your leadership team accountable. It also enables you to communicate your success with funders and other stakeholders.
Measuring performance involves choosing metrics or indicators to measure progress towards desired goals, collecting and analyzing data, and reporting the results of these measures. This may involve using internal systems such as financial or customer databases, external sources such as market research or industry benchmarks, or a combination of these techniques.
The data you collect should be accurate and reliable, with a sufficient degree of granularity to allow you to detect small but important changes. You should also use comparative values, where applicable, to gain insight into the meaning of your calculated metrics. For example, a 5% increase in revenue might be impressive, but it could still represent poor performance compared to your competitors. You should also analyze the performance of these metrics over time to determine trends and patterns.