Data and Better Board Decision Making
By William Pawlucy, CAE, MPA
In working with associations for two decades as a staff executive and consultant, I have concluded that more than 90 percent of boards are missing out on a compelling opportunity to improve decision making, provide clarity to staff and enhance value for members.
The opportunity is to leverage data and performance measures to objectively assess what is working and what is not in your association. You may believe this topic does not apply to you. After all, you have plenty of data to sift through at each board meeting. For example, your executive director recently shared reports on the success of this year’s conference. And, at each meeting, the finance director arrives with reams of data to update the board on financial performance. But is that data telling you what you really need to know about the performance of your association? To determine this, partner with your executive director and answer the following questions:
Do not be discouraged if the answer to most of those questions is either “no” or “I do not know.” When it comes to data, many board members do not always know what to ask for. The board trusts the staff to provide the data it needs to make the right decisions, and the staff typically has plenty of data to share. But sometimes the staff is hesitant to provide too much data, fearing that information overload could steer a board discussion “into the weeds.” This can create an information gap. The information is there but is not available, or it is not leveraged in a strategic way. As a result, board decisions can sometimes be made subjectively on elements such as “gut feel,” consensus, personal influence or even in reverence to time-honored beliefs (e.g., sacred cows).
- How do you know the last conference was really a success? How does your association measure success and member satisfaction?
- Was the conference a good return on investment? Would the bottom line be different if you factored in the cost of staff and volunteer labor in addition to traditional conference expenses?
- Are staff and volunteers working on the programs that deliver the most member value and growth?
- Do you understand the cost of every program, service or benefit your association offers? Are you getting a good return on those investments?
I encourage boards to consider using data strategically to define what is running well, what is broken and how to avoid danger spots. Much like the dashboard of a car provides its driver with real-time information about a vehicle’s health and performance, the strategic use of data can provide a board with real-time information on whether a strategy you worked hard to implement is succeeding or if it requires a thoughtful look under the hood.
How to Start
When I talk to boards about the strategic value of making fact-based, data-driven decisions, cost and capacity are understandable concerns that are raised. Regarding cost, many boards worry it would require a pricey investment in a sophisticated database, a high-priced consultant or additional staff members to manage the new tools and resources. Regarding capacity, associations are concerned a new rigor around data analysis would overwhelm already stretched staff members.
There is good news. Regardless of size or scope, any association can secure additional data that it likely does not have today. This data is not expensive to acquire. It requires only a Microsoft Excel® spreadsheet and a few hours from your executive director or senior staff. First, simply conduct this baseline inventory of every program/service benefit you offer:
When boards I have worked with make a commitment to this initial analysis, they are often surprised at the results. The data provides new information that might not otherwise have materialized in a boardroom discussion. For example, they often discover that the association’s initial concentration of resources was not on the programs or services that were growing, or most valued by members. Alternatively, the data might show that the investment in one unhealthy program is significantly hampering the growth of another promising program. Sometimes, the data shows that a revered program is requiring the most staff or volunteers hours, but yielding the least growth or member value.
- How many members use it?
- Is it growing over a pre-determined timeline (i.e., year over year)? If so, by how much?
- What does it cost to deliver?
- What does it cost to maintain?
- How much staff resources are required and what is the value of those resources?
- How many volunteer hours are required?
- What is the return on investment of this program/service to members?
Herein lies the beauty of data. When interpreted correctly, it is objective and honest (although it does have to be interpreted correctly). It enables boards to temper the emotional aspect of decision making. A baseline exercise such as the one above allows the board to “pressure-test” the effectiveness of its programs and services against its strategies. In doing so, the board can provide the executive director with guidance to what matters most to the organization and then enable the executive director to shift resources accordingly. The exercise also provides justification for eliminating programs that are not adding value or hampering growth. It gives you the ability to empower your executive director and staff to focus on meeting the association’s objectives as defined by the board. The data shows you how and where to remobilize your volunteers or reenergize your members. It also allows the board to have honest and objective discussions about change.
Going Deeper with Data
Associations that are thirsty for an even deeper level of analysis can take this baseline exercise a few steps further by engaging staff to provide the board with targeted analysis on other performance metrics, including:
When strategically applied, data and performance measures enable a board to focus its discussions around what matters most in terms of investment, time, resources and value. Data equips the board and senior staff with new and unfiltered information that can provide clearer direction to staff and volunteers. It can also lead to focused decisions that drive member value by investing more in specific programs and services that deliver the most impact. An investment in using data and performance measures— at any level — enables better board decisions. And better decisions enable fresh and powerful focus for staff, volunteers and members.
- Member satisfaction – Your board should review metrics provided by staff that indicate value perceived by members around the products and services your organization offers. Such metrics can help your organization adjust its offerings to ensure even higher levels of satisfaction.
- Product and service performance – Understanding the impact and true costs of your products and services will allow your association to both improve such offerings and determine their effectiveness.
- Financial and marketplace performance – Measuring your association’s financial performance is typical and expected. However, measuring financial performance against competing organizations is not typical and is the next step in understanding your performance.
- HR results – Your association’s performance is rooted in the staff, volunteer leaders and other volunteers that serve. A deeper understanding of the resources available, the allocation of those resources and their impact is important in ensuring the association is properly staffed to achieve its strategic goals.
- Operational performance – In delivering a set of programs and services, your association needs to assess its own performance to meet the needs of its members. Measuring operational performance allows an organization to make “just-in-time” changes to meet the needs of its members.
||William Pawlucy, CAE, MPA, serves as founder and CEO of Association Options, a global management-consulting firm that helps nonprofit associations in strategic planning, board training, leadership alignment, management assessments and searches, and special long-term projects.
APRIL 2015 EDITION
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