Monday, February 21, 2011

More on Metrics

In between writing an article on metrics (Critical Issues #8: The Measure of Success) and preparing for an upcoming webinar on the same topic, I happened to read two illuminating articles on higher education in the New York Review of Books.

Andrew Hacker, in “Where Will We Find the Jobs?” (February 24, 2011), challenges many quantitative measures in the six books he reviews, some for their validity, others for the ways they seem to be misused. But he makes many of his points with other measures, such as income disparities. He ends with a call for increasing student retention as a solution to the demand for a more educated workforce. This would require more funding for more individual attention in teaching and advising students. To this end “our colleges will have to examine many wasteful, perfunctory, and senseless practices.” While he alludes in passing to overspending on athletics, he identifies—in this article, at least—neither the scale of funding required for his vision nor the wasteful practices sufficient to cover it. He does, though, make it clear that transforming his argument into action would require quantitative exploration of qualitative judgments.

While Hacker’s approach is to embrace metrics as a tool to achieving qualitative goals, Simon Head focuses in “The Grim Threat to British Universities” (January 13, 2011) on the misuse of metrics and "management systems" by benighted bureaucrats. Out of Harvard Business School, by way of McKinsey, came the Balanced Scorecard and its Key Performance Indicators. This tool and others like it, Head tells us, have been wielded with a heavy hand by the government functionaries in charge of funding higher education, to measure performance in research, scholarship and teaching as if they were manufacturing operations with goals limited to productivity and return on investment. Head sees this state of affairs as the diastrous triumph of small minded managers running amok through fields of knowledge and substituting mediocrity for excellence, to the detriment of the nation.

Head appears to be describing a genuinely destructive phenomenon, but he does not distinguish among (1) tools, (2) the material to which they are applied, and (3) how they are used (see CI #8: The Measure of Success).

Business Process Reengineering or Total Quality Management cannot simply be dragged in one piece from business into the nonprofit sector by a forceful trustee or a second-career chief financial officer newly transported from a corporate job. These tools have often been misunderstood and used poorly even in their business setting, and they require all the more thought about where, how and to what to apply them if they are to be used in a nonprofit.

A Key Performance Indicator in a profit driven business culture may simply be widgets produced or precisely calculated return on investment. In CI #8: The Measure of Success and in the webinar "Why Metrics Matter" I point out how to connect measurable actions to qualitative outcomes through a hierarchy of questions. The process may be asymptotic rather than direct, but it’s still a critical tool.

On a nonprofit board, the disagreement between people who focus single mindedly on measurable performance or budget, and those who reject the notion that the intangibles of mission can be quantified, cannot really be resolved. It can only be managed as an ongoing (positive) dynamic tension. If there is a shared commitment to a cause, these two positions are both essential to organizational achievement. The trick is to bring both sides to understand the shortcomings of their own position and the strengths of the other.

Having worked with many boards facing this dichotomy, I can testify that within a nonprofit board—in contrast to the toxic contemporary political environment addressed by Simon Head—bringing apparently opposed positions together in mutual understanding is actually easier than it sounds.

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