Associations continually struggle with the issue of what is commonly referred to as the "value proposition. From coast to coast the story is the same: leadership believes members don't recognize or appreciate all their association does for them… they don't see the value gained from the dues they pay.
Actually it's there to be seen, but you need a special lens for value to become visible. In this sheet I'll show you how the use performance measurement to reveal to your members the value proposition of your association.
Performance measurement refers to the system of determining goal achievement and tying it to association efforts. So far, so good. Don't let the technical aspects of what follows derail you… performance indicators refer to the items that are measured as representative of the association's efforts and achievements.
There are three kinds of performance indicators:
OUTPUTS indicate the variable amount of effort, expenditure or use of resource an association puts into achieving a specific program goal.
OUTCOMES indicate the variable amount of results or goal achievement that come as a result of the amount of OUTPUT applied.
EFFICIENCY indicators allow the ratio between OUTPUTS and OUTCOMES to be assessed in terms of the unit cost of a given level of output to outcome. It's assumed that there is one optimal ratio.
Sounds pretty technical… and it can be, but a little commonsense can turn this jargon into straightforward managerial practice to highlight the value proposition.
It easy to get started if your association has a good mission statement: whether it already conforms to a straightforward DO:GET format, e.g. this is what we do and what we expect to get.
The DO and the GET conform directly to the OUTPUTS and OUTCOMES of performance indicators. And the quickest way to get a list of performance indicators is to break the mission statement into its various components (program evaluators call this "deconstruction."
Don't get hung up on numbers and statistics, yet. It's the logic that matters here. While, by definition, performance measurement requires quantification, that does not mean that distinctions about quality cannot be made. Indeed, making quality distinctions for outcomes lends itself readily to performance measurement. I'd prefer to express all performance as numbers, but sometimes qualitative distinctions of good and bad is the best I can do.
The idea of performance measurement is not to create the perfect set of indicators (that would be an ideal worth pursuing), the aim is to determine how well we are doing at a specific point of time and point to directions for improvement.
Referring to a point in time releases the power of performance measurement. Measurement has little utility unless it is taken in comparison with something else. Those comparisons are called bench-marking… a way of determining whether your association's performance is better or worse when compared to something else.
There are three useful points of comparison:
- To yourself at some previous point in time.
- To similar organizations.
- To industry standards.
The first option is particularly useful because once measurement begins, the first assessment sets a baseline and over time it is used as a stable reference point from which to discern trends, even make forecasts.
Pushed a little further, it is possible to see whether budget allocations (spent dues dollars) produce anticipated results. That is the value proposition. Done properly performance measurement encourages viewing spent dues dollars as investments and levels of outcomes as ROI.
Pushed even further, good performance measurement can lead to performance based budgeting (PBB) a system by which leadership makes allocation decisions based on past performance. With PBB it is possible to "dial in" the exact level of service members want by adjusting allocations upward or down.
Pushed to its furthest extreme, an association could employ a "dashboard" with instruments that monitor real time performance along key dimensions.
The idea of the dashboard instrument panel may seem extreme, but a more modest approach, the association "report card," is a workable approach. Remember the report you got in elementary school? The teacher scored you on the topics relevant to grade school education in a way that communicated a lot to you, your parents and other teachers.
The same logic holds here. An association has a handful of really key performance indicators meaningful to members and leadership alike. Performance tracked on a quarterly or annual basis and noted on a report card, graded A through F (incompletes are allowed) can quickly show where the association stands. Put two reports back to back and you have a true bench-marking comparison.
The items to be reported should come from leadership and members. It's not difficult to pull together a couple of focus groups of regular members and ask them what they expect to see for their dues contribution.
The only tricky part in all of this is the actual process of measuring specific do:get pairs. As a social scientist, I can get pretty serious about issues of validity and reliability, cause and effect. When you get to this point you might want to get assistance from someone who understands the statistics of performance measures.
I do not, however, want to discourage you from starting, even though measurement may be qualitative and subjective. ANY form of measurement is preferable to none at all. Gaining consensus on what the report card items is a major step forward.
Here's an example. In June I worked with Rick Rielly and the Columbia-Greene Board of REALTORS® located in the beautiful Hudson Valley. These are the items they identified for their report card:
- Education and Training (# courses provided, attendance, evaluation).
- Quarterly meetings (# held, attendance)
- Newsletters (# sent, response)
- Financial Viability (revenues, perceived member value).
- Engagement/participation of members.
- Effective and efficient use of resources.
- Community involvement.
This is a good start. As performance measurement its heavy on the do's, but there are outcomes specified. The selection of "perceived member value" is good.
The report card is an excellent management practice as well as helping explain to members the value proposition. It can point to areas that need improvement and demonstrate to members any increase in the value received from the investment of their dues dollars.
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