Although performance management for social outcomes has evolved over the past few decades^[i], interest has surged in recent years. Performance management is perceived as increasingly important by governments, service delivery organisations, philanthropists, development agencies^[ii] and social impact investors^[iii].

The Capacity-Building Working Group for the UK Advisory Board to the G8 Social Impact Investing Taskforce wrote in its 2014 report,

“There are two types of organisational capacity-building required by the social sector – one is around building strong resilient organisations which can grow sustainably. The other is around building organisations which can reliably and predictably produce meaningful social outcomes, eventually for large numbers of people. Both are crucial for the social investment market to flourish, but the latter has been neglected in attempts to develop the market”^[iv].

The Working Group sees performance management as an essential capability for organisations whose business is producing social outcomes. They describe performance management capabilities over four organisational stages, as seen in the table below^[vi].

Start-Up	Early Stage	Growth Stage	Later Stage
Operational data is collected, but individual judgment drives service delivery decisions.	Relevant datasets are identified to allow tracking of progress against outcomes. Individual client progress is routinely discussed during staff supervision.	Relevant datasets are clearly defined and routinely collected. Staff and managers review individual client progress with reference to these.Organisation can design and use feedback loops in service delivery to facilitate ‘course-correction’ with individual clients.	Data collection is routinely used to manage performance and improve work with clients.Feedback loops are leading/have led to tactical changes to delivery (individual client level) and strategic change (codified program level).

Outcomes-based contracting for public services is one trend that is driving the need for performance-management systems that work towards achieving social outcomes. In addition, the rise of social impact investment and collaborative service delivery has created an urgent need for performance management adoption. This is partly due to the devilish difficulty of implementing these models, which require information over and above that generated by most social purpose organisations (and governments).

Please note that the cited drivers are not the only situations where performance management systems are necessary, nor should these drivers be interpreted as recommendations.

---

[i] Hunter, D. K. (2013). Working Hard – and Working Well. Hunter Consulting.

[ii] Cox, M. (2014). 3 Reasons Why We Need Business Analysts in ICT4D. ICTworks.

[iii] Winkler, M. (2014) A flourishing performance management landscape. Urban Institute.

[iv] Impetus-PEF (2014). Building the Capacity for Impact. p.3.

[v] Impetus-PEF (2014). Building the Capacity for Impact.

[vi] Impetus-PEF (2014). Building the Capacity for Impact.