Wednesday, 16 March 2011

Measuring the Unmeasurable (Part 2)

We continue our debunking of Einstein's statement "Not everything that matters can be counted." Happiness-counters ('well-being' if you prefer) please take note!

The factors that contribute to human happiness are largely understood. More than 50 years ago Abraham Maslow published his 'Hierarchy of Needs' which classified the building blocks of well-being very succinctly – see illustration. (Looking at this from the relative comfort of the UK it is disturbing to see how many parts of our world struggle with the very basic needs of this pyramid's first two levels, whereas we agonise over relatively trivial matters towards the top.)



In measuring these factors, it is important to do so from the perspective of customers or stakeholders – those on the receiving end. For example, the value of an initiative to reduce youth unemployment does not lie in the amount of money invested but in the benefits and perceived increase in well-being from those it affects (trainees themselves, their families and their communities). Some of these benefits may be intangible – the 'feelgood factor' if you like – but there are ways to quantify even these benefits. Social Return on Investment (SROI) uses many of these techniques.

From a policy perspective the most testing aspect then becomes understanding how we attain that increase in value. What initiatives or activities will yield the best results in terms of improving these outcomes, and how can we make the best use of available resources to achieve these? Currently, the government's whole Big Society approach is predicated on the idea of maximising well-being at minimum cost by seeding communities to bring about change and improvement for themselves rather than have the authorities do it for them. As a philosophy this is difficult to argue with; it's the means of bringing this about that are much more controversial.

Measuring the effectiveness of this type of 'enabler' activity thus becomes critical in understanding what works and its likely impact on well-being. How will we assess for example the success or otherwise of the government's Community Organisers, for whom a training contract has just been awarded to Locality? It's easier in fact to say how not to do it, and that is by using the first metric that comes into your head. The right approach is to develop a long list of possible indicators ('brainstorming' is a permissible term), and then distilling this down in group discussion to one or two indicators that best reflect what you are trying to achieve.

Working with a housing organisation, I once tackled the question of how they should assess the effectiveness of their communication to and from tenants. We brainstormed a wide range of ideas, and the metric eventually selected actually came up quite late in the discussion. They chose to measure the percentage response rate from annual tenants surveys, partly because a higher response rate should indicate a more engaged tenant community, but also because this indicator should also encourage the right mindset and behaviours amongst their own staff.

Whilst it may be possible to attribute numbers to these intangibles, and hence measure the unmeasurable in this way, the real point is not about numbers but about change. If we have some indication of happiness/well-being levels, and have measures which tell us which of our attempts to influence these are most successful, then there is very little added value in being able to articulate this to several decimal places. It's at this point that we make the essential and very welcome transition from measurement to actually making it happen!

Check my web site at www.real-improvement.com for more information and ideas.

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