Wednesday, 8 February 2012

Outputs, Outcomes and Impact

What's in a name? There is an increasing preoccupation amongst public and third sector organisations with demonstrating the value of what they deliver. This is often - justifiably - connected with funding from commissioners or other sources.

The easy bit is moving beyond outputs, which simply measure the volume of activity – number of people seen, units processed, activities undertaken or whatever. Most people appreciate the drawback that this fails to measure what those activities actually achieve, although sadly such output indicators still form the basis of many service agreements.

So we're trying to measure the change, what difference we make, right? Is this outcome or impact, or doesn't it matter? Such issues of terminology are commonplace, not helped by parts of the consultancy profession who try to convert the latest jargon into their USP (Unique Selling Point – more jargon!).

Let's illustrate with an example. Suppose we have an organisation dedicated to helping disadvantaged youngsters find full-time work. Output will be the number of young people they deal with, regardless of how these individuals progress. Outcome could be assessed in a couple of ways: short-term outcomes might be qualifications achieved, longer term outcomes could be how many young people get and keep a full-time job. In both cases, the benefits may go beyond these to include greater confidence, self esteem and life chances generally.

Impact takes this a step further, by looking at wider change beyond direct beneficiaries. Here, it could include the families and friends of those young people, the local economy, and wider society through greater prosperity and reduced welfare expenditure. Social Return on Investment (SROI) uses a definition of impact that takes account of these various perspectives, and also measures the achievement of the particular organisation in question by excluding external factors such as what might have happened anyway and the contribution of other services.

The key is not really about words at all. It's about understanding everything that changes as a consequence of the organisation's work, and being able to see that from the perspective of those affected – 'stakeholders' if you'll pardon the jargon. Measuring real value in this context is crucial to overcoming financial constraints and achieving real benefits to people and communities.

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