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How can we become data-driven without data driving us crazy?

Posted by Menko Busch on 16 October 2015

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Impact measurement often requires organisations to collect more data. But with more information, the risk of information overload and attention fragmentation increases. How can we cope? How can we become data-driven without data driving us crazy?


Information overload

“We are swimming in sensors, and drowning in data” said Dharmendra Modha, a principal investigator at IBM. WinterGreen Research estimates that “the market for sensors integrated with processors will reach 2.8 trillion devices in 2019” (Bloomberg). In other words: if we’re already drowning, we need Noah’s Arc to survive the flood of information coming our way.

Unfortunately, multitasking isn’t the answer. Contrary to popular belief, people can’t do several things at the same time. According to McKinsey, multitasking slows you down, hampers creativity and makes people anxious. Resist the urge to do everything at once and you’ll become more efficient and happy.

This also applies to measuring impact: focus on what you want to achieve, filter what you need to know and follow through on your analysis.

 

Focus

First of all, we need to focus on what’s really important. Organizations that start with measuring impact often create a long list of stakeholders, an even longer list of outcomes and end up with a huge list of indicators that they can measure. Not only does it take much time and energy to gather all this data, it can also make the analysis complicated and overwhelming.

When it comes to focusing on your impact, start by reflecting on your mission statement. What do you want to achieve? Why is this valuable for your stakeholders? You can then create a Theory of Change that shows how you want to achieve this mission.

This picture shows a logic model, which can be used to develop a Theory of Change:

Logic model

Especially when you want to benchmark, it’s important to look at just a handful of metrics before zooming in on more specific data. It can be helpful to have a single impact metric that shows the average performance of multiple indicators.

 

Filter

Even when you have focused on a specific impact area, it can still be a challenge to prove your impact. Many organisations either give up on proving this, while others set out to measure every indicator that they can think of.

Smart organisations take a different approach and check which assumptions in their Theory of Change can be substantiated by existing research – the Global Value Exchange is for instance a good source for this. After you have identified which assumptions are still uncertain, you select the indicators that you want to monitor.

 

Follow through

When you’ve determined what you want and what you need to know, it’s time to follow through on your analysis and implement your ideas. Don’t hesitate to experiment and start making an impact!

Once you’re busy and have been working with your stakeholders, you can reflect on ways to further improve your impact. Need help? Contact us for more information!

 

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Topics: Impact measurement, Social impact, Stakeholders, Impact investing

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