Key performance indicators - 14 simple measures to establish a baseline and enable progress to be assessed
From www.entrepreneurstoolkit.org
There is a growing body of management literature on how and what to measure as indicators of successful performance in enterprises, but few of these are specific to an enterprise which seeks both social and environmental benefits. In parallel, the field of social entrepreneurship or enterprise has a wide range of approaches, methodologies and tools used to measure performance. But tools are geared for those with knowledge in the field, and who evaluate a range of enterprises. For a new entrepreneur in a developing country context, whose first priority is to make their business succeed, these tools are perhaps difficult to use. A more simple approach is warranted.
This page describes fourteen performance indicators that can be adapted to the specific circumstances of each enterprise, so they can monitor their performance against these simple but informative indicators of progress towards their economic, social and environmental goals. It is based upon IISD's work with the SEED Initiative. These indicators can also be monitored by those investing in and supporting an enterprise to assess whether the potential of the enterprise is being realized, and to recognize early signs of crisis that can be mitigated if addressed in time. These indicators address:
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• Business performance:
Financial viability of each start-up enterprise has improved
Indicator 1: Business plan in place, reviewed and updated regularly
Indicator 2: Marketing networks established and new opportunities investigated
Indicator 3: Livelihood provided for the enterprise manager
Business plans should demonstrate that the enterprise is establishing objectives, products and service lines; setting up supply chains; identifying revenue targets and the investment and financing requirements and marketing strategies to meet those targets; as well as outlining the roles and responsibilities of those involved in the enterprise -- all of which are essential to improving financial viability. The provision of income for the enterprise manager suggests that a measure of stability and continuity is being achieved that will allow the enterprise to grow.
• Social performance:
The provision of income or employment to community beneficiaries and contribution to community livelihood and well being
Indicator 1: Income provided
Indicator 2: Delivery of occupational education and skills training
Indicator 3: Fostering stronger community organization, in particular women’s and youths’ roles
Indicator 4: Social development benefits secured
In addition to the provision of employment or sharing of revenues, the enterprise contributes to social development through education and new skills training which help to sustain and diversity economic activities within a community. Improvements in community health and well being that result from increased income, new skills and stronger community organization can be signaled by more children attending school; improved access to health care; and so forth. Observing and documenting such changes for annual reflection will help triple bottom line enterprises ensure that the downstream social benefits are in fact being realized by their target beneficiaries,
• Environmental performance:
Contribution to conservation and sustainable management of resources in the area
Indicator 1: Evaluation of environmental impact of enterprise
Indicator 2: Delivery of environmental awareness, training and education
Indicator 3: Changes in community choices and actions
Indicator 4: Technological innovation occurs
In order to determine environmental benefits, benchmarks need to be set against which environmental changes (either positive or potentially harmful) can be monitored. Observations of change need to be validated to provide assurances that environmental improvements are in fact taking place, and on what scale. Community involvement through public outreach and awareness raising, leading to changes in community choices and actions are additional signals that environmental goals are being achieved.
• Partnership management:
Relationships are built which contribute to enterprise development and growth (funders, supply chain, markets) and lead to the success of the enterprise, achieving multiple goals of economic development, social benefits and environmental conservation
Indicator 1: Roles, responsibilities and expectations established and monitored
Indicator 2: Regular communications maintained
Indicator 3: Monitoring and managing change in partnership composition
The enterprise leader should map the key relationships required for the attainment of objectives, and monitor on a regular basis how those relationships are serving the enterprise. How communications are maintained among partners can reveal much about partnership “health”. Changes in partners – who joins, who stays, who leaves – can also signal whether the partnership as a whole has the capacity to achieve its goals.
