What is the purpose of assessment, measures and metrics?

Assessing progress is about more than just measures and metrics. In considering how to do it well it is helpful to bear in mind two apparently contradictory truths what counts is what gets counted and what really counts can’t be counted.

Some measures and metrics are needed, but purpose cannot be measured directly and evaluating social outcomes and the quality of human relationships is difficult. However, particularly for large companies, some measures are essential to enable oversight, inspire progress and assess alignment to the purpose, and to help enable the right conversations with management and investors.

What do we mean by assessment, measures and metrics?

A measure is a number that is derived from looking at progress against a pre-determined measure e.g. in the case of marketing, the number of impressions, the number of visits to a website or the number of sales generated by a campaign.

A metric is a calculation between two measures. e.g. a percentage, a ratio, a fraction, a decimal or a multiple.

An assessment is a form of judgement – it is based on evaluating evidence, and the nature and form of the evidence used will vary depending on what is being assessed and for what purpose. An assessment can include quantitative as well as qualitative information.

We encourage the companies we work with to be wary of just looking at measures and metrics. Measuring enables understanding of what is happening only against pre-determined measures. A perspective focussed solely on quantitative data risks losing understanding of the underlying values and assumptions. We encourage them to assess progress taking a more holistic analysis with a view to understanding what can be learned from the data, whilst keeping the overall strategy and purpose front of mind.

Why assess and measure?

• To provide evidence of change, progress or impact
• To help understand what is happening, what is working or not working in order to learn and improve, and to inform strategy
• To send a signal of what is important in an organisation and so help to influence and drive change
• To benchmark a contribution to a wider specific measure or goal (e.g. the SDGs or climate targets)
• To report information required by investors, regulators or other third parties
• To enable scrutiny of the company’s alignment to its purpose

Assessing the impact of purpose is of course important and being able to demonstrate positive impact helps to change the way people inside and outside the organisation feel about the organisation – thus helping to inspire people to work together to contribute to a joint worthwhile endeavour. It also pushes the business to understand its wider impacts and to actively aim to reduce harms.

It is helpful to think about whether the primary aim is to report or to learn. The motivation to collect this information and the way it is used will differ depending on whether it is for external reporting (e.g. mandated reporting on gender pay gaps or modern slavery, ESG reporting to investors, and other reports to NGOs, regulators and other third party stakeholders) or whether it is developed as management information to be used internally to understand and learn from what is happening to inform strategy and culture.  Of course, some measures can be both a source of learning and a means of reporting.

The key to using the information well is to use it to inform a conversation

Whether it is for reporting, or for internal learning and to inform decision-taking, the key to using the information well is to use it to inform a conversation to help assess what is happening. And a combination of qualitative and quantitative information along with narrative can offer a broader assessment which helps to contextualise measures and metrics: to point to what they are showing and what is being learned in order to aid in that conversation. The conversation may be with external stakeholders, or with colleagues internally.

But the key insight is that the information – the metrics – are never an end in themselves – they are always in service of something else, namely a better quality dialogue to help the business consider questions such as:

• How did we get here?
• Is it desirable or sustainable to carry on this way?
• What do we want to change?
• Where should we go next?
• How do we think about it?