Develop Good Indicators

What are indicators?
What makes a good indicator?
Case Study – The Soap Co. Edinburgh

What are indicators?

Once you have used the storyboard and impact map, and are clear on what you want to know, it is time to set indicators so that you can measure and track your outcomes and impacts.

Indicators can help you to find out what happened or changed as a result of your organisation’s work and other factors, and can help you to ask further questions about how these changes happened. For any outcome, there is a range of possible signs, symptoms or hints by which these outcomes can be observed, measured or detected with varying degrees of certainty.

Indicators can be either quantitative – having to do with a quantity or number – or qualitative – having to do with the qualities or characteristics of what is being discussed. See Table 1.

Quantitative indicators help to answer questions about things that are inherently expressed in numbers. Qualitative indicators help to demonstrate, describe or measure that something has happened.
  • How many?
  • How often?
  • How much?
  • How?
  • When?
  • Who?
  • Where?
  • Which?
  • What?
  • Why?

Some indicators can help you to identify objective outcomes (e.g. whether employees have stayed in post more than six months, or how many tonnes of household furniture were recycled by your organisation). 1

Objective Outcome Indicators – example questions
After leaving employment with the Soap Co., have you been employed?
Yes □ No □
How long have you remained in post at your current job?
Less than a month □ One to six months □
Six months to a year □ More than a year □

Other indicators can help to show the presence of, or changes in, subjective things: ideas, opinions, or attitudes (e.g. whether or not trainees feel they have more self confidence). 2 In either case, you can ask questions that elicit simple ‘yes/no’ or ranked responses and can be categorised and assigned numerical values. Where qualitative indicators are used to illustrate or demonstrate that something has happened, or to capture a process of change, questions can also be asked in a more open-ended way, and can be more open to a person’s individual interpretation. 3

Subjective Outcome Indicators – example questions
Would you say that overall, you are satisfied with your life?
Yes □ No □
If you consider your overall life, how satisfied would you say you are?
0 —not at all to 10—totally or extremely

0

1

2

3

4

5

6

7

8

9

10

Often, indicators of the two types of outcomes – subjective and objective – are of equal importance to social enterprises, so it’s useful to capture change or progress in both ways.

One benefit of using subjective indicators is that it can be possible to compare people’s feelings, attitudes, and perceptions over time in order to measure what is often referred to as distance traveled. For example, an employee working at the Soap Co. may indicate, using a scale from 0-10 like the one pictured above, that she feels more confident in her interaction with the shop’s customers than she did when she was asked six months earlier. This is progress that is often difficult but very worthwhile to understand and demonstrate.

What makes a good indicator?

Many issues are interesting to the organisation and its stakeholders, and an organisation can seek to measure lots of things. It’s essential to develop processes that help you to understand why things happen and provide more free-form feedback. As a complement to these, it’s important to choose indicators of performance, quality, or outcomes that are within the organisation’s scope to measure and use. Four criteria for choosing indicators are summarised by the acronym AIMS:

  1. Action focused. Does knowing about this issue help your organisation or its key stakeholders to do things better or more effectively? Is it within your organisation’s power to influence it?
  2. Important. Is it relevant to your organisation? Is it a priority for a core stakeholder or group of stakeholders?
  3. Measurable. Can you get information that tells you something about the effects you’ve had?
  4. Simple. Is it clear and direct enough to be understood by all stakeholders? Is it easy enough to get information without expert assistance if none is available?4

The Soap Co. Edinburgh is a social firm developed by Forth Sector, an organisation that provides supported employment and training opportunities for people with mental health problems. It runs several social firms that create jobs and training opportunities in retailing, production and marketing. The Soap Co. is located in the heart of Edinburgh’s historic town and produces and retails high quality, handcrafted products, made locally from basic raw ingredients. Its expression of its philosophy is: Traditional • Hand made • Unique, and its objectives include:

Case Study: The Soap Co. Edinburgh

  • To improve employees’ self esteem and personal development
  • To develop a sustainable business

As it takes on a proving and improving process, the following are some examples of a ‘brainstorm’ of indicators that the Soap Co. Edinburgh might want to use to determine whether it’s meeting its objectives.

 

Sample Quantitative Indicators for the Soap Co. Edinburgh

Social – Indicators that the Soap Co is improving employees’ self-esteem and personal development.  Business – Indicators that tell the Soap Co. that it is meeting, or how it can meet, its business objectives.
How many hours of training did the employee receive? How many units of soap and other products were sold?
How often did an employee require health care for a certain condition as compared with other people outside of the company that had the same condition? How often did customers come back for more products?
How much money did the organisation bring into the local economy? How much money did the company make in profits?
How long did an employee stay in her new job? How long does it take the business to see a surplus or profit?

Sample Qualitative Indicators for the Soap Co. Edinburgh

Social – Indicators that the Soap Co is improving employees’ self-esteem and personal development.  Business – Indicators that tell the Soap Co. that it is meeting, or how it can meet, its business objectives.
How confident did the employee feel in working in a shop when she began? How confident in this does she feel now? How has the marketing of the products affected sales?
Why do employees work at the Soap Co? Why do the customers buy from the business? Is their motivation in line with how the business markets itself?
When do employees move into other jobs? When does the business generate its highest turnover?
Who does the company employ? (e.g. what are their characteristics, who are they?) Who are the target customers? Has the business reached them effectively?
Which forms of support can the company give that can have the most effect on employees’ personal development? Which products have sold out of stock?

Sample Qualitative Indicators for the Soap Co. Edinburgh

The Soap Co. would want to put all of these potential questions to the AIMS test:

Action focused – If the company wanted to improve its marketing, the answers to the questions on the bottom right hand side of the sample indicators chart would be able to feed into the process.

  • Important –The Soap Co. would seek answers to the questions most important either within the management, to the employees, to the customers, to Forth Sector, the umbrella organisation, to financiers or funders, or to all of these groups together.
  • Measurable – Some things would be very important to stakeholders, and help to inform future action, but are not necessarily easy to measure! The Soap Co. is looking for a way to measure changes in people’s self esteem, so the management might start with what it can measure, like how long people stay in their jobs alongside their reasons for staying or moving on.
  • Simple – Knowing which products sell out of stock is an indicator of the popularity of those items and can inform decisions like how much of the product to make in future. It is a much simpler alternative to more elaborate market research that determines the same thing.

Mayoux, L. (2002) What do we want to know? Selecting Indicators. EDIAIS


1 Some organisations call the objective changes that occur as a result of their work ‘hard’ outcomes.
2 These changes in attitudes, opinions, skills and other things that occur within people or groups are sometimes called ‘soft’ outcomes.
3 Mayoux, L. (2002) What do we want to know? Selecting Indicators. EDIAIS
4 Walker, P. et al (2000) Prove it: measuring the effect of neighbourhood renewal on local people © nef (the new economics foundation) London.

 

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