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Hitting the right notes

Eva Peron, former first lady of Argentina, copyright HerFariasP
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Hitting the right notes

Finance | Ian Allsop | 7 Mar 2012

Ian Allsop gets advice on management theory from Andrew Lloyd Webber, Tim Rice and Paul McCartney.

I was watching – for research purposes – the film Evita last week. Although I had never seen it before I felt I had, as my parents were huge fans of the stage musical and constantly played the LP during my childhood. As such I subconsciously knew off-by-heart a lot of Tim Rice’s fizzing wordplay, and Andrew Lloyd Webber’s score was as familiar as if he had simply recycled the tunes of existing composers. But one song - in particular - stood out.

It was And the Money Kept Rolling In (and Out), which is about the charitable foundation established by Eva Peron (pictured) to help the poor of Argentina. There are very few examples of charity being mentioned in the lyrics of popular culture.

The only other I can think of (though I would welcome further examples from my loyal reader) being Paul McCartney in Band on the Run. Here the incredibly wealthy former Beatle pledges, if “I ever get out of here” to “give it all away, to a registered charity”, something that Heather Mills may or may not have made a mental note of when she first heard it.

Conundrum

There are lines in Rice’s song that say: “When the money keeps rolling in, you don’t keep books. You can tell you’ve done well by the happy grateful looks, accountants only slow things down, figures get in the way”. It does illustrate that even in post-war Peronist Argentina they were grappling with the conundrum of how to measure outcomes, apply funding mechanisms and quantify the success of charitable endeavour.

And it doesn’t get any easier. Recent articles on civilsociety.co.uk highlight two new-fangled concepts on this theme.

The first is ‘payment by results’. On the surface this seems to be a logical method of financing public service delivery through incentivisation. Meet your targets to receive the cash. Sing for your supper, and sing well.

But even a few seconds of thinking this through suggests all sorts of possible flaws.

For a start, it relies on the targets set being realistic, assuming that they are even tangibly measurable in the first place. It could increase the problem of organisations drifting away from their mission in a bid to dig at the end of a rainbow that might not be in the same direction as the original storm. And it could hamper the riskier solutions that charities are often at the forefront of trialling, especially smaller organisations.

Is the short-term, impatient, instability of the football-manager culture really the way to address complex social needs? Or, to put it another way, would members of the government, so keen to impose such a framework, be happy to be judged and rewarded by the same criteria?

The other relatively new management concept discussed in the preceding pages is the ‘balanced scorecard’, which always conjures up for me an image of a cricket team’s completed innings where every batsman reaches double figures. But what is it in reality?

Wikipedia describes it thus: “A strategic performance-management tool – a semi-standard structured report, supported by proven design methods and automation tools, that can be used by managers to keep track of the execution of activities by the staff within their control and to monitor the consequences arising from these actions.” Which clears that up nicely. Though, being Wikipedia, it could equally mean that it is actually a 1539 Spanish furniture-assessment scheme.

Like a lot of these exciting new management tools, it has roots in Scandinavia. I suppose Abba were a perfectly-balanced group in terms of gender symmetry. And their own song about money was the first to explore, if subtly, the problem of maximising gift aid from higherrate taxpayers.

But underneath the jargon the key message for charities is to take the bits of such tools that can help your own organisation compete and be more effective, without being tied down to a point where you spend so much time measuring what you’re trying to do that you don’t do as much of it.

Charities do need to be able to assess how they operate and improve performance, not because it is important to keep up with the latest fad of the management-consultancy industry but as an end in itself. Especially if funding is going to be driven more by achieving results, or at least someone’s interpretation of them.

I could say more, but I am slightly concerned that people might already have stopped reading. Which would mean that I wouldn’t get paid, due to failing to meet one of my own hard-to-define targets in writing this column. 

 

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Ian Allsop

Ian Allsop is a freelance journalist and editor specialising in not-for-profit management and financial issues.

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