Implementing KPIs and Performance Reporting

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Implementing KPIs and Performance
Reporting

• Peter Bradbury
• Arthritis Research Campaign

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Arthritis Research Campaign (arc)

• Established in 1936
• Fourth largest UK medical research charity
• Annual income of 34m
• Income streams from Legacies, Fundraising, Retail
  and Intellectual Property
• Net Assets of 39m
• 130 members of staff
• 16 Trustees
• Based in Chesterfield, Derbyshire with
  Fundraising and Marketing operations in London

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The Crooked Spire
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arc Our Vision

• Our vision is a future free of arthritis

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arc Our Mission

• Our mission is to improve the lives of people
  with arthritis by-
• Funding high quality research into the cause,
  treatment and cure of arthritic conditions
• Translating the outcomes of research to benefit
  patients
• Educating health professionals
• Providing information to the general public

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arc Organisation Structure

• CEO
• Research and Education (15 staff)
• Marketing (6 staff)
• Fundraising (16 staff)
• Retail and Trading (77 staff)
• Administration (15 staff)
• Externally, we also have a series of Research
  Committees plus Finance and Marketing Committees
  and the Board of Trustees

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UK Arthritis Facts

• More than a third of the population aged over 50
  have some form of arthritic pain that interferes
  with their normal activities
• More than 6 million people (1 in 6) suffer from
  back pain
• One in 5 adults consults their GP each year with
  some form of arthritis
• Arthritis is the most common condition for which
  people receive Disability Living Allowance

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Personal Profile

• Qualified management accountant and marketer
• Twenty years experience as a FD in SME
  organisations in South Yorkshire
• Joined arc in March 2007
• Recruited to help initiate the change process
• Responsible for all the administration functions
  Finance, IT, Human Resources and Quality

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Personal Profile (cont)

• Proactive in developing Strategic and Business
  Planning processes, including KPIs
• Focused on organisation structure, culture, and
  systems development
• Passionate about benchmarking and the utilisation
  of best practice

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The Implementation of KPIs

• A new era within arc
• A new Strategic Plan was being established
• The standard of management reporting had been
  limited
• It was an excellent opportunity to help influence
  and focus the strategic and operational direction
  of the charity

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The Implementation of KPIs

• Strategic KPIs The Balanced Scorecard
• Operational KPIs Departmental Performance
  Measures (which support our Business Plan
  objectives)

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Development of the Balanced
Scorecard within arc

• Initial review of Vision, Mission, and Values
• Developed the Strategic Plan
• Established a Revenue Plan (5 Year)
• Developed a Business Plan which is aligned to the
  Strategic Plan but departmentally focused and
  managed
• Established the Balanced Scorecard and
  Departmental Performance Measures
• Developed the Management Reporting

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The Balanced Scorecard The
Four Perspectives

• The theory suggests the grouping of enterprise
  wide performance measures into four categories-
• Customer
• Processes
• People and Learning
• Financial

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Drivers for the arc Balanced
Scorecard

• Personal experience with proven success
• Simple performance measurement tool to support
  our strategic development
• Strong communication tool for the use by both
  management and trustees
• Effective framework to assist our strategic
  management

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The arc Perspectives

• Activities - Income (Customer)
• Activities Expenditure (Processes)
• Organisation (People and Learning)
• Financial (Financial)

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Activities - Income

• Attain a growth in Legacy Income of x pa
• Attain a growth in current Fundraising of x pa
• Attain a compound growth in Retail Income of x

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Activities - Expenditure

• Attain a compound increase in Charitable
  Expenditure of 10 pa
• Attain a 50 Directed Mode expenditure by 2012
• Attain 5 topic specific Centres of Research by
  2012
• Attain an overall 10 of Charitable Expenditure
  committed to Education by 2012

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Organisation

• Zero accidents
• 100 Training Plan Adherence
• Absenteeism levels of 2 or less

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Financial

• Balance Sheet Reserves do not fall below those
  quoted on the Revenue Plan
• Operating Expenses not to exceed, as a percentage
  of revenue, the targets within the Revenue Plan

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arc Balanced Scorecard Summary

• Organisational best practice
• Visual face of our strategy
• Quantitative framework for the organisation and
  helps ensure that the charity is on track
• Easy to update / maintain / understand
• Facilitates trend analysis and corrective action
• Complimented by departmental performance measures

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Current Status of the Scorecard

• We have just completed (July) the second year of
  the Strategic Plan
• To date we are ahead in 7 out of the 12 targets.
  The 5 areas of adverse deviation are receiving
  our attention
• The content of the Balanced Scorecard will remain
  unchanged for the next 3 years
• The Balanced Scorecard has become an integral
  part of our reporting and monitoring system

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Departmental Performance
Measures

• Operational rather than strategic
• Support the departmental targets in the annual
  Business Plan
• Communicated to management and staff but not
  trustees
• Facilitate corrective action
• Fairly flexible
• Open to development on an annual basis

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Example Performance Measures

• Number, and type, of legacies received
• Active donor database
• of YTD grant applications approved
• Press cuttings per month
• Return on investment against benchmark
• Average website visitors per day
• Staff turnover

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Performance Reporting

• The Recipients-
• Staff
• Departmental Heads
• Senior Management Team
• Trustees
• Our Donors and the General Public

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Performance Reporting (cont.)

• The Methods-
• Staff and Branch Newsletters
• Donor Magazine
• Management Information Report
• Annual Review / Report
• Committee Meetings
• Management Meetings
• Finance and Trustees Meetings

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Summary of Progress to Date

• Overall we have made pleasing progress BUT the
  real challenges are still to come
• Highlighted a need to focus heavily on shortfalls
  to target
• Highlighted a need to continually ensure
  (annually) the flexibility of our performance
  measures in the support of our business planning
  targets
• Highlighted a need to further engage all members
  of staff in the attainment, and reporting, of our
  targets
• Helped promote genuine excitement around the
  future development of the charity

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Thank you for your attention