[MUSIC] The third option is a little bit different. It says no, we're going to create a score card or a dashboard, but we're going to take a much more varied approach. We're going to say that there are multiple dimensions and we're going to be flexible across organizations in terms of what the dimensions are and what the metrics might be. So here is the earliest formulation of this idea about Kaplan's balanced scorecard where his insight was that corporations in the for profit side traditionally focused on financial matrix to assess how well firm was performing. But Kaplan's point was we need more than that. Financial metrics tell us on a lagging basis how well an organization performed. At the end of the year, you look at the money, you see how the profit turned out. You measure market share, you look at share value. You look at a whole set of different financial metrics and you get a sense of how the organization performed, but it's a backward looking perspective. And Kaplan's insight was that firms need forward looking, leading indicators. And so he argued that firms should also be measuring consumer perspectives on the firm. How well is it that the firm is regarded by consumers? Do they like the company? Do they admire it? Are they satisfied with the products? And his claim was that consumer perspectives would be leading indicators. They would tell us where the firm is heading, not where it's been. Alongside customer perspective, his second addition to the financial basket beyond customers is an internal business process or quality perspective. And here the argument was, we need to know how well a firm is doing in terms of producing consistently high quality products. If the quality drops off, people are going to ban the company. So, we need to know how effective is the organization at consistently producing high quality outputs. The final dimension that Kaplan added was a learning and growth dimension. And here, the idea was, we can't just judge how well our organization is doing by its financial, customer, or quality dimensions alone. We need to know how it treats the people inside the organization, how well it's doing at promoting learning and growth among employees and staff. Because a firm that has and retains the best people is ultimately going to perform best over a long period of time. So the main insight here as this third model says, performance is multi-dimensional. It has not just one dimension, but multiple dimensions. And these dimensions are going to look different, potentially, across different organizations. Each organization will need to have its own scorecard, its own set of metrics across different dimensions to assess performance. This idea, which was born in the corporate sector, was eventually translated into the social sector into a slightly different model. And what I'd like to do, is I'd like to drill down deeper into this idea of a balance score card, and see if we can develop four social purpose organizations, an approach that's multi-dimensional, flexible. But the guess to this question, of how do we assess performance accurately? In sum, there are some challenges and opportunities when it comes to measuring performance. First, there's a fundamental asymmetry between the financial metrics and the social metrics. We can assess issues related to funding. We can assess issues related to liquidity. We can assess financial metrics very, very accurately. But when it comes to the social metrics, the measures of social impact, the other metrics tend to get less precise. And so what happens is, in many social purpose organization is that there is a focus on the financials because those are the things that can be measured and the social impact metrics are left behind so you have to guard against that asymmetry. Second, measurement of performance requires patience and a commitment of money. This is not cheap. It doesn't happen overnight. It requires a long-term commitment to serious data-collection. I do think that performance measurement has multiple benefits. It can drive increased performance. It can drive greater funding. It can drive greater internal alignment. In sum, performance measurement is a powerful tool for any social entrepreneur trying to get results. Let's drill down now into this question of how do you develop a balance scorecard or dashboard. [MUSIC]