This paper summarises Nesta’s approach to performance management.

Nesta has a broad mission to support innovation. That involves us in two main types of activity:

• first, supporting particular ideas or ventures and helping them to develop, and then grow to scale and achieve impact;
• second, influencing the environment so that it’s easier for innovations to flourish, for example through changing government policy or the policies of  big firms such as banks.

So how can we know if we’re succeeding?  How can we judge if our resources could be better spent elsewhere?  How can we, our board, or our stakeholders, judge if we’re doing a good job?

Over the last few years we have developed a rigorous approach to evidence of impact (summarised later in this report), and have worked with hundreds of organisations to help them achieve greater impact.  But the management of performance and impact in innovation is not easy for many reasons – because of the often long gap between actions and results; because radical innovation involves many failures as well as successes; and because some of the best innovations end up achieving outcomes different from those they originally intended.

Nevertheless we think it’s important to do our best in managing effectiveness, and it’s also an important aspect of our charitable status that we should demonstrate the public benefit we achieve.  In this paper we set out some of our thinking, with the aim of prompting responses and ideas on how we could do better.