Slicing the impact management buffet into bite-size chunks
Impact measurement and management (IMM) seem to be a huge buffet of mostly unknown flavours, calories and requirements that are sometimes hard to “stomach” for social entrepreneurs. So how to get started and apply the freshest and most basic ingredients? In this new blogpost series, we will show how to make the IMM meal as easy and digestible as possible.
When it comes to the topic of impact measurement and management (IMM), social entrepreneurs often find it overwhelming: too many choices of tools and approaches, too few resources to handle the heavy meal. Investors, on the other hand, also struggle to factor-in the impact when making their investment decisions. In other words: Often, they are too used to the light traditional three-course menu of RISK, RETURN AND LIQUIDITY and therefore rather puzzled about how to add IMPACT as the icing on their cake.
In the first two blogposts of this series, we will try to break down this big IMM bubble into smaller, bite-size chunks. You will learn where to start, when is the right timing to use specific frameworks, and how to mark the main milestones to track your progress in the impact world.
Setting the “table”
First things first: Why should you be doing IM at all? Isn’t it just something you do because your present or future investors demand it? Or is it because you really want to know if all of your efforts lead to the desired goal? Because you want to hold yourself accountable to the impact that you claim to be creating?
In today’s advanced understanding, IMM is a discipline that tells you as much about your solution and the needs and problems of your clients/beneficiaries as it helps you to communicate your results to the outside world. Here’s a video of Sasha Dichter from Acumen that explains this important shift of mind-set:
Thus, IMM is a regular, continuous and conscious effort that helps you to improve your ability to deliver services or products that really affect your target community in the desired way. There are many reasons why organizations conduct impact measurement, but we believe that the two primary reasons are as follows:
- It incorporates accountability in all your activities.
- It allows you to optimize your processes of delivering impact with the help of data tracking.
As we are about to address the different tools and framework, let’s start with a basic breakdown of the different steps for IMM.
(1) Why and what to measure (why are you doing what you are doing)
(2) How to measure
(3) How to evaluate, interpret and use it to improve
We focus on the first two steps in this blog and dive deeper into step 3 and other related topics in our next blogpost.
Step 1: Why and what to measure
Before we dive into the deep and unknown sea of IMM, start within yourself. WHAT IS THE MISSION AND VISION OF YOUR ENTERPRISE? WHAT LONG-TERM GOAL DID YOU SET OUT TO ACHIEVE IN YOUR TARGET COMMUNITY? Ultimately, you are answering a key question: what is the impact that you are trying to create?
It helps a lot to have an image in mind. For example: improve access to energy for rural, poor communities in remote Peru. Or increase employment of disadvantaged youth through capacity building in the UK. Or reduce illiteracy rates among adult women in Bangladesh. Choose 1-2 long terms goals. The more focused and specific they are, the better and easier to manage. Here are some questions that may help you to sharpen your goal:
- WHO EXACTLY IS YOUR TARGET GROUP? How does it differentiate from other “neighboring” groups?
- WHAT IS THE MAIN CHALLENGE OF THIS TARGET GROUP? What is the beneficiaries’ primary “pain point”?
By providing answers to these questions, you should also be ready to fill in the I-O-O-I MODEL. Our video on the Theory of Change could give you a little boost if needed (if you haven’t done so already, just register for free for SFA to have access to all the videos and resources):
By the end of this step, you should have the first two columns of this data plan in sight.
Step 2: How to measure
Now we move on to the second step: the HOW. There are different ways to collect data. Generally, it is always a good idea to combine impact data generation with customer satisfaction data. Ultimately, it is about how responsive you are towards the needs of your customers/beneficiaries. THERE IS OFTEN A HIGH CORRELATION BETWEEN IMPACT AND CUSTOMER SATISFACTION. If no customers are buying your product/service, you are not really able to generate impact.
- DIRECT DATA COLLECTION: you run surveys and interviews
- DATA EXTRAPOLATION: you use evidence-based coefficients and model calculations to translate sales figures into outcome data. This is less resource-intensive, but make sure to always check your assumptions.
- HYBRID DATA: you get more than one insight out of one single data point. For example, if you are working to improve the economic situations of coffee farmers in Ethiopia, you can collect business data on the amount of coffee sold. Meanwhile, this single data point can also give you insights into the amount of income increase for the farmers. Be creative so that you can make the best use of data that you have been collecting. Don’t stretch yourself too much and don’t deviate from your daily operations.
Another important part is to think about the WHEN. The timing and frequency of data collection can help you tell different impact stories. For example, if you want to prove the impact of your vocational trainings to young people, it may make sense to collect data from them via surveys or phone calls, e.g. 6 months or 1 year after they completed the program. THIS HELPS YOU TO UNDERSTAND THE DURATION OF YOUR IMPACT. ALSO, BEING CONSCIOUS OF THE TIMING OF DATA COLLECTION WILL HELP YOU TO PREVENT OVERBURDENING YOURSELF. The graph below gives some guidance on this:
Are you hungry for more IMM food for thought? Our next blogpost will introduce you to the “how to evaluate your impact”.