Slicing the impact management buffet into bite-size chunks
Here’s the second part of our IMM blog. How do you continue with the next courses in your Impact measurement and management (IMM) menu? For starters in the IMM gourmet experience, please read here first).
Step 3: How to evaluate your impact
Once you found your answers to steps one and two (see here), you will almost automatically stumble upon three key terms: the THEORY OF CHANGE (TOC), the I-O-O-I LOGFRAME and the 5 fundamentals from the IMPACT MANAGEMENT PROJECT (IMP). Don’t panic – we will make them easy for you to digest. If you feel you would like to understand more about ToC and I-O-O-I first, check out this great lecture video from our friends at the SOCIAL INNOVATION ACADEMY (free registration):
NOW, HOW CAN YOU RECONCILE THIS WITH THE IMP? THERE ARE 5 FUNDAMENTAL IMPACT DIMENSIONS THAT FORM THE BACKBONES OF IMP: (1) “what”, (2) “how much”, (3) “who”, (4) “contribution” and (5) “risk”. If you are a beginner, we would highly recommend you to just focus on the first three.
IMP is an initiative to create a common framework of how we understand impact. It is also supported by major impact investors and funders worldwide.
The first fundamental is “what”. Once you have outlined your vision of impact, it is important to ask yourself “HOW IMPORTANT IS THIS IMPACT TO MY TARGET GROUP?” For example, how vital is access to off-grid energy for the poor communities in Peru? Is it high on their list of “pain points”? Or are there other problems that need to be addressed first? While setting your impact indicator(s), it is best if the indicator(s) directly reflect(s) the answer to this question.
(2) How much
When asking yourself about the scope of impact that you (can) achieve, there are three dimensions:
- SCALE = the number of people experiencing the outcome
- DEPTH = the degree of change experienced by your stakeholders
- DURATION = the period for which the stakeholder experiences the outcome.
For example: When providing capacity building to disadvantaged youth in the UK, you can design your solution in a way that it is highly scalable and will thus reach a large number of beneficiaries. Yet scalability may come (or come not) with a price tag on the depth of impact: The intensity of the program or training may be smaller for the benefit of more scale. But even if you manage to maximize both, the question remains if a one-time training will have a rather short-lived or a more enduring effect. To find the optimal solution, measuring and managing the three dimensions will be key.
Very often entrepreneurs think that they know exactly who their stakeholders are, because they are working with them on a daily basis. However, this may be a trap. There are times when we don’t see the wood for the trees and forgot to ask ourselves the following questions:
(1) Who is the stakeholder that experiences the outcome we aim to deliver?
(2) Where does the stakeholder experience the social and/or environmental outcome that we described? (e.g. Addis Ababa, Ethiopia)
(3) What was the level of outcome experienced by the stakeholder prior to engaging with our product/services (= so-called “baseline”)? For example, if you intend to deliver services to solve the problem of youth unemployment, it may make sense for you to also establish a baseline for the duration that these young people need to get a job.
(4) What are the stakeholder’s characteristics? This question refers to socio-demographic information about the stakeholder. For example: age, gender, and behavioral information such as motivations or beliefs. These characteristics will help you to segment your stakeholders during the intervention. Take the youth unemployment example: You can define your stakeholders more clearly by specifying their age and the duration that they have been unemployed.
WITH THE HELP OF THE FIRST THREE FUNDAMENTALS OF IMP, YOU SHOULD BE ABLE T DISSECT AND PRESENT YOUR IMPACT IN SEVERAL DIMENSIONS. This will help you to communicate much better, both internally to your team as well as externally to beneficiaries, funders, investors and other stakeholders. A natural next step to make use of this important exercise is by creating a more precise and structured impact report.
By the way: The Impact Management Project has just released a batch of new resources that give actionable guidance on how enterprises can set their impact goals and manage their performance. It’s meant for ALL enterprises out there, social and traditional. Or, as IMP hits the impact nail on the spot:
“All enterprises have effects on people and the planet, positive and negative, intended and unintended. Using the five dimensions of impact (and their respective categories), enterprises can identify which effects matter and assess the performance of those effects.”
We at SFA subscribe to that spirit. So if you are eager to dive deeper into the IMM buffet, have your fork, knife and napkin ready and go here.