A Guide to Impact Measurement Frances Soong (francessoong.com)
 Kai Hubner (kaihuebner.com)
Introduction Businesses solve problems for people. Doing so, they automatically positively impact these people’s lives. Buying a car, I’ll now be able to freely move from point A to point B, whenever I want. My mobility has been highly impacted. Some businesses also negatively impact their target group’s life (e.g. Coca Cola is heaps of fun but bad for their customers health). Impact happens 24/7. Quite astonishing that no company really measures this impact on the individual customer’s life.
Quite astonishingly that no company really measures this impact on the individual customer’s life.
Introduction
No one actually reviews how “Heinz Müller’s” life has changed after purchasing or using their product.
Beneficial Impact Metrics
But, why does it make sense to assess these individual impact situations? And how do you do it?
The Importance of Impact
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Introduction In order to understand how and why to assess your business's impact on the individual’s life, we first need to understand what impact actually is. We define impact in positive, humanistic terms: impact is the consequence of the solution applied to a pain point in someone’s life. Thus, it’s a positive contribution to someone's life and his / her livelihood. Impact causes a positive change in someone’s life. Whereas negative impact (in the following: “impairment”) can be
defined as: The enhancement or creation of a pain point in someone’s life. Thus, impairment causes a negative change or consequence in life.
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IMPACTFUL SOLUTIONS
Metrics account for the impact right in the solution itself
The Importance of Impact Think about one service that you absolutely love. Think about how exactly using that service enhances the quality of your life.
How about all your employees, all the suppliers, the nature and society being impacted by your business operations?
Introduction
Will you continue using it? Very likely.
You create a lot more impact and impairment through business operations than you might thought of yet.
Beneficial Impact Metrics
Will you continue paying for it? Very likely. Out of a customer perspective, good businesses are businesses that solve one of the customer’s problems. That make his life easier and better. This problem solving kind of impact is widely known and used by entrepreneurs and businesses but but how about all the other people impacted by the fact that your customer uses your product?
By closely observing, understanding and using these impact dynamics, you might have a chance to skyrocket the success of your business Which leads us to the question: How can impact help your business?
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Beneficial Impact Metrics We already discussed the dynamics behind creating a product or service that really solves a customer’s pain. By maximizing the impact on your customer’s life, you will create a true fan of your product or service, that is willing to pay a lot of money and will refer it to friends. If you additionally manage to impact people that are part of your customer’s life you’ll have another strong value proposition and an even stronger sales position. Your employees, partners, and the world around you can easily be impacted or impaired by your operations, too.
Understanding how you can improve your employees quality of life by improving how they do, what they do, can result in a massive value add (see case study below). Impact on third parties can even result in additional revenues (see case study below). Whereas impairment on these players can result in slow business operations, little motivation and even infringements and a lot of legal problems. All of this leads us to the question: How do we measure impact?
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Identify Existing Impact Think about your business ecosystem. Think about all the parties involved in your business operations.
These are: financial capital, natural capital, social capital, human capital, and physical capital.
In order to assess if and how you impact the livelihood of these organizations and individuals, it’s a good start to take a look at their livelihoods. You can break a livelihood down into five categories.
Which of these categories is impacted by being part of your business ecosystem? Which is impaired? How are they impacted or impaired?
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It’s no surprise that the chance of finding the most impact in your customer’s livelihoods is very high.
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LIVELIHOOD CHECKLIST
FINANCIAL CAPITAL
NATURAL CAPITAL
SOCIAL CAPITAL
HUMAN CAPITAL
PHYSICAL CAPITAL
See accompanying worksheet for further breakdown of these categories
Identify Existing Impact After you have gained insights about how you impact or impair the livelihood of your customer’s and your business ecosystem, it’s time to find a way to talk numbers. Measuring impact is all about quantifying the change that has happened in your target group’s livelihood after a certain amount of time. By looking at the initial “problem” or “pain” in your target group’s livelihood, you can define how his life and his livelihood should look like without this pain. What does he need? How much does he need? Try to point this out and do the math. For example, if we want to measure the impact on health and wellbeing, we can measure it in the change in
blood values or body fat percentage. For measuring the impact of meaning in life, we measure of perceived happiness while working by measuring the hours of “flow” in a day.
Introduction The Importance of Impact Beneficial Impact Metrics
Does measuring the hours we work really encompass the meaning of life? No.
Identify Existing Impact
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Body fat is only one aspect of wellbeing. Though we do “math,” your measurements will never be perfect. What is more important is that you make a clear attempt at measuring it. We cannot improve our definition and measurement of impact until after we can share the specifics of how we are do it in the first place.
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Resources • Code of Good Impact Practice
Frances Soong
• B Corp Index
Design Consultant francessoong.com
• Theory of Change • Models of Impact Toolkit: • Measuring Social Impact • A Guide to Actionable Measurement
An independent creative who works collaboratively, meticulously crafting priorities and refining ideas. Continuing her work with startups, and now, teaching others how to design while teaching herself social entrepreneurship.
• Impact Measurement Toolkit • Logic Model
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Kai Hubner Entrepreneurial Coach kaihuebner.com A serial entrepreneur and startup coach. He has coached social entrepreneurs for several years. His human-centered view on problems is finding and eliminating hindering assumptions and maximizing the impact companies make.