Post on 03-Aug-2016
description
A Guide to Impact MeasurementFrances Soong (francessoong.com)
Kai Hubner (kaihuebner.com)
Introduction
The Importance of Impact
Beneficial Impact Metrics
Identify Existing Impact
Resources
r
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.
No one actually reviews how
“Heinz Müller’s” life has changed
after purchasing or using their
product.
But, why does it make sense to
assess these individual impact
situations?
And how do you do it?
Introduction
The Importance of Impact
Beneficial Impact Metrics
Identify Existing Impact
Resources
r
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.
IMPACTFUL SOLUTIONS
Metrics account for the impact right
in the solution itself
Introduction
The Importance of Impact
Beneficial Impact Metrics
Identify Existing Impact
Resources
r
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.
Will you continue using it?
Very likely.
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?
How about all your employees, all
the suppliers, the nature and
society being impacted by your
business operations?
You create a lot more impact and
impairment through business
operations than you might thought
of yet.
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?
Introduction
The Importance of Impact
Beneficial Impact Metrics
Identify Existing Impact
Resources
r
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?
Introduction
The Importance of Impact
Beneficial Impact Metrics
Identify Existing Impact
Resources
r
Identify Existing Impact
These are: financial capital, natural
capital, social capital, human
capital, and physical capital.
Which of these categories is
impacted by being part of your
business ecosystem? Which is
impaired? How are they impacted
or impaired?
It’s no surprise that the chance of
finding the most impact in your
customer’s livelihoods is very high.
Think about your business
ecosystem. Think about all the
parties involved in your business
operations.
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.
FINANCIAL
CAPITAL
NATURAL
CAPITAL
SOCIAL
CAPITALHUMAN
CAPITAL
PHYSICAL
CAPITAL
LIVELIHOOD CHECKLIST
See accompanying
worksheet for further breakdown of these
categories
Introduction
The Importance of Impact
Beneficial Impact Metrics
Identify Existing Impact
Resources
r
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.
Does measuring the hours we work
really encompass the meaning of
life? No.
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.
Identify Existing Impact
Introduction
The Importance of Impact
Beneficial Impact Metrics
Identify Existing Impact
Resources
r
• Code of Good Impact Practice
• B Corp Index
• Theory of Change
• Models of Impact Toolkit:
• Measuring Social Impact
• A Guide to Actionable Measurement
• Impact Measurement Toolkit
• Logic Model
Resources
Frances SoongDesign Consultant
francessoong.com
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.
Kai HubnerEntrepreneurial 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.