A Guide to Impact MeasurementFrances Soong (francessoong.com)

Kai Hubner (kaihuebner.com)

Introduction

The Importance of Impact

Beneficial Impact Metrics

Identify Existing Impact

Resources

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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.