Achieving social impact
An a priori to achieve social impact is to be able to articulate your business’s purpose clearly. Defining your Theory of Change is one of the variables that distinguish social-focused enterprises from others that are only engaged in purpose washing.
Your “theory of change” is composed of two elements: “change” which is the vision of the social impact that your organization wishes to create, and a “theory” which should describe your core business inputs, outputs, processes, and outcomes, i.e., your idea for how you believe that you will make such change possible.
There are five steps in a continuous improvement model for implementing your theory of change:
- Set your objectives
- Test and validate your hypotheses with your stakeholders (lean startup methodology)
- Measure results
- Correct (if necessary) based on verified impact
- Share
Scaling impact
Your social impact should scale at least proportionally (and, if possible, exponentially) to your growth. Achieving and scaling positive social outcomes will not happen by itself. Less so if it is not your company’s core business objective. In a nutshell, scaling impact is the process of increasing positive social impact to better correspond to the identified social need’s magnitude.
Companies that do not prioritize achieving their purpose as their primary goal, creating impact as their core business objective, may be successful (when measured by other parameters) but should not consider themselves social enterprises.
One of the shortcuts to achieving social impact is to work in networks and via alliances with other stakeholders that share common impact goals.
Finally, although an elusive concept, if you honestly try to scale your impact, you should measure your social impact. Your impact goals should be tracked and measured by relevant KPIs. Reporting such KPI and providing regular Investor Updates will allow you to refine your objectives and processes and ultimately achieving a more significant social impact.
“Human creativity is unlimited. It is the capacity of humans to make things happen which didn’t happen before. Creativity provides the key to solving our social and economic problems.”
Muhammad Yunus, Founder of Grameen Bank