Prioritising Impact: Whose impact is it anyway?
What are we all doing to raise the bar on impact? What’s the difference between our own ideas (and claims) on impact and the impact priorities of our investees? And are we giving enough thought to the real impact on the people who really matter?
From board members to investors, various stakeholders in the impact investment process can forget some quite important people – those they set up the investment to support.
This is where measuring and managing social impact comes in, argued Adam Richards, a manager at Social Value UK at this workshop session at The Gathering.
The room was divided into four tables, each representing a stakeholder in a hypothetical impact investment: the board, the investors, the management team, and the service users.
Each was asked to imagine that their investment had been used to support a 12-week employment programme – ‘Employ-Ability’. The investor would be looking for a 3% financial return, and some social impact aligned to the UN Sustainable Development Goals.
The tables were asked to devise a list of questions they would ask to assess the effectiveness of the investment after 12 months.
Questions from each table were broad but as they presented their lists to the session, it became clear that the board, management team, and investors had forgotten someone – the service users themselves.
“No one went to ask the service users table what they wanted,” Richards pointed out.
He continued: “The well-intentioned management team said ‘We know best, we know what to ask,’ and that’s a pitfall: people don’t involve the people whose lives are affected.”
Because of this, he said, not only can the experience of service users be forgotten in decision-making, but they can be left without anyone to hold accountable for their experience.
Richards said awareness and action was growing over the importance of considering and engaging with users and all stakeholders when measuring and managing impact. But, there was still “a lack of power for those end users – they don’t have the ability to hold people to account, whereas other stakeholders really do”, he said.
“If the board don’t provide sufficient information to the investors, then the investment can be removed. But if people’s lives aren’t changed as they hoped – what power do they have?”
Key actions:
Asking service users for feedback – there is a need to think of the best way of getting feedback, and the power dynamics involved, to make sure that questions are framed in a way that is more likely to result in honest answers.
Having a key framework of impact questions to ask from the beginning of the process – it might be useful to develop a ‘top 10’ set of impact questions that are consistent but cover different perspectives.
Enough precision for the decision – different levels of detail are needed from each stakeholder depending on what you are trying to achieve, so be precise enough with your questions.
Remember there’s always work to be done. Always scrutinise and consider changing your own practices to get the best results. There are many fantastic examples of people’s lives being changed by social enterprise – good impact management can help us do that more and do it event better.