The slippery business of social impact

 June’s The Crowd Forum spotlight was on social impact. Our Associate Director Jono Adams hosted a round table on ‘Going beyond the business case’, a discussion which focused on how businesses can transcend traditional business performance measures and start to measure the social value that they create.

Social impact measurement can be a tricky thing to get right (and something we’ve blogged about in the past). Our round table participants felt that it’s important to work backwards and ask yourself, ‘what will the social impact measurements actually be used for once we’ve got them?’ Talk turned to what those uses are, and three main themes emerged. It’s my pleasure to summarize them below.

  1. Using social impact measurements to… monitor and evaluate outcomes of social impact initiatives

Goal: robust, quantitative measurements.

There’s been considerable success in recent years in improving the scope, accuracy, and reliability of environmental impact measurement, so it’s tempting to believe that success will follow in the domain of social impact by using similar direct measurement techniques. However, experience and opinion around the table indicated that this is an unlikely outcome due to the “slippery” nature of the social impact parameters which require measurement (please take a look at my colleague Ben’s recent blog on this).

Perhaps a successful path forward could involve identifying directly measurable surrogate parameters that represent the social impact parameter of interest. For example, if you wanted to measure ‘community connectedness’, you could survey how many neighbors each different community member knows. Or, if you wanted to measure employee health and well-being, you could use productivity data, absenteeism rates, or, better yet, employee retention. While these measurements are undoubtedly proxies, the table saw value in using such metrics to evaluate effectiveness of social impact initiatives, estimate ROI, communicate the good being done to external audiences, and inform further investment decisions.

  1. Using social impact measurements to… influence business decisions

Goal: build consensus and drive business decisions using softer, less-quantitative social impact information.

There was some feeling around the table that forcing social impact into monetary terms to derive a compelling business case is not productive, given the challenges of achieving cold, hard measurements. Instead, it might be better to embrace the vague, non-measurable nature of social impact by instead collecting true stories and anecdotes to understand and communicate the value of social impact initiatives. These stories can be collated to influence business decisions – they could be a key contributing factor in getting this topic on the radar of leadership teams, and inspiring social impact vision and decisive action at your organization.

The table stressed that while setting clear targets is essential for motivating action overall, there needs to be an “act first, measure later” strand to proceedings to get everyone moving in the right direction.

  1. Using social impact measurements to… inspire the fundamental purpose or mission of a business

Goal: re-frame the need for social impact measurement in the first place; this might mean eliminating the need for the robust, quantitative measurements described in #1 altogether…

Convention would have us believe that the fundamental purpose of a for-profit business is maximizing profits for the owners of the business by providing value to customers. With this perspective, the social impacts of the business could be seen as “afterthoughts” – and that anything which reduces negative impacts or fosters positive ones requires explicit additional effort beyond execution of core business activities. With this view, social impact efforts are seen as costly distractions from the fundamental business purpose and any decisions to invest in social impact initiatives would require rigorous business case analysis based on the quantitative type of social impact measurements discussed in #1, above.

It’s about flipping this conventional way of thinking upside down. Consider instead that the fundamental purpose of a business can be maximizing value to customers with the understanding that doing so sustainably (in the long term) has to require profitability. With this perspective, the social impacts of the business become intrinsically linked to the fundamental reason the business exists in the first place. Social impact initiatives are no longer extraneous costs, but core business activities. If you’re in this frame of mind, it’s much less crucial to have well-defined, granular, quantitative measurements; the returns of social impact initiatives would be captured by overall business performance metrics (e.g. revenue). If this is your mind-set, then the ultimate social impact metric could in fact be how much you actually sell.

What do you think? Are these the three main uses of social impact measurement, and what is your organization making of the “slippery” business of measurement?

Please get in touch using the form below. See previous blogs on the The Crowd Forum here.  


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