Impact Boost: How to evolve from Extractive to Win- Win-Win transactions
When in any transaction we talk about splitting the pie between stakeholders from a point of view of fear and scarcity: the more people we split it amongst, the smaller the slice of pie for each of the stakeholders. Thus it is natural that our human survival mode steps in and we pick the self-interest solution of taking the most possible pie for ourselves. But when we view any transaction from an abundance and longer term point of view any pie has the potential to generate bigger pies in the future; then we realize that giving a slice to everyone involved actually makes future pies bigger for all of us.
Impact investing is not an asset class; it is a practice of investing with intentionality, measuring the intended impacts and seeking social, environmental and economic returns.
In every transaction lies the potential to boost our impact not only with what we do with said transaction but also with how we do it if we make this impact investing practice a habit. As organizations, that are truly committed to being Impactful we should apply this practice in everything that we do: internally and externally, leading by example.
How to apply Win-win transactions within the impact sector
When leveraging knowledge or value that was self-funded by another change agent (individual or organization) not paying for using it is extractive and does not serve the greater good of the impact sector. Taking advantage of free or cheap labor is a constant throughout the entrepreneurial ecosystem reflected in referrals, mentoring hours, asking for valuable knowledge, etc. If a report has been sponsored, then by all means share and use it, but if there is a consultant hired for that report that is taking valuable hours at an entrepreneurs’ own time and expense, then we should find a way to compensate said entrepreneur for their time and value added or else we are being extractive as the ‘business as usual’ practice is.
This is often the hardest thing to understand by employees of impact organizations who are so used to getting a monthly salary: they are oblivious to the fact that other people in the impact space are in “sell or die” mode every single day. Expecting an entrepreneur to be available for free delivery of value against pure recognition is an extractive practice that we can certainly hope the sector evolves from. Also not paying a supplier on time is such a common malpractice, it’s outrageous; what if that supplier is in bootstrapping mode ?
As Martin Montero once said: “We are quite happy to share what we have learned, but the change we seek is only sustainable if it is personally sustainable for everyone involved.”
“ Social justice, or even social impact, cannot exist in the absence of economic justice for all those involved in the value creation supply chain.”
“We need a new type of social change and investment dynamic — one that is not doing this for “social impact”. One that is doing it because they realize that we are all in this together and therefore, hitching their wagons together. Interdependent investing” .You can read Martin’s sincere letter to the Impact Sector here.
This is an invitation to everyone that is trying to achieve an impact to consider evolving from a zero sum game to a win- -win-win practice. Acknowledge the fact that the more you give to everyone involved, the more they will collaborate with you to make future pies bigger for us all. Practicing interdependence will drive our impact to the highest standards.
A lesson on Interdependence
There was once a wheat farmer that every year won the best quality wheat award in his region. For several years he kept winning until one day a journalist came to interview the farmer to find out his secret sauce for lasting success. The farmer then replied that every year he gave his best seeds as a gift to his surrounding neighbors. The spreading of his best seeds in the neighbors’ fields assured 2 things: that the neighbors would have a collaborative attitude towards him (instead of fostering competition and jealousy), and that the quality of the seeds that would get carried by air to his own fields would be as high as possible.
If you want to take an extra step from extractive supply chains (Consciously or unconsciously, the term “supply chain” directly recalls the early capitalist era of colonization, where traders and landowners literally used slaves in chains to supply agricultural commodities to their expanding empires) to win-win-win transactions you can aim for building a Regenerative Supply Web and exploring new forms of Interdependent Impact Investing.