Social impact: inquire your own Theory of Change.
Everyday new products, services and companies see the light of day. Designers, innovators and strategists, are all in the business of designing better ways to solve problems and create positive change. And yet 85% of companies struggle with diagnosing and therefore framing the problem correctly. What if the success of the change you’d like to create depends on how you frame it and how you keep measuring it when the solution develops?
Framing the problem correctly, using the right parameters and thus making the right investment leads from having social responsibility to creating social opportunity for both the investor ánd for the world.
The Theory of Change
In order to gain insight in the challenges we like to solve and framing the problem correctly Mindt uses a methodology called: the Theory of Change (ToC). This ToC helps us understand how we make impact in the world. It breaks down our goals and activities into four segments: inputs, outputs, outcomes and impact. The ToC is used by organizations like Acumen and Sinzer — they use this model as a foundation to inquire the impact they make. See for instance the Guide Social Impact Measurement p. 6 from Sinzer. As well as these slides about Acumen’s ToC from the course: Making sense of social impact.
In this and the coming articles I will help you inquire your own impact strategy. I wrote down a short explanation of the aforementioned segments and some questions that need to be answered in order to find your own ToC. But let’s say a few things first about how we at Mindt work with this method.
Although it is a model that is often used in the non-profit sector, we are convinced that is highly relevant for the profit sector as well. Andy Last explains in his book ‘Business on a Mission’ the inherent connection between business and society and he states that: “The business risk of forgetting the social connection is overtaking the benefits of taking those short cuts” (2016. p.28)
“It is simply a recognition that businesses grow better and more sustainably when they are aligned to the goals of society. It is social opportunity, not social responsibility” (Last, 2016, p.21)
Although I find the latter debatable, it is the first sentence I wholeheartedly agree upon. We at Mindt don’t do charitable work, it’s hardcore business. We build businesses that are profitable and scalable, ánd with the main goal of creating social impact.
In order to achieve social impact we need to use this ToC because it enables us to inquire if we are really having impact. It is not just a measurement at the end of the road. In designing our startups we make assumptions about the impact we make and we will measure those assumptions along the way. Inquire if we are on the right track and if we are truly working towards the improvement of the social mission. That means that it is not only about improving positive impact but also about minimizing our negative impact.
Your own impact journey
Social Mission:
Let’s dig deeper into the ToC and begin with the social mission, the startingpoint of making social impact. What is the social challenge you like to change or solve. This will be the main anchorpoint you’ll continually challenge your activities with — do they really have a positive impact on your social mission. Besides defining your target group and making a stakeholder analysis can ask yourself:
- Why you want this to change?
- If there is any development going on already in this case?
- How the world look like when this challenge is solved? (dream)
Inputs: (company analysis)
The inputs represent all the activities of the organisation, everything you are doing that leads to the desired impact. This also includes the number of people you’re working with, the tools and processes you use.
- What distinguishes your company from other companies?
- Why does this input lead to the desired impact? (assumption)
Outputs: (company analysis & target group)
The difference between the input and output can overlap. But roughly stated: output is the product or service that reaches the target group. Think about your concrete activities or products that the target group sees.
- Why does this output lead to the your social mission? (assumption)
- What can go wrong in using the product or activity? (assumption)
Outcomes: (target group)
This is the intended social good you are trying to create. What difference does your product/service make in the activities of your target group?
- How does your target group use your product or service?
- Is the way the target group uses your product also the way it was meant to be used?
Impact: (target group)
The long term effects that can be attributed to the product/service of your company, above and beyond what would have happened anyway (Clark et al. 2004). It is important to think about other influences that play a role in this change and which positive and negative consequences result from your output.
- How much and in what way has something changed in the lives (or activities) of your target group?
- What is the drop off of the effects?
To keep in mind
In addition to all those questions that will help you to figure out your own impact strategy — there are some important points that have to be said about the whole model. It is important to keep in mind the logic behind the segments: does the input really lead to the impact you want to have? Besides explicating the segments you also need to think about the underlying assumptions behind those segments and the linkages between them. It can be quite difficult to say what your impact is on forehand, therefore it is necessary to make hypotheses about your impact — those are exactly the points that can be challenged during the process of change.
Moreover; in the process of creating your ToC it can be helpful to think about the impact risks. Simply put the things that can go wrong. When people use your product in a wrong way, or other influences that have a negative effect on the social mission you want to achieve. Thinking about those risks helps improving your product/services and therefore your impact.
About me
I am an organisation philosopher working with Mindt on the social impact question. What exactly is social impact and how can we make it a solid business principle in our start-ups? Besides this social impact inquiry I am also giving workshops about social mission and the ToC.
This blog is the first step in taking you guys with me on my social impact journey. In upcoming blogs I’ll dive deeper into issue of measuring impact and the specific elements of the ToC. Hopefully you’ll gain insights in order to create your own impact strategy. If you have questions regarding this article, or topics you like me to write about, please let me know!
Resources
Acumen Courses. (2017) Making Sense of Social Impact.
Clark C, Rosenzweig W, Long D and Olsen S 2004, Double bottom line project report: Assessing social impact in double bottom line ventures; methods catalog, viewed 4 april 2017, <https://centers.fuqua.duke.edu/case/wp-content/uploads/sites/7/2015/02/Report_Clark_DoubleBottomLineProjectReport_2004.pdf>
Last, A. (2016). Business on a Mission. Greenleaf Publishing
www.sinzer.org
