We thought we’d start the year off with a recap of the impact management basics we’ve covered so far.
1. This is the era of “impact intelligence”
The world has moved beyond minimizing damage, figured out that we need to be able to measure our impact, and now we’re working toward getting smart about how to actually manage to impact. This is the era of impact intelligence.
2. Context matters
A first principle for impact metrics is that they should always be viewed in context. Two key questions are:
- Does the measure capture something meaningful?
- What does it tell us about progress relative to the desired goal?
The cardinal sin of impact measurement is to mistake size for value.
3. Distinguish between impact and value
For a measure of impact to be generally accepted as meaningful, there must be consensus on the part of those knowledgeable about the subject that the measure does capture something of value.
It’s worth noting that impact is not the same thing as value. We may all agree that a ton of carbon is being removed from the atmosphere, but we may not agree what the value of that is. Ultimately, value is in the eye of the stakeholder.
4. Value is in the eye of the stakeholder
Whether something is worth measuring depends upon who is doing the measurement. It is safe to say that presently the general public has achieved consensus that some impacts are important enough to track, including a number of large-scale environmental impacts. Other impacts will depend upon the goals of the entity performing the analysis, the interests of its main audience, the interests of other stakeholders who take an interest… and our knowledge of the ever-changing world in which we live.
5. Scope is an active decision
To frame the analysis, a good place to begin is with your “addressable impact.” Addressable impact is the total potential social or environmental problem that could be solved by a given solution each year.
6. There are benefits and risks to standardization
- Benefits: easier collaboration to solve problems; and the ability to understand entities’ relative performance and the scale of impact.
- Risk: measures can mislead when taken out of context.
Another issue that works against standardization is that there may simply not yet be sufficient consensus about the frame of reference or the value of the impact to make a standard—whether process, measurement or performance– functional in a given sector.
With these principles in mind, it is possible to define the goals of impact measurement and successfully tackle any technical challenge. This year we will be exploring examples that illustrate various impact measurement topics from the perspectives of investors, philanthropic funders, companies and nonprofits as well as governmental entities.
This entry was originally published on the Skoll Foundation’s SocialEdge.org website on our other blog – SVT on Impact.