Six ways businesses can maximise social impact

‘Purpose’ has become a new frontier for businesses and organisations conscious of their public image and bottom line.

Companies now recognise the importance of including social and community change as part of their mission, alongside creating profit.

The challenge is to make this change meaningful, not merely a marketing strategy or 'tick-box' exercise.

In this space of authenticity, the social or solidarity economy (which the OECD also defines as ‘mission-driven organisations’) has much to offer in shaping the language and practices of purpose in the broader business community.

However, the sector needs a common language to communicate best practices to businesses, policymakers, and government alike. That means having a shared framework to measure what works.

That is why we published a new OECD report, Measure, Manage and Maximise your Impact — A guide for the Social Economy'.

Social change pays - if you can show what you achieved

Purpose does not entail a net loss – quite the opposite. A recent study by B Lab Global found that B Corp companies (those benchmarked as acting on sustainability) outperformed ordinary businesses in revenues and resilience.

Consumers are demanding more purpose-driven activity from companies, in line with the values enshrined Sustainable Development Goals (SDGs).

In a Global Trends 2021 report by Ipsos of respondents across 20 countries, two-thirds said it was more important that companies do their best to fight climate change than pay the right amount of tax. A majority across all countries wanted business leaders to speak out on social and political issues.

Yet research shows that 60 per cent of brands with purpose-driven initiatives aren’t measuring their impact on society, leaving companies at risk of accusations of impact washing or greenwashing.

A lack of measurement also means companies can't learn from mistakes and may even do accidental harm.

Finding new ways to measure impact is vital to sustaining business energies in this area. If we can begin to outline measurable successes, other companies may be more likely to follow.

One of the starting points for our report was going beyond traditional quantitative measures of deliverables to a flexible, holistic, mixed-method approach which benchmarks impact and meaningful social change.

Another was that we wanted to ensure our framework was flexible and adaptable enough to suit different contexts and organisations.

The six points that follow express both these priorities.

1.     Translate your social mission into a narrative of change

Organisations need to create a story about the change they want to achieve.

Who will it impact? How will you go about it? What impact would you like to have and why? What is your change strategy or your pathway to change?

Use this story to identify your most meaningful targets along the way.

2.     View the change strategy flexibly

Impact measurement should be ongoing and flexible. What if you don’t reach your intended audience? There may be something you can adjust mid-project to correct that.

In Coventry UK City of Culture 2021, where I was Social Impact Evaluation Lead, there was one event where certain postcodes weren’t signing up.

The Evaluation team realised this was because fewer people had smartphones with data in those areas and were on ‘pay as you go’ tariffs. We changed our strategy to advertising with paper posters. The team noticed an increase in signups.

Or did you reach an entirely new audience you didn’t expect? If you are flexible enough, this can become part of your evaluation of success.

3.     Put your stakeholders centre-stage

Involving and co-creating with stakeholders from the beginning is vital to project success. Engaging with your stakeholders is not only motivating but also helps avoid costly mistakes. Stakeholders can discuss the effectiveness of your mission and your story of change, and help you understand the best impact measurement techniques.

During 2021 Coventry UK City of Culture, we held a change strategy workshop with some of the beneficiaries of the events.

Refugees and migrants were presented with some data which referred to them as being marginalised communities. They said they were not marginalised, just “seldom heard”. We took this reflection away with us and implemented a change immediately.

One of the most difficult challenges for any organisation or project is finding the right measurement tool for stakeholders.

Is it reasonable, for example, to ask time-poor or physically or energy-stretched people to fill out long questionnaires, sometimes repeatedly? What kinds of measurements work for their lives?

The table below, reproduced from the report, outlines challenges in data collection with disadvantaged populations and some potential solutions.

4.     Think about proportionality

Organisations do not always have the resources to engage in a complex impact measurement and reporting exercise. It's critical to choose manageable and relevant methods of assessing impact. The benefits of measuring impact should outweigh the costs of completing the exercise.

5.     Be transparent

In this report, we offer a framework for conducting impact assessments that is applicable to any organisation. However, it is flexible and will depend on resources, stakeholders, and what happens during the project. Being transparent about how you conducted your impact assessment will allow others to translate and learn best practises from your project.

That includes:

·        Biases, gaps, and limitations of your measurement.

·        How you have collected, assessed, and reported your impact data.

Being transparent also means being open with and accountable to your stakeholders.

6.     Use your data to transform

Impact assessment should not be a tick-box exercise. When done effectively, it can improve how you work before, during, and after a project. It can help organisations learn to be better and build capacities within their organisation.

Your data can also help you advocate for your stakeholders with policymakers, the media, and the wider sector.

The benefits of engaging in social change activities for business include increased customer support, better returns, and more resilience.

And there's an added bonus. Effective impact measurement can be translated into thought leadership. This can be transformative for society and your organisation alike.

Businesses have nothing to lose and everything to gain.

Further reading

How co-ops and mutuals can measure their social impact

Five steps for companies to deliver the UN's Sustainable Development Goals

Three ways to nudge customers to buy green products

Measure, manage and maximise your impact: A guide for the social economy

Haley Beer is Associate Professor of Operations Management at Warwick Business School. She teaches Creating Sustainable Organisations and Leading and Harnessing Diversity on the Executive MBA and Global Online MBA.

Learn about Behavioural Science for Ethical Leaders and Negotiators on a four day Executive Education course at WBS London at The Shard.

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