Social impact evaluation is now mandatory for your brand to be credible.
Some form of social impact performance monitoring and measurement is a mandatory activity for any company that wants to credibly claim that social benefits result from its business activities. Performance monitoring for improvement in operations is not a new idea in business management – but it is largely a technical activity, with tools and methods to measure outputs and variances. Social impact evaluation is not only more challenging to measure because of the complex nature of many long-term social changes, but it also comes with additional demands for both internal and external communication layered on top of the evaluation activities.
Designing a strategic approach to evaluation that addresses both your marketing department’s need for a good story and your operational/management need for precise and detailed performance data can be a significant challenge. These information needs may seem opposed to each other, or appear to be competing for the same limited pool of evaluation resources. In this post we look at ways to find harmony and integration inside and outside your business through a strategic approach to impact evaluation that focuses on how you engage stakeholders with your evaluation data. At every step we’ll provide suggestions on achieving these complementary aims without unnecessarily duplicating your efforts and expenditures.
There are two basic reasons for evaluating impact: “to prove, and to improve”.
In a business context, you must continuously prove that your actions meet stakeholder expectations and are consistent with your brand values. Proving your impact means using evaluation data to tell a credible story backed up by facts. Marketing, communications, and corporate reporting are externally focused applications of evaluation data that show how your company’s actions make a meaningful difference to the lives of your customers, your employees, your suppliers, or other stakeholders.
Improving impact is ultimately about making better decisions – decisions that lead to better business outcomes and better social outcomes. The more that evaluation data can inform your management decisions, the more you will have the opportunity to test your own assumptions about how (and whether) you are achieving your social impact goals.
The best practice for both “proving” and “improving” is engaging your stakeholders.
The one-way “push” model of marketing communication has been superseded by the ‘engagement’ paradigm – building a community of customers and stakeholders who actively participate not only in telling your story, but adding to it, building on it, questioning it, and making new meanings out of it.
So don’t fall back into old habits with evaluation data, and push out a flat report of impact metrics once a year – your impact metrics are not meaningful without the context of an ongoing relationship with a particular audience. Evaluation data should be an everyday piece of your public-facing communication.
Similar to the real-time communication on social media that is now a basic expectation for consumer brands, there are practical steps you can take to make your evaluation part of an engaged conversation. The Timeraiser Plus tool catalogue offers reviews of several types of data collection and management tools for a host of ‘social-friendly’ criteria including real-time results, data piping, and mobile OS compliance. It pays to keep the end goal of social engagement in mind when you make initial investments into your systems and tools that you’ll use to manage your impact data, so that you’re not burdened with time-consuming barriers to making your data easily available.
Tell a whole story, not just a good story.
Once you publicly commit to measuring impacts and sharing data, you can’t pick and choose the impacts you’d like to talk about – your stakeholders will (rightfully) assert their own priorities for what impacts your company is responsible for, and should include in its communication and reporting on social impact.
“Walking the talk” in terms of accountability for your impacts may be a new, and perhaps uncomfortable, way of thinking for those accustomed to the marketing approach of describing and selling the value proposition to the customer.
“So every time you see an approach to measurement which … is solely positive and stops there – step away gently. …. You won’t be as accountable as you need to be to make decisions that increase the social impact of your work. You need an approach that puts accountability and power at its heart.” – Jeremy Nicholls, CEO, Social Return on Investment (SROI) Network
This is a much broader scope of responsibility than most companies are accustomed to, and it may feel like it opens the door to a loss of control over your brand and message where social impact is concerned. This is where established social and sustainability reporting standards (like Global Reporting Initiative and Integrated Reporting) provide useful approaches to materiality analysis, which allow a company to declare (and defend) a set of priority issues for their CSR activities that are most likely to address stakeholder concerns as well as business risks.
Is it a difference that makes a difference?
While it’s useful to be able to justify your priorities, the guidance on best practices for reporting is still quite clear that you can’t opt out of reporting on issues because you would prefer not to address them, or don’t know how to deal with them.
The important point is that your statements about your goals, priorities, and impacts (good or bad) should come with enough supporting information that your customers or other stakeholders can critically appraise your claims—a 10% reduction in emissions is good, but what is the industry average? What is the legislated requirement? What is the threshold for human health impacts?
The best practice is to provide data that empowers the reader to consider a trend over time, in context of a ‘relevant background’ – as opposed to ‘data crumbs’ that may have emotive value but don’t aid stakeholders to hold you accountable for your results.
For small- to mid-sized enterprises that may not have the capacity to do an in-depth materiality analysis and/or follow an international reporting standard, the Demonstrating Value framework provides a useful process to identify your information needs with respect to the key audiences you need to reach, as well as your internal need for decision-making information.
Boost your evaluation ROI.
Raw evaluation data – a costly resource to extract, analyse, refine, and present – is challenging to use directly in marketing materials, and often fails to provide much of a return on the investment required to collect it, if marketing is the primary purpose for the evaluation activities. Given the common wisdom that customers will only pay ~5% in premium for the socially-responsible value of a product, this sets a limit on the value of evaluation data that specifically relates to sustainability or impact claims for marketing purposes – only enough to support the premium and/or value of increased competitive market share.
For some, investing in evaluation is a matter of principle, but for many, it’s a matter of pragmatism – and evaluation budgets are commensurately small. There is a huge lost opportunity where social impact evaluation is only conducted ‘after the fact’, and is not incorporated into strategic management decision-making.
Respect your stakeholders’ time.
The data you collect, and more importantly, the voices of the purported beneficiaries of the social value your company creates, must be present in your management decisions. This extends not only to the decisions about how you allocate resources to different priorities in the company, but also to the decisions about what you will measure, and how. Measurement of social impact is intimately bound with questions around ownership and control of management decisions – measurement is irrevocably political in nature, and this can only be managed, not avoided, in the governance of mission-driven companies.
That said, where stakeholder engagement provides real value to the company, don’t abuse stakeholders as a source of free evaluation labour. While it’s laudable for the CEO of Salesforce to extol the virtues of stakeholder engagement, “stakeholder activist” time has value, so the ‘ask’ for their time must be specific and focused so that the company is not imposing a cost on them in order for social benefits to materialize.
Listen to the collective wisdom of front line workers.
Framing impact evaluation as an ‘expert’ activity that is done ‘to’ employees, rather than ‘by’ them, runs the risk of putting front line staff in a backseat role – and missing out on their creativity, insights, and valuable observations about how impact happens. Accordingly, your communication with staff about your goals and measures of impact must include more than a conversation about metrics and targets.
Particularly for service industries, one of the best ways to know more about what difference you’re making for customers or beneficiaries is to engage your staff in sharing their experiences. Facilitated exercises that draw out your employees’ experiences—like Empathy Mapping—can provide incredibly rich information about what your stakeholders think and feel, see, hear, say and do about the social impact issues relevant to your company.
Effective employee engagement for impact evaluation isn’t about who can put up the highest numbers on a set of predetermined impact metrics. Evaluator and consultant Ben Kadel of Emotus Operandi put it succinctly: “Evaluation is about adventure, not proving things”. Impact evaluation, done well, generates excitement for a shared adventure where learning and identifying opportunities for impact take center stage.
The virtuous cycle of communicating social impact.
Including social impact information in your marketing and communications content attracts and build an audience of supporters that share your values and goals; you must build a values-aligned market to achieve impact at a large scale. In return, the information and critical feedback from engaged stakeholders fuels transparency and accountability and helps to hone your impact strategy and decision-making. It’s a virtuous cycle.
Having compelling social impact data (and making it open and available) is a strong point of competitive differentiation and also supports a broad movement of change makers that include customers, employees, policy-makers, local communities, and many others.
Garth Yule is a Managing Director with Junxion. He supports strategy consulting work for a variety of Junxion clients, and specialises in impact evaluation and reporting projects for social ventures. You can reach him via [email protected].