Impact management: Have you done as much as you could?

"We need the same relentless pursuit of social value as private business pursues financial value," argues Jeremy Nicholls, CEO of Social Value UK and Social Value International.

More and more organisations are starting to think about impact as something to manage rather than something to measure. This is good news as it shows that we are making progress towards enough agreement about how to measure for us to move from how to why, to move from ‘prove’ to ‘improve’.

It also shows that more examples are being shared and initiatives like the NatWest SE100 Index can showcase examples of organisations using data, encouraging others to follow. Impact is becoming more about performance management now.

Good but not yet good enough.

Simply aiming to improve year on year isn’t good enough if the starting point is a long way from what could be achieved. There is a world of difference between managers looking at the results of their impact measurement and considering improvements, and boards asking whether the organisation has created as much value as it can with the resources it has.

Everything follows from this question. It means the organisations have to be actively considering alternative ways of delivering services and alternative services. Not those option appraisals with one credible option, one clearly ridiculous option and one no change option, but appraisals of credible alternatives to existing services alongside ongoing reflection for more radical overhauls.

It means having a discussion about the relative value of different mixes of changes in different groups of people’s wellbeing. It means having to put the views, needs and expectations of those whose lives are expected to improve at the heart of any discussion about what outcomes should be delivered to address which underlying issues. It means not thinking about a group of beneficiaries or even a single group of customers but constantly thinking about whether there are enough people who want slightly different outcomes to justify the cost of more focused products with specific attributes. It means having to think about who to work with if sustainable value is going to be created. It means having more granular and detailed information about changes that have to be aggregated in order to report to funders and commissioners who often need data to be summarised across groups.

Could we have created more value with the resources we have available?

This thinking process is much less about ‘evaluation to prove’ and much more about constantly trying to create more value for those we are working for, and thinking about the viability of different offers for different sections of people we work with. Entrepreneur not social scientist. As such it means replacing a test of good enough data designed to ‘prove’ with tests that are designed to ensure information is good enough for timely decisions where boards and management need to develop a better understanding of the risks and consequences of getting a decision wrong, increasing the need for assurance as opposed to evaluation. It means accepting that information is not always designed to be objective but designed to bring more transparency of the issues relating to value to any group that are trying to make decisions to increase value. It means benchmarking against others and sometimes it means changing what we do.

If this all sounds similar to private sector approaches to creating financial value that’s because it is. We need the same relentless pursuit of social value as private business pursues financial value.

It may also be no surprise that the issues that need to be addressed and the questions that need to be answered look like the Principles of Social Value supported by Social Value International. That’s because they are. These Principles are the necessary set for any organisation that wants to try and maximise value. Applying these Principles is much more than measurement techniques or even the harder decision of what to measure in the first place. It means putting in systems to provide timely information for decision making, systems to ensure that that information is good enough and that risks are understood. It means developing a culture that is aspirational, where KPIs are targets for value created in a governance debate between targets that are too high to be possible and targets that are not as high as we can achieve. It means changing practises, shifting resources around when performance doesn’t achieve targets and sometimes having to accept we are doing the wrong thing.

Perhaps that doesn’t happen very often, but one example is Unlimited Potential in Salford where director of innovation Chris Dabbs has gone back to commissioners on a couple of occasions, perhaps half way through the commission and asked them to stop the contract once they realised it wasn't going to deliver the intended value. He reckons that this has led to trust and opportunities that have far outweighed the initial lost income.

Social Value International’s Principles are designed to help maximise value, not just report on how much value has been created. However, in order to embed this approach, organisations will need a culture where the board is asking the question – could we have created more value with the resources we have available?

 

Photo credit: Pierre Rougier