The third principle in our “Think like a Social Enterprise” series is to be able to clearly define the positive outcomes that your enterprise achieves.
The owner of a social enterprise knows why their social enterprise exists. They have a deep sense of purpose and can describe the change they want to create in the world.
This clarity of purpose helps to focus their strategies and to inspire others. This was discussed in last month’s edition of Small Business Connect.
Since a social enterprise is a social business, it is concerned with its financial performance and strategic position.
However, since a social enterprise has a “double bottom line”, it is equally concerned with its social performance, and this is expressed in the form of key social outcomes that need to be achieved.
These outcomes are achievable and measurable. The outcomes act as social performance targets in much the same way as a traditional business aims to capture a certain market share or achieve a certain profit margin.
The Logic Model Development Guide by the Kellogg Foundation (available for download at www.wkkf.org) places social outcomes in perspective. This model describes how an enterprise uses its inputs to conduct activities which produce outputs, outcomes and social impact. This is described in the figure below.
Here is a description of the key components of this model.
- Resources/inputs: These are things such as time, money and people that allow your enterprise to do things.
- Activities: Things you do every day (attending meetings, sending emails, manufacturing products).
- Outputs: The immediate visible result of activities. Outputs include the number of wheelchairs manufactured, workshops facilitated or people completing a training programme. Outputs demonstrate how busy an enterprise has been. Focusing on output increases productivity.
- Outcomes: These describe the changes in people or organisations that occur as a result of activities and outputs. Outcomes may include the increase in knowledge and skills of workshop participants or the decreased rate of tuberculosis in a community. Focusing on outcomes enables an enterprise to be innovative and measure how well it is doing.
- Impact: The long-term effect of these outcomes on a broader community or system. A social enterprise might seek to reduce crime among youth or ensure that everyone in a community has access to health care. Social impact takes time to achieve and is influenced by forces such as economics and community dynamics that are outside of an enterprise’s control.
Have you considered measuring your social performance? What are the social outcomes that your enterprise aims to achieve? These are important questions, regardless of what your enterprise does.
Asking these questions will enable your enterprise to move beyond the standard metrics of financial performance. It will add another dimension to how you do things.
It will also enable you to be more creative about how you can meet your customers’ needs.
Furthermore, it will help you to focus your activities and inspire others with what you want to achieve.
And it will help to transform the way you do business!
- Marcus Coetzee is a social enterprise strategist and heads up the African Social Entrepreneurs Network.