The fourth principle in our Think like a Social Enterprise series is to gather evidence of having achieved your promised social impact.
This builds upon the lessons contained in principle two (clearly define your purpose) and principle three (determine your social outcomes).
Social enterprises exist to make a difference in the world by using business thinking to help fix a social or environmental problem. Social enterprises are becoming increasingly popular as businesses become interested in social issues, and as non-profit organizations apply business principles.
These enterprises need to know if it is being effective at creating change in the world. There are many different views on how to decide this.
Some people believe that it is near to impossible to accurately measure the effectiveness of a social enterprise.
Instead, they suggest that we just ask the opinions of stakeholders such as staff, investors, donors and beneficiaries.
Alternately, they suggest that we inspect an enterprise’s internal systems and judge its effectiveness based upon this.
While the above ingredients are important, I believe that an effective social enterprise is able to achieve the social and environmental change that it sets out to achieve.
So how would you measure this? The first step is to clearly identify the social or environmental outcomes you want to achieve. This could include things such as the successful rehabilitation of prisoners or increased functioning of a clinic.
Second step is to identify indicators that represent this outcome. These indicators must be measurable. For example, good indicators for the successful rehabilitation of prisoners could include whether they have found employment and stayed crime free.
Likewise, indicators for the increased functioning of a clinic could include patient satisfaction levels or whether the clinic is clean and has all the equipment it needs. Third step is to determine how to measure these indicators, and gather the information that is needed.
It may be necessary to collect statistics, interview people or run focus groups.
Tools such as questionnaires, checklists, discussion guides and spreadsheets may be need to be developed.
You will need to document your approach and consult with some experts to make sure you are doing things correctly.
These three steps will lay the foundation for measuring your effectiveness at creating positive changes in the world.
I suggest you just jump in and start measuring these changes.
Don’t wait for the perfect method. Just start and do it the best you can.
It’s important to get in the habit of measuring.
Then each time you decide to measure you impact, you will improve on the previous time.
There is a lot you can do to improve your research approach.
You could consult with experts, set up a research committee to advise you, speak to some more experienced organizations, search the internet or attend a short course. Overtime your results will become more convincing and scientific.
These results will enable you to improve the effectiveness of your enterprise.
You will also be surprised at how your investors, staff and partners become very excited about the difference your enterprise is making in the world.
Even if you only run a small business, you will definitely be having some positive impact.
Start by measuring this, and over time you may even become a social enterprise.
- Marcus Coetzee is a strategist specialising in social enterprises. He also heads the African Social Entrepreneurs Network.