mpact measurement and management (IMM) is a term that has gained prominence in recent years in business and society. Although there is no single definition for this concept, its importance is undeniable. Social impact alone is meaningless if it cannot be measured, analysed and demonstrated. MGI becomes the bridge that connects impact with the ability to make informed decisions and manage change effectively.
Three Key Approaches to Impact Measurement and Management
MGI is based on three fundamental approaches, each with specific strategic objectives:
- Positivist: This approach views measurement as constructing an objective and rational representation of the real world through accurate measurement instruments. In other words, it seeks to establish tangible, quantifiable facts.
- Critical: In contrast, the critical approach focuses on the principles of democracy and accountability. It advocates the accountability of organisations to a wide range of stakeholders affected by their activities, encouraging transparency and the active participation of these groups in decision-making.
- Interpretive: This approach sees measurement as a tool to facilitate dialogue between different social groups, enabling the joint pursuit of desired social change. Open and transparent communication is essential in this process.
These approaches can co-exist and are used for a variety of purposes, such as improving operational performance, acquiring resources, or building and maintaining an organisation’s reputation.
Seeking Consensus: Defining Impact Measurement and Management
It is crucial that organisations establish a common definition of MGI to foster a shared language in the ecosystem. We see three key elements:
- The backbone is Stakeholders: Recognise the importance of involving stakeholders from the start of the measurement process. This ensures two-way validation and reinforces the organisation’s legitimacy. Transparent and trust-based communication is essential in this process.
- Contribution: Defines impact in relation to the social changes directly attributable to the organisation’s action. Measurement should consider how other factors may influence the achievement of the desired objectives, promoting transparency.
- The Goal is to Manage: Emphasises that measuring is only a means to make decisions that improve an organisation’s performance. Measurement and management are intrinsically linked and are essential for ongoing success.
Why Measure and Manage Impact
What cannot be measured is as good as non-existent. Impact cannot be a mere statement of intent, it has to be real and tangible.
Systematic and rigorous MGI offers numerous benefits for organisations:
- Continuous Improvement: It facilitates evaluation of past efforts and strategic planning, leading to constant improvement in performance. It also increases staff motivation and their sense of belonging to the organisation.
- Increased Transparency: Helps identify inefficiencies and areas for improvement, basing decisions on objective and quantifiable data, which strengthens the credibility of the organisation.
- Resource Efficiency: Allocates resources more effectively and mitigates risks, which saves costs and optimises capital.
- Fund Attraction: Organisations that can demonstrate their impact are more likely to receive funding, both public and private, strengthening their financial position.
- Social Contract: Promotes greater engagement with stakeholders and fosters a social contract necessary for the long-term success of the organisation.
- Robust Economy: Collective MGI strengthens the local economy by understanding and maximising impacts in a specific region.
What to Measure (and Therefore What to Manage)
The definition of outcomes and impacts can vary according to perspective. Some distinctions include immediate outcomes, short-, medium- and long-term impacts, and intended and unintended effects. Despite the differences, the importance of measuring at least the resources used and the outputs generated is recognised. The definition of results is essential to identify appropriate indicators. Furthermore, there is a need for the results to be shared and accepted by the various stakeholders involved.
MGI is a crucial component for any organisation seeking to improve its performance and contribution to society. Through effective impact measurement and management, organisations can move towards a more transparent, efficient and results-oriented future.
