5 ways to strengthen your overall business strategy with impact metrics
June 5, 2019
When I first started my strategy consulting practice nearly three years ago, my business model and brand focused almost exclusively on impact metrics. Why? Because they’re at the absolute heart of building a financially sustainable and impactful organization.
However, many of us in the social impact space get so focused on metrics that they overtake a whole lot of our capacity.
This is why I zoomed out in my business’ focus, and not help my clients with metrics as an integrated part of their revenue and impact generation strategy.
Because without integration, and without basing strategic decisions on data, what the heck are we even measuring things for?
Below are my top five tips for making this work.
Remember, most of you are not a data company (leave that to SoPact!). You should be measuring as little as possible to give you the data you need.
If lines and lines of spreadsheets are eating up room on your server and you do absolutely nothing, get rid of them! Pretend Marie Kondo has come on in, because truly - your data should bring you joy in its relevance and informativeness to decision making and communications.
Start with something super simple – like the Net Promoter Score discussed above – as a measurement tool and then if you need to get more complex or want more nuanced data, you can always build on it later.
To me, data and metrics serve two purposes: to inform decision making (including resource allocation and/or procurement) and to communicate what you’re doing. There are infinite means of measuring data out there, from a simple Net Promoter Score (“on a scale of 1-10, how likely would you be to recommend this product or service to a friend”) to a complex randomized control trial (RCT).
In impact, there’s often the perception that to get funding and investment and be taken seriously, we need an RCT. But do we? Generally, unless that data is informative to decision making and necessarily in communicating to audiences who really need that level of metrics, the answer is no. Figure out how to get data that’s just good enough, and then move on.
This is why I’m really into SoPact. Data that lives in a spreadsheet (or – worse – multiple spreadsheets) won’t “talk” to other systems you have and just has limitations.
And manually having to analyze it and generate reports is far more costly from a human capital perspective than using a tool that does this all for you.
I’m a huge fan of integrating and automating as much as possible, and in the rare case my tools and systems don’t talk to one another I’ll use Zapier to help connect them.
But the more you can automate your impact metrics from collection to reporting, the less time you’ll spend on managing data and the more time you’ll have to use it!
Whether you’re using the Business Model Canvas or some other tool (I love the canvas as well as logic models, which I outline in my free download), you should have some articulation on paper of how the various components of what you do influence and relate to one another. And the relations and connections between these are either backed by data or just assumptions!
Make sure you’re not just measuring your social impact, but also the efficacy of the key things you do to generate that impact – doing so, for example, could help you realize that an activity you’re spending 5 hours a day on isn’t generating as much impact as one that only takes an hour a day, or could help you understand the baseline components necessary to expand into a new market.
While communicating your data is important, you also need to . . . use data to improve your communications. Meta, I know.
But remember, in social impact, people are giving you dollars for the impact you’re making – whether they be from funders, investors, customers, or all the above.
This relates to #4 above, but you should also be consistently testing and improving how you “sell” your impact and build long term financial sustainability. Looking at key metrics around the success of marketing efforts, messaging, and more is a key component of your strategy and ability to grow.
While I focus on strategy, I love finding tools like SoPact out there that’ll help my clients take what they work on with me and execute on it. I welcome you to follow both our businesses as you (the easiest way to do so with my practice – and to get more content like this from me – is to subscribe to my Impact Boss Digest!)
Other resources: Actionable Impact Management Guidebooks.
Hannah Gay helps small to medium nonprofits and social enterprises globally finally get the revenue and impact they deserve through her strategy consulting and coaching practice. She shares her favorite social impact content in her weekly Impact Boss Digest, and can be found as @impactbyhannah on Instagram.