In 2019, we had a conversation with Ben Carpenter from Social Value International regarding, "What is preventing us from listening to the stakeholders?" In 2020 especially post-pandemic, for companies to become more inclusive and resilient, stakeholder engagement rises to the top and becomes a MUST. Any impact evidence framework you may be following, such as Impact Management Project, Shared Value, Social Value, SDG, or Sustainability frameworks, incorporating how your stakeholders are pursuing the change is crucial to document, get insight, and act upon. Without reliable data from the stakeholders, outcome learning and impact management is incomplete.
STAKEHOLDER ANALYSIS STEPS
The first step requires enterprises to start by understanding who their customers or stakeholders are. You can begin by collecting data on their demographics and seeking feedback on their wants and needs.
- Start with engaged stakeholders.
- Collect reliable data as feedback from stakeholders.
- Ask the right questions to understand all five dimensions of impact.
This article will understand how to ask the right questions to understand all five dimensions of impact. According to the impact management project, to understand any impact on people or the planet, data is needed across all five dimensions: What, Who, How Much, Contribution, and Risk. The impact can be both positive and negative - the crux of the matter is to ask and collect data on the right questions.
STAKEHOLDER IMPACT ANALYSIS - FIVE DIMENSIONS OF IMPACT
An enterprise may ask for specific feedback from stakeholders. For example, what other kinds of impact, positive and negative, they are experiencing while engaging with the enterprise for the product, service.
The key here is to ask,
- Is enterprise generating a negative or positive outcome?
- Is enterprise delivering a level of outcome above or below a national or international performance standard?
- Is the enterprise creating unimportant outcomes?
To manage the impact, the enterprise will need data on which effects are the most important to the stakeholder? And the degree of change (How Much) that have occurred for each.
There are four Impact Data Categories required to assess “What is changing ?”
- The level of outcome experienced. The outcome can be positive or negative, intended or unintended.
- The threshold for a positive outcome. The level of outcome that the stakeholder considers to be positive or ‘good enough.’ The threshold can be a nationally- or internationally agreed standard
- Importance of outcome to stakeholder. Stakeholders’ view of whether the outcome they experience is important.
- Alignment to Sustainable Development Goals or other globally recognized goals.
How underserved are the stakeholders concerning the outcome? There is four impact data category that describes WHO dimension.
- Stakeholder The type of stakeholder experiencing the outcome
- Geographical boundary Where the stakeholders are while experiencing the social and/or environmental change.
- Baseline outcome level: The stakeholder's level of the outcome before engaging with the enterprise reaching well-served populations reaching underserved populations
- Stakeholder characteristics Socio-demographics and behavioral characteristics of the stakeholder to enable segmentation.
Continuing with the same hypothetical example, the Fitness company could determine out of all the people who join the Fitness, how many of them are overweight?
This gives them a good understanding of how underserved the people are, giving them a good baseline to effectively measure their impact.
Read More: Putting the “S” in ESG Social
HOW MUCH OF THE OUTCOME OCCURS ACROSS SCALE, DEPTH, AND DURATION?
Scale The number of individuals experiencing the outcome generating the outcome for few? Are you creating the outcome for many?
Depth The degree of change experienced by the stakeholders. Are you delivering a small degree of change towards the outcome? Are you providing a significant degree of change towards the outcome?
Duration How long has the stakeholder experiences the outcome? Are you creating long-term change?
For example, if the Fitness company identified that many people were overweight in the "Who" dimension, they could ask if many people lost weight? This tells the enterprise the degree to which the stakeholder experiences the outcome.
WHAT WILL HAPPEN IF YOU DID NOT CONTRIBUTE?
What is the enterprise's contribution to what would likely happen anyway?
Depth counterfactual The estimated degree of change that would occur anyway for the stakeholder contributing marginally or not at all, relative to what would have happened anyway? Are you contributing significantly relative to what would have happened anyway?
Duration counterfactual The estimated period that the outcome would last for anyway.
For example, the Fitness company could ask its stakeholders if they have used services from some other company or used some other products to experience weight loss. This would indicate if the outcomes experienced by the stakeholders can be attributed to the Fitness company.
WHAT IS THE RISK?
What is the risk to people and the planet that impact does not occur as expected?
Impact Risk type The type of risk that may undermine the delivery of the outcome taking a low level of impact risk?
Impact Risk level The level of the risk specified in risk type (e.g., High, Medium, Low)
Risk is an essential data category. In the example, the Fitness company could continuously measure the number of people who drop off after starting the program. This gives them the drop-off rate, which can effectively tell them the risk they are running toward the product or services they offer to people.
Once results from a large enough population are collected, enterprises can classify each effect, as shown in the impact scorecard. Investors can use the information presented for their due diligence. Once the investment is made, investors can request yearly improvement to monitor improvement year after year.
Impact Cloud's innovative impact strategy allows a better alignment between investors' impact framework and the enterprise's intended impact. Both investors and enterprises can collaborate to create self-reported data that can easily align with due diligence and regular recurring monitoring and evaluation results that investors may be looking to learn.
Once you have designed a survey, you should test the survey's effectiveness with a limited group. Once finalized, use whatever mechanism is best suited for the given situation. Data collection could be door-to-door when collecting data in areas with a poor network or online if network connectivity is functional.
Gradually, over the last decade, an alternative model for measuring social change has emerged. Keystone Accountability helps organizations understand and improve their social performance by harnessing feedback, especially from the people they serve.