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What is Impact Management?

What does this mean for you?
The practice of impact management is often referred to as “Impact measurement and management” or IMM. But while measuring impact is more clear, we often get asked, what is impact management? How do you manage something nebulous like “impact”?

Let’s break it down.

Impact management is about setting up the systems and practices to a) understand where and for whom your company drives impact and to what degree, b) track it over time and c) optimize the levers in your business model for both revenue and impact. It’s about the process we put in place to collect meaningful data, interpret it and make critical strategic decisions with it.

ONE PLANET

Nearly universally, investors said that impact measurement & management (IMM) is important for understanding:
  • Whether they are making progress toward their impact goals (100%)
  • Improving their impact performance (99%)
  • Poactively reporting impact to key stakeholders (98%)
  • Capturing business value (93%)
  • Marketing or fundraising (92%)
  • Addressing client demand for impact information (80%)

The Playbook

Here is how to position yourself to succeed
To be clear, impact management is strategic. Impact creates value. Whether metrics capture resource efficiency, improved outcomes, or increased access, innovations that drive impact save costs or unlock new value. The companies that can capture and optimize impact, consistently outperform. This is part of the value of impact management services.

The question is how?

The first step is to define the key metrics and outcomes your innovation is designed to drive. Then, collect data from your users.  Set up a baseline data collection survey when you onboard new clients. Build prompts in your technology every quarter to check in with your users. Start with just one user or buyer! Just begin.
Impact Management

The Algorithm

The next step of social impact management is to relate impact creation to revenue. When impact is a function of commercial activity, it shouldn’t be evaluated in a silo, distinct from the revenue that drives it. We use impact modeling here to answer these fundamental questions: How much impact is created per sale over how much time, and for whom?

Then, we can build upon this initial foundation, applying it to different markets. Compare impact quantities and valuations for different buyers and geographic markets. Where and for whom do your products have the most impact value? Where and for which buyers do you project the greatest revenue over the next 3-5 years?  Once this is clear, you’re in a position to evaluate the markets and buyers where your products and services maximize for both revenue and impact. Or you can evaluate trade offs, and design growth strategies that reflect your company’ score mission. iX modeling sets up the infrastructure for you to evaluate relative impact across various markets, play with estimates, and understand how changes in your business model affect your impact (and vice versa).

A Framework for Evolution

Provide Context
You may not be in a position to understand these dynamics with high resolution. That’s ok! The beauty of impact modeling is that you can begin with rough (and conservative) estimates. Even this beginning can be immensely powerful for early-stage decision making.

The next step of impact management is to put processes in place to get smarter. Now you know what data is critical to validate your impact claims. Build upon your initial data collection processes, even with a small sample size. Collect both quantitative and qualitative data at a set cadence.
79% of Impact Investors evaluate IMM during Due Diligence
Impact Management

Impact Management Over Time

Validate your impact
Every quarter, review the data you’ve collected and your data collection methods. What are your response rates? Who is responding? Why or why not? How does the data collected compare to your initial estimates? Adjust your model accordingly.

Then take a step back. Now you’re in a position to make some real decisions. Managing your impact by a) relating it to revenue and b) tracking it over time can show you where and for whom your innovation unlocks the most value. These insights can take your go-to-market and growth strategies to a whole new level.
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Impact Management

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