Social Value UK

Tag: Linkages

  • Impact management is a state of mind!

    Impact management is a state of mind!

    This is a blog by Ben Carpenter, Operations Manager, Social Value UK.

    There’s a slight change in the air… You may have heard it whispered on the grapevines… “Impact Management” is the phrase on everyone’s lips. No longer are people talking about impact measurement. Now, the word on the street is ‘impact management’! Now this may seem like a very subtle change and perhaps not one that warrants a blog. However, I do want to pick up on this nuance in language. I do think it’s worth a blog and I do think I’m justified in feeling quite excited about it. I want to share with you why this could be the start of a significant shift in thinking and practice for the social sector.

    Look up measurement in the dictionary and it’s defined as “the act of measuring something”; “the size, length, or amount of something”; and; “a unit or system of measuring”. That sounds about right. For years we’ve all been fixated on the measurement of social impact. Is this the right way to measure an ‘outcome’? What’s the best tool/system for measuring this outcome? Look how much impact we’ve had this year?!

    In truth, when I walk into a room and say “Impact measurement” people’s eyes roll, there are groans or if I’m lucky perhaps a polite resigned sigh. “Yes we do it.” But ‘it’ has become a chore, in many instances; measurement is seen as something that has to be done. It’s part of the charade of proving impact to ensure funding continues. For so many; ‘measurement’ and collecting information has become an onerous and often meaningless task.

    What difference will a shift in language make?

    So why am I excited that swapping measurement for management will be any different? Back to the dictionary… Management is defined as “The process of dealing with or controlling things”. Whilst I don’t love the word ‘control’, this immediately sounds much more practical and worthwhile. No longer are we measuring for the sake of measuring. Management to me means ‘making decisions’ and let’s throw in another M word: maximising a situation. So perhaps the new questions will be: ‘how can we have more impact?’ or ‘are we creating the most impact we can with the resources we have?’

    If I walk into a room and say words like ‘agile’, ‘iterative design process’ and (wait for it…) ‘pivot’ people’s eyes light up! (OK it helps if the room is full of ‘lean start up’ types or those who are comfortable with a culture of change). The lean start up movement is all about using information to make decisions about design. Let’s build something, collect information to see if this is working, learn from it and re-design. If you read Eric Reis (whose book the Lean start-up has achieved almost biblical status amongst entrepreneurs) the emphasis is on finding one or two bespoke metrics (not standardised) that can quickly give you the information you need to validate your model or help you re-design to make sure you are maximising your success. This is management, not just measurement.

    OK, before you typecast me with full on hipster beard and shout “Oi! You’re not in silicon valley now mate!” let’s just root this in the context of the social sector: UK charities and social enterprises. I think it’s completely possible and the time is right for these social purpose organisations to start adopting a ‘management’ approach to impact. (Check out Acumen’s recent Lean Data initiative.) Success to a charity or a social enterprise will not be measured with financial profit but that doesn’t stop them from behaving in the same way: using information to inform decisions about programme design to maximise their social impact. This is management.

    The crowd who are sick and tired of collecting information for measurement sake are understandably bored. Nothing ever comes of this data collection. A (soon to be published) piece of research from Social Value UK finds that most organisations do nothing with the impact information they’ve collected. What if suddenly staff at charities and social enterprises were collecting information that was being used to inform decisions and change the way services are delivered? I reckon it wouldn’t seem like a chore anymore.

    Isn’t it easier said than done?

    Quick wins?

    There are some small changes that charities and social enterprises can do very easily that can make a big difference: Make data collection less formal. It’s the form filling, questionnaires and rigidity that kills it. Start having conversations. Regularly sit down with beneficiaries (and other people who are affected by your work) and ask them simple questions like:

    What has changed for you? Was that expected? Has anything else happened? What did that lead to? Out of all of these changes, which is the most important to you? Would that have happened anyway? Who else has helped with this?

    Collect the results of these conversations and discuss them at team meetings! Regularly. It won’t be long until you have a rich picture of the changes that are happening (good and bad) and what’s important to people and probably how you can change things to make it better. This to me is management.

    If anyone says they don’t have the time or the resources to do that, they’re talking nonsense. Charities and social enterprises should be talking to their stakeholders and they should be having internal staff meetings. The new questions may lead to some uncomfortable answers but let’s face it – asking beneficiaries to complete mundane questionnaires is equally as uncomfortable. Trust me I’ve been there.

    This doesn’t sound very rigorous?

    Perhaps it’s time we stopped worrying about rigour when it comes to impact measurement. The parallels with highly rigorous academic evaluation are not healthy and if you look at businesses; low levels of rigour is used frequently to support decisions. (Low levels of rigour often better than nothing) As someone one said to me… “it’s about enough precision for the decision”

    I don’t think my funder will like this!

    You’d be surprised. Most investors I’ve spoken to would love to see a ‘management’ approach by their investees. Access Foundation and Power to Change have recently launched an Impact Management Programme that we are very excited about being part of. Bridges Ventures are a world leading impact investor and have recently published a report titled ‘More than Measurement, A practitioner’s journey to Impact Management.’ And it was a grant maker Nominet Trust that have done some excellent work around lean social metrics and instilled a mantra of: ‘a learning organisation is an effective organisation’. I encourage more funders/investors to be bold enough to move away from shared measurement frameworks and look for evidence of their investments collecting useful information, being agile and responsive to change. (Let’s talk about aggregation another day.)

    If I was an investor, above anything else, I would want to know that my investees are collecting information that is useful. Perhaps the only metric I would be interested in is “How many changes have you made to your service/product based on impact information?”

    I am genuinely excited about a shift to a more management approach to collecting impact information. For the measurement professionals and geeks out there (myself included) there are some technical changes required around what questions to ask, how to analyse qualitative information and then extrapolate that with quantitative data. Rest assured, those blogs will be coming over the next few months. The key thing is that impact management is ultimately about creating a culture within an organisation. A culture that is brave enough to ask the tough questions, listen to stakeholders and embrace change. Impact Management is a state of mind.

     

    Find out more about the work SVUK are doing with NPC and other partners: NCVO/CES, SEUK, SIB, Young Foundation and Impetus PEF by subscribing to the Access Impact newsletter.

     

  • SROI and Cost Benefit Analysis

    SROI and Cost Benefit Analysis: Spot the Difference, or Chalk and Cheese?

    This blog will aim to look at similarities and differences by comparing the two from the perspective of each SROI principle.

    Though SROI does draw from Cost Benefit Analysis (CBA), it developed drawing on two other traditions; sustainability accounting and financial accounting.

    1. Stakeholder involvement

    This principle is fundamental to the SROI approach, and is followed in all aspects of SROI. It is especially important to involve stakeholders when trying to determine outcomes, or the changes that result from an activity.

    CBA can focus on a particular policy issue that is being considered, and doesn’t implicitly require involvement in deciding what outcomes are, though they may be consulted.

    2. Understand change

    Both CBA and SROI focus specifically on change, predominantly change in situation, capacity or behaviour with related changes in wellbeing. The only slight difference is that SROI has an assurance process to ensure completeness of change.

    3. Only include what is material

    This principle identifies the most notable difference between the two approaches.

    CBA is an aspect of welfare economics, so begins from the perspective that all welfare effects will be included. In practice, however, it often focuses on a particular policy outcome with some recognition of unintended consequences. Whilst it is not possible to consider all welfare effects, focusing on a policy objective without stakeholder involvement risks omission of important effects.

    SROI on the other hand recognises these limitations and aims to include material outcomes, drawing on financial and sustainability reporting, which hold materiality as a central tenet.

    Materiality is not the same as proportionality. Materiality requires a decision to ensure that the outcomes included, both positive and negative, are those that, if omitted, would affect the decisions of the stakeholders. This process requires a judgement on the extent to which stakeholder groups are split into smaller groups which experience different material outcomes – a balance is required between considering every stakeholder as an individual case with a personal outcome profile, and aggregating stakeholders together and so risking a loss of understanding how different smaller groups experience different outcomes.

    Proportionality means that the extent or depth of the analysis should be tailored to the relative size, impacts, and risks of the activity under analysis.

    4. Do not overclaim

    This need to consider benchmarks, counterfactual, attribution and displacement is shared by both approaches.

    5. Value what matters

    Whilst both approaches use money to value benefits, the valuation technique and/or perspective from which the valuation is taken can differ.

    Many CBAs focus on value from the perspective of real, potential or imagined savings to the public sector. This value can either be expressed as an indirect financial value to the taxpayer, or sometimes as a proxy for achieving a stated social policy goal.

    Although some SROI analyses do use these types of values, they also aim to value outcomes from the perspective of the stakeholder. This could be by using revealed preference, stated preference, or (more recently) wellbeing valuation techniques, applied as appropriate to the outcome or stakeholder.

    6. Be transparent

    This principle should be another area of overlap between SROI and CBA.

    7. Verify the result

    SROI follows accounting and some sustainability reporting by requiring appropriate verification of the result. This may well take the form of an external assurance process, but could include a range of other methods of verification (such as going back to the stakeholders and asking their opinion on the results of the report).

    The reasoning behind this principle is that an SROI analysis will inevitably include judgements about what is included or excluded, and these judgements need to be reviewed as reasonable or unjust.

    CBA does not have an audit process. However, since judgments on what is included and excluded are made and the audience need to know whether these judgements are reasonable, an external assurance of those decisions, acting on behalf of those affected, is required.

    Other similarities and differences: Audience and purpose/rigour

    CBA tends to be used by the public sector or quasi-public sector, so is often applied with a reasonably high level of rigour.

    In contrast, SROI principles can be used at any level of rigour, as long as it is ‘good enough’ for the type of decision it is being used to inform. In this respect it is similar to financial accounting, which aims to provide information that is good/accurate enough predominantly to inform investors, as opposed to social science levels of rigour.

    At one end of the spectrum SROI can use similar levels of rigour as CBA, with additional requirements for consideration of materiality and assurance/verification. At the other end of the spectrum a much lower level of rigour could still be good enough for board-level strategic decisions within organisations.

    An illustration of this would be the Maryland Scientific Methods Scale. This is a scale that ranges from 1-5, and indicates the level of scientific rigour of a particular study. At the top end of the scale lies Randomised Control Trials (RCTs), which can be used in an SROI context but depends on use and purpose for the SROI analysis.

    At the bottom end of the scale would be an assessment of the counterfactual simply by asking beneficiaries what would have happened otherwise when they enter a program, and does not have any other use of control groups etc. This type of rigour would be unlikely to influence policy, but is still useful for designing services.

    This different application of rigour in SROI applies to valuation as well; an estimate for a value may be good enough for a particular audience. Similarly, in accounting we see examples of judgement being used in figures such as the bad debt provision.

    In summary, whilst CBA and SROI do have areas of overlap, their differences originate from the fact that SROI is additionally informed by financial accounting and sustainability reporting, particularly with respect to materiality, verification of a result, and use of different levels of rigour according to use and audience.

  • The SROI Network & HACT release joint linkages paper

    The SROI Network & HACT release joint linkages paper

    The SROI Network (soon to be Social Value UK) and HACT are very pleased to publish a ‘linkages paper’ that sets out the relationship between Social Return on Investment (SROI) and HACT’s Social Value Bank (and accompanying tools the Value Calculator and Value Insight). 

    HACT is a social enterprise-based ideas and innovation agency for the UK housing sector. In 2014 HACT launched the Social Value Bank – the largest set of methodologically consistent social value metrics ever produced including 636 wellbeing valuations. HACT have developed the Social Value Bank in partnership with SImetrica, a research consultancy led by Daniel Fujiwara, an economist specialising in policy evaluation and social impact measurement.

    This paper has been produced in collaboration between The SROI Network and HACT and aims to clarify some small areas of divergence and promote the strengths of HACT’s resources and their compatibility with the SROI approach to measuring and managing social value.

    CEO of the SROI Network Jeremy Nicholls said: “I’m delighted we have been able to produce this linkages paper together. It is an important document that will help people to understand how HACT’s fantastic resources can be aligned with the principles of SROI.

    HACT’s resources will help organisations use valuations (of social outcomes) to make decisions about resource allocation. This is a big step forward.”

    Click here to download the document. We hope you find it useful. Please do not hesitate to get in touch with Ben (ben.carpenter@thesroinetwork.org) if you have any further questions or if you have some examples of how you have integrated SROI principles and HACT’s resources into your impact measurement strategy.