At Virgin Unite we work with the ethos of 'Changing Business for Good'. We believe that entrepreneurship and business must lead the way in solving the world’s problems – and that through this positive leadership we can change the world – leaving society, and the planet, in much better shape.
Entrepreneurship is key to this business evolution. Firstly, because small business is the engine room of global economies. Let’s take the UK for example. There are roughly 5.4 million businesses across the UK – 5.2 million of these employ less than nine employees. That’s a lot of small business! When small businesses thrive they generate revenue and jobs, resulting in positive impact on the local economy and the neighbourhoods they operate in.
Secondly, because we are seeing a new wave of social entrepreneurs – entrepreneurs who measure success not just by the money they generate, but through the impact they have on communities and the natural environment. So, how do we know if we, or any other organisation, are having a positive impact?
Most organisations focus on measuring easy things – like number of units shifted, or deliverables achieved – not so much on whether the world is a better place. Understanding impact measurements is a seismic shift for many organisations – both for-profit and non-profit – and moving from measuring outputs to also measuring outcomes is a strange new world of reporting.
Aaron Tait at *Spark has written a really pragmatic paper on how they measure impact. This is a great starting point for anyone looking to understand both the difference between an output and an outcome of the work they do, as well when they can consider that the impact is as result of our work.
At Virgin Unite we’ve been refining and improving how we measure the impact we create through our entrepreneurship work. And whilst we’ve still a bunch more work to do, here are a few things we have learnt along the way.
1. Figure out what questions you are trying to answer. It is all too easy to get caught in the detail of the data points you want to collect without thinking about whether this actually provides you with any insight. Prepare a hypothesis for the impact your business will have then ask yourself ‘How will I know if I’ve achieved this impact?’
2. Be clear on your assumptions. It is unlikely that you will be able to measure how your work creates large global societal shifts, but you can make pragmatic assumptions about how the impact you have contributes to these changes. For example, we measure revenue and jobs created by entrepreneurs as a proxy for wider economic development.
3. Keep it simple. Impact measurement can be really complex, but it doesn’t need to be. Often a few data points are all you need to tell your story.
4. Use baseline and control data. Measuring impact is all about a positive change, so you need to know what the change is by comparing against baseline data. You also need to know what would happen if you hadn’t intervened – so compare against a control group. Often we use something simple like government statistics for business survival as control data and compare our results against these.
5. Win both hearts and minds. Yes, measuring impact is about collecting robust data to prove the success of your programme, but you will win more support if you can tell a great story as well. At Virgin we find showcasing a successful entrepreneur who has thrived during hardship is as powerful as sharing the data.
Here are some great examples of when impact measurement and storytelling is done well:
- The Goldman Sachs 10,000 Small Businesses programme keeps it really simple, with a clean infographic showing that entrepreneurs who participate outperform typical US small businesses. Very good storytellers.
- Enterprise Growth Services, a social enterprise programme from EY, produces a neat little yearbook showcasing some of the impact businesses they have supported through the year. More stories than data.
- Our friends at Entrepreneurial Spark go the whole hog and produce a proper impact report detailing both the impact they are having, as well as winning our hearts with inspirational case studies.
- And finally, a personal favourite of mine, our very own Branson Centre for Entrepreneurship in Jamaica who demonstrate the impact of their work with three very clear figures – jobs supported, jobs created and revenue growth.