Monitoring and measuring change is key to the successful execution of Positive Impact
In the last decade, results-based funding and pay for performance models have become increasingly popular in business and public sector contracting. These models, in large part, hinge on the successful creation, implementation, and sharing of monitoring and measurement systems. We heard from different experts on their experiences with measuring and monitoring Positive Impact. Well, for one, if business leaders are to demonstrate the will to integrate Positive Impact principles into their core business strategy, they need to understand what Positive Impact means in practice and what it can deliver for them.
Measuring and monitoring business initiatives and projects (whether they are delivered through Positive Impact Partnerships or not) allows us to connect strategy and targets to real, tangible, day-to-day results.
Traditional monitoring and evaluation mechanisms, including impact measurement systems, demonstrate accountability, but they also enable innovative and responsive practices and improve our understanding of how systems experience change. This in turn can lead to a deeper understanding of what is working and what needs to be fixed in order to meet our goals. Because performance and impact measurement is a continuous process, it becomes vital to practicing adaptive strategy management. In essence, it ensures businesses can be more flexible and agile in their responses to changing political, economic or social environments.
But, for impact measurement and monitoring to be effective, business managers and decision makers must select meaningful indicators that actually measure value creation. We hear from business leaders that their companies develop great strategies and initiatives aimed at creating Positive Impact; but they ultimately struggle to measure and monitor their impact. Even more frequently, businesses struggle to bridge the gap between their commercial activities and the outcomes of their Positive Impact initiatives.
It is important to remember that value creation does not stop with the company’s sales figures; nor does it stop at income increases in a community. Rather, it depends on positive changes in economic, social and environmental impact across society and individually for all actors in society. This magnitude of impact extends beyond a single company and surrounding community to include the government, distributors, and others. Inevitably these changes are complex, interdependent, and often difficult to quantify. It is just this level of complexity that compels companies, and many partners prioritizing the creation of Positive Impact, to push the boundaries of impact measurement.
How can we develop meaningful Positive Impact Indicators?
We use in-depth analyses of Positive Impact initiatives to ensure we’re choosing the right indicators and develop strategy maps that reveal the potential value creation in any given system. Analyses that take into account the complexity and nuance of different systems are a critical foundational step. Next, we cascade Positive Impact scorecards to each actor and create impact metrics that are aligned with desired and agreed outcomes.
But we are also learning by doing. Our work with Syngenta is a timely example of this. The greatest lesson we have learnt is agility. Making sure you’re monitoring the right indicators sometimes requires revising initiatives, and the overarching strategy. To ensure value creation is actually enduring beyond the scope of an initiative, it is vital to move away from the fixed beneficiary-focused indicators of past donor projects and measure commercially relevant indicators that quantify costs and benefits to all actors. With Syngenta’s Good Growth Plan, for instance, the economic value created for smallholders (e.g. increased total sales, increased farm yield, increased gross margins) actually becomes the social value Syngenta is creating.
To measure and monitor impact, we need to first recognize that impact measurements are interdependent and intertwined.