An investment towards an impact objective (environmental, social, governance) relies on many stakeholders to succeed. Research shows that the networks are more complex than typical business models or standalone business initiatives in organizations.
Impact investments and social entrepreneurs work in an ecosystem of customers, suppliers, vendors, public sector participants, educational institutions, public, private, or individual investors, consultants, support providers, and influencers. An internal impact project may involve functions like strategy, human resources, sustainability, CXO and business heads, internal management systems, and external reporting.
Further, an actual stakeholder – a customer, an employee, or the community – experiences the desired or unintended impact an organization creates. Therefore, entrepreneurs and change-makers must understand what impact means to those who experience it. Such insights give them focus on what moves the needle based on evidence received directly from the source.
Given the importance of stakeholders in an impact-focused project or enterprise, Impact Measurement and Management (IMM) practices put an enormous focus on this topic. Most practices begin with understanding the operating ecosystem and stakeholders. The solutions are designed with stakeholder priorities. The measurement honors the stakeholder’s metrics of success. Ultimately, IMM uses this knowledge to manage and improve results for stakeholders.
Here are some examples of how IMM approaches stakeholder voices.
- In the ROI Methodology, which tracks and measures projects and initiatives, the earliest indicators are stakeholder feedback taken immediately as the solution is delivered.
- Another IMM solution may be to have a stakeholder satisfaction index and track its trajectory.
- Yet another way IMM methods bring attention to this topic is by creating operating principles, such as Social Value International’s (SVI) first principle, “Involve Stakeholders“.
- The SDG Impact Standards, developed by UNDP, which provide ten actionable guidelines for organizations and investors to design their entire organization around sustainability, emphasize the need for IMM infrastructure to manage impact.
All respectable IMM methods understand that impact goals are achieved in collaboration and need regular evidence-based conversations amongst stakeholders. A sound IMM system deliberately includes the stakeholder voice, allowing organizations to learn and improve the stakeholder experiences.
Please contact us to continue this discussion for your impact project or investment.