The IMP is a forum for building global consensus on how to measure, manage and report impacts
Impact Cloud provides an in-depth implementation of impact management project. SoPact Impact Cloud provides both investor and enterprise-centric approach.
The article helps users of Impact Cloud to quickly familiarize themselves with the Impact Management Project process on Impact Cloud. The users would be able to create their custom journeys for their projects after going through this article. If you are an enterprise trying to determine which of the many effects that you generate really matter? You need to think about what data can you collect to assess the performance of those important effects.
There are many frameworks available that help organizations keep track of the success of their programs. Some frameworks help in tracking output and outcome metrics while some are more methodical and allow you to systematically think through both the negative and the positive impact an organization may have through its programs.
At Sopact, we recommend using either the theory of change or the Impact Management project model (or IMP). In this article, we’ll talk about IMP, and how organizations can get started with this methodology to better understand the impact they have on people and the planet. For information on getting started with the theory of change, please take a look at our previous videos. Links are posted in the description below.
We will focus on the Five Dimensions of Impact management project from an enterprise's view. Soon we will be bringing you 5 dimensions of impact from investor’s lens, so dont forget to like and subscribe to our channel so you can have a complete view on the subject.
Any enterprise directly affecting people or the planet – whether a large multinational, a small business, or a non-profit – can manage its impact. The question is, how enterprises can set impact goals and manage risks? So, without further ado, let’s dive into what these 5 dimensions are and how enterprises set impact goals and communicate their impact.
Many leading standards like IRIS, GRI, and SASB are starting to integrate Impact Management Project so that their users can use standards consistent with the IMP based on five dimensions of impact.
What are the Five Dimensions of Impact?
After hundreds of in-person and virtual conversations, the IMP reached a consensus that impact can be deconstructed into five dimensions: What, Who, How Much, Contribution, and Risk.
- What tells us what outcomes the enterprise is contributing to and how important outcomes are to its stakeholders.
- Who tells us which stakeholders are experiencing the outcome and how underserved they were prior to engaging with the enterprise.
- How Much tells us how many stakeholders experienced the outcome, what degree of change they experienced, and how long they experienced the outcome for.
- Contribution tells us whether an enterprise’s and/or investor’s efforts resulted in outcomes that were likely better than what would have occurred otherwise.
- Risk tells us the likelihood that the impact will be different than expected.
Enterprises can collect, analyze, and assess data across the five dimensions to understand the impact that people and planet experience as a result of their products, services, policies, etc.
Now, you may be wondering:
Looking at this example from the 5 dimension lens,
Your research may show that low-income families in certain geographies are most at-risk of obesity globally. This is your “who”. Using the WHO dimension enterprises can find out how underserved their stakeholders are prior to engaging them within their programs.
The enterprise can seek what outcomes their activities are driving, for example, in this case, an enterprise can actually see if their programs or activities are actually helping people to be less obese and thereby delivering positive physical and mental health outcomes. In this, the enterprise also seeks to know how important those outcomes are to their stakeholders. This is your “What”.
The “How Much” dimension delves into whether stakeholders are experiencing the outcome to a satisfactory level, on a more profound, lasting level. For example, did they lose enough weight to be considered not obese? How many people reached this goal? How many people maintained this outcome over a longer period of time? It is possible to give fat burning pills to people but they gain weight right back when they stop using the pills.
When looking at Risk factors, anything that undermines the enterprise’s ability to make people healthier and to tackle the challenge of obesity falls under this category. In the IMP there are nine types of risks that can adversely affect an enterprise's ability to have the desired outcome. For example, would the stakeholders drop out of the program if they lose patience early? This is a drop-off risk. All these risks are factored in the Risk dimension.
If people indeed got healthier, can we attribute the outcome solely to the enterprise or were there any external factors that contributed to the outcome. This is considered in the “Contribution” dimension. What would have likely occurred anyway and not particularly because of the enterprise?
Building on this analysis, you may choose to create an intervention with a proven track record of delivering a specific outcome or try new strategies that have a limited evidence base. The selection of a goal will be determined by the impact risk you are willing to take and the contribution you seek to make.
Let's now look at the different types of risks
What are the different types of risks?
Impact risk developed by the Impact Management Project is perhaps the most important category. We will take a deeper dive into the “Risk” from the Investor’s perspective in our future videos. At Sopact we see the importance of risk assessment and that is why Impact Cloud allows an enterprise to identify each risk, and define mitigation plans.
There are nine types of risks.
- Evidence risk: The probability that insufficient high-quality data exists to know what impact is occurring (or will occur) across the other four dimensions of impact, for all Stakeholders.
- External risk: The probability that external factors disrupt the ability to deliver the expected impact.
- Stakeholder participation risk: The probability that the expectations and/or experience of Stakeholders are misunderstood or not taken into account.
- Drop-of risk: The probability that the positive impact does not endure and/or that negative impact is no longer mitigated.
- Efficiency risk: The probability that the expected impact could have been achieved with fewer resources or at a lower cost.
- Execution risk: The probability that the activities are not delivered as planned and do not result in the desired outcomes.
- Alignment risk: The probability that impact is not locked into the enterprise model, making mission-drift more likely.
- Endurance risk: The probability that the required activities are not delivered for a long enough period.
- Unexpected impact risk: The probability that substantial unexpected positive and negative impact is experienced by people and the planet.
4. How do enterprises communicate their impact?
Enterprises frequently communicate their impact goals and performance to their stakeholders – whether raising investment or securing funding, speaking to their Board, or engaging with their employees and the local community.
Why? Because, investors will want to support business models that not only set goals to try to reduce the negative impact but also seek to have a significant effect (how much) on the underserved people (who), resulting in an improvement of the situation relative to what would otherwise happen (contribution), with any risk of impact failure (risk).
5. How can impact management with IMP help you?
By focusing on an outcome (such as good health) rather than a sector (such as healthcare), the dimensions also widen the array of business models that investors may find relevant. For example, education and clean energy (e.g. solar that replaces kerosene) are both significant drivers of good health for underserved populations.
This article covered,
- What are the 5 dimensions of the Impact Management Project?
- How 5 dimensions can be used to set the goals?
- What are the different types of risks?
- How do enterprises communicate their impact?
- Why is impact management with IMP important?