What is an impact intelligence, and why this is a future of the stakeholder-driven economy?
This is work in progress. Please check back in few weeks
COVID-19 has changed everything forever from philanthropy, impact investors to businesses are forced to realign shareholder based economy to stakeholder-based economy. Each of the players is going to realign differently. For those who have been looking to improve stakeholder-based evaluation approaches through Randomized Control Trial (RCT), Ratings (like B-Analytics, ESG Rating), and Monetizing (such as SROI) should be forewarned that these are the instruments of past as they tend to be backward-looking.
Even monitoring and evaluation based reporting should consider things of the past as organizations spend a substantial amount of resources on building year-end report are looked as an impact justification.
From innovative governments throughout the world, businesses, impact investors, we finally see an appetite to rebuild a stakeholder-based economy. This means social finance or sustainable finances will have to focus on near real-time learning from stakeholders to ensure that they are serving them effectively and improving outcomes.
This is nothing new in the corporate world, where profit drives customer and product intelligence. Businesses already have built a strong DNA on understanding what customer wants well beyond their scale market or understand what works and what doesn't work with product design well before they spend millions and billions of dollars building new products.
The real question for the new stakeholder economy is that are new players of the socially aligned model ready to make a real change, or will they continue to pay lip service? While it will take a decade to transform, we see initial evidence that suggests this transformation in an early stage.
Moving To Impact Intelligence
While during the last five years, we have made the right progress from a backward-looking model to impact measurement and management, which is entirely holistic. In our opinion, still many impact investors are struggling despite progress made by many standard bodies such as GIIN IRIS+, Impact Management Project, IFC Principles, Social Value Principles, and others. Even now, most organizations do not allocate budget and resources to make it stakeholder-driven.
While they all talk about continuous learning and improvement, we do not yet see the thought leadership on how to bring this change across the entire impact ecosystem. While for long many of these nonprofit players have been focusing on standards and frameworks, but very little effort has been going on to involve tech players who have a true potential to streamline and disrupt the age-old evaluation approach which does not focus on continuous learning and improvement.
We describe how SoPact plans to contribute to this work, and we clearly explain how we plan to lead. However, SoPact cannot be the only player here. This is our crying help to align, bring other leaders to improve vision and discuss how we all plan to disrupt old orthodoxy of working in silos.
Phases of Disruptions
Many organizations looking to build impact reports often do not start with impact strategy. Many nonprofits do not have any theory of change. Businesses have hardly heard of the theory of change If they have a theory of change they do not align with metrics or data collection processes. An organization looking to scale social impact, we believe that building an impact strategy shouldn't be complex and long. SoPact has launched an innovative impact strategy that reduces impact strategy creation burden. This cloud-based application is available to anyone free. While we believe this innovative application will reduce a barrier to build impact strategy, it is critical to work with an experienced impact strategy that can guide you to build the most effective strategy.
Experienced impact practitioners will typically start by using out-of-box, practitioner designed impact strategy and configure impact strategy for each organization. This approach can reduce the time by building two impact frameworks
- Theory of change (TOC)
- Impact Management Project (IMP)
Next, you will align TOC and IMP with standard-based metrics or custom metrics. The final step will be to align organization outcomes with key indicators or SDG Goals and Targets.
Building Data Capacity
We believe social businesses will hold keys to the new economy, they will need tremendous support