If you can’t measure it, does it even exist?

Hands holding paperwork with figures and charts, while tapping a phonescreen

Khanya Okumu is a 2019-20 Oxford MBA candidate and participant on our co-curricular Impact Lab programme. She reflects on one of the Impact Lab Masterclasses taught in the autumn term, an ever growing and popular discussion  by social entrepreneurs, impact measurement.

For quite a while now, in the world of ‘impact’, there have been many opinions on whether impact can be measured. Even more contentious views exist on how it should be measured and if there is scope for these measurement metrics to be standardized. To address this specific topic, the Skoll Centre for Social Entrepreneurship hosted a masterclass on the ‘Theory of Change and Impact Accountability’ as part of its Impact Lab Masterclass speaker series.

In a room of 100 people, less than a quarter were confident to admit they know everything there is to know about impact measurement and have the requisite skills to implement impact measurement well. This created fertile soil for speakers Nick Andreou and Francesco Valente (MBA 2018-19 candidates) to plant some ideas on how impact measurement works and how it should be applied to different initiatives.

The ‘why’ for impact measurement is relatively clear, imagine being a business owner or manager who did not monitor income, expenses, employee productivity or customer satisfaction, you would have no idea whether the business should continue or if you should just close shop. In the same way then it makes sense for social impact projects, programmes and investments to monitor and measure whether they are adding value in the way intended.

It’s the ‘how’ for impact measurement where things start to get blurry, and this is where a theory of change becomes important.

The logical steps in a theory of change start off with a needs assessment which identifies specific inputs or activities. These activities when done well lead to a specific set of outputs and outcomes. The result, therefore, should be impact.

I resonated with the initial definition provided by Nick and Francesco on what impact measurement is, as I am an accountant by trade, they defined it as ‘data collection and analysis – the accounting of the impact world’.

In order to do any kind of impact measurement well, the metrics need to be focussed on programme design, delivery and effectiveness. The three approaches covered in the masterclass are outlined in the figure below:

Figure table:

Impact (heading)
born ~50 years, example of bespoke study, focus on internal & external, is both quantitative and qualitative, has a low or different comparability, low to high rigour and very precise measurement.

Accounting (heading)
born ~20 years, example of GRI, ISO 26000,IRIS+ and more examples, focus on internal/external, is quantitative, has a high comparability, medium rigour and medium precise measurement.

Finance (heading)
born <5 years, example of Impact Money Multiple, focus on external, is quantitative, has a high comparability, low rigour and least precise measurement.

What is clear is that because of the varying outcomes to be measured different measurement tools such as reports, proxies and triangulation can be used. The challenges in adding rigour to the tools are the increase in costs and additional time required. Many ‘impact-first’ programmes tend to rely on external funding, funding which is intended to implement not necessarily for monitoring and evaluation. This is an opportunity for a work-around in the way funding is currently allocated by funds, donors and project sponsors.

By the end of the session, one thing was clear to me: there is a better understanding overall of impact measurement within the impact sector. Furthermore, our impatience with how metrics and measures could be standardised will draw us closer to a world where the metrics and measures are used in a way that adds value to all stakeholders.

The session noted above was part of a curated series of masterclasses for the Skoll Centre for Social Entrepreneurship’s Impact Lab 2019-20 cohort. This session was run by Nick Andreou and Francesco Valente and co-created by MBA students Marvin Tarawally and Aupah Makoond.