Working cAPITAL INNOVATION FUND
Stories & Metrics
Investee Impact Management and Measurement Journeys
Over the last year, the developmental evaluation (DE) team worked with four investees – Provenance, QuizRR, Ulula, and OpenSC – to support their impact measurement and management (IMM) activities. All investees have been forced to confront the challenges of the pandemic context, which has presented both opportunities and constraints to IMM. In this article, we are sharing selected insights and implications related to their IMM approaches, journeys, and learning along the way.
Investees describing and evolving their understanding of impact
Over the past year, investees have adopted different strategies to describe and evolve their understanding of impact. In some cases, this has been a response to the pandemic context, as they needed to shift their priorities or resources. In other cases, it represents a progressive evolution of their venture as they further develop their solutions, businesses, and capabilities.
We describe three ways we observed this occurring:
Clarifying Impact Pathways —
Some investees spent additional time to clarify their impact goals, and revisit the ways in which they are influenced by their (changing) internal and external context. This built on earlier efforts using a Theory of Change (ToC) process to surface relevant questions on impact goals, assumptions, and context on how their solutions could lead to desired changes. For example, with Provenance, there was a shift in focus from SMEs to large corporates.
Deeper Exploration —
The pandemic forced investees to not only find operational efficiencies, but also to review which impact considerations may (now) be most significant. The shift to fully virtual engagement required alternative means to communicate with workers and/or clients. As well, the pandemic is providing early signals that clients and funders may be interested in probing further into questions that relate to worker wellbeing; for example, Ulula has been able to integrate additional indicators and baseline data for new proposals
Organizational Integration —
Some investees more deliberately integrated impact considerations and IMM practices across various parts of their teams, solutions, or operations. Integration is important from both a process perspective – to ensure reinforcing activities across the different functions – and a cultural perspective – to encourage a shared commitment across the various team members. For example, QuizRR’s IMM approach is being refined across various teams including management, sales, and product development.
Impact measurement and management journey and practices
All investees have further refined their ToCs, particularly in clarifying their intended impact, and how their activities connect to their expected impact. All investees have some current measurement processes in place to collect and analyse data. However, they are also often constrained in their ability to conduct systematic outcome assessment, and at this stage are usually only able to share specific anecdotes and examples, which are not yet sufficiently robust to be generalizable. Overall, it is encouraging to observe investees approach the ToC and impact measurement development process with enthusiasm, consider it as an important aspect of their work, gain confidence in their practice, and see it as a useful tool.
Other examples of IMM practice development we observed across the investees included:
- Impact considerations are emphasized across multiple areas (product, mission, culture, etc)
- The relationship between product-market fit and impact is regularly revisited, challenged, and evidenced
- Processes to develop, challenge, and refine how impact considerations show up in strategy and operations
- Consistent processes in place to collect and/or analyse multiple data points and test assumptions
Leaders who have displayed a strong personal commitment to advancing this work internally, as well as externally. Perhaps one of the few silver linings from the pandemic context is that there is seemingly more societal attention being paid to the plight of vulnerable and frontline workers. This is driving more mainstream attention and demand for investees to report on impact and investees are being asked by existing and potential investors for impact reporting.
Even in normal times, measuring and demonstrating impact is a challenging endeavour for the best resourced teams. The investees have limited resources for IMM and have to manage competing demands on their available time. As investees have become more aware of what it takes to achieve and measure impact, they realise that demonstrating impact is a significant challenge, particularly when their contribution is indirect and complex and/or it takes a long time for the impact to occur.
Acknowledging investee IMM journeys
For early-stage ventures, the IMM journey is similar to the broader start-up journey – constrained by time, resources, and attention. Assessing investee readiness to go further or faster on IMM remains both an art and a science, as there is no ‘recipe book’ yet for what good looks like or what it takes to get there. What we’ve observed is that when investees are clear that impact considerations matter, they find ways to pay attention to them – but it varies between proactive vs reactive, discrete vs integrated, foreground vs background, etc.
This is why we are encouraged to see positive signs of how investees continue to make both tangible and intangible shifts in how they are clarifying, deepening, and integrating impact considerations. There is greater chance of success when impetus comes from senior leadership, when it is deliberately embedded across multiple functions, and where there are processes and time for team members to discuss and implement in a way that is meaningful to them personally, and aligned with the investee mission.