APS1015 Class 9: Managing for Social Impact

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APS 1015: Social Entrepreneurship Class 9: Managing for Social Impact Wednesday, July 3, 2013 1 Instructor: Norm Tasevski ([email protected]) Karim Harji ([email protected])

Transcript of APS1015 Class 9: Managing for Social Impact

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APS 1015: Social Entrepreneurship

Class 9: Managing for Social Impact Wednesday, July 3, 2013

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Instructor: Norm Tasevski ([email protected]) Karim Harji ([email protected])

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Agenda

•  Assignment review •  Managing for Social Impact •  Preparing your enterprise presentations •  Next Week

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Managing for Social Impact…

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Two Main Responsibilities as a Manager of a Social Enterprise…

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Achieving social goals

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Achieving financial goals

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Achieving Financial Goals

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Key Concepts •  Focus on your mission •  Know when to say “no” •  Build a business independent of yourself •  Test (prototype) often, and fail fast

The Market or the Mission? (Brinckenhoff)

•  The market is always right •  The market is not always right for you •  The mission should be your organization’s ultimate

goal

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Achieving Social Goals…

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Exercise: From Intentions to Impact

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When  did  you  volunteer?  

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Exercise: From Intentions to Impact

How do you know you made an impact?

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Impact vs Net Impact

Is your effort better than what would have happened anyways?

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Impact vs Net Impact

Is your effort better than what would have happened anyways?

NET IMPACT is what matters

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Achieving Social Goals !

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1.  Identify your social goals –  Theory of Change (defining your social value) –  Embed them within/across your operations

2.  Measure the social value created –  How do you measure your goals? –  Address the common challenges in measurement

3.  Communicate your impact –  Know what to say and who your audience is –  Be creative around your message

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Step 1: ID Your Social Goals !

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•  What Social Benefit are you creating?

•  How do you decide?

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Embedding “Social” across the Business Model

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Exercise: Balancing social & financial value

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+  

+  

-­‐  

-­‐  

$  

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Step 2: Measure the Social Value Created !

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Why Measure, and for Whom? •  Management

–  Performance management (meeting needs/objectives)

–  Organizational sustainability, attract new investment –  Demonstrate the value created by organization

•  Social Investors (inc. funders) –  Impact of grants, mission alignment –  Accountability measures –  Assess organization value, relate to risk/return (of

investment) •  Government Programs/Policy

–  Make the case for investment in organization/approach

–  Accountability measures

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Why is Measurement Important? !

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“Not everything that can be counted counts, and not everything that counts can be counted”

“You can’t manage what you can’t measure”

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Challenges in Measurement !

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•  Outputs vs. Outcomes •  Attribution vs. Contribution •  Qualitative vs. Quantitative •  Prove vs. Improve •  Rigour vs. feasibility

“Metrics and evaluation are to development programs as autopsies are to health care: too late

to help, intrusive, and often inconclusive.” (Trelsad)

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A Note on SROI!

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•  Discounted, monetized value of the social value that has been created, relative to the value of the investment.

•  Pioneered by Roberts Enterprise Development Fund (REDF) and Jed Emerson

•  Various uses for, and approaches to, SROI

•  Despite “hype” around SROI, it can be resource-intensive, and issues around feasibility, replication, reporting still remain.

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SROI Snapshot: TurnAround Couriers!

Avg  Change  in  Societal  Contribu3on    (Target  Employees):   $9,391

Average  Number  of  Target  Employees: 10

Current  Year  Cost  Savings  to  Society:   $93,910

Cumula3ve  Cost  Savings  (prior  to  Y5): $191,170

Total  Cost  Savings  to  Date: $285,080 Cumula3ve  Societal  Payback  Period: 1.8    years

Cumula3ve  SROI: 285%         Note:  ini3al  SCP  investment  =  $100,000  

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Overview  of  Target  Popula;on  (sample)  • 38%  recruited  directly  from  shelters  • 23%  female  • Average  age:  21  • 100%  unemployed  at  3me  of  hire  • 54%  receiving  social  assistance  at  hire  • 54%  been  involved  with  jus3ce  system  • 54%  did  not  complete  high  school  

 

Employment  Outcomes  (sample)  • Increased  target/non-­‐target  staff  ra3o  to  83%    • 69%  con3nue  to  work  at  TAC  (9)  • 15%  moved  onto  mainstream  employment  in  window  cleaning  industry  (2)  

• 8%  went  on  to  post  secondary  educa3on  (1)  

Sustainable  Livelihood  Outcomes  (sample)  • 89    youth  in  total  have  been  hired  over  5  years  

• 100%  target  popula3on  recruited  from  shelters  able  to  get  out  of  shelter  system  and  secure  independent  housing  within  6  months  of  employment  at  TAC  

• 85%  who  relied  on  income  support  through  social  assistance  at  3me  of  hire  able  to  get  off  and  stay  off    

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Acumen Fund: social performance measurement in the investment process!•  Due Diligence

–  Literature review: state of practice

–  Estimate # of people served over the life of the investment

–  Assess how delivery of those “outputs” compare (more or less favorably) to the “best alternative charitable option”

•  During Deal Structuring –  Conversations on how to think about performance management

over the life of the investment, not just “mandatory reports”

•  Post-Investment –  Quarterly reporting – performance, capacity, strengths/weaknesses

–  Semi-annual “forced ranking” across portfolio against investment criteria - financial sustainability, social impact at scale, breakthrough insights, and high-quality leadership - as well as actual performance to date and the investment’s potential for impact in the future

•  Closed Investments –  Short “exit memo” looking at results generated, financial return, and

lessons learned

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Simple Measures for Social Enterprise: Lessons from the Acumen Fund!

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•  Culture matters far more than systems –  Tolerance for / learning from failure

•  If you build systems, start with a pencil and paper –  Start simple; technology is an enabler not the solution

•  Think on the margin –  Performance is always relative to what you had been doing

before (past), to what your competition did over the same time period (peers), and to what you should have done (projections)

•  Count outputs and then worry about outcomes –  “the conclusions you can draw from these outputs may not be

made with scientific rigor, but they can inform businesslike decisions and raise important policy questions”

•  Don’t confuse information with judgment –  Balance qualitative and quantitative –  Use informed judgment, hold oneself accountable (to them)

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Step 3: Communicating Your Social Impact!

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How?

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Break

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Your Investment Pitches…

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Elements Important to the “Social Investor”

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•  Overview and mission •  Management and

Advisors •  Problem

–  social issue being addressed

•  Size of the problem –  how big is the social issue

•  Solution –  Here’s how it works…

•  Value proposition –  Inc. social benefit

•  Business model •  Competitive advantage •  Collaboration/

partnerships •  Marketing and Sales •  Financial projections •  Financial requirements

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An Example…

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