COMMENTARY

Peter Burgess

Impact Forum 2012: Measuring Success: How to know when you are making an impact? part 4/6

This panel elaborates on tools and approaches to measuring change and impact. It discusses how to define metrics for social impact across different investment approaches and how to maximize impact by increasing transparency and accountability in your investments. The session is led by Prof. Durreen Shahnaz and joined by panelists Sanjay Sinha of M-Cril, Fabio Malanchini of Impact Finance Management, Laura Callanan of McKinsey, and Jeremy Nicholls of the SROI Network.

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English (Automatic Captions) 0:00and then lastly the idea that risk 0:03you know you can have crazy wild risky go gambling 0:06or you can take risk that's based on some information and some 0:10experience we think that intelligent risk-taking is very important and is 0:14again 0:15good characteristic a learning culture so just 0:19to close as I said we did a year long project and social impact assessment we 0:23developed a lot of materials that we hope will be 0:25useful to you the address for our website 0:29where you can find all these tools and download or 0:33fine electronic version of our report is it SSO 0:36which stands for social sector office SSO dot mckinsey dot com backslash 0:40social impact we created a database 0:43the tools and resources for assessing social impact the Tracy database 0:48has a 150 tools methods and best practices 0:51it's available through our website or with our partner organization the 0:55Foundation Center 0:56the report as I mentioned can be downloaded from the website and 0:59hopefully you can take copies back with you today 1:02and then we developed interactive workbook 1:05which helps an organization developed an approach for social impact assessment 1:10and there's a beta version the workbook online now 1:14and a much better much more user friendly version will be available by 1:17the end of the summer 1:18thanks thanks a lot I'm holding on my comments everyone gets a chance to speak 1:24and then we will have the discussions a jammy who fail 1:29technology test ago 1:32thank you so much him apologizes awhile this morning when I didn't think I was 1:38going to make it 1:39with flights in one thing and another doing well know why that was 1:43so stressful me here 1:47that 1:50yep lakeside morning everybody 1:54on this is the base the day when we do the community singing 1:58okay this is the kind you're gonna sing along to John Lennon song 2:01imagine okay many might 2:06know perhaps not up but that's what I want you to 2:09to do this morning with me just a little bit is imagine imagine a couple things 2:13first thing I want you to imagine is your waking up tomorrow morning that is 2:17no more 2:18financial accounting its goal great 2:22actually there's no auditing either that's also go 2:26and what happens as we kinda stagger out of bed 2:29is that we decide we will have a world where we can have any number 2:33ways of doing financial accounting everybody can do that 2:37thing all the investors say while you can 2:41account to your financial results however you want we've got a few ideas 2:45here you get on with it do your own thing 2:48and you know what we won't ask anyone to check 2:52whether what you've done is reasonable not will just take your 2:55financial report fantastic world that would be 2:59way what 3:03do you think will happen morning investment markets 3:06if that was the case that 3:13is what would happen investment would fall 3:16of cake would be no just vanish 3:20BKS and yet that seems to me 3:24the world that we we live in thinking about 3:27social impact the world in which investors often say 3:31well %um can't feel social impact in the way that you think 3:35is appropriate your situation there are many ways 3:39doing this thing and somehow that's a good thing 3:44and I think it's absolutely not a good thing 3:47it's a disastrous thing the we were gonna flip ground is to imagine the 3:51scale investment 3:52that might be possible we could imagine a different world 3:56wolfgang this morning was all asking is that question which i think is a really 4:00important question about 4:02how is it so much what's happening that's market is going on here we are 4:06relatively small area 4:08lying about these things whereas most money is flowing around 4:12financial returns player up when it returns because that is that 4:16framework which allows us to account for a particular type 4:21itself financial is also of course 4:24part all type a socialite it is a value 4:27in our society and we should not forget but 4:31that's where all flows mime so 4:35its imagine a different 4:38tight world now as imagine world 4:41in which we have resolved debate this question 4:45and we have sorted out balance everyone's been talking about this 4:48balance between 4:50unity how do we have enough standardization 4:53we've now sort we can actually communicate with each other 4:57in a much more standard way despite the fact that 5:00obviously hugely different organization 5:03executed value all over the world 5:07I'm just stick with financial reporting second 5:10we use the same approach internationally matter the counter to the room 5:14I'm so we can have a big argument about the subtle differences in one thing and 5:17another 5:17broadly all over the world we use the same 5:20approach to accounting financial the same principles 5:24and the same friend so we have to imagine a world 5:28we have achieved the same thing and this and this was gonna need in that world 5:32and we need to compromise a little bit gonna get there is otherwise we're gonna 5:36be sitting there going 5:37I have the way I have the answer you not you don't have 5:41never gonna get ability to communicate and as we get over some 5:46so what we need well we do need some more consistency 5:50we need a lot more consistency them and given that you're all nerds 5:55beginning I'm sure you will understand the difference between having 5:59framework understanding what we should measure 6:03is different from allister tools about how we 6:06should measure I'm run into the problem all the time 6:10people saying the challenge we have is so many ways of doing this 6:13actually that's not the case are increasingly very few frameworks 6:17asking ourselves the question what should we measure 6:21and I think the principles that underpin that are becoming more standardized 6:26once you've decided what measure obviously you need 6:29to find some way how you should measure it 6:32and once we want you if you measuring the same thing it makes sense 6:36to use the same indicator providing you measuring 6:39the same thing in which case things like Rs 6:43a very very useful because they help us get some consistency some 6:47standardization 6:48about how we measure the same thing possible we have to get the 6:52the consistency around what it is that we are 6:56going to measure and as 6:59absolute said returns needs to be good enough the what was the price 7:02the rigor in re should be no more than that we do not 7:06needs to answer this question by getting a piece were 7:09we can bang out four-star Journal 7:13sorry I 7:17we don't need to spotters science level test 7:20truth financial accounting does not do that it is not a science 7:24is not follow that paradigm it's good enough 7:28to allow people to communicate financial results across the world 7:32and we need something that good enough and we should do the minimum necessary 7:36the minimum necessary in order to be able to account for this wider impact 7:41but it'd be hard enough as well because 7:45I see so many stories where people are not really a questions the questions I 7:48think underpaid 7:50what difference every med 7:53we and I just gotta pick out some what I think is any part to the hard enough 7:57we have to answer the question what would have happened anyway 8:01something would happen if we hadn't been the is an issue 8:04about a benchmarking a counterfactual 8:08this question that we like that before again we don't need to do randomized 8:12control trial 8:12time we cannot possibly achieve that but if we at the same time just go 8:16because we can't do that we want answer the question you don't think about 8:20question and we're not and we're gonna know were making 8:24a difference good enough level 8:27absolutely have to ask ourselves what happened anyway 8:30we absolutely I think have to differentiate between an organization 8:34being clear about its objectives 8:35and managing that which is absolutely great 8:38and recognizing that in soon objective 8:41you will change things all sorts of ways and some other 8:45nothing to do with your objective language you're here is unintended 8:50negative consequences but actually these a call 8:53it's just important we can account for impact we need to understand that what 8:57happens 8:58bigger wider just objectives 9:01otherwise is bad stuff is happening the road to hell is paved with good 9:05intentions we have this morning again 9:07exactly because I want to do that and I do not look 9:10all the other stuff happens and the third one out flag up this week 9:14absolutely 9:14have to start of understanding by listening to the people whose lives 9:18up being affected by oil does misery and 9:22we should start with the constituent Voice stakeholders 9:26absolutely have to be the beginning why should we know in Ave 9:30look where we are you know what it's like was changed 9:34level somebody's life in very different circumstances 9:37it's dangerous to assume that we do so that kinda you know 9:41the good enough hard enough but the consistency that's all they want 9:45because will agree with that what's good enough for me 9:49or what's hot enough for you may not be for me 9:52and so that doesn't really help that's why we started 9:56Network membership body around such a return on investment as a membership 9:59organization 10:00so that we can resolve that bottom-up debate 10:04even get involved in this question and we say other 10:07is substandard is Asian so that we can agree that what is good enough 10:11actually something we have to start to share but it's hard enough 10:14something that we have to start share my job increasingly 10:18sitting in the middle of the this is too easy group and attitude 10:23and trying to get a balance we started idea 10:26what we actually me and that is what financial accounting achieved 10:29several hundred in at it is achieved 10:32community which is shared view what is good enough 10:36and what is hard enough not be able to communicate financial 10:40and if we can achieve the same where we are going to have to comply it 10:44then I think we can get to a language where we can seriously stop understand 10:47the social value the social impact we're having 10:51we started a network around that the other piece I think we put into this is 10:54I'm gonna have have it set aside for you to take notes this point 10:58that in our database open this up to everybody in the world 11:02wiki Voice where voiced antibodies outcomes indicators for stakeholders 11:07a voice the people if you want where anyone in the world can 11:11at that resource what they think that's a code 11:14their outcomes that indicated and their values 11:17and we can crowd source if you want this conversation about what good enough 11:20looks like 11:21at the same time as having these processes which are coming down from the 11:25top 11:26and just maybe if we can start to recognize that we have to achieve this 11:29week 11:30have to you know if not this isn't the kind used in the debate this is not the 11:34really innovative outside exciting 11:37inspiring kinda the 16-bit discussion that will happen 11:41but it's so important we get to this place where 11:45we actually can see that we live in a world 11:48where most investment flows into those activities 11:51actually are pledging more social impact and not 11:55raising the level about degradation social consequences the company saying 11:59I don't want to live in a world which isn't engaging with that 12:03thank you thank you Jamie 12:06have we had fantastic array 12:09love ideas here and I just want to do a quick check on time 12:14its five past well then 7 last 12:17the past 12 have I know we're we have gone over time but we started late 12:21so if dole record I love you to Arsenal Ange 12:25so I will keep you for 10 more minutes if you don't mind so 12:28there will be food day I am so I think justice to quickly 12:32just in one line to summarize it's very interesting how impact assessment is 12:36viewed by the different parties even just 12:39you know sitting here on this stage I mean Sun Jan upset 12:42impact assessment from lot from the investor's point if you when they're 12:46looking at investing 12:47right the looking at obviously large organizations what can impact to having 12:51lot built in mic finance in Albion fob you are you looking at different 12:55perspective from a portfolio 12:57and really requiring your portfolio companies to 13:01embrace impact assessment and Lori looking at obviously organizations 13:05how dare embracing impact assessment which is very important 13:09mean going back to the $10 trillion dollars that 13:12their wealthy have you an Asian that something they should be looking at 13:16and then obviously with the work that Germany's doing in terms of 13:20standardization so I think 13:23you know what I want us to pick up on is very Germany left off 13:26in terms of standardization and this is something that 13:29you know we deal with it in a day in day out 13:33which is bringing the common language and how 13:36can be done take this feel the impact investing 13:39to the mass you know I'm really struggled because 13:43obviously knowledge investors be work with their own high net worth 13:46individuals 13:47we would like to bring it to retail and you know to bring it to retail 13:52the mass has to care in a way that they understand 13:56you know what kind of investment they're getting into so what's your 13:59part in terms of how do we actually bring it from 14:03their you not to down here for people to actually understand for each one of us 14:08an individual level to be able to make an investment based on the impact 14:13you not having a fun not running a big organization but 14:17we need to going to that level of an individual son did you wanna 14:20give us some thoughts 14:26well what what you're talking about syrian-israeli a paradigm change 14:32its I believe it's starting to happen 14:36when we first launch term 14:40micro finance rating late nineteen nineties 14:45nobody had any idea what we were talking about 14:48you know where where at this thing come from 14:51we were well ahead of time and 14:54this is happening with a number of things that we've been doing 14:58the rating

Published on Jul 12, 2012

This panel elaborates on tools and approaches to measuring change and impact. It discusses how to define metrics for social impact across different investment approaches and how to maximize impact by increasing transparency and accountability in your investments. The session is led by Prof. Durreen Shahnaz and joined by panelists Sanjay Sinha of M-Cril, Fabio Malanchini of Impact Finance Management, Laura Callanan of McKinsey, and Jeremy Nicholls of the SROI Network. Category Nonprofits & Activism License Standard YouTube License