Impact is now high on the agenda for Third Sector organisations. But how do we ensure that a concern with impact drives real changes in the way that organisations work and the benefits they deliver, rather than just being about measurement and accountability?

Impetus-PEF, in their recent paper Building the Capacity for Impact, argue that Impact Readiness is not just measuring impact but about building organisations that can reliably produce these impacts. This is important, as it means looking at the whole organisation and how it functions, and not just at the products or services they deliver. 

We need to link the success of social purpose organisations to their success in delivering positive outcomes for the people they serve. As the Impetus-PEF report notes, "the ability to generate revenue should depend on consistently delivering positive outcomes" (emphasis mine).

In my conversations with sector leaders I am struck by how little accountability there is amongst UK charities and social enterprises to the people who use (and hopefully benefit) from the services on offer. Of course, accountability to commissioners or investors in reporting on impact is intended to ensure that organisations are effective in meeting needs.  But this type of feedback is indirect, and may not drive the day-to-day details that can make a big difference. For example, I recently heard about one social care team UK that had always assumed that families needed respite breaks, when their disabled children stay away from home for a period. Uptake and satisfaction was good. But when these same families were given control over their budgets, parents mostly chose to spend the money on iPads, which provided for “daily respite”, allowing parents to get on with their day to day tasks. 

This resonates with the concept of customer centricity now popular in the business world, where as the saying goes the “customer is king”. In the market, there is a very direct relationship between the revenue of a company and its ability to deliver what its customers want – if customers don't get value they simply stop buying the product or service. That said, it’s also true what a customer will buy is not necessarily the same thing as what they need (just think of alcohol, tobacco or payday loans). So if we (as social entrepreneurs) are concerned with impact, we need to think beyond the market. 

In our recent book, The Business of Doing GoodKatherine Knotts and I explore how a social enterprise needs to build its organisational systems to ensure that it delivers on its good intentions. Yes – this means getting the products and services right (meeting needs as well as wants); yes – this means reporting externally on outcomes to our stakeholders, whoever they might be. But in between these are the internal workings of the organisation that deserves serious consideration in the discussion on organisational effectiveness. 

Often in my work I see a reality gap between what an organisation says it does and what front-line staff deliver on the ground. This is in part about managing what matters – being clear what is important for delivering impact and motivating and managing staff to make sure this happens. It is also about ensuring meaningful accountability to clients. For this to happen, a strong connection with customers is essential. This means engaging to understand the client perspective on our services and not just collecting outcomes information. 

Bottom line: external accountability is important, but ultimately I feel we should work towards a world where it is the clients who ultimately judge the value of the work of a social enterprise or charity. 

- Anton Simanowitz