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Students will learn about some of the key management challenges involved in running a social enterprise. Concepts to be covered include goal-setting and target-setting, identifying and measuring key metrics (both financial and social) and leading and inspiring a team. This class will also feature a “live case” with a guest social entrepreneur.
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APS 1015: Social Entrepreneurship
Class 10: Managing for Social Impact
Monday November 11th, 2013
Instructor:Norm Tasevski (norm@socialentrepreneurship.ca) Assaf Weisz (assaf@socialentrepreneurship.ca)
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© Norm Tasevski & Karim Harji
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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© Norm Tasevski & Karim Harji
Two Main Responsibilities as a Manager of a Social Enterprise…
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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© Norm Tasevski & Karim Harji
Exercise: From Intentions to Impact
When did you volunteer?
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© Norm Tasevski & Karim Harji
Exercise: From Intentions to Impact
How do you know you made an impact?
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© Norm Tasevski & Karim Harji
Impact vs Net Impact
Is your effort better than what would have happened anyways?
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© Norm Tasevski & Karim Harji
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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© Norm Tasevski & Karim Harji
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.
© Norm Tasevski & Karim Harji
SROI Snapshot: TurnAround Couriers
Avg Change in Societal Contribution (Target Employees): $9,391
Average Number of Target Employees: 10
Current Year Cost Savings to Society: $93,910
Cumulative Cost Savings (prior to Y5): $191,170
Total Cost Savings to Date: $285,080
Cumulative Societal Payback Period: 1.8 years
Cumulative SROI: 285%
Note: initial SCP investment = $100,000
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Overview of Target Population (sample)• 38% recruited directly from shelters• 23% female• Average age: 21• 100% unemployed at time of hire• 54% receiving social assistance at hire• 54% been involved with justice system• 54% did not complete high school
Employment Outcomes (sample)• Increased target/non-target staff ratio to 83% • 69% continue to work at TAC (9)• 15% moved onto mainstream employment in
window cleaning industry (2)• 8% went on to post secondary education (1)
Sustainable Livelihood Outcomes (sample)• 89 youth in total have been hired over 5
years• 100% target population 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 time of hire able to get off and stay off
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© Norm Tasevski & Karim Harji
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
• 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”• 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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