Explore The Five Dimensions Of Impact

How Much

How significant are the outcomes delivered by enterprises — across scale, depth and duration? We take a deep dive into the impact data categories under the ‘How Much dimension to answer this question.

The ‘How Much’ dimension covers the significance of the outcome — across scale, depth, and duration. This page provides guidance on the ‘How Much’ data categories that enterprises and investors can use to collect, assess and report on the significance of the outcomes experienced by stakeholders. If you are unfamiliar with the impact dimensions (and their respective data categories), we recommend first visiting the short section What is Impact.

Introduction: The ‘How much’ dimension of impact

The data categories under the ‘How Much’ impact dimension help enterprises and investors understand the significance of the outcome across scale, depth and duration.

How significant is the outcome experienced by stakeholders? 

Knowing the number of lives touched (i.e. scale) is only one part of the equation. To fully understand the significance of the outcomes experienced by stakeholders, enterprises and investors need to consider all three data categories under the ‘How much’ impact dimension:

  • Scale: the number of people experiencing the outcome
  • Depth: the degree of change experienced by the stakeholder
  • Duration: the time period for which the stakeholder experiences the outcome

Collecting data across the ‘How Much’ categories provides complementary insights. Consider a solar energy company with operations in three East African countries. Reporting that 500,000 solar home systems have been distributed, reaching 450,000 households, gives some insight into the magnitude of the outcome; however, it does not reveal whether the solar home systems improved customers’ productivity — and for how long those improvements lasted. Conversely, knowing that customers’ productivity increased by 20% provides meaningful information about the degree of change that target stakeholders experience. But without scale and duration data to back the depth results, the enterprise is missing two important points for understanding and improving its impact performance.

In an ideal scenario, enterprises would generate important positive outcomes that affect many people, bring deep change, and last for a long time. But none of these significance drivers is necessarily more important than the other. Some enterprises and investors will prioritise a deep, enduring outcome for relatively fewer people, over a more marginal outcome for many – or vice versa. Others may see all drivers as equally important.

In the sections that follow, we distill the three ‘How Much’ categories, focusing on how each one plays a role in understanding the significance of an outcome and improving impact performance. 

What is the scale of an outcome?

Scale refers to the number of people experiencing the outcome. When the stakeholder is the planet, this category is not applicable.

The scale category captures the number of people — whether that is employees, customers or distributors — who experience the outcome. Scale data provides insights about the significance of an outcome delivered by an enterprise. All else equal, an enterprise that touches 100,000 lives would be producing a more ‘significant’ outcome than one that reaches 50,000 lives.

While scale is widely used by enterprises and investors, this category alone is not enough to understand the significance of an outcome. For example, only knowing that a multinational company has reached 20,000 people through its CSR fails to reveal whether the initiatives have actually improved lives. Alongside scale, enterprises and investors need to consider depth and duration (covered in the next sections).

Beyond serving as one of the elements to understand the significance of the outcome, scale can be used for two strategic purposes:

  • (Re)setting scale targets: Comparing scale performance data against specific targets and the addressable population can yield useful information for (re)setting scale targets.
  • Understanding the value proposition: Comparing scale performance year-on-year can provide insights into whether customers (or other stakeholders) are satisfied with the enterprise’s products (or policies). This is the same as calculating customer growth and churn rate.

Accounting for scale is fairly straightforward. Depending on the type of stakeholder and business activity, enterprises can use sales data, registration forms or patient records, among other data sources, to assess the scale of an outcome.

What is the depth of an outcome?

Depth is an analysis of the degree of social or environmental change experienced by the stakeholder.

The depth of an outcome captures the degree of social or environmental change experienced by the stakeholder. As opposed to scale, available as raw data, depth is derived from comparing the level of outcome that stakeholders are currently experiencing against the baseline. Depth can be a 10-point improvement in test scores, a 30% increase in salary, or a 5,000-tonne reduction of CO2 emissions. The diagram below illustrates the concept behind the depth of an outcome.

Along with scale and duration, the depth category is an essential data point for understanding the significance of an outcome, providing an insight into whether the lives of people or the environment improved (or deteriorated).

Enterprises and investors can also leverage the depth category in combination with other categories such as:

Dream a Dream: Using depth, socio-demographic data and stakeholder feedback to improve outcomes

 

Social enterprise Dream a Dream equips disadvantaged young people with the knowledge, attitude and skills to thrive in life.

 

Motivated to improve its impact performance on the thousands of young people it engages every year, the Indian-based organisation developed the Dream Life Skills Assessment (DLSA), a framework for understanding the depth of the outcome experienced by each participant. DLSA covered five core skills: self-initiative, communication, problem-solving, conflict resolution, and following instructions. To make the framework operational, Dream a Dream collected baseline data on 1,000 individuals to act as benchmarks against future performance.

 

A few months into using the assessment, the enterprise discovered that 20% of participants in one school were showing no signs of improvement in any of the five skills. To uncover the ‘why’, Dream a Dream dug into the socio-demographic data, which showed that the school was located in a slum which catered to a specific minority group. The organisation then spoke to the school’s senior staff who revealed that, due to the culture of the community, these young people had rarely ventured beyond their neighbourhood. This finding was particularly meaningful as it seemed to get at the root of the problem: life skills are most effectively improved when applied in an external environment.

 

On the basis of these findings, Dream a Dream negotiated with the school and community to design an additional programme to help these students get exposure to and apply the lessons in an external environment. These insights were also fed back to Dream a Dream’s programmatic planning, in order to more effectively target and deliver outcomes to minority and severely underserved groups. 

Calculating depth

Since depth is the difference between the outcome in current period and the baseline, it can be calculated as relative change or absolute change. No one type analysis is better the other. Both should be assessed as they provide complementary data points (see diagram below for a simple illustrative example). For guidance on selecting indicators for depth, visit the outcome and baseline categories.  

Relevant Resources

What is the duration of an outcome?

Duration refers to the time period for which the stakeholder experiences the outcome.

The duration of an outcome is intuitively important: just as stakeholders want positive outcomes to be long-lasting, they want negative outcomes to be short-lived. Society’s collective investment in education illustrates the point. Parents invest significant resources in educating their children under the assumption that the payoff will be positive and last for many years to come — a belief backed by World Bank research which shows that every additional year of schooling returns a 9% increase in hourly wages.

Given the value of duration from the perspective of the stakeholder — and that impact may be realised over time —, this data category serves as the final piece for understanding the significance of an outcome. It pushes enterprises and investors to think about sustainability, reflecting on how their activities can affect stakeholders in the short-, medium- and long-term.

Yarra Valley Water: Quantifying human capital over time

 

As part of its commitment to ‘enable extraordinary performance’, Yarra Valley Water — Melbourne’s largest retail water utility — invests heavily in training and developing employees. The company recognises that these human capital investments are not only relevant to its operations, but also to employees’ future earning potential and the local community, now and over time. With a view to maximise the returns on human capital investments, Yarra Valley Water set out to monetise the value that employees carry forward into society once they leave the organisation.

 

Using salaries and increments as proxies for employees’ skills and development, Yarra Valley Water calculated the flow of benefits to employees from hiring to retirement, based on assumptions around future salary growth rates for different types of employees. To estimate future benefits, the model accounted for the changes in present value of employees’ income in current financial year until retirement year.  

 

This process enabled the company to report $114M in human capital creation and $7.7M in human capital externalities, with an average value of $0.21M per employee. While acknowledging the limitations of the model, the organisation has used the results to create internal benchmarks, manage attrition, and communicate its human capital return on investment to society.

 

Source: Yarra Valley Water, Integrated Profit and Loss (IP&L) Report (2017)

Calculating duration

In estimating the duration of an outcome, three facts shape the process. First, outcomes have different durations. Some may last only a few months, whereas others may persist for years (as with the education example above). Second, outcomes may materialise immediately, or in the medium- and long-term. Third, many outcomes go beyond the end of the intervention. This means that the affected stakeholder may still experience the outcome even after the enterprise stops its initiative (or policy). The diagram below illustrates the concept behind the duration of an outcome. 

Deriving a duration estimate can be done through a few methods, with varying degrees of rigour. On one end of the spectrum, enterprises can survey the affected stakeholder on a recurring basis, from the start until the end of the intervention (or for even longer periods). While this method usually yields accurate duration estimates, it can be cost-prohibitive for many organisations.

On the other end of the spectrum, enterprises can use evidence-based research (e.g. impact evaluations) or market research (e.g. government or think tank reports) to estimate how long a particular outcome may last. When using either of these methods, enterprises should assess the validity of the estimate by considering how well the research study reflects their own intervention (e.g. was the study conducted in the same country or in a completely different setting? Did the evaluated intervention have a similar set of inputs or target a similar population?).