Study points out impact paths to a social enterprise

The management of actions in search of an impact assessment is pertinent when dealing with social enterprises. That is why the study by Juliana Rodrigues (doctoral student at FGV EAESP) and Aurélia Adriana de Melo (professor at Faculdade Dom Bosco) published in the GV-executivo magazine of the School of Business Administration of São Paulo (FGV EAESP) aims to discuss the evaluation of social impact as a way to improve management in social enterprises.

In this context, there are many movements that influence the development and strengthening of social entrepreneurship in Brazil. In order to deal with the complexity of the subject, the path chosen for the analysis of the leading indicators (leading indicators) and the result (lagging indicators) is the impact, either through the evaluation or management of actions, based on the theory of change.

“You can't manage what you don't evaluate, you can't evaluate what you don't define, you can't define what you don't understand, there's no success in what you don't manage”. Based on Edwards Deming, a statistician and one of the main references in quality management, the authors highlight what is essential in the process of understanding social impact assessment.

Scope

The beginning of the process is formed by the scope, it can be well defined and related to the core activities when the definition of impact is narrow and intentional. The next issue involves deciding which range of impact to assess: in the short and medium term (outcomes) or in the long term (impact). Next, it is worth observing what makes sense to evaluate considering the stage of development/maturity of the business. Finally, it is up to choose between customized or standardized evaluation approaches and the indicators, quantitative, qualitative or mixed

Path

The way to achieve a social enterprise, based on positive impact, has as its motto the theory of change, which accompanies and manages the process. The components of the theory are:

• Inputs
  Required Resources
• Activities
  Strategies implemented
• Outputs
  Immediate products of activities
• Outcames
  Short or medium term results

Impact

According to the researchers, when the theory of change is adopted as a guide for management and impact assessment, it is recommended to define key indicators for each of the elements, organized in stages.

Indicators

It is difficult to pinpoint a single indicator for the assessment. One possible way of classification is to organize it into two categories:

• Result indicators (lagging)
  They can also be called occurrence indicators, they offer a reading of the current state of what is evaluated, as a result of past actions.
• Leading Indicators
  Or leading indicators are those that can drive expected performance and should be monitored more frequently.

The focus presented in the study is to incorporate the notion of direction and result indicators in the impact evaluation process, so that it becomes a mechanism and management. “The aim is thus to balance the perspective of processes – with a greater focus on efficiency, effectiveness and follow-up of the implementation of the plan of activities – and that of results, with a focus on long-term social transformation”, said Juliana and Aurélia. 

possible paths

It is extremely important, in addition to the long-term follow-up of impact businesses, that short to medium-term results are also achieved. Thus, the more complex mechanisms adopt outcome indicators based on the theory of change.

“As much as these process indicators do not replace the impact assessment itself, once thought out and structured based on a theory of change built in a robust way, they can be used both for management and for the relationship and communication with the strategic actors”, concluded the authors.

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