Do we have any consensus on good practice tips for reporting inclusive business progress?
Do we know what good practice looks like for tracking results across inclusive businesses?
I've been reflecting on some of what has worked and what hasn't for programmes, organisations and funds that support portfolios of inclusive business. I've come up with a set of good practice reflections. I'd love to know what you think.
General good practice for developing a results framework for an investing or grant-making organisation
- Agree the Theory of Change first. Debate it. Choose indicators and build the results framework on that.
- Ensure a ‘golden thread’ links investment appraisal, indicators for portfolio reporting, management reporting and strategy.
- Work out how information will be used not just how it is collected.
- Ensure existing data is very well-used before collecting more.
- Recognise that investment is needed in design, first iteration, and running the system. Work out the budget and resource implications.
- Distinguish between performance management (are things on track, what needs to be changed) to impact evaluation (what are the results of our input?)
- Don’t just track the portfolio of grantees/investees, but track organisational performance and other activities too.
- Share your results framework, not just your results, for others to comment and understand.
- Get in the habit of sharing results across the team, partners and public, and reflecting on them, from early on, even when they seem too preliminary.
General good practice for tracking results across a portfolio of inclusive business investees/grantees:
- As much as possible, focus on data that is useful for the business
- But recognise some information is useful for investors not business and vice versa
- Limit universal indicators to very few, and give clear guidance so the data is comparable for aggregation
- Base other indicators on what is more relevant for the business
- Combine financial, operational and social indicators. Operational indicators are often best proxies for both financial and social at first.
- Identify the ‘last hard number’ that the business can report.
- Do a ‘baseline’ at the start, even if there is little hard data, so as to capture what is and isn’t known.
- Put reporting commitments in the contract: good will is no help when people get busy running their innovation. But then provide user guidance, not just legal language, on how to do it.
- Photos are great for baselines and periodic updates.
- Log and review assumptions that underpin metrics (e.g. % of products that are actually used/effective).
- Draw on evidence from elsewhere to generate assumptions and proxies, but be careful on how replicable the data is.
- Log and aggregate data as soon as it arrives, track trends, so as to spot issues
- Differentiate: Reporting to investors is different to reporting to funders. Reporting to funders is different to reporting for websites. Clarify your role.
- Don’t rely on paper and templates. Dialogue says more about progress.
- If counting numbers of people reached, specify what counts as one reach.
- Don’t just count numbers reached: who benefits, scale of benefit, and indirect dynamic affects can be hugely important.
- If your target beneficiaries are 'BoP' or low-income define what you mean, or say you don't have a definition.
- Distinguish between what can be reported by investees themselves, and what needs external assessment and extra funds to research.
- There are only a few things that can be meaningfully aggregated across social businesses, unless using high/medium/low, Red/amber/green, or other rankings.
- Flourishing, on track, progressing slowly, and stalled are useful categories.
- Explore combining a few indicators into an indicator or index of commercial viability, social impact, or organisational progress.
- Contribution can be assessed if you start early and accept the value of stories of change. Attribution is hugely difficult for an organisation/investor to claim.
Finally, I have found it important to recognise different kinds of businesses, when working out how much reporting on social impact can come directly from the business:
- Those that collect data on social impact as core to their USP (e.g. those providing credit to poor households, or accessing carbon credits)
- Those that use technology and have data but have not interrogated it – but can (e.g. PAYG energy providers)
- Those that don’t collect it but will find it useful when you help them (e.g. ZHL Ambulance service)
- Those for whom social performance data it’s not business critical and just a burden (e.g.a typical seed company)
- Those for whom even basic financial reporting is a struggle (e.g. CEO-led start-up without management team in place).
What have you found is good practice?
Blog on how ZHL found customer profiling useful
Discussion Paper: Tracking Reach to the BOP - highlighting the array of definitions of BoP