Building an impact strategy involves various starting points, such as identifying stakeholders and gathering insights on key issues or projects. An impact strategy is not only the right thing to do, but it also benefits the business. This article explores how to get started on this essential journey.
An impact strategy is planning and measuring positive social or environmental changes resulting from an organization’s work and actions. Whether a company has a social purpose or is a traditional for-profit entity, an impact strategy enables channeling resources properly to generate positive change.
There are several compelling reasons for companies to adopt an impact strategy, with two significant ones being:
- Conscious Consumers: Consumers increasingly demand that brands generate positive social or environmental change, not focusing solely on generating profits.
- Business Competitiveness: Positive social impact has become a tremendous competitive edge for companies. Companies emphasizing social and environmental changes are expected to attract more investments and outperform competitors.
Developing an impact strategy is not a nice-to-have but a must for companies to grow, become more competitive, meet consumer priorities, and leave a positive legacy on the world.
How to Get Started with a Impact Strategy:
The critical question is, where do we begin to create an impact strategy? Here are two steps that may help you.
Ask foundational questions
Companies can contribute to many social and environmental causes to create positive change, like tackling climate change, hunger, and poverty.
We cannot solve all social issues simultaneously, so it is essential to start by asking ourselves questions about our company and the environment surrounding us.
Most experts in impact strategies agree that the first step in building a strategy is to answer three foundational questions. These questions will clarify the strategy and allow to establish the company’s direction.
Who are we?
This question goes beyond defining the company in terms of what it does. The question must be answered by considering what causes matter to the organization or its founders and how these can be connected to the business model.
The impact strategy must connect with the vision and be consistent with the brand’s values. For this reason, it is vital to understand who we are.
What do we want to achieve with the impact strategy?
Unlike social responsibility programs, the impact strategy has to be embedded in the company’s general plan. For this reason, we must ask ourselves what we want to achieve and what kind of social or environmental change we intend to accomplish.
We must clearly understand the issues surrounding our company, industry, and society in general to determine the objective of our impact strategy.
Being clear about what we want to achieve will help us channel the necessary resources and find the right allies to reach our goals.
How are we going to achieve and demonstrate our impact?
Every strategy needs to be clear about the how, that is, the operational and tactical part. Several methodologies, such as the Theory of Change or the Logic Model, can help us define how the impact strategy will be executed.
In this section, it is essential to be clear about how the company’s staff and other key stakeholders will get involved and define how the impact generated by our actions will be measured.
Research and choose a Framework for Your Impact Strategy
Many frameworks guide and help companies to define and execute an impact strategy correctly.
Some of the most recommended and well-known are the Global Reporting Initiative (GRI) and Benefit Corporation (B-Corps).
Frameworks are handy for measuring and communicating the impact of the strategy. For this reason, it is advisable to analyze several frameworks and determine which one best suits the structure, resources, and type of impact you want to achieve.
Studying the different types of frameworks and how other companies apply them is a good starting point to build your impact strategy.
Case: Gibson
Gibson is a well-known name in the music industry. For more than 125 years, the company has manufactured the highest-quality guitars.
The company has also implemented an impact strategy to create, develop, and support music initiatives.
Gibson’s impact strategy is fully aligned with its business model since, for example, they have made alliances with organizations such as the Change Foundation. Through this alliance, they have supported 15 music programs in 11 countries.
Incorporating an impact strategy allows companies to better connect with current consumer trends, increase competitiveness, and attract investors and partners. The most critical aspect is to keep the plan authentic, genuinely aiming for a positive impact that aligns with the organization’s values, vision, and business model.