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The power of outcome measurement for impact-driven businesses

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In this article we take a look at the powerful benefits that outcome measurement can have for impact-driven businesses and outline some of the key steps that companies should follow when looking to track and measure the positive change they bring about through their products, services or way of doing business.

Why should businesses track and measure outcomes?

Outcomes are a powerful means for organisations to demonstrate the tangible effects of their efforts and evidence their positive impact; the inclusion of outcome metrics in communications outputs better enables companies to showcase the real-world impact they are having for their customers, their employees and/or the communities where they operate. However, when done well, outcome measurement not only results in better storytelling, it also serves as proof of concept and provides valuable insight that can drive further innovation over time.

So, what do we actually mean by “outcomes”?

The short answer is that outcomes are observable and measurable changes that have occurred as a result of something a business offers or does, for example a specific product or service they deliver for their customers, or a programme or initiative they deliver for their employees. 

Importantly, when we talk about outcomes, a fundamental distinction that needs to be highlighted is how they are different from outputs. Put simply, outputs relate to the numbers your business churns out, e.g. the number of a certain product you have sold, the number of times a service you offer was used or the number of individuals that were touched by a certain campaign. Outcomes on the other hand are all about the bigger picture, they are the actual changes happening because of what you’re putting out; it’s less about what you’re doing, and more about what’s happening as a result of what you’re doing. Often outcomes demonstrate there have been changes in the way people feel, what they understand about something; longer-term outcomes often show there has been a behaviour or attitude change, or even an improvement to quality of life. 

Notably, outcome measurement has its roots deep in the non-profit sector where demonstrating changes brought about in the lives’ of beneficiaries is often key to unlocking further funding. It is unsurprising then that on the for-profit side of things we typically see businesses limiting the use of outcome measurement and reporting to their corporate philanthropy initiatives, charitable partnerships and CSR programmes. However, when businesses truly bake positive impact into the way they operate, then outcomes should be both identifiable and measurable at the operational and business model levels too.

What does outcome tracking and measurement look like in practice?

One great example of a company engaging in quality outcome measurement, and using it as a means to effectively differentiate their brand, is the B Corp NEOM. In ‘the NEOM trials’ the company carried out four independent blind studies on 100 volunteers, each focused on one of the brand’s wellbeing routines which centre on essential oils, candles and bath and body care. Outcomes identified include 87% of study participants feeling happier while using NEOM’s ‘Scent to Make You Happy’ routine, and 91% feeling more relaxed after using their ‘Real Luxury’ routine. 

Pukka Herbs are another example of a consumer brand tracking the wellbeing outcomes of their products; they carried out a survey of 527 UK Instagram followers and found that 98% of respondents felt Pukka supports their health and wellbeing (read more in their 2022 impact report here). 

Identifying areas of your business where outcome measurement could apply

When setting out to define the outcomes you wish to track, the primary question to ask is ‘what area of our business has been intentionally set up to create a positive impact?’. For many companies this will be the impact created by your products or service lines, for others it might be how you treat your employees or support the local community. For B Corps, the aspect of your business where outcome measurement is most appropriate will be any area where you have been awarded an Impact Business Model (IBM). 

Using Theory of Change thinking to define your outcomes

So once you have identified the area of the business where outcome tracking and measurement is most relevant, best practice is to identify and define the outcomes you want to track using a Theory of Change (TOC). In short, a TOC is a strategic tool that serves as both a comprehensive explanation and a roadmap of why and how a desired change/impact will occur; a TOC applies logic to forecast what outcomes will emerge from specific inputs and outputs. 

Notably, when developing a TOC, it’s crucial to acknowledge and address any assumptions you’re making, as they can have a big impact on whether your theory holds up in the real world. For example, are you making assumptions about the way a certain customer group behaves, or what they want? Yet, to an extent making assumptions is unavoidable, so ensuring they are backed up with research, stakeholder insights and/or rooted in lived experience is a good way to go. 

For a great example of big, bold thinking when it comes to outcomes, take a look at North Star Coffee Roaster’s TOC here; we can see clearly defined longer-term outcomes the company is working towards, such as ‘increased consumer demand for quality, impact-led coffee’. The company then uses carefully selected indicators to report on progress towards their defined outcomes each year in their impact report, for example the % increase in the number of sales on their online shop as an indication of demand.

Carefully selecting the indicators you will use to track your outcomes

Despite the value that outcome measurement offers to impact-led businesses, the overarching tendency we see is for impact monitoring and reporting to centre mostly on inputs and outputs. In part, this might be due to a belief that measuring outcomes is time and resource intensive as it can involve lengthy data collection methods such as focus groups. However, this doesn’t have to be the case as social media features like polls and feedback surveys can be used to gather outcome-focused insights from your audience quickly and efficiently. 

What’s key to effective outcome tracking is ensuring you have identified specific and measurable indicators that directly reflect the intended change or impact outlined in your theory of change; using a combination of both quantitative and qualitative measures will ultimately help you to understand and demonstrate how you are progressing towards your defined outcomes. 

Closing thoughts

It is clear that defining and tracking outcomes has a valuable role to play in evidencing positive impact. By distinguishing outcomes from outputs and employing theory of change thinking, businesses can strategically track and measure the real-world changes they bring about, tell better stories and differentiate their brand or product more effectively.

If you are interested in learning more about how Greenheart can support your organisation with the definition, tracking and reporting of outcomes, or developing a theory of change, then please reach out for a chat with one of the team: contact@greenheartbusiness.com 

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