Someone recently asked me:
“What is the difference between ‘Impact’ and ‘Social Impact’?”
I thought it was a great question!
There are many literal and theoretical definitions for both. Here’s my interpretation and why I think they both are valid and necessary for business.
What is Impact?
Impact in one sense means ‘having a marked effect or influence’ on someone or something. If you already are part of our Future-Proofers community, you probably want to make a difference in the world and touch other people’s lives through your business. You want to be seen, to be heard, and you want to make a difference – or to make a ‘dent in the universe’ as the founder of Apple once famously said.
The truth is that we make an impact whether we are aware of it or not. We tend to measure impact by how we feel, rather than by measuring it scientifically or financially. So, ‘impact’ is almost an intangible aim or objective, usually associated with positive effects.
“The problem arises when we fail to understand and measure the negative impacts. These are created by us collectively through businesses, organisations, and governments because of the focus on pure shareholder value and short-term return on investment.”
What is Social Impact?
Social impact looks at the societal, economic and environmental impact of our businesses. It manages and measures the specific and intended effects as ‘outcomes’ over and above the generic impact we naturally make through our products and services.
When you adopt outcomes-based approach in your business you have clarity about the positive change you want to create in the world. You can also explain that change with data you have collected and tell the stories behind that data.
Social impact asks the question:
“What would happen if my business did NOT exist?”
So, in this sense it’s about the intentional and tangible impact that we want to create with our business. It can be demonstrated through intentional planning, stakeholder engagement and meaningful measurements that are shared; i.e., success as well as learning narratives and stories of lives changed.
Criminally good beer
Tap Social is an example of a UK-based business that makes and sells craft beer with a difference. It works with people recently released from prison to create training and employment opportunities. Having a job is proven to dramatically reduce reoffending rates by around 67%.
The outcomes in this case can be found both on personal and familial levels AND on systemic and economic levels. The ability to rebuild lives after prison with dignity and integrity, financial savings in the criminal justice system, and contributions to the wider society, including to GDB, all add up in social impact co-creation.
So how to decide between Impact and Social Impact?
For me it’s not an ‘either or’ kind of a question. It’s really about understanding the importance and relevance of both impact and social impact for us as humans in business and exploring the space and opportunities between them. Perhaps we can instead ask ourselves:
“What positive change would NOT happen if I didn’t dream bigger and took actions towards my vision now?”