Q&A: How to have real social impact (and commercial success)

What is impact, and how does it relate to business?

Impact is a huge topic, but before you can talk about impact, you must first understand business. I’ve always said (perhaps provocatively!) that business has just two functions – to solve problems and to create value. Using this as a starting point, we can think about what impact might mean for business.

Value can be considered making profit – but there’s also value in how a business behaves, and the relationship it has with its staff, customers and clients. The unique power that businesses have in their ability to solve problems is an incredible force that can also be harnessed outside of the traditional business sphere.

Businesses have impact all the time; it’s inherent. It interacts with the physical, social and economic environments which surround it, whether you like it or not. So, any discussion around impact is basically about being conscious of what this effect is on all levels. You have to step back a bit and work out what those problems are, and what change you’d want to see if your problem solving were to be permanent.

Impact is about how you can harness your expertise at solving problems to solve bigger problems, without it diminishing what you do as a business.

There are some common frameworks that are used to talk about and start measuring impact:

• Social value is an agreed financial way of measuring positive impact and problem solving - often used in public sector procurement to quantify social effects.
• Corporate social responsibility (CSR) is a phrase that was used a lot more in the 90s to signpost any additionalities that a business was creating (such as support for charities or causes). It’s typically used in cause-led businesses as a ‘bolt on’ to their other activities.
• Environmental social governance (ESG) is about embedding values, culture and behaviour from top to bottom. Originally born from a risk management and compliance perspective, it’s since broadened its scope.
• B-Corp is a global accreditation, a sort of gold standard of responsible and ethical business. It’s typically a good indicator of a business because it requires participation from the entire staff, not just a single person.
• Purpose is a way for businesses to show that they exist to create change, rather than just support it.

What’s the biggest driver for businesses to talk about impact?

Brighton has always been home to exciting, impact-led businesses disrupting their sectors. But it’s fair to say that there has been more of a shift in the last five years away from “How do we look like we care?” towards “How can we do this better?”

There are two main reasons behind this. Firstly, it’s the right thing to do, and secondly, a tipping point is fast approaching. Soon, there won’t be any option other than to be more conscious of impact – both due to legislation requiring transparency, and employees and customers having higher expectations of businesses.

There are many reasons why a business might be hesitant to talk about their impact. It can be expensive; it’s difficult to change; it could lead to profit dilution; lack of time, capacity, resources; and the political climate can be hostile to impact-led businesses.

But, it’s imperative for businesses to be more creative - impact is fundamental to commercial growth as it informs the business identity, what they’re selling, and why. It’s the future of business.

How would you define impact?

Every business needs to define its own impact. It covers everything from wellbeing to environment to governance – and there are very few businesses that can fulfil all of those criteria on top of their day-to-day operations. Approach it as a process, a conversation with everyone in the business, from staff to suppliers. Work out why they’re doing what they’re doing.

The key thing when defining your strategy is to have a consensus about your overall direction, then work backwards on how to get there – start with why. Without a clear understanding of why, you won’t see real change.

A good starting point to define your version of impact is to ask yourself “so what?” What happened because of the work you did? What would have happened if you didn’t do it? What if someone else had done it? Why did you do it? You have to link the choices you’re making to the benefits for society to properly embed impact.

How do you measure impact?

This is the single biggest challenge, and most people struggle with it. While it isn’t easy, we believe it’s not as hard as it seems.

We’re in a digital age, and every business has access to lots of information points that set out what you’re doing, how you’re doing it, and who you’re doing it with. This data is typically used for economic growth, but it can be correlated with other data to help measure impact. As well as looking at the numbers, consider:

• Anecdotes that your team have
• Conversations that started because of your work
• Events you’re invited to off the back of it
• New doors and opportunities being opened up

Tracking these outcomes alongside business performance and customer feedback helps you understand what matters to people, and where you can have the greatest effect.

The best impact-led businesses are the ones who are transparent about what isn’t working too. Because that creates a dialogue that brings others into the conversation and on your journey to work out how to do better.

How do you embed a consideration for impact into all levels of the business strategy from the outset?

People asked the same question about digital strategy ten years ago. How could they expect staff to be competent digitally when it wasn’t taught at school, and it wasn’t in their job role? Fast forward ten years, it’s in most job descriptions. That’s what needs to happen – we need impact literacy. Every employee should be asking themselves:

• What problem am I solving?
• What do I want to be a part of?
• Where could we be innovating?
• Where could we reduce waste?
• Are there signs of poor culture and burnout?
• How can we make sure we manage up as well as down?

Impact consideration needs to be everywhere, from team meetings to strategy documents to away days.

How do you talk about impact without switching everyone off?

Start internally. Lots of businesses focus their impact discussions outwards first, and that’s where it can come across as disingenuous. If the only people who in on the discussion are the executive and comms teams, it won’t last long. Get comfortable talking about impact internally. It’s a working process everyone can feed into, so don’t be afraid to reprioritise as you go.

Only once you’ve got that culture right internally, when impact is actually driving your company, can you talk about it externally without it being preachy. When employees are talking about it with as much genuine enthusiasm as they would a product or design, that’s when people will listen.

Should businesses have a balance sheet that includes social impact?

In an ideal world, absolutely. But - we’re not in an ideal world, so not being able to balance all your profit with social impact shouldn’t put you off trying!

In the world of accounting, ESG scorelines are very much linked to investment, particularly for big businesses, and this is only going to become more common. So getting smaller businesses more comfortable with it as a metric is important. It’s something I’d encourage in accountancy firms particularly, to have conversations about impact with their clients and link it in with the reports.

Are there any examples of local businesses who are doing well with both impact and growth?

Absolutely. These are some that I’ve chosen because it’s really clear what problems they are trying to solve – which for me is the overriding bit of clarity when it comes to impact.

• Kreston Reeves is an accountancy firm who have recently achieved their status as a B-Corp, showing their commitment to being sustainable and socially conscious. They are one of few in their sector to achieve the accreditation. 
• Lewes Football Club is putting a huge emphasis on solving the problem of gender inequality in football, which has given them a national platform.
• Brighton Gin is championing LGBTQ+ leadership and are a sponsor for this year's Pub Pride.

With thanks to Richard Freeman. Richard is CEO of always possible, a company which enables businesses, charities, and public sector organisations to make the best decisions they can.

You can watch more Chamber Q&As on our YouTube channel, and find upcoming events on our Event Calendar.

If you want to contribute to the Chamber blog, contact us on hannah@brightonchamber.co.uk