Start with Impact 1- Transformation

Eric Reis’, in his book, The Lean Startup, talks about the temptation for business owners to use vanity metrics— numbers the project the appearance of success but which actually work to mask inertia or failure—to shore up their image of their business. His argument is that vanity metrics are unhelpful, and so, while tempting, they must be resisted at all costs. 

The same could be true for the world of social enterprise. I’m speaking of something more than using vanity metrics in the way Reis describes them, on the business side of things. Rather, I’m thinking of ways we might find ourselves applying vanity metrics to the impact side of our social enterprise. 

In the church/non-profit world, there are countless ways we could fall prey to vanity metrics. We might count participation numbers without asking what effect the participation has on participants. We might count fundraising increases year to year without evaluating the way the increased monetary capacity facilitates our approach to engagement in the neighborhood. The question is this; does increased participation, or increased donations, reveal anything about the impact we are making? There could, of course, be a correlation between them, but participation and fundraising could never honestly be considered a true mark of actual effectiveness. 

This is an important distinction because the entire reason we engage in social enterprise and economic development is to make an impact. It might seem obvious to point that out, but we have found that it is a crucial first, and ongoing conversation, in the world of enterprise and economic development. 

We get into this work to make an impact, so it makes sense that the work of social enterprise begins with the question of impact. More to the point, if we want to see transformation of people and place (an essential aspect of the work) then it pushes us to not only name the impact we want to make, but to ask ourselves how we will measure our impact (from the beginning) so that we resist the temptation to fall into vanity metric ways of evaluation. 

Naming our impact, and getting clear on how and what we measure, is one way of guarding against allowing a creative business idea pull us toward mission drift. It would be a real shame to get 6-12 months into a creative social enterprise venture only to discover that you created a business strategy that actually works against the impact work you want to do. 

In our work through CovEnterprises, we are always encouraging people to start with naming their impact. This second blog series is aimed at starting to unpack those ideas. We coach people to think through the markers of community transformation they want to see. What does your neighborhood look like 5 years from now because of the presence of your business? What is different about the folks who work for you? Getting clear on the outcome you want your enterprise to produce will allow you to design business mechanisms that serve those outcomes, rather than the other way around. 

In our discussions on community transformation, we focus on 4 main categories of transformation that open up to us through social enterprise. Opportunity, development, flourishing, and resiliency. These four categories move us into a space where we might see real transformation in people and place. Over the next month or so, we will unpack these categories, as starting points, for thinking through the impact we might have in the neighborhood through social enterprise. 

About Adam Gustine

Adam Gustine leads CovEnterprises for Love Mercy Do Justice and the Evangelical Covenant Church. He is also the founder of Jubilee Ventures; an economic incubator in South Bend, IN. He and his wife, Ann, live in South Bend with their three kids.

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