What organizational conditions support continuous improvement?

February 7, 2018

Note from the Impact Management Project: We have learned that impact management is an ongoing process of figuring out which effects experienced by people and the planet are material, both positive and negative – and then trying to prevent the negative and increase the positive. But as we learn more, how do we really use that information to adapt our goals and improve? How do we create a culture within our organizations that seek to know more, and where necessary, change course? Tara Murphy-Forde, VP of Impact & Research at Global Partnerships, shares her experience.

Since 2016, the Impact Management Project has facilitated virtual and in-person conversations – between people from different disciplines and worldviews – to find shared fundamentals for how we think about, measure and manage impact. Over the course of 12 in-person workshops, 25 virtual sessions and many more interviews, a common theme emerged: certain organizational conditions must be present to improve impact management practices.

I see the practical implications of this in my role as Vice President of Impact and Research at Global Partnerships (GP) – an impact investor dedicated to expanding opportunities for people living in poverty. In hopes that our learnings can support other practitioners involved in the project, I have outlined four organizational conditions that enable stronger impact management. To ground these observations in practice, I also share how I have witnessed them influence our work at GP.

Condition #1: Re-thinking strategy and organizational design

For starters, we must shift our strategies from being “mission-driven” to being impact-led. Implicit in the shared fundamentals of the Impact Management Project is a departure from designing our work around fixed (often un-tested) interventions. The fundamentals instead encourage regular learning and improvement – inviting us to re-design our teams, systems and processes around what delivers the most impact.

In Practice: Global Partnerships provides loans and seed-stage investments for social enterprises that deliver market-based products and services that empower people to earn a living and improve their lives. Today, we contribute to a range of poverty solutions, but our portfolio hasn’t always been so diverse. When we began investing in microfinance institutions (MFIs) back in 1994, we did so believing, like most at the time, that access to financial services would enable those living in poverty to earn a living and improve their lives. We learned, through experience and the emerging body of evidence, that not all MFIs target marginalized populations and that financial services are necessary, but often insufficient for end-clients to realize desired outcomes.

To ensure deeper inclusion and stronger impact, we pivoted our strategy to focus on MFIs that target female and rural clients and leverage their platform for the provision of additional services such as basic financial literacy, business training and health. Over time we have diversified our portfolio beyond microfinance to invest in a broad suite of products and services that demonstrate compelling economic, health, housing and energy outcomes. This decision was rooted in our commitment to expand opportunity for households living in poverty, without being prescriptive about what those opportunities might entail. Our approach has required continuous innovation in our financing instruments as well as agility in our teams. We have had to responsibly exit organizations that weren’t demonstrating desired effects, or where execution risk was too high. We have also had to maintain strong communication with internal and external stakeholders in order to ensure continued alignment in our impact and financial performance objectives.

Condition #2: Putting impact data at the center of decision making

In order to be impact-led we need impact data; but what data are needed, by whom, at what interval, and to what end? To successfully manage impact, we need organizational leaders that value impact data and make it a critical input to strategy. Furthermore, we need leaders to mobilize and dedicate resources to capturing, storing and analyzing this data.

In Practice: Several years ago, GP was in the process of developing its ten-year strategic plan. The Board of Directors and Leadership Team were setting aspirational goals for not only geographic expansion and capital deployment, but also impact. As a result, the leadership team spun out the Impact and Research Team, whose mandate is to measure and manage the impact of our investments. Among other things, our team is tasked with defining our impact strategy as well as our corporate impact indicator, which sits on the management dashboard for quarterly review and discussion by the Leadership Team and the Board. By dedicating resources, carefully capturing data and tracking performance regularly, our impact goals have secured their rightful place in decision-making alongside financial and operational considerations.

Condition #3: Investing in talent

Data is necessary, but not sufficient, for strong impact management. There is consensus that we need higher quality impact data, but we also need the talent to collect, scrub, analyze and interpret that data. As noted by Kate Ruff and Sara OIsen in their piece – The Next Frontier in Social Impact Measurement Isn’t Measurement at All – analysts must think holistically (looking across data sets to identify patterns and relationships), have strong technical skills (both qualitative and quantitative), and be able to skillfully read and communicate results. Finding this talent can feel like looking for a unicorn. As professionals and students pursue more impactful careers, we must be willing to train talent and be strategic about what we outsource to specialized firms.

In Practice: When we formed the Impact and Research Team at Global Partnerships (GP), we needed to be clear about how it would complement GP’s Capital Resources (raise it) and Social Investment (deploy it) teams. We landed on an advisory and monitoring function that plays a critical role in setting portfolio strategy, screening potential investments, evaluating impact performance and reporting on results. Identifying these functions was critical to understanding the talent we needed to be successful.

We built a small team with presence at both headquarters and field offices. Rather than looking for sector experts or monitoring and evaluation (M&E) specialists, we looked for candidates with strong investment acumen, quantitative reasoning and critical thinking.  We developed an impact management methodology that explicitly leverages results and insights from our own portfolio, expert/practitioner opinion and the emerging body of evidence. In turn, we need talent that can work across various disciplines and recognize emerging patterns. We complement this with targeted studies, executed by third parties specialized in mixed-methods field research.

Each time we post a job opening, we are met with an overwhelming response. While we have extremely qualified candidates applying out of academia, finance and more traditional nonprofit organizations, very few candidates, if any, are the “unicorns” we are looking for. Furthermore, our strategy is such that we know our needs will evolve over time. For these reasons, we opt to hire for the core competencies noted above and train into the technical abilities we need.

Condition #4: Creating a learning culture 

Impact management is not linear. It is a disciplined, iterative practice that leverages multi-disciplinary data to gain deeper insight and inform strategy. It requires an organizational culture that embraces learning and is highly adaptive to what delivers important positive outcomes (and avoids important negative outcomes) for people and/or the planet. Creating this type of culture requires that we loosely hold what we do and how we do it – our strategies and business models – so that we never lose sight of why we do it.

This is just as important in the back office as it is on the front line.

In Practice: Global Partnerships’ iterative approach to impact management means that our tools, systems, and processes are in a continuous state of refinement. Furthermore, our approach requires strong and frequent communication with stakeholders, both internal and external, upstream and down. It takes effort – requiring a high degree of trust, flexibility and commitment. To nurture this in ourselves and in our teams, we adopted a set of shared values; together we aim to be- Dedicated, Strategic, Collaborative, always Learning, and striving for Excellence (DSCALE). These values are part of our hiring process and are revisited regularly in quarterly performance previews and at all-staff retreats. In the spirit of these values, we invite you to get in touch (I can be reached at tmurphy@globalpartnerships.org) and if you are interested, please check out our Annual Impact Report, and subscribe to our blog.

Author Bio: Tara Murphy Forde, VP of Impact & Research at Global Partnerships. She leads GP’s efforts to define, measure, and strengthen the impact of its investments. In this capacity she oversees the qualitative and quantitative methods, tools, and processes used to identify high impact opportunities and cultivate learnings from the existing portfolio. Prior to her role on the Impact and Research team, Tara spent five years on GP’s Social Investment Team where she was responsible for the monitoring and evaluation of Fund performance. Her approach to impact investing is informed by academic, professional, and entrepreneurial experience addressing the issues of poverty, gender and conflict. As a Fulbright Scholar, Tara researched the gender-differentiated effects of the armed conflict in Colombia and was part of a start-up tackling the socio-economic reintegration of displaced families. In addition to her time in Colombia, Tara has lived and studied in Cuba and Northern Ireland. Tara holds a B.A. in political science from Vassar College and a certificate in executive leadership from the Albers School of Business at Seattle University. A special thanks to those that contributed thoughts through the Impact Management Project, including but not limited to; Clara Barby and Amanda Feldman from Bridges Impact+, Ben Carpenter from Social Value UK, Tom Adams from Acumen, Laura Foose and Leticia Emme from the Social Performance Task Force, Anton Simanowitz from Social Performance Solutions, and Tris Lumley from New Philanthropy Capital.

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Whether you are a frontline business, asset owner, intermediary or evaluator, managing impact starts with talking about impact in a way that everyone can understand.

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