Generally, the discussion about impact focusses on the outcomes achieved. But it also needs to be about the cost of delivering those outcomes.

I completely agree that we need to understand what works—and then do more of it. But we cannot undertake activities at any price; there are always cost constraints. People in the voluntary sector are used to working with limited resources, so it would be good to have a systematic way of viewing activity through a prism of efficiency and effectiveness. Would more funding improve the outcomes for individuals or just mean that more people go through the system? Which is better?

An example will help to explain what I mean. The Outward Bound Trust evaluated the courses it runs for young people, so they can understand the difference they make to participants. In their Social Impact Report 2011, they reported that the outcomes for people attending their three-week course were no greater than the outcomes for people attending the five-day version. They are currently undertaking more research to try and understand this finding, as the short-term outcomes may be the same, but longer-term outcomes may differ.

So what I am looking for is an “impact formula” which will help us to compare the outcomes achieved with the costs incurred along the way. I may never be able to put numbers into my formula, but I believe that studying these two components will help us to improve the ratio of outcomes:costs.

Another example may be useful. Some years ago, I was asked to help an organisation experiencing financial difficulties in running an apprentice programme. The funding was heavily weighted to payment by results. Results were basically defined as staying on the programme and completing the training; the organisation was therefore putting a lot of administrative effort into a massive database to track individuals’ attendance and progress in order to fulfil the funder’s reporting requirements.

A colleague and I observed the programme and listened to what people told us. At the end of our study, we reported back that they should spend less time on admin and more time on pastoral care of the apprentices. Initially, the organisation was surprised. Surely this will increase our costs? No—it will move your costs to the front end of the scheme. Pay someone to encourage the apprentices in to work at the beginning of the programme—more will get into the right patterns and stay the course. The organisation acted on our recommendations, becoming a top performer nationwide on the programme.

So what did this example teach me? I look for the underlying drivers of performance. Organisations have a theory of change; they believe that if they do certain things, it will have a certain impact. However, we know very little about these cause and effect relationships. Very often, the results are situation specific—it is not always possible to replicate results. Managers and their teams need to understand all the variables and then tailor their activity to maximise impact. This is usually done unconsciously by good managers, but it can be converted into conscious competence. And it can be taught.

We are using some of the techniques we have learned through risk management. For any given activity, there are a range of possible outcomes—what is uncertain is which outcome will materialise. However, a manager who starts to consider a wider range of possible outcomes can then also manage the likelihood of particular outcomes occurring. Just as the apprentices on the scheme got more attention at an early stage, you need to focus your time, effort and costs (‘inputs’) on the right activities at the right time. Studying your programmes and processes will help you to do that – something I’ll be talking about at NPC and CFG’s Impact Leadership Conference later this month.

Manage your luck rather than just hoping to get lucky.

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