Creating impact and making it public

One of our company goals this year is to create a social impact. In a previous article about our journey of creating social impact, we discussed some challenges to get started on our quest to be social. We made first consideration of how a suitable social component could look for our company. With this article, we want to add two more perspectives.

How can we create maximum impact?

We have limited resources (time, money, skills). Based on these limitations, we are looking for a problem and actions that have the best possible impact. As a first rule of thumb, we considered that using our skills makes better use of our resources. This should lead to more impact than just doing anything. For example, we could plant trees. An action that verifiably affects, but doesn’t leverage our skills.

Instead, we could help young people to get to the next level in their careers by giving them coding and management classes. We would create an impact on their individual lives. However, is that really a social action? These people don’t seem to suffer severe poverty. If increasing an individuals’ net wealth would be social, we could just keep maximizing our companies’ and employees’ wealth. That likely would create the highest wealth increase for the society that we can reach with our limited resources. Well, but that’s pure capitalism.

This reasoning showed us that thinking through our actions is important, but often results in a dead-end. Now you could rightfully claim that we could just switch to the following premise: Focus on people who live in poverty and teach them coding and management. Considering this premise the metric would be less about total wealth increase. It would rather be about the number of people who made it out of poverty with our help. But we felt like we could do better than that and continued deconstructing social for us.

The 3xE-Framework

On a recent hiking trip, Daniel saw some woman selling cake besides the hiking trail. They baked the cakes in the morning and sold the sweets to all hikers who passed by. 100% of cake revenue was going to a local orphanage. Despite admiring the women’s weekend activity, Daniel also thought: “That doesn’t seem like an efficient way of doing good! So much work, for so little revenue”. Based on this thought, and an article from Ness Lab, we created a framework to better think about social ideas. Let’s dive into it:

It rates a potential endeavor on the three dimensions to maximize our social impact based on a limited set of resources:

  • Efficacy – doing something that works
  • Effectiveness – doing the right things
  • Efficiency – doing things right

That sounds kind of vague. Let’s apply it to the cake example:

  • The efficacy here is certainly good. The money will have a positive impact! The children will benefit!
  • The effectiveness may be good, or it may not. We don’t know whether that’s the best social use of the money. On a local level, it can have a maximum impact. Donations would be useful if the orphanage urgently needs money to go from 0 to 1. Globally it could be more impactful to use every cent on climate issues.
  • The efficiency seems bad here: Are the resources used in the most efficient way to generate money? To bake enough cake, you need time and many ingredients such as flour and sugar. Perhaps they would be much better off donating the money for the flour and spending their time on a job with maximum pay and donating that money as well!

We have exaggerated a little in this example. We left out the fun of baking and the gesture behind the action for the explanation! Furthermore, the attention that the orphanage gets because of the action should not be neglected. No problem, this is the perfect bridge to the next consideration.

How to generate even more impact with the same resources?

We ask ourselves how to have even more impact. At first glance, many social actions look more symbolic. One’s behavior, like avoiding meat, and plastic seem to have no visible impact on society. We are not questioning this kind of behavior from a well-being and conscience perspective. It feels good to know that you are doing your part to solve the problem.

Nevertheless, let us zoom out and don’t look granular at this behavior. If you put these actions in the overall societal context, it can lead to a real impact. This symbolism makes rational sense as soon as your actions affect the behavior of other people. You become a role model! The formula is simple: the more people are inspired and follow your example, the greater the impact! Therefore, it is crucial to act in public, like the cake-selling ladies. Virality then makes it powerful because the impact of your available resources can grow exponentially. 

Let’s apply this to our situation!

With these two considerations, there seems to be a two-lane street. The first lane to create impact is about using your resources for actions that stand the 3xE. The additional way is to also optimize for virality. It is like the fast lane on the highway! We share our way and considerations to inspire others. Although we have not yet found the right action for us, we can already make our contribution. Documenting our journey will hopefully increase our impact as we affect people like you to do something good too.