Back in March this year, I published the first thoughts behind the impact lens that I have and use. It has since been further developed, the details of which are better explained in Chapter 1 of my book. However, here is a preview.
What is meant by “doing social good”, “things that matter”, or “positive impact”? I started by reflecting on the things all people need and want to do in life. This is not philosophical and not about why we do these things, but rather an observation of what people are already doing. Everything falls into one of five categories and we need Essential Resources to do them:
- Sustenance (food, water, shelter)
- Expression (art, culture, fashion, music, writing, numbers, communication)
- Connection (networks, transportation, places, mobile, internet)
- Managing change (financial services, insurance, travel, investment)
- Making decisions (education, information)
- Currency (money, means of exchange)*
Businesses enable us to Access these Essential Resources in six different ways:
Directly as customers:
- Basic (grow food, make clothes, build shelter, etc.)
- Efficient (agriculture, industrialization, new technology)
- Choice (organic, fairtrade, etc.)
- Convenient (mobile apps, retail chain stores)
Or in compensation as suppliers or resource providers:
- Supply Chain
When I dig deeper into what “impact investors” invest in, they tend towards Basic, Efficient, Choice, Employment or Supply Chain Access to Essential Resources. If a business is just making things more Convenient for people who already have Access to the Essential Resources they need, then impact investors tend not to look there.
Before even contemplating measurement, I hasten to remind people that metrics are meaningless if they lack connection to real people and the real purpose of helping people access Essential Resources. So, when you’re thinking about impact or what is good or what matters, think about Access to Essential Resources and ask yourself if what you’re doing or the business you’re thinking about investing in helps people improve their Access to Essential Resources, what Essential Resources are they, and what kind of Access is it.
*Note: Updated on August 19, 2013 to include Currency as an Essential Resource.