I believe impact is the fair and equitable access to resources for all.
I spent a fair part of last year responding with this statement when people asked me what impact is. However, it didn’t yet resonate with many people – some preferred more broad concepts of impact (such as doing good, values-based investing, and positive social and environmental impact), others were focused on specific causes (such as alleviating poverty, bottom of the pyramid, helping marginalized communities). The challenge with values-based investing is that someone who invests in businesses such weapons manufacturers, for example, is likely to be still investing in accordance with their values. They may happen to value war, violence, and power. The challenge with the phrase doing good is that people will have a difference in opinion about what “good” is. It’s up to someone’s judgement. Many actions are part of much larger, interconnected systems. Doing good for one person may result in an undesirable outcome for someone else.
Impact investing assumes a binary position – impact investing versus… conventional investing? But it is not binary. It is very grey in the middle.
Impact is personal. What is impactful to me is likely to be different from what is impactful to you. The impact of an action or a value proposition or a business triggers an emotional and possibly intuitive response and it can be challenging to communicate it to others. Words just might not be sufficient to express the impact. Many people have been advocating for better impact metrics – to communicate elusive impact in numbers. However, if you do not believe the the action or value proposition or business itself is impactful, no amount of numbers will convince you.
Instead, my starting point is the Pique Ventures Impact Lens, which still has its connections to fair and equitable access to resources for all. It is rooted in the purpose of businesses to enable people to access resources to meet human needs and do the things they want and need to do in life to survive and thrive. The Pique Ventures Impact Lens has three parts:
Let’s look at some examples, using food-related businesses. The images below refer to the component parts of the Business Impact Canvas.
1. Business providing low-price meal program for low-income people
This business provides food to sustain someone and gives them basic access to food. The impact is present in the value proposition itself, the customer directly benefits, and the revenue model enables the food to be provided at a low price.
2. Business providing healthier, organic food
This business provides food to sustain people, but it also enables them to express themselves and their values. This business gives people choice. The impact is present in the value proposition itself, the customer directly benefits.
3. Business providing a mobile app for finding restaurants
Although this example relates to food, the actual resource provided is information about restaurants, that helps people make decisions about what restaurant to go to. The app may also help people to connect with each other if there is a social sharing element to it. The business makes finding restaurants more convenient for people. The impact is present in the value proposition itself and the customer directly benefits from the convenience.
However, there may also be impact through the supply chain, if the app helps direct people to restaurants – helping local or sustainable restaurants attract customers.
4. Urban farm business that provides farm fresh food and opportunities for people with barriers to employment (for example, SOLEFood in Vancouver)
The business provides food and food security, by helping people sustain themselves and giving them the choice to purchase organically-produced food grown very close by. The impact is present in the value proposition itself and the customer directly benefits from the choice.
However, there is impact through the supply chain, through the business’ employment program which gives people basic access to skills and jobs that helps them sustain themselves and manage change.
At Pique Ventures, we focus on all five types of resources. We look for opportunities that provide basic, more efficient or better choice of access to resources. If we come across a business that provides convenient or luxury access to resources directly to its customers, we look for opportunities where other people and organizations can get basic access to resources through their supply chain. I’ll discuss in a future blog post examples of luxury access to resources and how such businesses could have impact in their supply chain.
Consider your own business or a business that provides you with the products and services you use each day. What resource does it provide? Does that resource help people sustain or express themselves, connect with others, manage change or make decisions? What kind of access does it provide? And where in the business model is the impact delivered – directly through the value proposition, in its relationships with customers or to its key partners, through activities in the supply chain?
More blog posts to follow in the future elaborating on access to resources and the purpose of business. This concept forms the first chapter of my upcoming book, ON PURPOSE: How Intention and Mindset Define Impact Investing. Sign up here to receive news and updates about the book.