Why you need a Theory of Change
When you aim for solving a social challenge, one of your most important task is to measure the change you are enabling. How can you measure a change, and what are the best models for doing this? We asked two of our members who are experienced in impact assessment, Oscar Ohlstöm, founder of the Impact Breakfast Club and Timea Hegedüs, Investor from Star Impact.
“There are many models for assessing impact, but the Theory of Change is maybe the most commonly used”, says Timea Hegedüs. “It provides a step-by-step description of how the short and long term impact of the social enterprise will be achieved, and is a great basis of reports for investors and other stakeholders”
The Theory of Change can be seen as a working document that help test assumptions, gather learnings and keep track of the milestones.
As a roadmap for your work
Oscar Ohlström, founder of Impact Breakfast Club has created a Theory of Change for his impact business.
“I think of the Theory of change as a roadmap that outlines the steps I need to take to achieve my goal. As the model forces me to identifying my underlying assumptions in each step, it also helps me to spot any potential risk in my business model”
Connecting to a bigger goal
If you are part of a team, you should make sure that everyone is on board with the change you are aiming for.
“It can be easy to lose track of your vision when you are stuck in your daily operations. Measuring the impact is a way to remember your WHY” Your Theory of Change allows impact to permeate in the entire organization and apply to every strategic decision. You need to be driven by making a difference, in order to actually make a difference”, Oscar says.
Measuring your success
The progress of your social impact business can be measured by regular impact reports that verifies that you are achieving the intended change. Yet, impact measurement can be hard. There are many variables that influence a change and it can be difficult to be certain about the impact of your specific product or service. Despite the uncertainty, the Theory of Change offers you a best available method to prove that your social enterprise solves the problems that you claim.
Creating your own Theory of Change
This is Oscar Ohlström’s assumptions for Impact Breakfast Club. Hopefully it can inspire you to define your own.
You will need to define the details of your product or service, and what actually happens when people are using it (Input, Output, Outcome, Impact). You also need to define the underlying assumptions that needs to be true in order for the change to take place. By measuring these assumptions, you will make sure you are on the right track.
“Your theory of change can be quite simple in the beginning and as the company gains more insights about the customers and the market it can be further adjusted”, Timea says.
Photo by Chris Lawton, Unsplash
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