Hi, I'm Isaac.

I'm a consultant and advisor  for social enterprises - using business to change the world.

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Impact Models - Making Your Change Sustainable

Impact Models - Making Your Change Sustainable

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As we talk about change, it’s important to understand it’s enemy: Inertia.
Inertia is the option of doing nothing, the option of not changing, and it’s how most things in the universe like to remain.
In other words, things stay the same unless acted upon by an outside force.
You’re that force.
More specifically, you get to design a force that fights inertia, and therefore changes the way things are today.

At first, the force is just you: your words, resources and actions.
For example, you might convince your friends and family to take up “Meat-Free Mondays”, a new initiative that proves that reducing meat consumption doesn’t need to be a pain.

If your friends and family love the concept, they might then tell other people about the idea, and those people might tell their networks, etc.
Within a few months, your whole country might go meat-free on Mondays.
Except…they probably won’t.
There’s so much inertia here to slow the progress of your idea.
Grumbling husbands, event catering, dietary requirements, old habits, the lure of a late night Chicken McNugget, leftovers in the fridge, old people who see no need to change, or resistance from people who take delight in not changing.
You exerted force that changed your family’s behaviour, but that force only travels so far.
If this is going to be effective, what you need is a consistent force that makes the change easier to implement, or which makes the change more appealing.
Look at the trend away from cage eggs; decades of campaigns and influence, in order to overcome the inertia of lazy shoppers and cruel farming practices.
It wasn’t enough to speak out against caged egg brands, they also needed to influence supermarkets, restaurants and home cook expectations, as well as marketing to change the minds of the end consumer.
A revolution, fuelled by an enormous amount of energy and patience.

So now the question is; if you’re going to overcome inertia, where will you get this enormous amount of energy?
Here are some options:


1. Pour everything you’ve got into it.
This is an obvious first step for a lot of activists, and there are several cases where it has been effective.
The other 99.99% of cases are not as well publicised, but they end in burnout and disenchantment.
It’s not sustainable for you to change the world on your own – you need to eat, sleep and nurture supportive relationships.
You’re going to need a professional setup, and these require money and resources.
You’re also going to need to be persuasive, which is hard if you’re bitter and exhausted.

2. Find some donors.
This is a better option, you get to use the resources of like-minded people/institutions to kick start your campaign.
Donor funding is like kindling – it turns sparks into flames, burns quickly and then goes out.
Good luck using kindling to stay warm – what you need is a log that will burn for hours.
Like kindling, donor funding is a great way to gather some momentum while you establish a more sustainable source of heat, but it’s not a permanent solution.
The problem is that it’s both addictive and hard to obtain in a hurry.
This trap leads a lot of well-meaning people to start donor-dependant projects, then they have to step back from the important work in order to chase the next round of donors.

3. Build a self-sustaining business.
The best option we have today; using the strengths of a business as a source of continuous energy.
A business serves a customer – giving them something they want in exchange for money.
Part of that money covers the cost of delivering the product/service, and part of it is left over – called a Surplus or a Profit.
Happy customers tend to come back and tell others about their experience, so a good business can keep gathering momentum and grow larger.
This presents a tremendous opportunity for your cause.
Businesses can work without you being on site, they can open up new locations, they can create free cash flow, and they can tell meaningful stories to a wide range of people.
Make no mistake, running a business is difficult, and adding your social mission to the equation only makes it more complicated.
There’s also no “perfect” approach to these businesses, you’re going to have a lot of choices to consider (and resistance from people who don’t share or understand your worldviews).

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I work on a lot of projects in this third category, which are given various labels like Social Enterprises, Inclusive Businesses or Impact Investments.
They’re relatively new in the business world, but as you’re discovering, they’re becoming more and more popular as vehicles for throwing energy at important causes.

If we look at that description of a business again, we can see the three ways in which a business can create change.
A business serves a customer – (1) giving them something they want in exchange for money.
Part of that money covers the cost of (2) delivering the product/service, and part of it is left over – (3) called a Surplus or a Profit.

Option 1: Giving people something they want, which is also good for the cause.
This is where your product or service creates positive change, so the act of selling these to customers generates energy for your overall mission.
For example, you might sell something nutritious, something good for the environment, something that provides an education, something that improves their mental wellbeing or something that replaces a toxic/harmful alternative.
The more happy customers you have, the more good you can do.
Selling reusable cups will lead to a reduction of takeaway cups in landfill.
Selling solar lanterns will allow young people to study at night.
Selling counselling sessions via videocall will connect more people with therapists.

You’re not asking for a donation, you’re offering something that a customer wants, which also creates some positive action for your campaign.

Option 2: Using your payroll, ingredients and partnerships for your cause.
This is where your choice of employees, suppliers and business practices create positive change, so the act of fulfilling customer orders generates energy for your social mission.
For example, you might hire people from marginalised communities, people who need training, use recycled/upcycled materials, refuse to engage in unethical practices or source ingredients from other socially conscious suppliers.
The more widgets you produce or services you deliver, the more good you can do.
Customers might never know that you’ve provided meaningful employment for people with disabilities,
They might not notice that you only use sustainably sourced and recyclable materials.
They might not know how much their purchase has changed the lives of your partners, or how their choice has reduced the amount of plastic that would have otherwise ended up in a dump.

You’re not a charity, you’re a successful and popular business in the eyes of your customers, which also happens to use its payroll and inventory to create positive action for your campaign.

Option 3: Using your surplus/assets for your cause.
This is where your leftover funds and equity can be channelled towards important projects, so the act of generating a profit generates energy for your social mission.
For example, you might be able to donate $1 or $10 per unit sold, give a percentage of your profits, or give ownership of the business to marginalised communities.
The more of a surplus you can create through your business, the more good you can do.
You could sell almost anything, so long as it makes a margin that can be put to good use.
This can also give you a competitive advantage, especially if you’re selling a commodity product to a kind-hearted customer.

You’re not a foundation, you’re a business that generates free cash flow for important causes.
The healthier the financial position, the more energy and resources you have for your campaign.

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These three approaches are not mutually exclusive, quite a lot of social enterprises do two or even three of these options.
My suggestion is this – don’t let a stupid rule restrict your thinking too early.
There are lots of ways in which a business model can create a huge amount of energy for your cause, and we want to find the best ideas so that we can test them.
You don’t need to instantly invent a perfect idea, you need to brainstorm lots of ideas - 50 would be a good starting point.
Not 50 solid gold ideas, 50 ideas which can later be combined and tweaked to form a shortlist.

The first step is to brainstorm the longlist.
This is much easier if you’ve previously apprenticed with the problem, but it also helps to have outside eyes so that you’re not locked in to the currently way of thinking.
The first three to five ideas are usually painful to get out, then 6-20 come out quickly.
Each time you hit a wall, take a break, go for a walk and let your brain work.
If you use clever prompts, you’ll start seeing lots of new options emerge.
These might include:

·      What would Steve Jobs do?

·      What could we build that would make the problem obsolete?

·      What would a wizard build?

·      Can we combine two existing ideas together?

·      How might we start thinking much, much bigger?

·      If we had a 3D printer, what would we print?

·      If everyone in the world had an iPad, what would we want them to watch/use?

·      Could we sell a product that would get the ball rolling?

·      What would Aldi do?

·      What have customers loved about what we’ve sold so far?

·      How can we make a positive product/service attractive to a customer?

·      How can we incorporate people from marginalised communities into a supply chain?

·      How can we use recycled or sustainable materials to make a product/service?

·      How might we build a cash cow that generates free cash flow?

Once you have a long list, we want to start observing themes.

What industries come up more than once?

Which ideas surprised you?

Which ideas have the greatest potential to be financially sustainable?

Which ideas have the greatest potential to change minds and behaviours?

Which ideas might be combined for greater effect?

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The second step is to start identifying a customer with a problem.
Tools like the Lean Canvas are great for this, helping you name the (real) person and their (real) motivations.
We want to identify a pool of frustrated customers, who feel compelled to try something new and who are willing to spend money.
What are their pain points?
What inspires them?
What are they excited about?
Why does this pain/gain mean so much to them?
Are they content with doing nothing?
What substitutes are they using today?

We’re making lots of assumptions here, so these will need to be validated in the near future.
If these customers don’t exist, or their desire to solve this problem isn’t strong enough, then there’s no potential for a sustainable business.
We want to hit that realisation as soon as we possibly can, because we avoid investing time and energy into the wrong thing.
If we can tap into a real need for the customer, then we can design solutions that support our cause, incorporate our cause into the people and resources we use, or use our proceeds to do important things.
If we haven’t found a genuine business opportunity, none of those three approaches will be possible and we’ll end up disillusioned.

So to recap, you’ve identified your cause, and now you’re in ideation mode.
You want to find a sustainable source of energy for your cause, which is likely to come from a donor model or a business model.
Now is the time to brainstorm all of the different ways that a new business could create genuine change.
You can sell a product or service that makes an important contribution.
You can use your payroll, resources, process and partnerships to make an important contribution.
You can sell products or services that create a surplus, which you use to make an important contribution.
You can do a combination of all three.

Go broad, think laterally about business ideas, and make sure that there’s always a customer with a genuine need at the heart of the business.
You should end up with 4-5 business ideas that intrigue you, which we’ll take to the next step of the process: creating business models that match your Theory of Change…

Lessons From The IBA 2019 Accelerator - Part Two

Lessons From The IBA 2019 Accelerator - Part Two

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