Impact Models - Perfect Is The Enemy Of Good

You’ve got a mission, a root cause, and a sense of financial security.
Things are good.
Conversations start to escalate, you get inspired by new ideas and integrations that will boost your impact even further.
People get excited by your movement, and the story starts to grow bolder each time you tell it.
It’s not like a greed thing though, it’s all for the cause.
This is the moment where you make a mistake – you make a statement that massively restricts your choices in the future.
It feels like the right thing to do, but the more you promise yourself and your initial audience, the more you paint yourself into a corner.
You get drawn into “ethical perfectionism”.

Ethical perfectionism works a lot like regular perfectionism– the desire to squeeze as much into (or out of) an opportunity as possible.
e.g. trying to design a social enterprise that sells the most environmentally friendly products at the most budget friendly prices, employing the most disadvantaged staff members and the most sustainable supply chain, all while donating 100% of your profits to other causes.
And you decide that the only way to operate is to do them all from Day One.
Don’t get me wrong, those are all great things to do.
The problem is trying to do them all at once, from scratch.
And here’s where it gets tricky: once you’ve made these promises to yourself or your audience, you’ll be incredibly reluctant to take them back.

“But Isaac, it’s important to stay true to our values and our vision, and this what we want to build!”
That’s the hard part – lowering your expectations feels like an ethical compromise.
The difference is to think in long timelines: your ultimate goal might be to sing at the Royal Albert Hall, but your first few goals might involve performing at a local bar.
Playing for 21 people doesn’t diminish your vision of the packed hall, it’s a step along the way.
If you refuse to play small gigs, it’ll be really hard to get the large gigs.
More importantly, playing at the pub isn’t ethically different to your underlying dream – they both bring joy to an audience.
You’re not compromising on what you believe, you’re compromising on what the first step might be.

Don’t let the perfect be the enemy of the good
Social enterprises need a series of “good” steps, rather than waiting for one “perfect” opportunity to emerge.
You might form a “good” partnership with a bank, who offer you $50k for the launch of your new program.
If that bank also previously invested in assets that were connected to palm oil plantations in Indonesia, are you genuinely going to turn down the money?

You might make a $15k profit for the quarter, but are in dire need of upgraded manufacturing equipment so that you can scale.
Are you really going to give away all of that money now, rather than reinvesting for greater impact in the future?

You might find the perfect transparent supply chain partners, but they source some materials from overseas.
Are you really going to refuse to work with them and pause the project while you search for an alternative?

You can say yes, it’s ok.
It just helps clarify which fights are worth having, and which can wait.
For example, you can partner with a bank and use the opportunity to change their views on responsible investing.
You can reinvest those profits to secure the future of your work, removing the constant fear of insolvency and closure.
You can use decent supply chain partners, until you are in the position to either switch to someone better or start your own logistics business.
In my experience, everyone who has waited for the perfect opportunity has been left on the sidelines – morally superior, but with no progress to show for it.

The 70% Rule
The remedy for perfectionism comes from a principle known as The 70% Rule: instead of waiting for something to be 100% perfect before sharing it with the world, go live at 70% and see what happens.
This takes guts, but it help you overcome the fear and paralysis that prevent you from taking the next step.
If an impact project or social enterprise can create a scenario that ticks at least 70% of their wish list, my advice will be to get started and see what happens.
If your product is 70% as sustainable as you’d like it to be, launch it.
If your app works on Android but not iOS, launch it.
If your pilot project can work with a few community groups but not an entire city, launch it.

This approach works because it gives you several attempts to learn from experiments.
You might change your mind about who you’re serving, how to best reach them and address their needs, how to promote your cause and how to generate revenue.
If the model is working, you’ll be glad that you didn’t wait for 100% perfection before launching.
If the model isn’t working, you’ll be glad that you learned that early on, so that the next iteration will be stronger and more impactful.

The reason why the 70% Rule works is like the old investment analogy: would you rather a big slice of a small pie, or a small slice of a huge pie?
Each project might not be perfect, but you more than make up for it through the quantity of change you can make.
More customers switching to sustainable products, more underrepresented groups employed, more participants in your training, more countries adopting your proven methodologies.

Good, Better, Best
One of my favourite questions is “If I can’t create the thing I dream of, can I at least create the thing I’m capable of making?”.
I love it because it’s both realistic and inspirational: to not aim for the best but your best.
It embraces the fact that you might not be the best in the world (at least not at first), and removes that as an excuse for not building something good.
A neat way of framing this is to think of the first three phases of your work as building something good, then making something better, then making it the best it can be.
The first goal is to make something good, not something perfect.
The second goal is to learn from mistakes, not avoid making mistakes.
The third goal is to make it as best as you can, not flawless or unrivalled.
Each of these goals feels realistic, and moves you towards your broader vision.

Serving Different Audiences
For a lot of impact projects, there is no single “mass market”.
Like any business, there are lots of different segments, each of whom have different needs, desires and appetites for change.
A great example of this in Australia is the ban on single use plastic bags.
In 18 months since the policy was introduced, no mainstream alternative has emerged.
·      Some people buy a thicker plastic bag for 15c every time they shop, then throw these in the bin.
·      Some people buy a thicker plastic bag for 15c and use it 3-4 times before throwing them in the bin.
·      Some people use canvas bags made in sweatshops.
·      Some people use canvas bags made by social enterprises.
·      Some people carry their groceries home in their arms.
·      Some people drastically reduced the amount of products they buy.

Each segment holds a slightly different view, mostly around how inconvenienced they’re willing to be in order to do the responsible thing.
They all have a justification that makes sense to them, but you have a good chance at moving them one step closer to a less materialistic worldview.
e.g. you can convince them to re-use their 15c bag, but are unlikely to make them shop less often.

Here’s where it gets interesting for social enterprises: their logical audience are the people who are already making responsible choices, but the real behaviour change happens when you nudge someone towards a better option.
That doesn’t mean you have to lower your aims, but it might mean creating several options that each encourage a different part of the market to lift their game.
I heard someone describe the fight against climate change in an interesting way:
“We don’t need a few people to do things perfectly, we need everyone to take imperfect action”.
That’s the huge opportunity, rather than preaching to the choir, can you nudge or intrigue a wide range of people?

Think of Tesla, who want to make electric cars commonplace.
They started with the top end of the market, then the upper middle, now the middle, working towards an affordable and great quality car that makes way more sense than anything that burns fossil fuels.
They’re trying to build something for everyone, just not all at once.

Tesla is an example of the difference between incremental behaviour change and radical behaviour change.
Incremental behaviour change is replacing BMWs with Teslas.
Radical behaviour change is eliminating the concept of car ownership.
They’re both valid, but also imperfect.
Tesla want a large number of people making small environmental improvements at a time, rather than asking for huge environmental improvements that only a few people can realistically adopt.
They’re going to have ethical flaws, but they’re doing a lot more for the cause than all the other car manufacturers who refused to take electric vehicles seriously. 
You might be right to dislike Elon Musk, but I genuinely believe that if he didn’t exist, no other brand would be pushing electric vehicles, and that their overall net impact is better than the vast majority of large companies.

Navigating Judgement
What makes ethical claims difficult is the judgement of others.
We desperately want to avoid being labelled as a hypocrite – someone who claims to be ethical but cuts corners behind the scenes.
This accountability can be a good thing, it prevents greed and “greenwashing”.
But it can soon turn to nitpicking – trying to find any potential flaw and use it to discredit the whole project.

It’s helpful to remember that some people will hold you to their standards, and everyone will hold you to your standards.
For example, you might decide to reduce your meat consumption, and only eat meat on the weekends.
This is probably a great ethical decision, and more people should try your approach.
However, if you declare yourself a vegetarian, then still eat meat on the weekends, you’re seen as a hypocrite, a cheat and a liar.
Both have the same overall benefit, but we won’t notice that.
We’re not measuring your impact, we’re holding you to your own standards.
The solution is to take positive actions, without making loud declarations.
Any time you proclaim words like “Never” or “Always” or “100% of…”, you set an incredibly high standard and invite scrutiny.

A tricky area is the “critique”.
I think it starts out from a good place, the desire to see someone/something improve and become stronger, like providing a new perspective or raising an issue that might be in their blind spot.
In small doses, this is really helpful.
Where it gets weird is when people make suggestions without considering the tradeoffs.

Imagine it was shareholders of a big company, making suggestions for how the company should be making more profits:
These suggestions, while technically accurate, will result in side effects elsewhere within the organisation.
Squeezing suppliers, lowering standards, unpaid overtime, adding more products, lucrative commission structures, short term incentives, all of these can generate more profit, and also corrupt the business.
The decision to do things “the right way” for longevity means foregoing more profit today, and that’s probably a wise tradeoff.
So at your shareholder meeting, the directors might say something like “Actually we believe that by keeping our quality high and our staff happy, we’re better positioned to make more profit over the next decade”.

The tradeoffs are similar for your impact model.
A critique might make well intentioned suggestions that would make you unaffordable to your target audience, unable to retain your best staff and lower your visibility in the market.
You appreciate where they’re coming from, but can also decide to go with the tradeoffs that will allow you to make more impact over the next decade.

You are allowed to take up space
As a general rule, you’ll always be able to find a reason to critique the ethics of anything.
“The catering at your event should have come from a social enterprise.
And if it did, it should have been vegan.
And if it was, it should have been made of locally sourced ingredients.
And if they were, it shouldn’t have been covered in plastic wrap.
And if it wasn’t, it should have been delivered by bike instead of by van…etc”

This sort of nitpicking doesn’t inspire people to make better decisions, it builds resentment.
You’re better off setting a good example rather than pushing for perfectionism.
There will be a reason against every form of advertising; be it the use of paper, ink, data, media ownership, etc.
By all means be discerning, but this is not a reason to not advertise.

Where this comes to a head is when this line of ethics makes you feel guilty for doing anything.
One of my friends told me she’d read about “the carbon thumbprint” and the concept that every email you send takes up server space, and those servers use electricity and therefore carbon.
That’s true.
But this led her to question whether or not it was responsible for her social enterprise to send emails to their audience at all.
She wasn’t doing it to grandstand, it came from such a sincere desire to do the right thing, but it would have led to her keeping her business invisible, while her competitors sold far worse products more effectively. 

Right now, a social enterprise or responsible business does not have the option of existing without taking up some sort of space.
Fighting for a better world is excellent, but on the way there we’re still going to use resources – a ticket to a conference, a seat on a flight, a hosted domain, an office with signage, electric vehicles with batteries that were mined from the earth.
My encouragement is to use your best discernment, get it to a point that you feel is good, then start growing your business without guilt or shame.
As you grow, your stories, products, team and budget have the ability to create more and more change.
We need you to fight fair in the marketplace, fighting for the right causes, but not fight with both hands tied behind your back.