As a continent, we are always living in survival mode to make ends meet, owing to the scarcity of resources. This is especially true in Kenya where we see a lot of businesses come up and post great performances on the Nairobi Stock exchange (NSE) only for them to collapse within 5 years of establishment. The reason for this is that when many entrepreneurs open shop, the longevity of their business does not integrate into their business processes or their mission.

In order to address this challenge in the month of May 2021, we recently held a webinar on how to measure impact for hubs. The session was moderated by Grace Wachori, the Community and Partnerships lead at B Lab East Africa, whose mission is to create a regenerative economic system for the society while using business as a force for good. They do this by inspiring cultural shifts in both established and growth-stage entrepreneurs to scale their for-profit organizations to purpose-driven organizations. The impact achieved is not only useful for the shareholders but is also useful for the stakeholders who encompass the clientele, suppliers, distributors, and the society at large.

During the webinar, she discussed that B Lab Africa measures impact through a tool specifically tailormade according to the  Sustainable Development Goals, which is referred to as the SDG Action Manager. This tool allows organizations to select an SDG with which they can align their company’s mission hence creating an impactful organization. In addition to this, they also have the B Impact Assessment tool which helps in managing and measuring an organization’s social and environmental impact. The tool also allows for business processes to be collaborative owing to its automated processes of assigning deadlines, while capturing information on resources and dependencies and easing the reporting process among other functions.

Grace mentioned that through utilizing the BIA tool as an organization, the outcomes would scale up operations in organizations in the following ways:

  1. It would save costs by making reductions to environmental impacts
  2. It would increase revenue by improving the environment and benefitting the local economy
  3. It would map out risks through engagement with stakeholders
  4. It would build a reputation that increased environmental efficiency and improves environmental responsibility.
  5. It would develop human capital strategies through better human resource management 
  6. It would improve access to capital and funding through better governance for the organization

To understand how the BIA tool works she mentioned that the tool had a component whereby it combined operational practices and Impact Business Models (IBMs) to gauge impact. The difference between the two was that with the operational component it was a day-to-day practice whereas with the IBM it was tied into an organization’s design or DNA which would be long-lasting and impactful. During the presentation, she used an example to showcase the difference between the two components in a hiring process . For instance, if an organization hired an employee from within Nairobi, this employee would probably not stay for long if a better opportunity presented itself, however, if the company hired an employee from Turkana who does not have competency rates, if you train this person they will be loyal to your cause, there will be lower attrition rates and consequently longevity in the business.

The BIA covers the following areas as captured in the image below:

Caption: A snapshot of the areas the BIA Tool covers

In conclusion, Grace mentioned that the benefits of measuring social impact for hubs and organizations were:

  1. Help organizations to demonstrate their ability to stakeholders and funding partners 
  2. Track an organization’s performance by evaluating against ethical standards and sustainability practices
  3. Improve on the quality of products and services within the organization
  4. Allows organizations to comply with the in country’s laws
  5. Helps organizations rate themselves among peers in the same sectors or same business size
  6. Assists in external reporting 
  7. Allows organizations to receive certification from third parties