When you develop a sustainable solution to a social problem for your impact startup, there are often many questions at the beginning: Who is actually affected by the problem? What are the underlying causes and effects — and how can we tackle them effectively?
In order to have a targeted impact, it is crucial to understand the problem, the target group and relevant stakeholders precisely. Of course, every start-up has its own challenges and particularities. This chapter therefore offers guidance that can be individually adapted.
You’ve come to the right place if …
- you want to found an impact startup or are already in the middle of it with your team.
- you know what problem you want to solve, but you don’t know your target group yet or not yet well enough.
Not quite ready yet?
Then select the appropriate chapter here
This chapter helps to …
- identify the social problem and understand its causes.
- identify the effects of the problem.
- define your target group and stakeholders.
Identify the core problem
The first step is to precisely name the problem you want to solve so that you can carry out a well-founded analysis of the causes and effects. The problem should be formulated in such a way that it describes the negative situation from the target group’s point of view. Try to be as specific as possible — depending on what your current level of knowledge allows.
A social problem can have different levels - social, ecological, economic.
- Social dimension: This relates to interpersonal interactions and social structures. This includes aspects such as social justice, education, health and social networks.
- Ecological dimension: This concerns environmental and climate issues. Challenges in this area include climate change, loss of biodiversity, soil degradation and water shortages.
- Economic dimension: This refers to economic aspects such as income, wealth or economic development.
Example:
“Many people in rural areas of Lebanon have no access to clean drinking water.”
Identify the causes of the problem
To understand the central problem in depth, you can analyze its causes in four steps. Start with the question: Why does this problem exist?
1. identifies main cause categories
Divide the problem into main causes, which you can assign to the following categories:
- Social trends (demographic change, urbanization, digitalization, regulations, e.g. laws, ordinances, standards…)
- Application of technology (fossil or renewable energies, e‑learning platforms, telemedicine)
- Economic conditions (unemployment, income distribution, inflation)
- Cultural understanding (traditions and customs, values and norms)
- Environmental conditions (climate change, availability of resources, natural disasters)
- Institutions (educational institutions, health organizations, associations, local initiatives)
- Political conditions (government stability, international relations with trade agreements and sanctions)
- Individual needs of groups of people (educational needs, healthcare, housing)
- Existing level of knowledge in the population (level of education, awareness, technological competence)
2. identify the causes using the 5‑Whys technique
To dive deeper into the problem, you can ask yourself for each identified cause: “Why is this happening?” and repeat this step five times. This allows you to identify the underlying causes. These causes form the roots of the problem and help you to understand it in its entirety.
Example:
If the core problem is “Many people in rural areas of Lebanon have no access to clean drinking water”, a 5‑Whys analysis could look like this:
- Why don’t they have access to clean drinking water? — Because there are no water treatment plants.
- Why are there no water treatment plants? — Because there is a lack of financial resources.
- Why is there a lack of funding? — Because the local authorities do not provide sufficient budgets.
- Why don’t local authorities provide sufficient budgets? — Because the problem is not a high priority.
- Why is the problem not a high priority? — Because awareness of the health consequences of a lack of access to clean drinking water is low.
3. include current scientific findings in your analysis
Use databases such as Google Scholar, JSTOR or PubMed to find relevant studies and research results. Public reports (UNDP, German government, etc.), statistics, documentary films, journalistic reports, newspaper articles and publications from associations are also often helpful. However, you should check these for accuracy.
Attending network meetings, industry events, conferences or trade fairs can also help you with your analysis. This data-based approach provides objective insights into the causes of the problem and confirms or refutes your assumptions.
Analyze the impact of the problem
Once you have analyzed the causes, you should identify the effects of the problem. What consequences does it have for those affected and their environment?
1. determine the effects using the 5‑Whys technique
Use the same method as before and ask for each impact: “What are the consequences?” and repeat this step to identify systemic effects on an ecological, political, social, economic, cultural, spiritual, etc. level.
2. include current scientific findings in your analysis
When analyzing the effects, you should also consult the latest research findings in order to gain sound insights into the long-term effects of the problem. How you can do this is described above under Identifying the causes of the problem.
3. visualize your problem in a problem tree
The problem tree you can also use later for communication purposes. It graphically depicts the causes and effects of the problem. This is how you create a problem tree:
- Draw a box in the middle of the diagram and write the core problem in it.
- The direct causes of the core problem are recorded in the line below the core problem, with the causes of the causes pinned below.
- The immediate effects are placed above the core problem, the effects of the effects are entered in the row above. And so on.
- The problem tree branches upwards and downwards.
- If there are connections between the causes or effects, these are mapped using cross-references. Gaps are marked using placeholders, which you can fill in later if necessary.
Use simple drawing software or pen and paper to visualize the problem tree. You can also find this graphic template in the PHINEO Effect course book:
Consider the systemic context
In order to understand the problem holistically, you should place it in a larger systemic context. This will allow you to develop targeted measures that address the causes at the right level.
1. use the Social Change Matrix for a systemic classification of your problem
The Social Change Matrix divides the problem into four quadrants:
- Quadrant 1: Material and structural — problems that affect large groups and require structural changes, e.g. in laws or institutions
- Quadrant 2: Material and individual — consequences of structural problems that affect individuals or small groups, e.g. lack of education or poverty
- Quadrant 3: Symbolic and structural — problems that affect social perceptions or beliefs and require, for example, changes in public discourse
- Quadrant 4: Symbolic and individual — problems relating to personal perceptions or attitudes, e.g. low self-esteem
Consider in which quadrant the problem is expressed or manifests itself and how, whether all quadrants need to be included and where which causes and consequences can be addressed. Material changes are measurable and tangible, whereas symbolic changes affect cultural and social attitudes.
Structural changes affect society as a whole, while individual changes influence the behavior and attitudes of individuals.
Sometimes, however, changes at the material or symbolic individual level also affect the system level — i.e. not only top-down but also bottom-up. A change in values (symbolic) can change the material quadrants in the long term or even radically.
Example:
Assume that the central problem is “low environmental awareness among the population”. This problem could be classified in quadrant 3 (symbolic and structural), as it affects social perception and requires changes in public discourse.
Measures could include educational campaigns or political initiatives to raise environmental awareness (symbolic) and change individual behavior (material).
Define target groups and stakeholders
Based on your problem analysis, you can now clearly identify your target groups and stakeholders. Think about who is directly responsible for the causes of the problem and who is affected by the consequences. These can be your potential target groups and stakeholders.
1. who are your target groups?
Target groups are the people, organizations or systems you want to have an impact on. Those for whom you want to bring about concrete change are your direct target group. If necessary, you can form subgroups here to customize your solution more precisely.
2 Who are your stakeholders?
Stakeholders are all persons or groups who have an interest in your solution or can influence it. Important: All target groups are automatically stakeholders — but not every stakeholder belongs to your target group.
You can find out with a stakeholder analysis:
- Who are the relevant internal and external stakeholders?
- What expectations, fears and hopes do they have?
- How can they influence your solution positively or negatively?
Examples of stakeholders:
- Internal stakeholders: your target group, employees, management.
- External stakeholders: Investors, authorities, NGOs, partner organizations, citizens’ initiatives or companies.
Target group vs. customers
In the Lean Impact Journey we differentiate between the target group when we deal with the impact model and the product and customers when it comes to the business model.
How you use these two terms for your project depends on what your solution consists of. In this playbook, the target group is defined as people who use the solution and those who benefit from the solution.
Depending on the solution, the target group can combine both.
Next chapter: Validating findings
The first step has been taken! You now know the causes and effects of the social problem and your potential target group. You have also identified other stakeholders.
In the next chapter you can validate your findings about your identified problem and your target groups and stakeholders in a direct discussion.