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Scal­ing for impact: Gov­er­nance, val­i­da­tion and growth for impact star­tups

You’ve come to the right place if …

  • your oper­a­tional mod­el is mature and proven.
  • you have proven that your approach works.
  • you have suf­fi­cient finan­cial and human resources at your dis­pos­al.
  • your orga­ni­za­tion is ready for change and growth.
  • the scal­ing is in line with your mis­sion and your desired sys­temic change.

This chap­ter helps to …

  • choose a suit­able scal­ing strat­e­gy.
  • estab­lish an impact-ori­ent­ed Advi­so­ry Board.
  • train your team in the area of impact and find a com­mon lan­guage.
  • exter­nal val­i­da­tion and scal­ing of your impact.

Build­ing your scal­ing strat­e­gy

There are var­i­ous levers and strate­gies to sus­tain­ably mul­ti­ply the impact of your solu­tion:

Scal­ing social impact

In 2015, the Ber­tels­mann Stiftung con­duct­ed a Euro­pean study that exam­ined the nation­al and transna­tion­al scal­ing strate­gies list­ed above and their suc­cess fac­tors. Click here for the pub­li­ca­tion.

Once you have decid­ed on a strat­e­gy, the next step is to iden­ti­fy rel­e­vant suc­cess fac­tors. You should con­sid­er aspects such as replic­a­bil­i­ty, resource mobi­liza­tion and man­age­ment exper­tise. Also impor­tant: the envi­ron­ment may change in a new mar­ket or with a new tar­get group. This not only affects direct play­ers, but also the frame­work con­di­tions and inter­ac­tions with­in the sys­tem. Just because there are sim­i­lar prob­lems does not mean that the prob­lem has the same caus­es. To check this, it is best to car­ry out a new root cause analy­sis (chap­ter “Prob­lem, tar­get group and stake­hold­er analy­sis: the first step towards an impact start­up”).

Define clear goals and mile­stones for your scal­ing, plan the nec­es­sary resources and adjust­ments to your busi­ness mod­el and estab­lish process­es to con­tin­u­ous­ly review your scal­ing progress. You should con­stant­ly incor­po­rate feed­back from tar­get groups and stake­hold­ers and, if nec­es­sary, adjust your strat­e­gy.

Scal­ing vs. lin­ear growth

Lin­ear growth means that sales increase in pro­por­tion to the use of resources. With this type of growth, the scal­ing fac­tor remains con­stant. This means that for every addi­tion­al unit of resources (e.g. employ­ees, machines), there is a con­stant increase in out­put or turnover.

True scal­ing, on the oth­er hand, aims to increase sales and impact dis­pro­por­tion­ate­ly with­out increas­ing costs and resources to the same extent. This enables more effi­cient and prof­itable growth.

Estab­lish infra­struc­ture and exper­tise for sys­tem­at­ic impact mea­sure­ment and man­age­ment

In addi­tion to a clear strat­e­gy, you need the right knowl­edge and the right struc­tures for sus­tain­able scal­ing. An advi­so­ry board, an impact hand­book and tar­get­ed train­ing will help you to man­age impact strate­gi­cal­ly and anchor it as an inte­gral part of your cor­po­rate cul­ture.

1. estab­lish­es an advi­so­ry board

A well-assem­bled advi­so­ry board can sig­nif­i­cant­ly enrich the strat­e­gy, growth and deci­sion-mak­ing of your start­up in the scal­ing phase and give you a deci­sive com­pet­i­tive advan­tage. The involve­ment of impact experts, data sci­en­tists and aca­d­e­mics in your advi­so­ry board is par­tic­u­lar­ly ben­e­fi­cial:

  • Strat­e­gy devel­op­ment: They can help you to devel­op and imple­ment data-dri­ven strate­gies, which is cru­cial for com­pet­i­tive­ness.
  • Net­work: Impact experts con­tribute their expe­ri­ence to your impact man­age­ment and sup­port you in build­ing a larg­er impact net­work.
  • Spe­cial­ist knowl­edge: Sci­en­tists con­tribute in-depth spe­cial­ist knowl­edge and the lat­est research find­ings, which are valu­able for inno­v­a­tive solu­tions.
  • Data analy­sis: Data sci­en­tists can sup­port you in using advanced ana­lyt­ics to gain valu­able insights from your data and make pre­dic­tions.

In order to build an effec­tive advi­so­ry board with impact experts, data sci­en­tists and researchers, …

  1. defines clear objec­tives and expec­ta­tions for the Board,
  2. look for experts with a rel­e­vant back­ground and expe­ri­ence in your field,
  3. ensures that the mem­bers con­tribute diverse per­spec­tives and exper­tise,
  4. estab­lish­es reg­u­lar meet­ings and clear com­mu­ni­ca­tion chan­nels and
  5. uses the Board for key activ­i­ties and strate­gic deci­sions.

2. train your employ­ees on impact top­ics

By cre­at­ing an impact hand­book and con­tin­u­ous­ly train­ing your employ­ees, you can ensure that your impact strat­e­gy is lived and imple­ment­ed in all areas of the com­pa­ny. The advan­tages at a glance:

  • Com­mon under­stand­ing: An impact hand­book cre­ates a com­mon under­stand­ing of your mis­sion and impact goals through­out the com­pa­ny.
  • Increased impact: Sen­si­tized employ­ees can pay more atten­tion to pos­i­tive effects in their dai­ly deci­sions and actions.
  • Employ­ee moti­va­tion: Com­mu­ni­cat­ing your impact vision can increase employ­ee moti­va­tion and com­mit­ment.
  • Con­sis­tent com­mu­ni­ca­tion: A guide­line helps all employ­ees to com­mu­ni­cate your impact strat­e­gy uni­form­ly to the out­side world.
  • Com­pet­i­tive advan­tage: Well-trained employ­ees can bet­ter rep­re­sent your impact approach to cus­tomers and investors.

To cre­ate an impact hand­book and train your employ­ees, you can pro­ceed as fol­lows:

  1. Define your impact goals and met­rics clear­ly and com­pre­hen­si­bly. You can find instruc­tions on exact­ly how to do this and sam­ple indi­ca­tors in the chap­ter “Growth with respon­si­bil­i­ty: impact man­age­ment for impact start-ups”.
  2. Use col­lab­o­ra­tion tools or project man­age­ment tools to cre­ate the hand­book togeth­er and make it acces­si­ble to every­one.
  3. Struc­tures the hand­book into easy-to-under­stand sec­tions, e.g. cor­po­rate mis­sion, impact strat­e­gy, mea­sure­ment meth­ods and best prac­tices.
  4. Inte­grates con­crete exam­ples and case stud­ies to illus­trate prac­ti­cal appli­ca­tion.
  5. Devel­ops inter­ac­tive train­ing for­mats such as work­shops or e‑learning mod­ules to con­vey the con­tent.

Train­ing on the top­ic of impact

The SKala-CAM­PUS offers indi­vid­ual learn­ing jour­neys on the top­ic of impact — in the form of guide­lines, exer­cis­es, video tuto­ri­als and fur­ther train­ing. Inte­grates tar­get­ed impact train­ing into the onboard­ing of new employ­ees. The SKala-CAM­PUS is aimed par­tic­u­lar­ly at NPOs in the social sec­tor. How­ev­er, many of the meth­ods and tips can also be applied to impact start-ups.

  1. Imple­ments reg­u­lar impact meet­ings to keep the top­ic present and com­mu­ni­cate updates. Encour­ages employ­ees to con­tribute and imple­ment their own impact ideas and links impact goals to per­for­mance reviews and incen­tive sys­tems where appro­pri­ate to empha­size the impor­tance.
  2. Include your Impact Hand­book in your Code of Con­duct.

Note

If your strat­e­gy is based on knowl­edge shar­ing or part­ner­ships, make sure that your solu­tion also has the desired impact in oth­er hands. To do this, share your Impact Hand­book and Code of Con­duct and stay in reg­u­lar con­tact with part­ners and users.

Next step: Mea­sure KPIs

You have start­ed to pre­pare for the scal­ing phase of your start­up, devel­oped a sol­id scal­ing strat­e­gy, appoint­ed an expe­ri­enced advi­so­ry board and thought about exter­nal val­i­da­tion of your impact.

In order to make data-based busi­ness deci­sions in your scal­ing phase, you should now mea­sure your KPIs. We’ll do that in the next step.