http://unreasonableinstitute.org/

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Each of the past two summers, 25 promising, early-stage entrepreneurs are selected to attend the Unreasonable Institute in Boulder, Colorado. Through access to valuable mentorship, capital, and deep relationships with their peer Fellows, participants are provided a wealth of tools to boost the success of their startups. I was extremely impressed with the culture they’d created as a 2010 mentor, and of course I’ve been particularly interested in what the Institute is doing to ensure Fellows are prepared and devoted to accurately measure their ventures’ impact. I’ve wondered whether the Unreasonable Institute might be underemphasizing impact management skills, and as such Teju Ravilochan (Unreasonable Co-Founder and VP Partnerships and Communication) and I have had a series of interesting conversations on this topic.

The Unreasonable Institute has always emphasized the importance of fellows successfully pitching their vision for impact to investors and other audiences. Indeed the Unreasonables are in a class by themselves in the social enterprise incubator world in terms of outstanding use of media to engage audiences in the work of their entrepreneurs, and I think this is one of their great strengths and a model for others to emulate.

However, key to a good pitch is being able to communicate not only one’s potential impact at an inspiring scale, but also how the entrepreneurial team plans to deliver genuine results despite challenges. I’ve seen many savvy investors look for entrepreneurs who can speak from firsthand experience to those real challenges, and whose projections are tempered by operational reality. So I know that building real impact goes hand in glove with a capacity to measure that impact. Does the curriculum convey that adequately?

Teju has persuaded me that the Institute believes proven results drive the story, not the other way around. He says, “the better they make their businesses in terms of delivering real impact, the better story they’ll be able to tell investors and the world.” The Institute has integrated, and continues to evolve, training sessions that help fellows understand and articulate their impact. One such session last summer, run by Kevin Starr of The Mulago Foundation, emphasized the importance of determining a single metric to measure one’s impact against. During the session, Kevin actually had the fellows apply this concept to their ventures. While many more comprehensive (and complicated) methodologies exist, Teju said fellows found Kevin’s session to be the most valuable exercise because of its simplicity. “It helped them focus on what is truly important to them and their ventures,” he said.

I agree that at the earliest stage it is helpful to focus on one or just a couple of metrics- this has definitely been true for entrants of the GSVC. However I believe it is also imperative for the field that entrepreneurs even at the earliest stage understand the fundamental necessity of having a way to identify any important impact on people or planet that arises, whether or not they are the single most important ones. If we are to shift business and philanthropy so that they better serve humanity, we must equip these institutions with the ability to recognize the major externalities they are having, even if those impacts are not intentional, such as by following principles of impact management discussed here using SROI analysis or stakeholder accounting (see Keystone Accountability) to identify what’s going on that matters. This “design principle” for social ventures should be taught to every social entrepreneur from day one. Otherwise we will keep designing solutions to current problems… while unintentionally creating new problems: in other words, more business as usual.

The Unreasonables are listening to their stakeholders, and that’s a very good thing. Their stakeholders- ventures and impact investors, most of whom are relatively new to the issues of measuring impact- are mainly telling them simpler is better. That is clearly a top design priority. But it would be an amazing thing for the field’s advancement if the Unreasonables grappled head-on with the conundrum that faces all of us in the impact management business: how to measure what matters, including the significant unintended consequences of what we do, without getting bogged down in complexity. I know the Unreasonables could make a powerful contribution to the answer if they tackled it head on!