The Challenge of Measuring Social Value

I’m using these short LinkedIn articles to build towards the development of a manifesto to maximize the social value dimension and impact in large scale urban and community development programs. I’ve published a few by now and have more areas I still plan to reflect on, including the impact of investment in community and technical colleges (with thanks to Melanie Israel ), libraries, community centres or village halls, and some observations on arts and culture.

My objective, or maybe more of a hope, was that they would be engaging enough to solicit feedback and further ideas from LinkedIn colleagues, and I’m pleased to say that some of the articles have, including the last one on the role of universities in creating social value. My starting point for each of these is mainly my own observations. I’ve recently left a program that made a big impact on me, and one motivation has been to capture all that I’ve learned while it's still fresh in my mind.

But I know there is much more for me to learn, and the feedback I have received has been invaluable to me. ?eill McAdam ’s term “public blackboard” summarizes the approach nicely, better than I could have put it myself. I’m hoping this article will similarly stimulate and engage. This process is helpful to me in looking at my present challenges and opportunities, think more deeply, and be future focused- while simultaneously reflecting on past lessons, if that makes sense!

Social value refers to the positive impact that organizations, programs, and initiatives create for individuals, communities, and the environment. It inherently feels like a good thing, and in major urban development programs often features prominently in benefits realization plans. Often social value features in bid scoring, particularly for proposals for public sector contracts, and can

But measuring social value is far from straightforward. It needs nuanced, collaborative approaches to optimize the measurement framework and drive the delivery of social value throughout the program supply chain. And I have a personal confession on this subject, I tend to work intuitively, and some sessions I’ve been involved in where frameworks have been shared have left me cold. Yet the subject is a vital one. Investments need to be channeled and impacts assessed.

Some of the challenges I have observed are:

Subjectivity and Variability: Social value is inherently subjective, malleable, and variable. Unlike financial metrics, which are often objective and stable, social value depends on context, perspectives, and timeframes. When we recognize this subjectivity, we can develop better metrics to capture it.

Time Horizon: Estimating the long-term impact of an action relative to its immediate costs is challenging. Social value often unfolds over years, making it difficult to predict accurately. Balancing short-term costs with long-term benefits is crucial but complex.

Proliferation of Metrics: Over the past four decades, numerous methods for calculating social value have emerged. Foundations, NGOs, governments, and academics use different tools, leading to confusion and lack of consistency.

Championing social value can be hard, and for arguments to be compelling they perhaps need to be better made, which I believe requires improvements to social value frameworks. So, my suggestions, based on reading around the issues to better understand them, are:

Co-Creation and Flexibility: Social value frameworks work best when they are co-created with stakeholders. Involve diverse perspectives, including beneficiaries, in defining what matters most. Flexibility allows for adaptation to specific contexts and goals.

Focus on Inputs, Activities, Outputs, Outcomes, and Impact: When measuring social value, consider the entire chain: inputs (resources invested), activities (actions taken), outputs (direct results), outcomes (changes in behaviour or conditions), and expected impact (long-term effects). This holistic approach provides a clearer picture.

Material Issues and Differentiation: Identify material issues specific to your industry or sector. Develop initiatives that set your organization apart from rivals. Differentiation enhances social value creation.

Accountability Mechanisms: Create accountability mechanisms to ensure commitment at the board level. Transparency and regular communication with investors about environmental, social, and governance (ESG) matters build trust.

Decentralize ESG Activities: Infuse the entire organization with purpose and enthusiasm for sustainability and good governance. Decentralize ESG activities throughout operations, involving employees at all levels.

Adapt Existing Frameworks: Rather than reinventing the wheel, adapt existing social value metrics to your organization’s context. Understand the limitations of each framework and choose one that aligns with your goals.

Measuring social value is essential, particularly in many public sector procurements contracts these days, but it requires a nuanced approach. By acknowledging subjectivity, involving stakeholders, and focusing on the entire value chain, we can create better frameworks that truly reflect the positive impact organizations make in society. Our weakness can become our strength.

We need to remember that social value matters. That it has lasting effects on people, on communities, and on the world in which we live. The gain genuinely is worth the pain. Measurement frameworks matter to the investment community but also, perhaps more importantly to we practitioners, we can feel the impact of our efforts.

I did more reading for this article than for any of the others. These documents informed this piece and I recommend them to anyone interested in this field:

·?????? Guide to using the Social Value Model - UK Government.

·?????? How to achieve social value | Facilitate Magazine.

·?????? Social-Impact Efforts That Create Real Value - Harvard Business Review.

·?????? Measuring Social Value - Stanford Social Innovation Review.

Sarah Alanazi Leisa Vink Dana Al Hasan Ababneh Jason Morris Andrew Hall Raghad ALzhufi Joe Raelin Christine Abbott Kieran Ronnie FICRS Richard Hale Charles Margerison