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Collective Impact and SROI

Collective Impact and SROI

BY JEREMY NICHOLLS

With all the current interest in collective action in order to create significant and sustainable change, I can’t help thinking back over the UK Governments long and cross party history in investing in collective action to achieve sustainable change; from City Challenge, the Single Regeneration Budget (SRB), Local Strategic Partnerships and Local Economic Partnerships.

In 1994, I was working with Urban Strategy associates and for one of the SRB Partnerships in Liverpool, in Granby and Toxteth. The SRB seemed to have all the requirements for success; a central point, regular communication between those involved, clear goals, shared measurement, processes and metrics. One of the areas we were focusing on was enterprise development; the goal was to increase numbers of enterprises and therefore employment opportunities in the area.

All went well. We gathered all the agencies involved in enterprise support, from the government backed Business Link to the local Yemeni Business association. We worked with them, first to agree a reasonable target for a net increase in enterprise numbers in the area, and then to work out how the organisations would ‘share’ that target, contributing as appropriate to help businesses seeking support. Otherwise, multiple claims of number of enterprises starts supported far exceeded the actual numbers of new businesses.

We agreed system wide targets and organisational targets within this; we set budgets, allocated resources. We agreed a shared measurement system using a spreadsheet model to capture information on businesses supported, and collate this across the different organisations involved to compare actual performance against our shared targets. However in the end, the number of enterprises as a share of those in Liverpool didn’t change significantly, and neither did the number of job opportunities. Something or things hadn’t worked as we had all hoped.

I remember presenting the strategy to the board of the SRB partnership on an evening when I had my three year old son with me – playing under the board table. At one point one of the local business representatives on the board said “this is all very complicated” and a small voice replied from under the table “no it isn’t, it’s easy.”

I suppose it depends on your point of view, but at the time we thought it was pretty simple and that it was the idea of collective action of shared targets that was complicated. Turns out of course it was more complex than we thought. Amongst the reasons, and there are several, were the questions of who we had involved in setting targets, and what was the size of the area over which we were working.

We had missed out private sector business advisors, some private sources of finance (we had one of the high street banks), more informal sources of finance and advice, potential customers, owners of land and property and so on. Small wonder our carefully laid plans were not successful and yet this was not strange at the time, and would not be strange today.

More fundamentally we hadn’t realized that the system we were working in was just too small. The structural issues that were facing businesses were operating over a larger scale than Granby and Toxteth, growing businesses may just move out, competitiveness would be affected by a new shopping centre just outside the area. And this is the bigger question. What size of area should you be working at? Too large and you will never be able to start. Too small and you won’t make a difference. We now think that the principles of SROI would help. If we had spoken to stakeholders, owners of businesses, owners of land and property, customers and thought about who else was involved in creating change more clearly, we would have wanted to expand the scale. The problem is that this is so often a given, someone somewhere decides that a project will cover a town, a community, even a region but unless some consideration is given to the scale at which the project needs to operate, it risks being unsuccessful.

I am hoping that my friend and colleague who I was working with at the time, Garry Haywood, will be inspired to help us out with some ideas on setting the right scale for shared action.

Then with the right objectives, people, the central support, the shared management, and regular communication, maybe we can create sustainable social change.

 

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