While historically monitoring and evaluation systems are used by NGOs and development organizations to monitor the implementation of projects funded by them, increasingly, inclusive businesses have started using them to evaluate their impact on communities as they focus at the bottom of the pyramid. Many entrepreneurs starting businesses in the continent do so with the intention of impacting the community not just as part of their corporate social responsibility. This means a lasting and sustainable impact.
However, even if your business is not an inclusive business monitoring and evaluation will help you stay on track and creatively seek ways to make a difference in the community and your performance. Keep your system simple and let it fit your business – do not go out of your way to seek indicators that are not part of your normal business process unless they will also help you in making important business decisions. The following are some factors to consider when you are setting up your monitoring and evaluation system:
- List key measures: The first step in monitoring is to list key measures you want to monitor or impact you want to have in the community. This could be:
- i) the number of jobs created: as your business grows you are able to create jobs, The number of jobs you create is dependent on the type of business and use of technology. Businesses that use manual labor tend to employ more people unless it uses people to build the technology e.g. coders and call centers;
- ii) the supply chain: you can get quality supplies from the local community as a result of capacity building, supplying them with farm inputs and new production methods;
iii) the products and services: your end product or service can target the poor;
- iv) the distribution channels: having distribution channels among the poor;
- Indicators: These are trends, milestones, or factors that show you are moving towards meeting your objectives. For example, if your overall objective is to improve livelihood in the community through the jobs you create some of the indicators you may have are an annual loan program for school fees for your staff, medical cover to include families or to continually improve salaries to match market rates even though it may not have been possible in the beginning.
- Baseline survey: this takes place before you start your business. Most likely when doing research for your startup, you covered some of the areas you would like to impact and this should be considered as part of the data for your baseline. The baseline survey shows where you are starting from and makes it easy to later see the actual impact your business has had directly or indirectly. You can use questionnaires, observation, or conduct focus groups just as you do with other research when doing your baseline survey.
- Evaluation: periodically analyzing data to track your progress with the indicators will enable you to stay on track and encourages the accountability and effectiveness of the team. After the baseline survey, the first evaluation can occur after three or six months depending on how fast the business is progressing. Understand that in most cases the indicators will show a downturn before increasing in impact due to the learning curve and other dynamics that would affect your data and business.
- Assessing impact: If you choose indicators that are directly linked to your business then the results can be directly linked to your business. For example, for jobs created this can be directly measured by the number of new jobs you create however reduction in unemployment in the community may not be directly linked to your business even if you are the only major employer. Other factors like urban migration and improvement in agricultural businesses may create other opportunities that will reduce unemployment rates.
Let everyone understand what you are measuring so that the data is accurate and correctly measures the true impact of your business.
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