Societal value creation, social as well as environmental, is at the core of the strategies of more and more organizations. In this post we discuss how Theory of Change (ToC) thinking in general and Changeroo specifically can be of great value to these organizations. We discuss the different functions of Changeroo and how these help organizations in their mission to realize societal impact. We introduce the six strategic themes that organizations apply to their Theory of Change.

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Communication

» Combines logic and visualization into a powerful way of communication
» Concrete and convincing
» The ideal foundation for the communication strategy of social organizations
» Suited both for a quick overview as well as in-depth insight using six strategic themes
» The new “about page” for social organizations

Your ToC is an intuitive and powerful way to communicate why the organization’s strategies are or aren’t successful in creating change and impact. It’s at the heart of your strategy and therefore perfectly positioned to explain the different strategic issues your organization experiences and how these relate to your ability to generate impact. It’s convincing and enthuses. Indeed, issues are strategic because of their effect on your ToC. It is these issues and their effects that strategy discussions are about.

Changeroo facilitates the conversation about the strategic issues at play. You can apply six fundamental strategic themes on the components and relationships of your ToC (see the box on the right). Applying a theme generates a wikipage to present information on the theme for the component/relationship the theme was applied upon. This is where you can zoom in on the details and provide insight into practice. You can include research, video illustrations and arguments. These wikipages are focused on consensus, integration of information and objective facts, instead of repetitions and endless texts. Together with stakeholder input they build a Wiki Report on the societal value creation of your organization.

Changeroo supports using your ToC beyond the internal organization and to instead use it as the basis of all communication. Combining it with the six strategic themes is one way we achieve this. Another way is through an API feature that allows you to embed your ToC, including its interactive features, on your organization’s website. In fact, we like to consider it the new ‘About Us’ page for social organizations.

Six strategic themes

  1. Progress: Key Performance Indicators
    The progress theme allows for the application of leading and lagging indicators on your ToC. Using tables, diagrams, etc., you inform about the impact and progress of the organization. It may also include goals, timelines, measurement methods, scope of impact, etc. Indicators show results achieved and progress made. They also bring to light if and where your ToC works out differently than expected, thus enabling learning.
  2. Validation: Arguments, evidence and assumptions
    The validation theme is all about explaining the rationale of your ToC, making it credible and persuasive, and explicating its underlying assumptions. The theme exposes the assumptions you’ve built your ToC on as well as the arguments and evidence for your rationale to hold up on scrutiny. This could for example include research reports, assumptions about the behavior of groups in response to events, and assumptions about the circumstances if the effect of an action depends on such. Stakeholders add their perspectives and critically examine proof and assumptions.
  3. Trade-offs
    The organization specifies where trade-offs inherent to the ToC exist and explains the choices it makes. Such trade-offs may include negative side-effects (accept a negative impact to allow for another positive impact) and opposing positive components (more of one positive outcome comes at the expense of the performance on another). Stakeholders may provide solutions regarding trade-offs and add experiences about how decisions regarding trade-offs work out.
  4. Innovations
    The innovation theme allows you to add information on innovations (management as well as technological innovation) within your ToC; innovations that contribute to achieving your vision of success. These innovations demonstrate the uniqueness and creativeness of your ToC and its approach to create societal value. Stakeholders can engage to add information from their perspective about how innovations work out and possibly add additional information about an innovation.
  5. Needs
    Through this theme the organization describes its most pressing needs and challenges to implement its impact rationale. The organization formulates its needs for innovation and improvements as well as describes the challenges it faces in the hope that stakeholders may have solutions. These can be very specific but also more general, such as UNICEF indicating that they would like to see “better inexpensive housing for refugees”. Stakeholders obtain an overview of the needs of the organization and gain insight into where they can contribute to help raise the level of social value creation. These needs offer (business) opportunities to other companies, scientists, etc.
  6. Opportunities and threats
    This theme is used to show the potential areas where you could strengthen your ToC and where you need to anticipate developments that might threaten your ToC’s effectiveness. It has great overlap with so-called ‘materiality analysis’, which seeks to define those issues that “have a direct or indirect impact on an organization’s ability to create, preserve or erode social, environmental and economic value for itself, its stakeholders and society at large” (GRI). Something is only material if it affects both stakeholders and the (future) success of the organization. ‘Success’ of the organization is broadly defined here; effect on success can stem from effects on growth, productivity as well as risk management. Stakeholders express the issues important to them and where they see opportunities and threats for the organization. They add knowledge, ideas, experiences and solutions.
  • Finally there is a discussion page for more subjective information. It allows for more opinionated texts, expectations, sharing and discussion of ideas before they are implemented in the ToC. These discussions may later be consolidated and added to the impact rationale and/or one of the themes.

 

Stakeholder Engagement

» Continuous dialogue and co-creation
» Source expertise and resources from stakeholders
» Brings the power of consensus, co-creation and group processes

You are most unlikely to be able to oversee the entire system that you’re trying to change by yourself. Therefore, a ToC is always a co-creation with stakeholders. Convinced stakeholders show you your blind spots, provide variation in perspectives on the issues involved, provide new ideas, support you where possible, and thus increase the chances of success. Indeed, actors elsewhere in the value chain, your employees, community representatives, customers and consumers, scientists, etc.; they all hold knowledge and resources your organization stands to benefit from.

Changeroo is designed with the purpose to convince stakeholders and get them excited about your approach, to show them where they can contribute, enable them to follow your organization and its progress over time, and to create a low-barrier for stakeholders to apply their expertise and resources to help you move to higher levels of societal value creation.

  • Stakeholders can engage and provide input using your ToC’s wikipages.
  • Or they can first discuss their input through the discussion page of your ToC. On the discussion page stakeholders can also express more subjective information and discuss their opinions, expectations and ideas. This keeps the more subjective input away from the wikipages and allows for a discussion before such information is added to the wikipages.
  • One of the six strategic themes relates to the needs of your organization. This theme offers stakeholders insight in the needs you see yourself confronted with in the pursuit of societal value, and allows them to assess whether they are in a position to contribute.
  • Verified, reputable, stakeholders may contact organizations directly and discuss potential collaboration.
  • Stakeholder contributions to Changeroo accounts feed back into stakeholders’ profile. Changeroo thus allows them to present and profile themselves, adding to the incentives to help organizations realize impact.

Having a Changeroo account is by itself an invitation to stakeholders to get engaged with your organization. Changeroo also offers a function with which you can invite stakeholders to provide feedback and input to your ToC, as well as to contact expert stakeholders for the same.

 

Strategic Thinking & Learning

» Fosters the mindset and capacities of ToC thinking
» Helps understand success and failure: why something works or not
» Constantly evolving view of reality, together with stakeholders

A ToC is not only a product but also a process. ‘ToC thinking’ refers to the process or, perhaps better formulated, the mindset underlying the development of a ToC. It represents an always ongoing learning process, together with stakeholders and with a critical and questioning attitude about what works and why or why not. This requires the ability to question oneself, deal with uncertainties, have communication and problem solving skills, non-linear and complexity thinking, ability to acknowledge a diversity of perspectives, etc.

A ToC is the cornerstone of attempts to understand and improve your societal value creation. It opens up the black box of how you seek to realize change and impact. Thereby, just as it explains why an organization is successful, it also helps to understand if and why something does not generate the desired impacts. It shows where your rationale broke drown, which strategies were ineffective, which assumptions proofed false or which conditions might not be met. It thus provides a framework for learning about what works and why, and helps to move forward to more effective strategies.

An important part of the thought process as you build your ToC is to bring to the surface the implicit assumptions upon which your success depends. Although we take our assumptions for granted and we often are not aware of them, they are not always valid. Making these assumptions explicit helps you become aware of them, critically discuss and test them, and make adjustments where necessary. It helps you to examine whether they are guiding you to act in ways that are optimal for the context, people and changes that you seek.

The necessity of learning and adapting your ToC also comes from continuous changes in the context. Technological advancements generate new opportunities. The political situation may change. Other actors may cause the context to change. Not only the social system changes over time but also your understanding of it from the experiences you have changes. Your organization’s strategies about how to have an impact within these systems are therefore also likely to change over time.

The stakeholder engagement functions and the ability to embed your ToC on your organisation’s website all facilitate the ongoing development of your ToC.

 

Planning: Buy-in

» Buy-in from stakeholders
» Shared understanding: shared and focused ‘road-map’, framework for implementation

Your ToC helps stakeholders assess whether your organization has a well-thought-through strategic approach to societal value creation that inspires them and instils confidence, without being required to have to read lengthy reports. These are the organizations stakeholders wish to spend their resources and expertise on. Indeed, funders such as impact investors and philanthropy look for accurate and intelligent insight and validation, job seekers look for it in their prospective employers, employees become more motivated and focused, suppliers and buyers as well as local and state governments include it in their sourcing and partnering decisions, and it builds legitimacy and credibility toward civil society.

By combining a well-thought-through strategic approach with transparency about what you know and don’t know, conveying your needs, and making stakeholders part of the process, it becomes much more engaging for them. The participatory approach of Chnageroo generates ‘buy-in’ from stakeholders and creates a constantly evolving shared ‘road-map’ towards the desired impact: a shared vision on how change happens, buy-in for the goals to pursue, the strategies to pursue them with and who will do what.

 

Monitoring & Evaluation

» The basis for impact measurement
» Your ToC makes clear what needs to be measured
» Results feed back into your ToC

Your ToC offers the framework for impact measurement. Impact measurement is the monitoring and evaluation of your ToC. There is a wide range of methodologies for impact measurement and monitoring & evaluation. What links them all is the importance of having a ToC that lays out the expected story in advance of the changes happening. This then provides a blueprint for determining what to measure, collecting the evidence, checking other possible explanations, and learning and adjustment (Isabel Vogel).

Changeroo offers the KPIs theme (see the box on the right) to include your impact measurement results in your ToC, thereby closing the loop from building your ToC to monitoring and evaluation. Another related theme is that of Validation, which is intended for including any evidence you have for your rationale as well as for explicating the assumptions underlying your ToC.

 

Increased ToC Adoption and Quality

» Changeroo helps by guiding users
» Recognizable through standardization

Changeroo aims to help organizations build and develop their ToC, together with their stakeholders. The application guides users through the process and provides them with help in the form of explanations, illustrations, tips and instructions. Engagement functionalities enable a continuous process of co-creation and improvement. By standardizing drawing, users don’t have to spend a lot of time on such and instead can spend their time and attention on developing an intelligent and thought-through ToC.

If organizations become better equipped to systemically and strategically think about and understand the impact they realize, while at the same time more successful in engaging stakeholders on their mission, such will contribute to the impact they realize.