Why Every Business Needs an Impact Statement

01 April, 2021 / Explainers

Why Every Business Needs an Impact Statement

Why Every Business Needs an Impact Statement

Most companies already have a Mission Statement – the sentence that sits at the very top of a business strategy and is a simple explanation of what they’re aiming to do – but few companies have an Impact Statement that lays out exactly the effect they want to have on the people who use their service or product. If you want to build a company with cult status, you need to be crystal clear on your impact so your staff and customers know what they’re aiming for together.

 

So let’s talk about exactly what an Impact Statement is, and then we’ll run through some examples. The idea for an Impact Statement comes from the world of research, planning and grants. In these areas, you have to be very clear about the impact a proposal will have before you can start anything. For example, in the environmental and town-planning industries, when a council approves plans for a new building or area, they ask the developer to submit a plan of how the development will change the environment around it before it is approved. The result is a document that can run for hundreds of pages. Luckily, the type of Impact Statement your business needs is ideally one sentence long, summarising who is affected by what your business does, and what changes it can bring.

 

An Impact Statement is different from a goal. A business goal is generally a number to reach, like ‘sell 1000 computers’ or ‘call 1000 people’. An Impact Statement is also different from a Mission Statement. A Mission Statement lays out what your purpose, or mission, is. It’s the reason that you exist, the what? of your company. An Impact Statement is the so what? of your company. If you fulfil your mission, then what effect is that going to have?

Mission Statement: What?
Impact Statement: So what?

An Impact Statement should be clear, achievable, live and measurable. An easy way to remember this is by using the acronym CALM: Clear Achievable Living Measurable

Clear: You should aim for your business’s Impact Statement to be no more than one sentence so that everyone in the company can recall and recite it. It should be so clear and concise that a seven-year-old would understand it.

Achievable: We all love to aim high, but the impact you want to have should be something you might realistically be able to achieve if all goes to plan.

Living: Your Impact Statement is a living, breathing organism that constantly evolves. It can be updated monthly or quarterly if that’s how often you track your impact.

Measurable: You should track your impact on a regular basis with meaningful statistics. How often you measure it will depend on the outcome you’re trying to achieve.

 

To create an Impact Statement, add the words so that… to the end of your mission statement and then complete the sentence. Let me give you an example using Junkee Media. Our mission is to connect young Australians to the things that matter to them the most. That hasn’t changed over a decade and a half despite everything that’s changed around us:

Mission Statement: To connect young Australians to the things that matter to them the most.

Now we add the words so that… to the end of the sentence to clarify why we’re doing what we do. Like this:

Mission and Impact Statement: To connect young Australians to the things that matter to them the most so that four million people a month are kept informed and entertained about what they really care about.

The second part of the sentence is the Impact Statement:

Impact Statement: Ensure four million people a month are kept informed and entertained about what they really care about.

 

How To Write Your Impact Statement

Your Impact Statement should interact directly with your company’s Mission Statement. If you already know what your Mission Statement is, then great: you’re one step ahead. You can skip over the next part and go directly to creating the Impact Statement. If not, then let’s write one first.

 

A Mission Statement is a sentence that describes what you do. It’s not as literal as what you actually sell to customers, it’s the reason that you exist for your customers and it should incorporate your purpose. To come up with a Mission Statement, you have to put yourself in your customers’ shoes and try to think about how they would describe what you do.

 

Here are some examples of company Mission Statements.

TED: Spread ideas
TripAdvisor: To help people around the world plan and have the perfect trip
Squarespace: Empower people with creative ideas to succeed
Kickstarter: To help bring creative projects to life
Spotify: To unlock the potential of human creativity
Betterment: To empower you to make the most of your money

 

You can see how they are a mixture of exactly what they do (‘spread ideas’) through to more ethereal concepts that describe how they want to be perceived by their customers (‘unlock the potential of human creativity’).

 

1. Write a one-sentence summary of what your company does. 

Have a go at writing the Mission Statement for your company, using the examples as a guide and trying to keep it as succinct as possible. If you already have one, move to the next step.

 

2. Write your Impact Statement by adding the words ‘so that…’ to the end of your Mission Statement

Remember that an Impact Statement should be CALM, that is Clear Achievable Living Measurable

Your Impact Statement should ideally have a goal in it. It might be the number of people you’d like to affect, the amount of houses you will build, or how many animals you will help in the process. Whatever it is, it should be a number you can measure and stand by. You should not use dollar amounts, or the number of products you want to sell. Use real human outcomes, like the number of people engaged or what behavioural change you’d like to see in them.

Some of the examples above already have their version of an Impact Statement, like Spotify: Our mission is to unlock the potential of human creativity so that we can give a million creative artists the opportunity to live off their art and billions of fans the opportunity to enjoy and be inspired by it.

Spotify’s Mission Statement: To unlock the potential of human creativity

Spotify’s Impact Statement: To give a million creative artists the opportunity to live off their art and billions of fans the opportunity to enjoy and be inspired by it.

Once you’ve got a clear purpose and a clear Impact Statement, it will make all of your planning, strategy and decision-making a lot easier.

 

This is an edited extract from my book ‘Cult Status: How To Build a Business People Adore’ that is available from wherever good books are sold. 

 

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