How To Determine An Impact Score For Your Innovation Project
How do you determine what the impact of a project is as an executive learning how to an impact score? We break down the full process in this article.
Enterprise clients are constantly determining what will have the largest impact on a business in the next 90 days, 3 months, 1 year, or 5 years. But how do you determine what the impact of a project is? It is actually not as hard as one may perceive, but let's explore this topic further and break it down even more.
Executives are required to understand both the financial and social return on the projects they undertake. Moreover, executives need to measure the intangible benefits of innovation as the team could be stagnating, and the boost of energy might propel the company forward even if the project was to fail.
But what innovation is right to pursue? The challenge becomes how important is the project to the future of the company.
What Is An Impact Score In Enterprise Organizations?
For enterprises, an impact score is simply a metric that can be used to measure the impact of a business initiative or decision. This is more of a quantitative measure that will assess the overall advantages, potential pitfalls, risks, costs, and other factors that would have some sort of influence on the needed outcome.
This type of impact score can be based on a range of criteria depending on the context and goals of the business. If it’s an investment, there are four measurements that are typically used by executives and decision-makers:
- Estimating the impact. This includes doing due diligence before investing or going after investment for your own organization.
- Planning the impact. This is where you draw from the metrics and data collection methods you have in order to monitor this potential impact.
- Monitoring the impact. Measuring and analyzing the impact to ensure it still aligns with the organization’s performance.
- Evaluating the impact. This is where you understand the post-investment or post-VC social impact.
Why Impact Score Is Key For Executives To Understand
In this case, it’s important for executives to have not only a good understanding of these methodologies but also to be aware of factors such as limitations or bias in the methodology, considering the impact score based on feedback, transparency around how it is used, and more.
Ultimately, an impact score can provide valuable insights into where executives can personally improve their effectiveness and performance. This then leads further into how their performance affects the organization and its stakeholders.
It’s data-driven decision making at the best level you can get as a high-level executive. Impact scores can then further be used to prioritize initiatives, better allocate resources, and more.
But this is a very broad overview. There are other methodologies that executives can use to measure their impact scores - let’s dive deeper into them below.
The Ways to Measure Impact Score through Measurements
The method used to measure an impact score varies depending on the organization and the initiative that is being set into motion. Usually, this goal is to provide a clear way of moving forward and making informed decisions based on the impact they could hold for the business.
The best way to determine is by using a scorecard. At NineTwoThree we use the EOS scorecard, but any business coach will have their system, and the basic measurements are generally the same.
First, you set a 90-day goal for the project. This must include having smart goals. Goals that have a deadline, are achievable, and measurable. Then, three aspects of the goal will be split into a KPI (measurable) a due date (deadline), and tasks (achievable.) The team will work on a weekly cadence to address the objectives of the project.
For example, a new initiative could be to launch a new google ad campaign. The smart goal of this campaign would be “Drive more business using Google ads to increase revenue by March 20th”, The idea is to allow the team to figure out the KPI and metrics to measure that business goal.
The KPI could be “10 Qualified Leads from Google Ads by March 20th”. To achieve the number 10, the team might need to extract one qualified lead per week creating the weekly cadence of checking in on the KPI. Lastly, the team would need to determine what a qualified lead does for the business. What is the percentage of the team that closes the deal?
How much value does one qualified lead bring to the bottom line? Etc. These sub-metrics drive growth and innovation around the ultimate goal of the initiative. “Drive New Business.”
Once a series of innovation strategies are in place. The team can compile the list into a single sheet. The CEO can finally determine the “impact score” of the initiatives. Each strategy will be discussed the level of importance for the future of the business - and in order for the team can rank the innovations.
There are a number of concepts about weights, for example, you could classify each innovation by risk, reward, value, cost, time, etc. However, we keep it simple and just rank them in order of impact. You know, because it's an “impact” score. 10 being the highest and 1 being the lowest.
When times are tough, we will cut off the 1’s first. And no matter how dire the situation is, we will always march toward our level 10s.
Thus, always be innovating.