Impact and value – what’s the difference and why does it matter?

Patricia Hind, Leah Henderson

Simply put, impact is the demonstrable proof that you’ve met the objectives of a learning program, while value is the worth of that impact to the business on a broader level. “It’s nearly always at some high level of culture or the sustainability of the business longer-term,” says Patricia Hind, Professor of Leadership and Management Development at Hult International Business School.

Unlike value, impact is what can be measured – whether through promotions, retention, or new business. “But the measure of impact is not an end in itself,” Hind stresses. “It has to add value to the business in some way, whether that’s financial, social, environmental, or all of the above.”

One problem with focusing solely on impact is that a measure in isolation might be misread. “On its own, higher engagement scores might be meaningless. It might mean people are scared to say they don't like something. But if we can, at the same time, measure and demonstrate better retention, for example, we can look at the two measures together. So, we could be adding business value by saving on recruitment costs, and by becoming an employer of choice in that people want to stay.”

So, to determine what to measure, you need to clearly define your desired value and the challenges you’re facing. “If you want your new leaders to have an idea of your expectations of a new leader, then that's quite small and specific. You could ‘teach’ them your requirements, and provide a checklist of measures against it. But if you need your senior leaders to manage a culture change program better, that's going to be different.”

Impact measurement needs to be tailored to the value you want to see, and for that, you need to understand the context you’re working in. “It is possible to get that wrong,” says Hind. “In trying to improve retention, an organization may put on lots of training programs as incentives to show people you are committed to development. However, if you put on poor or ineffective training, or if you’ve got bullies at senior management, no amount of incentives is going to help.”

Hind walks us through a familiar problem. “Organizations often want increased collaboration, and that's measurable in a sense – how many teams are you a member of, how many new partnerships have you established? But the value is in creating a more collaborative culture – people reaching out, being welcoming, more inclusive, and helping each other. All of those are a little less tangible and quite hard to measure.”

So when it comes to impact measurement, what metrics could be indicative of the desired value? “It starts with the purpose of the program: What do you want to achieve? You might want to equip leaders to be more participative, so we can translate that into delegation, which we can measure by asking leaders how often they are delegating, and by asking their direct reports how often they are being delegated to and consulted.”

But in the conversation around value, a longer-term view may be needed – more so than most impact measures provide. Take better decision-making, for example. “How will you know if better decisions are being made in the short term? The only real measure of that is in long-term value of the business and whether it is judged to be achieving its strategic goals,” says Hind.

A longer-term, strategic view is also needed to remain agile in change. “You need to think ahead to what the business might face by the time you’ve got a program up and running, because by then, the challenges might be different.”

Ultimately, identifying value and carrying out effective impact measurement comes down to the clarity of your purpose and challenges: “It's about knowing the business landscape really well, working with that context, and being prepared to change.”