Delivering the social impact bond over the past three years has been an insightful learning experience, throwing up sometimes difficult challenges, which in the end helped us to develop as an organisation and deliver greater impact. Now at the end of this journey our minds inevitably turn to the learnings we have picked up along the way. What did we get right? And what did we get wrong?
Firstly, here are three things I think we got right:
1) Picking the right investors: investors don’t just provide the upfront capital, many expect to join your board and play an active part in the development of the organisation. You therefore need to select partners that share your vision and who you know you can work with. In our case, both Impetus-PEF and Big Society Capital provided much valued input into programme design, operational management and future business planning.
2) Getting performance management right: if you are only paid for your outcomes, you need to be really sure that you can produce them. That begins with making sure that frontline staff understand the requirements, refining your programme design so that it can be delivered reliably and being able to regularly track progress. For us it also meant investing in a business analyst who could help frontline staff with data collection and analysis; beefing up our IT and case management systems; and embedding a more data-driven culture into our meetings.
3) Cherish your staff: funding is vital and systems help, but ultimately the achievement of impact comes down to the work of our amazing staff. From investing in their learning and development, to celebrating their successes (and commiserating when things didn’t go so well), we try to never forget that in a social organisation like ours, people are our biggest asset.
That all sounds good right? Well, there were a bunch of other things which didn’t go quite as planned. Our top three lessons were:
1) Don’t borrow more money than you need: we went for a very simple SIB structure, taking in all of the capital at the beginning and not paying any of it back until the end. Capital can be expensive; taking the time to do a very thorough cash-flow model will literally pay dividends later.
2) Don’t assume like-for-like results when you take pilot delivery to a larger scale: in our case we found that there were fewer young people than we expected who required support to improve their attendance at school, but more than needed support to improve their academic attainment. These require different approaches and we had to adapt our delivery model as we went along.
3) Don’t overestimate the capacity of delivery staff: in an effort to maximise outcomes we initially asked our staff to work with more young people than in our original business plan. As a result some of our initial results were lower than we expected. Our socially-minded investors agreed to some tweaks to make the caseloads smaller, giving our coaches a bit more time with each young person.
Overall, delivering the SIB has been good for us. From the frontline staff through to our board, we are a more impact-focused organisation than before. But we also learned that while ambition is good, it needs to be tempered by realism and backed up by sound planning.