Part of Solution
From pp. 33 of "Measuring the “Impact” in Impact Investing"
Learning & Growth (L&G) Perspective
The L&G perspective tends to describe how “people, technology, and the organizational climate”30 (including cultural attitudes) combine to support strategy and its execution. In a logic model, this is similar to how one would think about inputs (people, technology, funding), and how they combine to support activities of the organization. Tracking outputs related to people, technology, and the organization can also help to inform effectiveness of learning and growth efforts.
Business Processes Perspective
The business processes perspective “allows the managers to know how well their business is running, and whether its products and services conform to customer requirements.”31 In a logic model, this corresponds to thinking about how the activities of the organization are supporting desired outputs.
A traditional scorecard uses the customer perspective to measure customer-related objectives (e.g., customer acquisition, satisfaction, retention, profitability). These objectives match metrics available as outputs or outcomes in a logic model. It is important to note that social enterprises must think about two different sets of customers: beneficiaries (downward accountability), and investors (upward accountability).
The financial perspective includes financial data used to assess performance. As discussed in section 4.1, financial ratios can also be leveraged in the social sector to estimate and later determine performance. (e.g., SROI). Using a logic model framework, financial performance is assessed starting from inputs, and then evaluated against both outputs and estimated outcomes when possible. As a result of this analysis, we see how the logic model can be leveraged to build a scorecard analogous to the one used by traditional business. In addition to the perspectives included in the traditional balanced scorecard, the logic model framework also offers an additional important link between outputs and impact. A potential design is suggested in the “Recommendation” section.