STRATEGY, INNOVATION & IMPACT | VISION BUILDING

Theory of Change

90-120 Min

Theory of Change (TOC) is a framework to map 'desired change' against input activities and investments. It helps innovators build relevant strategies for change by differentiating between results and impact. The framework also helps link long term and short-term goals, creating a logical flow that can be used to guide efforts. The TOC is especially relevant to social businesses, and development sector organisations, because impact is critical. However, business sector organisations may also use it to consider their own ability to create impact. 'Product Roadmap' and 'Activity Plan' can be used to inform the TOC exercise and vice versa.

USE CASES

Create an end to end summary of the intended impact strategy of a programme or business at conceptualisation.
Diagnose and reflect on actual impact and fine tune strategy.
Identify human and resource investments needed to create impact.

LIMITATIONS

While the TOC helps identify potential strategy, there is little guarantee that activities and resources identified at an early stage will lead to estimated impact on ground. TOCs are often revisited and refined as data from the ground starts emerging.

Theory of Change | DIY Toolkit

UNDERSTANDING THE TOOL

The ‘Resources & Inputs’ section is meant to park the human, knowledge, skill, financial, technological, infrastructural, systemic capabilities that are required to create impact.
‘Activities’ are those tasks that the resources will help undertake. The nature of these tasks could be both user facing (awareness building, on-boarding, servicing, etc.) and internal (process development, skill building, hiring, technology adoption, etc.). Investors need to be convinced that resources are being spent on priority activities.
‘Outputs’ are the most basic numbers and metrics that help measure results achieved because of investments made. The outputs help understand the extent of effort (for example, number of people reached, campaigns undertaken, number of learning sessions held, etc.), without going into whether the efforts were successful or not.
‘Outcomes’ are deeper metrics than outputs, and start focusing on both the quantity and quality of results. The stress is importantly on short-medium term impact metrics (for example, level of awareness in people because of campaign, skills built in people because of x number of learning sessions, etc.).
‘Impact’ focuses on longer term shifts — on real, lasting impact created by interventions. The translation of outcomes and outputs into change is really brought to the fore here (for example, does awareness lead to better decision making and choice? do skills lead to an enhanced ability to be financially empowered?).
‘Assumptions’ are risk factors that an innovator needs to keep in mind as the TOC is being built. Assumptions are important to study and adjust as implementation is done.

STEP BY STEP

Define a vision: Discuss the intended impact of the program or service with your team.
Unpack the necessary resources: First fill in the left side of the tool to list the basic financial, people and material resources needed (or available) to roll out the programme. List down activities that these resources would help carry out. A team may choose to start with activities first, and then list resources (in case it is a proposal to raise resources).
Link efforts to impact: Link resources and activities to outputs (short-term) and outcomes (long-term) that together represent long-term impact.
List assumptions: Review the template and call out assumptions you may be making at each step. Discuss what these assumptions are, and what could be done to counter them.

HOW TO FOR FACILITATORS

At the start: Make sure participants understand the goal of the activity and the direction. Refer to facilitation questions if they are feeling stuck.
During the exercise: Start with participants’ existing knowledge of their strategic and operational plans, create a first version of the map. Discuss how they currently measure impact of their own investments.
At the close: Have participants walk you through the map and at each step, question them on their approach to their plans and assumptions.

FACILITATORS QUESTION BANK

What is the long-term impact that you want to create?
What are some key resources and capabilities that you have access to?
What sort of activities are your current resources and capabilities being utilised for?
What kind of quantitative results or outputs (short and long term) do your resources and activities help you create? Do these outputs help you achieve desired long-term change?
What are the desired output levels? What kind of additional resources do you need to get to these levels? How do you plan to access these resources?
What kind of qualitative change or outcomes (short and long term) will the current output levels help you produce? Do these outcomes achieve your long-term change goal?
What are the desired outcomes? What kind of additional outputs do you need to get to the desired outcomes? How do you plan to create these outputs?
What kind of impact will current outcomes and outputs help achieve? How does this level of impact compare to desired long-term change?
What are some key assumptions at each stage of the mapping? What can we do to minimise risk from these assumptions?
If we were to aim for ideal long-term change — what would a supporting pool of resources and capabilities look like? Is it feasible to consider if these resources can be raised? How?
What are some activities that additional resources would help undertake? How will these activities help achieve desired outputs and outcomes?

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