This article was originally published in MSM's Medium Account here.
A year ago, a group of brilliant people working in product (Camille Coyac, Sara Guerreiro de Sousa, Pedro Saleiro, and many others) got together to understand how we could bring more products with social and environmental considerations into the world. This question stayed in my mind. “Could it be that impact-driven products perform better?” This topic formed the backbone of a recent presentation I did for the Lisbon Digital School series on It’s All About Product & Innovation, ‘Products with Impact’, where I dug into this issue and tried to answer that question.
As someone indoctrinated by traditional economic models that perceive resources as infinite, I now see that this mindset does our planet and its inhabitants a gross disservice. We’ve been riding a wave of short-term gain, often at the expense of long-term sustainability and ethical concerns. Working in impact investing for over six years, I knew there had to be another way.
The changing paradigm of our times offers hope amidst the difficult challenges. Increasing social inequality, accelerating climate change, and rising global challenges — from pandemics to wars and mass migrations — have created a collective consciousness around sustainability. Wealth concentration, heightened consumer scrutiny, and the quest for purpose-driven work have shifted business incentives. Investors, talent, and consumers seek more sustainable solutions.
Impact investment focuses on resource allocation in solutions that solve social and environmental challenges. These solutions are goods or services through which people and the planet interact for their benefit. Therefore, if we do not consider the social and environmental impact of these solutions, we forget the interface between capital and people & planet. Solutions that are built from these considerations are what I call impactful products.
Impactful products are designed to improve people’s quality of life and promote environmental sustainability, hence offering an exciting economic opportunity. They provide internal benefits — aligning with the company’s mission, motivating teams, and enhancing financial resilience. Externally, they improve unit economics, user retention, attract top talent, attract more capital, differentiate from other products, and manage reputational risk.
But how can we integrate impact considerations into product development? That’s where the Impact Management Project (IMP) comes in. The IMP is a tool that helps organisations understand their products’ positive and negative impacts. It arose from a consensus-building initiative involving 2000 organisations aiming to standardise impact measurement, management, and reporting.
The IMP defines five dimensions of performance to help us understand a product’s impact.
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By integrating IMP with product development, we can create products that not only drive profit but have a positive aggregated impact on the stakeholders they touch.