Why You Really Need An Impact Statement

This is the most powerful tool you can have to ensure you're heading in the right direction.

I have most of my good ideas when I’m by myself. Either on the side of a mountain as my husband walks briskly ahead of me, or in my office listening to my curated Spotify playlist to zone me out.

Even when I’m in a busy place - like a cafe, office or plane - I usually need to block everyone out around me. That’s what I was doing several years ago when I had a simple thought that’s now blossomed into an invaluable tool.

We were flying back to Australia from the South Pacific, with my laptop balancing precariously on the small fold-down table in front. Noise-cancelling headphones helped to mute out the world, and I was thinking deeply about business.

I was in the early stages of sketching out the ideas that would eventually turn into my first book, Cult Status, and was fascinated by what made some companies really take off, and others fizzle out.

As part of my research, I was contemplating some of the usual strategic frameworks most businesses tend to have. I’m a big fan of taking something that already exists, and adding to it. James Clear calls it ‘habit stacking’ in his Atomic Habits, explaining that it’s easier to add something to a process that already exists than to start something new.

And I was stuck on Mission Statements. Most businesses have a Mission Statement, right? It’s the sentence that sits at the very top of a business strategy as a simple explanation of what you’re aiming to do.

But I couldn’t get past the idea that this wasn’t enough.

It’s not enough to just say what you’re going to do, we really should be taking it one step further and explain what the intended effect is on the people who use your product or service.

That’s where the idea of an Impact Statement came from, somewhere over the Pacific Ocean. I first wrote about it in Cult Status, but so much has happened in the years since then that I’ve decided it’s time for an update.

So for this month’s One Useful Thing I’m going to upgrade the process with insights I’ve learnt from doing it hundreds (thousands?) of times since then.

If you have your own business, this is perfect for you. If you work inside a bigger business, you should still have input into this for your company. But all of this applies just as much to a company as it does to an individuals. You can follow this same process to create your personal Impact Statement too.

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One Useful Thing for August 2024: An Impact Statement

An Impact Statement has four parts:

1. Mission Statement

2. Connector

3. Goal

4. The Why

I’ll give you my own Impact Statement as an example. I do a few different things now, like researching and writing books, public speaking, business consulting and Chairing the Digital Publishers Alliance.

One of the things I enjoy the most out of all of those is teaching people the lessons from my books. So this is how my own Impact Statement reads:

I teach people how to create and refine the impact they can have so that three hundred people a month are more motivated, fulfilled and clear on how they can contribute to the world.

To break that down into each of its four components:

Mission statement: I teach people how to create and refine the impact they can have

Connector: so that

Goal: three hundred people a month

The Why: are more motivated, fulfilled and clear on how they can contribute to the world.

This is the sentence that keeps me motivating when times get tough. It’s pretty simple, but extremely powerful.

Here is how to create your own Impact Statement for your business, project or personally:

1. Write out your Mission Statement

Every business should already have a Mission Statement. A Mission Statement lays out what your purpose, or mission, is.

If you know what your Mission Statement is, then awesome, you’re one step ahead. You can skip straight to the second step. If not, then let’s write one first.

A Mission Statement is a sentence that describes what you do. It’s not as literal as what you actually sell to customers, it’s the reason that you exist for your customers and it should incorporate your purpose. To come up with a Mission Statement, you have to put yourself in your customers’ shoes and try to think about how they would describe what you do.

Here are some examples of mega company Mission Statements.

TED: Spread ideas
TripAdvisor: To help people around the world plan and have the perfect trip
Squarespace: Empower people with creative ideas to succeed
Kickstarter: To help bring creative projects to life
Spotify: To unlock the potential of human creativity
Betterment: To empower you to make the most of your money

You can see how they are a mixture of exactly what they do (‘spread ideas’) through to more ethereal concepts that describe how they want to be perceived by their customers (‘unlock the potential of human creativity’).

Have a go at writing the Mission Statement for your company, using the examples as a guide and trying to keep it as succinct as possible.

2. Add the Connector

To create an Impact Statement, add the words “so that…” to the end of your mission statement. I call this the Connector, as it’s really the missing part at the end of every mission statement that helps you clarify why you are doing what you’re doing.

3. Add a Goal.

A goal might be the number of people you’d like to affect, the amount of houses you will build, or how many animals you will help in the process. Whatever it is, it should be a number you can measure and stand by.

You should not use dollar amounts, or the number of products you want to sell. Use real human outcomes, like the number of people engaged or what behavioural change you’d like to see in them.

We all love to aim high, but the impact you want to have should be something you might realistically be able to achieve if all goes to plan.

4. Add The Why

The final part is to add in why are you doing what you’re doing? If you are successful at it, what do you aim to achieve?

The simplest way to do this is to ask a series of ‘why?’ questions over and over until you get to the nucleus. Start off with superficial answers about what your company does, and each time you ask ‘why?’ dig a bit deeper underneath the surface.

To illustrate it, let’s start with a fictional example, using a company that sells training courses for computer programmers. I’ve intentionally chosen a generic business so you can see how easy it is for one question to narrow the answer each time.

Q. What does your company do?

A. We sell training courses for computer programmers

Q. Why?

A. Because we want computer programmers to be as good as they can at their job

Q. Why?

A. Because when you’re performing your best you feel good about yourself

Q. Why?

A. Because everyone deserves to reach their full potential

And that’s it. In this example it took asking ‘Why?’ three times to get to ‘The Why’, that is: the computer programmer training company’s purpose is to help people reach their full potential.

5. Combine all of the elements together

Once you have all four elements, combine them together until you get one sentence that has four parts:

Impact Statement = Mission Statement + Connector + Goal + The Why

Once you have a sentence, you can then refine, cut and edit it down to make it as simple as you can. You should aim for your Impact Statement to be no more than one (long-ish) sentence. It should be so clear and concise that a seven-year-old would understand it.

When you have your Impact Statement, stress test it out with colleagues, friends and your boss. You want it to feel inherently right, as though you’ve articulated something everyone already does but you just hadn’t put it into words yet.

Crafting and knowing your Impact Statement is one of the most powerful tools you have to helping everyone around you understand why you do what you do.

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I’m currently in Manchester for work, and then off to Georgia (the country) this week to eat, hike and eat before heading back to Australia for a fortnight. I can’t bloody wait.

Below is the brand new cover of Work Backwards for the international edition that will be published worldwide on November 7. If you have friends or colleagues in the UK, Europe or USA who you think would enjoy it, please pass on this email. Early sales are very important to authors, and you can pre-order it in the UK and Europe here or pre-order it in the US here.

I just love that all of the important lessons inside will soon spread even further around the world.

Until next time, yours in usefulness,

- Tim