Design possibilities within social impact measurement in SMEs: Bridging evaluation and creative practice

In the business landscape, there is an increasing recognition of the role that innovation plays in fostering long-term social impact. Demonstrating social value and positive impact is no longer just an internal priority, becoming a key differentiator for companies aiming to obtain funding and legitimacy. Yet, for many small and medium enterprises, proving their social value remains challenging, facing difficulties in assessing their impact on society and with placing value on intangible outcomes and softer values of their initiatives. Businesses span a diverse spectrum of profit-driven enterprises, social enterprises, and non-profit, where the understanding of social impact, value and innovation is often fluid and context-dependent. The concept of impact is often framed as internal or external to the organization, being conceived as the internal benefits provided to employees, fostering a culture of innovation and well-being, or externally, as their engagement with communities through projects that drive social change, either independently or in collaboration with stakeholders. Exploring how these different interpretations influence the discourse around social innovation and impact measurement, create understanding about how SMEs embed purpose within their strategies. This missing conceptual framework for social value and innovation leads to an increasing conceptualization of voluntary and routinary actions as a form of social innovation, where its impact and value is not part of the organizational overall social motivation. Capturing and measuring impact requires embedding evaluation processes into an organization’s management structure, where the challenge relies in ensuring that impact assessment does not become a compliance-driven exercise but rather a designed feedback mechanism that informs strategic decision-making and enhances the continuous innovation process. This paper aims to highlight the case of purpose driven SMEs, as businesses that aim to integrate impact evaluation into their practices, and how they navigate this complexity. While impact tools provide legitimacy, they are not always feasible for SMEs to adapt it to their practices due to their cost and technical demands. An alternative to these methods is presented by design discipline with a participatory and creative approach to evaluation and balance between quantitative and qualitative data, insight and metrics. The exploration of participatory evaluation methodologies as an alternative to traditional impact assessment tools to actively engage multiple stakeholders propose an option into defining what social impact means in a smaller setting and how it should be measured in consideration to its particular context, where qualitative impact narratives are equally valuable, offering depth and contextual understanding, capturing data that cannot be easily quantified. Examining how SMEs navigate the challenges of measuring and demonstrating impact, helps to understand that while structured evaluation frameworks play an important role in fostering accountability, they are not universally applicable. Instead, a shift toward participatory and adaptive impact evaluation led by a design perspective can enable more SMEs to integrate purpose-driven strategies effectively and enrich impact assessment theory beyond numerical performance metrics, allowing a more contextualized and inclusive understanding of impact. Design proposes a way of Bridging the gap between corporate purpose, social innovation, and impact measurement by highlighting how businesses can sustain their contributions to society while ensuring that their impact remains both measurable and meaningful.