How to create an epic theory of change

Article

What’s a Theory of Change? 

You may have heard of it but wondered “What’s a Theory of Change and how does it apply to my organisation?” A Theory of Change is a key asset that every organisation needs to plan and communicate their impact. The model helps map your impact, long-term goals, outcomes, and visualise how different initiatives work together system-wide. 

Why does it matter?

Traditional business tools like balance sheets or business planning tools are no longer enough for the modern organisation—the insights are too silo-ed and there’s no view of your impact. A Theory of Changes offers a holistic view of your operations and impact, and is fed by data and stories that enable better decision-making.  

What makes an epic Theory of Change?

Hatched’s Theory of Change goes beyond simply describing the impact you create. It visualises how your business operates as a strategic impact system: how your values create impact, which impact initiatives to focus on, what outcomes you need to achieve, and how to develop financial freedom. The model also incorporates a real-time view of your impact and feedback loops that help you make better decisions.

What’s the process?

First, we help identify your core capabilities and purpose through workshops and stakeholder interviews. Purpose is “why” your organisation exists and should be an enduring link to all of the elements of your Theory of Change. It can’t be a cosmetic brand statement: It must clearly communicate the impact your business creates. 

Next, is identifying the strategic impact initiatives for your organisation. These initiatives are mapped on the Theory of Change, creating  a visual guide to how your initiatives contribute to materiality, risk and opportunities, and impact areas such as customers, people, economic growth, community, culture, and environment. 

Finally, your outcomes need to be measurable. And through real-time measurement and sense-making, you can adjust for efficiency and scale to create long-term value.

Interested in learning more? Reach out to the team at hello@hatched.io