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3 Things Nonprofits Can Learn From Silicon Valley to drive impact at scale

There has been an incredible pace of progress over the last two decades in Silicon Valley, resulting in amazing innovation even for the most mundane needs. Yet in tackling some of the big challenges we face around the world, we have not been able to keep up.

We haven’t been able to innovate, drive change and track progress, and improve nearly as fast.

To quote entrepreneur and innovation expert, Diane Kander in her popular (and evergreen) 2014 Ted Talk.

“If we want to create companies that survive more than just business plan tournaments, we need more than hope that they’re going to be successful, we need facts”.

Diane’s approach is not only evergreen but also relevant to sectors beyond the startup ecosystem.

For instance, in the social impact space, founders are trying to solve long-standing intractable problems that they don’t have sufficient solutions for yet.

My thinking is that, in trying to tackle social and environmental challenges, the goal should not be to deploy as much as possible, but rather to learn as quickly as possible.

Nonprofits can do this by learning and implementing 3 key principles of innovation.

PRINCIPLE 1: THINK BIG

In the social sector in general, founders tend to think based on constraints. For example, nonprofit leaders would often find themselves discussing how much budget is available, the number of volunteers supporting a programme, a time-limited framework. And they’d ask themselves “What can we do with that?”

One of the important mindsets shifts that need to happen is moving from a constraint-based planning approach to a need-based planning approach.

the discussing can instead be; what can we do that would potentially move the needle on the problem? How can we scale to make a difference into the depth of impact that will make an even greater difference?

The Sustainable Development Goals

Setting the Sustainable Development Goals (SDGs) was an important move. But as we all know we’re 4 years in and we’re not on track. We’re falling short on many of the SDGs.

Specialists talk about the 2 to 3 trillion dollars annual gap in funding that’s needed to work toward the SDGs and certainly, we should try to get more funding. But it’s highly unlikely that we’re going to have access to that financial funding before 2030.

And yet an element we don’t focus on enough is that we need simply better solutions that can give us better results for the investments made.

We’re not going to close the gap with money, but with innovation.

Over the last 30 years, we’ve built slow but steady initiatives on some of the 17 goals including access to clean water, electricity and sanitation. We assume that it’s hard to do better than that because we’re working with people that are very poor, live in remote areas and therefore it’s hard to access them. However, during the same time, the adoption of mobile phones skyrocketed among the people living in the same rural areas.

So what can we learn from this example?

First, mobile phones were something people wanted. People would choose mobile phones before they’d choose water, electricity and sanitation in many cases. It’s a real need for people, they understood why it was helpful to them and they demanded it.

Second, there was a business model behind it. People would pay for the phone service in general. This enabled companies to continue investing both in developing better and cheaper products and in distributing the products extensively.

PRINCIPLE 2: START SMALL

Even though it may seem counterintuitive, It’s important both to think big but also to start small.

Too often in the social impact, we do the opposite. We think too small and we start too big. For example, nonprofits receive a grant, get a programme started and they’re held accountable to start delivering results. Consequently, the pressure of delivering doesn’t give the organisation much time to experiment and figure out the best solutions.

A key benefit of starting small is that you can quickly experiment, take more risks and learn more quickly and cheaply.

When planning for impact, we’d most likely end up doing a great deal of planning, meetings, and research. Over that period, we’d be building up significant risk and spend considerate amounts of time and, potentially, money. Instead, from a lean approach, we could look at how to overcome risks in advance. Without having spent so much time planning in detail, we would get into the field and test different variations of our strategies for each intervention.

We learn by experimenting

The core of the lean startup is to build, measure, learn and get feedback.

Again this is completely based on the scientific method.

You have a solution that you believe will work for a problem. You form a hypothesis about what you expect to happen, and then rather than just designing that at great length you go out and build a Minimum Viable Product. You then test that hypothesis and measure the results by gathering data and analysing it.

In lean terms, the faster you can go around this cycle, the faster you’re going to innovate. Therefore the focus should be on the speed of iteration. Not on doing things perfectly.

A necessary shift is to go from aiming at perfection to how fast can we go through this process and learn.

Value, growth and Impact

When it comes to social innovation, the things we want to test fall along 3 different dimensions: Value, Growth and Impact.

Many organisations get one or two of these right, but rarely all three.

Value is created by a solution that people want and will demand, tell their friends about and come back for. Making an impact is asking: Does this solution actually work? Does it have a social benefit?. If people want it and it works, Growth is asking: Can this solution be delivered at scale?.

If you miss one of these dimensions you’re unlikely to move the needle on a problem.

PRINCIPLE 3: RELENTLESSLY SEEK IMPACT

In the nonprofit world, delivering some impact is acceptable, praised even. Largely because most funds come from donations.

But we need to raise the bar.

Just as companies are required by regulation to maximise shareholder value and profit; working for good should be required to maximise the social impact that we’re able to deliver for the resources that we have.

However, there’s no shortage of factors that push against that. I.e.: we fall in love with the problem and we get too attached to a particular solution that may or may not work at scale. These things can often divert us from coming up with the best solutions, or partnering up with those that have these solutions.

Innovation starts with an audacious goal. Scalable Impact is the foundation of innovation.

When you have a goal that you cannot achieve with business as usual, it forces you to innovate. It forces you to take some risks and do things differently.

Nowadays, most organisations include innovation in their narrative. Yet when we look at their goals for the year, we can see that they don’t think big enough and aim at, for instance, 20% improvements. There’s no motivation to take risks and innovate to deliver an improvement of 80% because the goal is just 20% better.

KEY TAKEAWAYS

Culture change doesn’t happen until we shift our idea of what success looks like. Success should be something that you cannot do with a business-as-usual approach. If you find out that business as usual is insufficient to solve the problems at hand, you should have a goal with high potential for impact.

We also need to shift the way we measure our progress. Too often nonprofits, foundations, social enterprises and governments focus on numbers. For instance. A common claim among impact-driven organisations is “we touched n million lives”.

But do they have engines for growth that could scale solutions to the size of the problems at hand?

The recommended shift, in this case, would be to focus instead on innovation metrics: unit metrics.

We have to stop teaching innovators that they have to be future tellers. Instead we need to teach them how to be detectives, people who use factrs and evidence to back up their assertions.

— Diana Kander

Testing your hypothesis around ways to reduce your costs and ways to increase your success rate are the kind of metrics that matter for driving impact. The overall goal of taking a lean approach to social impact is to shift from knowing that we’re doing some good to knowing that we’re maximising the good that we can do, both from a depth and a breadth perspective.