A new manual for transforming the social sector

Are you frustrated with rigid, pre-cooked solutions that produce nice outputs but don’t move the needle on the root causes of social problems? Looking for greater agility and willing to try new answers that may be riskier but also hold the potential for transformation?

Ann Mei Chang, who spent two decades as a Silicon Valley engineering executive and the past decade addressing development problems in government and the social sector, provides a “how-to” manual in the forthcoming book, “Lean Impact: How to Innovate for Radically Greater Social Good,” and maps out options for a more agile, responsive, results-oriented approach for tackling social challenges.

Her solutions apply equally to problems here in the United States and in developing countries, and equally to practitioners and to funders. In offering a methodology for innovation for greater social impact, Ann Mei lays out the starkly different drivers behind innovation in Silicon Valley versus the traditional approach to addressing social problems.

Those tackling social problems tend to undertake lengthy planning to design an intricate, multi-step proposal, which, once started, is difficult to course correct. Metrics are typically built on vanity measures—number of people reached or trained—rather than actual impact.

In contrast, the entrepreneurial approach is to quickly test an idea, get immediate feedback, and continually iterate—test and adjust, test and adjust—until a product is deemed proven. And even after that, entrepreneurs constantly listen to feedback as to suitability and modify accordingly for continuous innovation.

Ann Mei notes that this is easier in the for-profit arena than in the social arena. For the for-profit, the consumer/user is both the funder and the target audience. For the social entity, more than one stakeholder matters—the funder and the intended beneficiary. Both realms require validating value and growth, but the latter requires a third dimension: impact. In a for-profit, feedback comes quick—is the product being picked up in the market and making a profit? In the social sector, measuring impact is complex and may take months or more likely years.

One of her guidelines is to fall in love with the problem, not the solution. Too often NGOs concentrate on implementing a specific approach, rather than constantly testing the solution as to whether it effectively addresses root causes and needs to be adjusted or altogether reconsidered.

The sequence of steps are: identify your assumptions; test the riskiest ones; validate what you learn; build the solution and measure the impact; keep learning from feedback and iterate.

Success in the private sector is built on taking risks and learning from failure. In Silicon Valley, failure is valued and even glorified. In contrast, in the social sector (and government) risk and failure are to be avoided at all costs, which stymies innovation and the ability to tackle the underlying causes of social problems.

“Lean Impact” is not an academic tome that evolved from some grand theory. It is based on what is happening in the marketplace—how businesses are built and how social enterprises, both non and for-profit, operate. The steps laid out in the book are made understandable and real by multiple examples of NGOs and social enterprises that have deployed them, drawn from interviews with over 200 organizations.

The mantra is continuous innovation to reach scale in order to address the root causes of social challenges—start small, but think big.

While the audience of the book appears at first to be the implementers, it also is funders—donor agencies, foundations, high wealth individuals. In fact, I would posit they are the most important audience, as they set the rules. It is funders who, in controlling the money, demand detailed plans and micromanage implementation.

Again, the contrast between the private and social sector is telling. The investor/lender to a business extends support based on a business plan, the team, and their track record, and stays removed from implementation. The funder places a bet on an entrepreneur with few strings attached. By contrast, government and foundation grants are based on meticulous plans, the implementation of which is closely scrutinized and second-guessed.

Some funders have moved beyond the traditional model to allow grantees greater flexibility to adapt their solution as they learn during implementation, and to encourage risking taking and iteration.

Just as sustainability has become the byword for international development, Ann Mei sets it out as the goal to be achieved because, with only a few exceptions she notes, “grants and donations will rapidly hit natural limits” that prevent reaching the scale needed to resolve social problems.

To end in Ann Mei’s own words:

“We are relying on nineteenth-century institutions using twentieth-century tools to address twenty-first-century problems. It’s time for us to stop acquiescing to the old rules of the game and create new ones….. There is no one right path to Lean Impact. What matters is setting our sights high, learning as fast as we can, and finding every possible way to maximize value, growth, and impact.

We are at an extraordinary moment in the evolution of our global society, a point at which charitable entities are increasingly embracing business-oriented approaches to expand their scale and impact, and companies are increasingly recognizing the need to balance profits with their benefit to society. As these two ends of the spectrum creep towards each other, new hybrids have emerged from social enterprises to benefit corporations and from venture philanthropy to impact investment. Only by harnessing the best of both our hearts and minds can we create an ethical, inclusive and prosperous world.”