Amid the growing backlash against Silicon Valley companies, the last thing any self- respecting nonprofit or philanthropist wants is to follow its increasingly discredited mantra of “move fast and break things.” At the same time, nonprofits can and should learn from Silicon Valley, but with a twist. Consider this the much tougher challenge: “Move fast and fix things.”
Technological advances and expanding global interconnectedness have combined to drive an accelerated pace of progress. While these changes have both enriched our lives and opened new potential for abuse, the world is not about to slow down. Our 21st-century problems will require 21st-century solutions. To find those solutions, we need to adapt the approaches to innovation that led to game-changing new technologies so we can apply them to solve the world’s biggest problems.
With all the frenzied hype surrounding innovation, there has been a tendency to conflate the spark of invention (hatching a big, transformative idea) with the process of innovation (bringing an idea to practical and constructive use). What allowed companies like Google, Facebook, and Amazon to excel was not that their services were particularly original but rather that their ability to iterate and learn was much faster than their competitors’.
The way such companies work was captured well in Eric Ries’s bestselling book The Lean Startup. The essence of this approach to innovation is to build something fast, measure what works, and learn from the results as quickly as possible. While the terminology may be new, at its core are the same basic tenets of the scientific method — hypothesis-driven experiments that reduce risk and increase the pace of learning. The “Lean Startup,” Ries reminds us, is a management process tailor-made for working “under conditions of extreme uncertainty.”
Nowhere are there more complex problems and greater uncertainty than in the nonprofit world. And innovating to achieve a mission rather than to make a profit is fundamentally more difficult. For example, the restrictive nature of funding often limits risk-taking and flexibility. What’s more, measuring social impact is far harder than counting e-commerce transactions.
Perhaps most important, in the nonprofit world we are trying to improve the lives of people, not products or services, and that requires a far more serious sense of responsibility. Nevertheless, through my work as chief innovation officer at USAID and my interviews this past year with more than 200 mission-driven organizations both big and small, I have discovered a growing cadre of entrepreneurial leaders who are undaunted by these challenges and are blazing new paths that meld the ambition, agility, and efficiency of technology businesses with the care, values, and ideals of nonprofits.
Here are the three key components:
Learn
Laying out a detailed plan can ensure that a proven approach is carried out well when a charity is dealing with relatively stable and well-understood problems. But in situations that are uncertain, dynamic, and without a clear path to lasting change, learning needs to be an intentional focus from the start, not a perfunctory exercise after the fact.
That means it’s essential to ensure the riskiest assumptions behind a potential solution are valid. Do beneficiaries and other key players see compelling value? Does it work to deliver the intended impact on society? Is there an engine for growth that can reach a significant portion of the need? Nonprofits have a tendency to avoid asking tough questions both out of a desire to encourage good deeds and to put their best foot forward for grant makers. Yet when organizations are explicit about their criteria for success, they can avoid supporting ideas that sound sensible but might not be, recognize critical lessons early, and know when it’s appropriate to double down.
When Summit Public Schools opened its first school in 2003, it sought a better approach to high-school education that would enable all of its students to graduate from college. Eight years later, the results were impressive but fell short of this goal. Summit believed it could do better. But it couldn’t afford to wait years for a new group of students to graduate and then monitor the results. Instead, Summit focused on embedding a culture and process for constant feedback and improvement, using assessments, surveys, and focus groups so it could adjust its approach every week based on data. Last year, 99 percent of Summit’s graduates were accepted into four-year colleges, and its approach to personalized learning has now been adopted in more than 300 schools across the United States.
Build
Nonprofits face enormous pressure from donors and the communities they serve to reach as many people as possible as soon as possible.
Investing the time upfront to make sure any offering is needed and effective and can be expanded to reach more people will pay dividends in the long run.
This happens by testing hypotheses to gain the next increment of learning using the smallest, cheapest, and fastest experiments possible. Take drug trials. They stage tests to ensure a medication is safe and effective before expanding usage. For a nonprofit building a new program, starting to test an idea on only a handful of people can speed up the process to figure out what works, minimize costs, and provide an opportunity to deal with any unintended consequences. In The Lean Startup, Ries calls this a minimal viable product. His goal is to make sure that ideas get tested as soon as possible in a real-world context, rather than just being debated in boardrooms and executive offices.
Code for America used this process after it learned that only about two-thirds of eligible California families were enrolled in the state food-stamp program. One clear barrier was the cumbersome online registration process that involved 200 questions. Half the applicants stopped filling out the forms before they were done.
While Code for America believed a much simpler approach could work, it decided to conduct a test first, recruiting people through online ads, directing them to an off-the-shelf web form with only 18 essential fields, and manually transferring the data to the government website. After the limited test worked, Code for America decided to build GetCalFresh, which has sharply improved completion rates.
Measure
How do you assess how well you’re doing? The most commonly used benchmarks tend to be aggregate numbers such as counting the people touched or served. Although this may be an easy data point to capture, the trouble is that it doesn’t signify whether what was done worked or whether it was more cost-effective than the alternatives. It’s also hard to tell if the idea can easily be spread elsewhere or whether the numbers were simply the result of a big donation that might not be provided again.
Metrics are useful for innovators only if they inform decisions that will drive essential improvements. These typically measure the cost and rate of engagement, referrals, adoption, or success on a per-person basis.
In South Africa, Harambee Youth Employment Accelerator aims to tackle the scourge of youth unemployment, which has hit crisis proportions. While it counts the over-50,000 disadvantaged youths it has helped to find jobs, it recognizes that the more crucial keys to long-term success are metrics such as the percentage of unemployed disadvantaged youths hired, how long program participants keep their jobs, and how much it costs to train each person. After analyzing data that showed program participants were especially likely to quit their retail jobs, Harambee began to have job seekers stand during its training program. That way it could help them get used to the working conditions they would face.
Repeat
The most crucial ingredient of build-measure-learn is not any one of the three components but rather the length of time it takes to iterate through each full cycle. The faster you go, the faster you learn and the faster you improve. For the purpose of innovation, speed is king. This is in no way meant to minimize the importance of careful adoption and rigorous evaluations. But before making those larger investments, learning as much as possible first will maximize the chance for success.
Foundations and philanthropists play a crucial role in unleashing the potential for social innovation. When they hold onto the reins too tightly, they put the focus on delivering short-term results and stifle agility and risk-taking in the process. However, when they offer flexibility and give incentives that prompt nonprofits to improve their performance, they can spark meaningful transformation.
In the business world, investors view spending on research and development as a leading indicator of future growth and long-term corporate health. Similarly, investment in innovation should be considered an essential and substantial component of any nonprofit’s portfolio. Even the most lauded programs can find ways to become more effective and cost-efficient. And every organization needs to find ways to adapt to a changing landscape and take advantage of technological advances.
If donors and nonprofits work together to find new ways to spark innovation based on constant feedback, we will collectively be better prepared to tackle the problems that plague our world today and in the years to come.
Ann Mei Chang is author of “Lean Impact: How to Innovate for Radically Greater Social Good” and executive director of Lean Impact at the Lean Startup Company. Previously, she served as the chief innovation officer at USAID and as a senior engineering director at Google.
