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Nov 26, 2014

Scaling What Works

Disruptive innovation and transformative change are phrases that capture the imagination and generate excitement.  We know how not to do that:  come up with a conceptual idea and throw tens of millions of dollars to create a new initiative or program.  It is more productive instead to identify what already exists that is successful and figuring out how to scale it up.  Jeffrey Braddach and Abe Grindle of The Bridgespan Group call this transformative scale.  In an insightful article in the Stanford Social Innovation Review they provide several strategies and examples of how this might be done.

The most exciting strategies are those that scale in a way that helps far more people while limiting the growth of their overall organization. This the authors dub “scaling what works.”  One strategy is to distribute through existing platforms.  For example, the YMCA has scaled a diabetes prevention program through its existing network of community Y’s.  But the original model required one-on-one attention from a health professional, a model that could not affordably scale.  So they shifted to a group model led by trained community instructors and provided results so compelling that they convinced insurance carriers to cover the cost.

The approach I have found most successful is to unbundle the programs of an organization and identify the component activities that have the most impact.  The organization then focuses on expanding the high impact programs and moves away from or drops the lowest impact programs.  Sometimes impact is financial, creating a highly profitable activity whose profits finance expansion of mission activities.  Sometimes impact is direct, expanding high mission programs with monies freed up by reducing or dropping lower mission money-losing activities.  This often allows impact to grow without growing the organization.

The potential of technology should never be ignored in figuring out ways to scale.  Outreach can tap social media.  Training can be online.  Services can be provided through smartphone apps.  All are ways to serve sizable audiences at minimal additional cost.

Equally important in identifying paths to transformative scale is to consider for-profit delivery models.  This path is the essence of social enterprise.  This path can create scale by opening support to investors and not just grant-makers.  This path can also lead to scale by demonstrating the viability of the market or business so that for-profit companies will enter the field and scale the impact through their separate efforts.  The challenge to this approach is finding what is called early-stage risk capital.  Outside of the technology field, this capital is scarce so that a combination of philanthropic and government support and some self-funding by the nonprofit may be necessary in order to prove the approach sufficiently successful to attract commercial investment and replication.

Braddach and Grindle conclude with some cautions:

  1. Identify what constitutes success in terms of impact, not in terms of growth.
  2. Make sure you can measure that impact and track it regularly so you can adapt along the way if a more impactful approach emerges.
  3. Think hard about the amount of capital that will be needed to reach the scale you target.  This amount must cover overhead and all expenses up to the point when scale is achieved.  It is not likely to be a 5-figure number or an 18-month project.
  4. Innovation must also focus on driving down costs.  Tripling impact at triple the cost is likely to run out of money and fail to scale further.
  5. These strategies require creating and building demand.  “Build it and they will come” will never successfully result in scale.  Marketing, outreach, and demand-creation are essential components in creating transformative impact.  For example, providing services to address lifestyle diseases like diabetes need strategies to make individuals demand services to reduce or prevent their contracting those diseases.
  6. Transformation requires investing (and getting funding for) new capabilities.  Just reassigning the same staff to new (or additional) tasks will not scale.  Training, hiring, new equipment are all likely to be necessary to achieve scale.
  7. Involve the community and don’t go it alone.  Scale requires broad-based support because change must overcome inertia and the comfort of the status quo.  To reach “escape velocity” for scale, there must by buy-in from staff, clients, and supporters.  And maybe their ideas may provide better solutions than your own staff might come up with.

If you want to scale what works, you need some support.  The workshops, bootcamps, and mentoring programs of the Center for Social Enterprise Development are designed to give you the tools and information to determine if scaling makes sense for expanding the impact of your mission.