The five stages of social innovation at scale
By Heather McLeod Grant / September 2013 / Leave a comment
This post is the sixth (and final) in a series published by Stanford Social Innovation Review.
We’ve learned a lot from our work helping large-scale nonprofits find ways to create social innovation at scale. As we’ve explored in the last five posts, we’ve helped them reconnect with their core purpose and realign their network around shared goals, and in the process, we’ve worked with them to reinvent their organizations, business models and brands. Looking across all of these cases, our single most important lesson learned is that this work is most effective when approached holistically, because every part of the system is interconnected. If you fix only a nonprofit’s strategy but don’t realign the organization around new goals for impact (including structure, talent, and governance), the new strategy has a poor chance of being implemented. If you tinker with the structure without establishing a north star, the nonprofit will be held back by its lack of strategic focus. If you help the group do better tactical fundraising without increased and sustained social impact, financial improvement will be short-lived. And, if you only tinker with an organization’s “brand promise,” you’re helping the nonprofit sell something that it can’t deliver on, and clients and supporters will quickly become disillusioned. All of these pieces need to be updated and changed together.
Here’s what we’ve learned about the process of transforming these legacy nonprofits to achieve greater impact at scale:
- Diagnose the organization or network holistically. The process should begin with a holistic diagnosis: which pieces of the organization and or network are most in need of fixing? Is the group still having impact, and is its impact still relevant? How could that impact be expanded or updated? How is its organizational health: its structure, its leadership, its talent, and its governance model? How healthy is its business model? And what about its brand—is it current and relevant, or does it reflect an outdated vision from decades past?
- Identify a new vision and strategy for impact: Many nonprofits still have a north star within them, but the light has diminished over time, covered over by layers of lower-impact activities. Finding that light takes an ability to both reconnect with historic purpose and reimagine the organization potential in the current era. Sometimes the light is distributed across “bright spots” within the organization’s network: small examples of programs and approaches that are working well but aren’t yet widespread. That light can then be used to identify what it will take for the organization to move from here to there and devise a change strategy for making the journey.
- Realign the organization around the strategy: Once the strategy is set, the nonprofit then needs to assess its organizational capabilities and fix what is broken or missing. This can include redesigning the relationship of national headquarters with its field or affiliates, restructuring at the top, hiring new talent, building new capabilities, or even changing the governance model. The list will vary from organization to organization. No matter what, focus on the highest-priority items and develop a roadmap that phases the work over several years rather than trying to change everything at once.
- Design a system-wide change process. You have to include representative parts of the system in the process to see points of connection, identify pain points, and create buy-in for proposed changes. Change can’t always be mandated, so broad stakeholder engagement and bottom-up input is critical, such as from local affiliates and end beneficiaries. This is especially true for federated groups and membership organizations. As with all change processes, the leader should plan for quick wins and sequence adoption in “waves” throughout the organization. If the nonprofit is a large, decentralized network (a federated model) the group needs to figure out whether to cascade the change out from headquarters to the affiliates versus horizontally, with some affiliates acting as early adopters and influencing others.
- Lead, communicate, and engage. Change is hard, and given the chance, most stakeholders will slip back into the comfortable status quo. Leadership of this process is critical and should come from many places. The CEO has to keep the organization focused on why they are doing this and create the hunger to make real changes. The board should also champion and communicate the why and the how. And leaders of affiliates should enroll and engage their local constituencies. Leadership at all levels of the system is important, as is constant communication and engagement. In fact, where we’ve seen this approach fail is when there is lack of concerted, aligned, shared, and sustained leadership for change at the board, executive, and affiliate levels.
Innovation is often described as new solutions to old problems, but those new solutions need not live only in new organizations. In fact, we think there is great potential in looking for other avenues to scale social impact, both through aligned action across many organizations and through innovation at scale that helps large nonprofits innovate and adapt to increase their impact. While it is still early days for the transformation efforts at the large nonprofits we’ve described in this series, the early signs give us great hope. We have found this work hard but rewarding, and we see reason to believe that many other established nonprofits can achieve similar results—provided they are willing to be clear-eyed about their current situation, address their problems holistically, and embrace significant change. As more of these efforts demonstrate increased impact, we look forward to the day when our sector is as excited about supporting the efforts of these leaders to innovate existing models as we are about supporting the next new startup.
This series was developed by Heather McLeod Grant, founder of McLeod-Grant Advisors, while she was a consultant with Monitor Institute. She would like to thank the Monitor Institute team for their contributions to the writing and analysis.