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Dr Andrew Young writes about the need to expand the gene pool when it comes to solutions for social challenges.

January 21, 2016

I have written about creating an evolutionary playing field (or market or ecosystem) for the effective delivery of social outcomes, and in my last three blogs I expanded on each of three parts:

  • We need to define ourselves – our organisations, our missions, our strategies, our activities – in terms of social outcomes.
  • We need to effectively measure – and transparently report – our progress in achieving these outcomes.
  • We need funding to respond and reward effective delivery of outcomes.

In the theory of evolution, one of the key forces is ‘survival of the fittest’. I’ve argued we need the ‘fittest’ to be the most effective deliverer of social outcomes.

But there’s another important mechanism, without which evolution can’t happen, and that’s genetic diversity . . .

We need to foster and scale effective social innovation

A key risk in having the whole of our system focused on and funding proven outcome delivery models is that new ideas are dead before they’ve begun. Why? Because a new idea – let’s call it social innovation – generally can’t demonstrate outcomes. In many cases, the timeframes may be years – five or more – before reliable evidence supporting their effectiveness can be produced.

For an effective evolutionary system, we need lots of genetic diversity. We need creative ideas and new models for delivering outcomes to occur to people, and we need them to be able to test their ideas. We then need to be able to pick the best (most effective) ideas, and we need to be able to appropriately resource and scale these to the point where they are sustainably funded in our market for social outcomes.

What are the key elements here?

  • Talented people with great ideas – and entrepreneurs who are capable of managing from innovation to ongoing operation.
  • Enough resources to test new ideas effectively.
  • Willingness to take risk. Failure of some innovations must be OK – especially if we learn something.
  • An ability to determine which innovations are working – and will also work when scaled. This is harder than it sounds – there is often a risk that the skills and energy of the leaders of a pilot cannot be replicated.
  • Growth investors – investors and funders willing to make larger investments as the ideas pass hurdles, but still before they can fully prove outcomes or enter into the mainstream funding market.

The investment pipeline

In the previous blog about funding rewarding outcomes I argued that large corporate and philanthropic contributions are a very small part of our overall social purpose funding pie. However, I think these funders have an absolutely vital role to play in the foster-and-then-scale innovation space. They’re much better placed to do this than either government (risk averse, slow to act) or fundraising.

One of the problems is that – traditionally – philanthropic investment in social innovation works almost inversely to corporate investment in research and development (R&D). In corporate R&D, companies spend the minimum they can to have a sufficient pipeline of new products, then when they find a winner, they plunge their resources into bringing this product to market and reaping the rewards. Many philanthropic foundations do the complete opposite – they invest in new program innovations, then as soon as there’s evidence that it might work, the foundation funds something else that is ‘new’.

We need large funders to think again about the basis of their mission – and whether it’s ‘funding lots of new things’, or ‘helping achieve genuine impact’. Some larger US foundations have significantly changed their approach to funding when thinking about this question – for example, moving to a venture-capital-like model with staged funding dependent on meeting measurement hurdles, culminating with a few of the most promising innovations funded to scale over several years. Given the size and scale of funders in Australia, this may be an aspiration we can only achieve if more funders are prepared to work together.

Some of the emerging social investment mechanisms – in addition to having a strong outcomes-focus – could also be important developments for the fostering and scaling of effective social innovation.

Connecting the dots: the future market & measurement

The biggest failure of attempts to foster and promote social innovation in developed countries has been the failure of these innovations to have significant impact on the mainstream delivery of social outcomes.

There are missing links in the evolutionary chain. We need pathways to scale and sustainability – whether it’s through social enterprise models, changes to government funding and government service delivery, franchise replication of a small community model, or some other mechanism, we have far too few examples of innovation creating impact at scale.

In short, unless we have a market in which effective social innovators can be confident of achieving future revenue, there is no basis for an active social investment market and little incentive for increasing philanthropic support for first- and second-stage social innovations.

The keys are the things I discussed in earlier blogs – effective measurement of social outcomes, and funding models that reward effective delivery of social outcomes.

The growing pains of social innovation

The field of social innovation is a hot topic in recent years and I am encouraged by a lot of the energy and momentum that is emerging.

As I write this blog, I am participating in the Social Innovation Exchange (SIX) Summer School hosted by the Australian Centre for Social Innovation in Adelaide. The conference is aptly named the growing pains of social innovation. Interestingly, most of the discussion I’ve participated in has not been about how to innovate – it seems accepted that we know a lot about this – but rather, the focus has been about the elements we need to capitalise on innovation. We’ve been talking about the importance of measurement, the keys to scaling impact and changes in funding models, among other things.

One of the speakers at the event said “there is no inherent value in ‘new’”. Unless innovation changes the way social outcomes are delivered and at a significant scale, we achieve little more than some interesting conferences and case studies.

Creating impact from innovation is a systems problem. Solving this will indeed take some major innovation.

 

This article originally featured on www.csi.edu.au

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