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Nonprofit Management

Shifts in Thinking to Achieve Transformative Scale

We need to shift from a focus on production to impact, and leverage principles of platforms, networks, community, and co-creation.

SSIR x Bridgespan: Achieving Transformative Scale SSIR x Bridgespan: Achieving Transformative Scale Achieving Transformative Scale is an eight-week blog series exploring pathways that social sector leaders around the world are pursuing to take solutions that work to a scale that truly transforms society.

There is a growing recognition that the next era of social sector innovation is emerging in what The Bridgespan Group’s Jeff Bradach and Abe Grindle call transformative scale. This innovation will require that we not only act differently, but also think differently.

To start, we need to shift our thinking about scale itself. The existing mental model of scale is left over from the industrial era. The 20th century was an era of mass production in which scale meant the ability to produce and deliver large quantities of goods and services. But the 21st century is an era of mass collaboration. Scale is no longer about production but impact. It’s not about how big you are and how efficiently you operate. It’s about how well you catalyze action around a shared purpose.

When the landscape changes, our mental models become outdated. Transformative scale will require that we adopt new mental models in four important areas:

1. Strategy: Product to Platform

In a digital age, the value of one’s product is less important than the value of one’s platform. It’s not about how well you create value, but how well you enable and empower others to create value. For example, as products, Microsoft’s smartphones are arguably just as good as those from Apple and phones using Android, but as a platform, Microsoft’s phones fall short. Developers are less likely to build apps for them, and the overall ecosystem is less appealing to customers. Meanwhile, in areas like software, transportation, and hospitality, platform companies like Salesforce.com, Uber and Airbnb demonstrate the power of platforms to disrupt even well-established industries.

2. Organization: Hierarchy to Network

The traditional approach to organization is hierarchical, with specialized roles and formal reporting structures. Industrial-era scale was achieved through centralized control and decentralized operations. This approach is efficient and consistent, but rigid and monolithic. Transformative scale requires greater agility and adaptability, and therefore a different organizational model. Networks are the answer. We can see the power of networks in everything from social media to the design of the Internet. Even in nature, flocks of birds and schools of fish can move with remarkable coordination, and yet no one is in charge. Network principles guide their behavior.

3. Communication: Audience to Community

For the last hundred years, communication has been largely one-to-many through broadcast media. Now the digital revolution has enabled many-to-many communication, enabling people to communicate on a global scale. Once-passive audiences are becoming collaborative communities. Social media such as Facebook and Twitter are only the tip of the iceberg. There is an opportunity for social innovators to create and engage their own communities in the way that Nike has engaged runners through its Nike+ community and American Express has engaged small business owners through its Open Forum community.

4. Relationship: Consume to Co-create

Connectivity and empowerment are changing the relationship between individuals and institutions. People are no longer consumers but co-creators. They don’t just want to receive something already made; they want to participate in its creation. This applies to every type of stakeholder—not just customers, but also employees, recipients, donors, and volunteers. Co-creation generates better engagement and ownership, as well as more creative and enduring outcomes. The success of companies like Kickstarter, Quirky, and Threadless are useful role models for those in the social sector.

To understand the creative outcomes of these shifts, consider the organization Ushahidi, which received the 2013 MacArthur Award for Creative & Effective Institutions. Ushahidi, which means “bearing witness” in Swahili, has brought transformative scale to transparency in human rights abuses and emergency response for natural disasters such as the 2010 Haiti earthquake. The Ushahidi software platform enables people to report incidents of abuse and emergency needs in their communities, mobilizing a rapid-response network. The combination of platform, network, community, and co-creation is a marked contrast to the more traditional approach of centralized collection, reporting, and outreach.

We are entering a time in which transformative scale is not only possible, but also essential. New challenges require new thinking. Across both the commercial and social sectors, we can see new ways of creating value, organizing, engaging, and collaborating around a shared purpose. With a shift in thinking, we have the potential to unleash the imagination, energy, and resources of a global community of citizen transformers.

See more from SSIR x Bridgespan: Achieving Transformative Scale

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COMMENTS

  • BY Katie S Milway

    ON May 6, 2014 01:00 PM

    Well said, Mark.  On all four counts.

  • BY Dr Tocquer

    ON May 6, 2014 04:36 PM

    Dear Mark

    Interesting article.  Early you mentioned the shift between Product to Platform. How do you define platform? Is it specific to IT?
    Regards
    GErard

  • BY Mark Bonchek

    ON May 6, 2014 06:29 PM

    Thanks Gerard.  I do don’t define a platform purely as technology, although often enabled by technology.  See the work of Profs. Marshall Van Alstyne and Geoff Parker.  Also strategist Sangeet Choudary on his blog platformed.info.

  • BY Janneke Lang

    ON May 7, 2014 11:56 AM

    I think this discussion is very relevant to the way business is transforming. With the Millennial generation’s interest in social good and business, we can see the social enterprise sector growing. Even companies that are not based on social good are creating mission statements with the intention of empowering their customers to be able to do something they weren’t able to do before. I think this is integral in fostering creativity, innovation, and purpose.

  • BY Nick Temple

    ON May 18, 2014 10:17 AM

    I don’t disagree with anything in the article - apart from making out that this is somehow new thinking or the ‘next era’. Scale in the social sector has *never* been about production (or growth of turnover / numbers of branches etc) but always impact - except for those who have lost focus on their mission.

    Co-production and co-creation have been happening for years - both before and after the terms started to be used regularly.

    Plenty of non-profits are already raising funds from crowdfunding platforms - in some cases, designed specifically for them.

    And the point about networks is made in the literature from the sector for the last decade and more (and before) - whether it’s Forces for Good or The Locust and the Bee or any number of articles on SSIR.

    This is evolution, not revolution.

  • BY Mark Bonchek

    ON May 18, 2014 05:49 PM

    Nick, thanks for your comment.  I am pleased that we agree on the main themes of the article.  However, I must disagree about the fact that these ideas are mainstream in the nonprofit community.  As one small example, the ranking of the Top 100 Non-Profits is not a ranking by impact, but a ranking by revenue.  (http://www.thenonprofittimes.com/news-articles/the-npt-2013-top-100/).  In many philanthropic circles, inputs still matter more than outputs.  Furthermore, among these large nonprofits, ideas like platforms, networks, and co-creation are very new and not widely adopted.  You are correct that these ideas have been around for a while, but both evolution and revolution take time.  It is incumbent on all of us as social innovators to continue advancing the cause of updating our collective thinking.  As Albert Einstein said, “We can’t solve problems by using the same kind of thinking we used when we created them.”

  • BY Nick Temple

    ON May 19, 2014 01:43 AM

    It may be a difference of US - UK context, Mark, but very few in the social enterprise + charity sector over here think in terms of inputs or outputs these days: outcome-based commissioning is fairly established (in principle if not always in practice), and we have large charities + social enterprises creating platforms, building networks and expanding their work involving users + beneficiaries in service design + delivery.

    Some people (in the one you cite a magazine, which may be using ‘top’ to mean ‘biggest’) do still use turnover as a proxy for scale of impact, but that’s usually due to a lack of impact data (a whole other debate about consistency / standardisation / principles of reporting etc), not a lack of understanding that it is the impact that matters. See the SE 100 (https://se100.net/) in the UK for one platform that measures both turnover and impact growth.

    I suppose I felt the tenor of the piece implies that the social sector has a lot to learn from these areas, as if it hasn’t been doing so - but we have a car-sharing social enterprise, many users of Salesforce (including one of the largest in the UK), and countless new projects utilising new technology and networks in exciting new ways. See http://socialtech.org.uk/ & http://unltd.org.uk/bvc/ for examples across the UK + globally.

    The focus on impact has also grown exponentially in the last decade: there is a whole industry of initials (IIRC, GIIRS, IRIS, SROI, SASB, TRASI) and many others that demonstrate that investors, funders, commissioners and providers alike are focusing much more on impact. Others insist that we remember that, to quote Einstein back at you, ““Not everything that counts can be counted, and not everything that can be counted counts.”

    Of course there are organisations catching up / slower to move / behind the curve / more traditional in outlook, but this is all stuff that’s been talked about for a long time in organisations big and small. [the opening para at the start of this article could easily be put in front of this article on SSIR from 7 years ago: http://www.ssireview.org/articles/entry/creating_high_impact_nonprofits/ ). We all repeat things to get the message across too (if I had a pound or even a dollar for every time I’ve been asked to define social enterprise…), so I wish you well - but for many this will be entirely familiar and already in train, not new or transformative.

  • BY Mark Bonchek

    ON May 19, 2014 12:31 PM

    Nick, I’m pleased to see that the UK is advanced in its thinking.  I didn’t mean to say that the nonprofit sector only thinks in terms of inputs and outputs.  The idea of impact has certainly taken hold.  Rather, I believe that our notion of scale is still defined in an economic sense in terms of inputs and outputs.  So when we look at how to scale impact, we need to think beyond conventional approaches of how to achieve scale.  After all, scale in this context is shorthand for economies of scale—“the cost advantages that enterprises obtain due to size, output, or scale of operation, with cost per unit of output generally decreasing with increasing scale as fixed costs are spread out over more units of output.”  But what does this mean in the context of a social enterprise working on achieving impact?  Scale of impact is not the result of decreasing units costs.  It is instead the result of something else, which I have tried to outline here.

    I would also add that we may be thinking of these concepts in different ways.  For example, I would not consider being a user of Salesforce.com as having a platform strategy.  That’s simply using a software-as-a-service.  I actually mean reconceiving of one’s enterprise as a platform itself.  How do other enterprises “plug in” to yours.  How do you enable them to grow their business?  How do you create a “two-sided market”?  http://en.wikipedia.org/wiki/Two-sided_market

    Similarly, I don’t just mean using technology networks, as those listed on the Social Tech guide.  I mean actually reconstituting one’s organization from a hierarchical model of organization to a networked model.  Take a look at what Tony Hsieh is trying to do with Zappos in implementing holocracy as a management method or what the game-maker Valve is doing in their organization (http://www.bbc.com/news/technology-24205497).

    The recommendations from the article in SSIR seven years ago are certainly good advice, but they are not fundamentally different approaches to creating value and achieving scalable impact.  I am not repeating these messages, but rather pointing to a new way of thinking that enables those ideas to move behind the interim phase of a “horseless carriage” to a true a automobile.

  • BY Nick Temple

    ON May 19, 2014 02:23 PM

    Hi Mark.

    Interesting links - I kind of wish more of these had been in the original piece…

    Anyway, I think we may be in agreement on most things.

    I still think scaling impact (not through an economic lens) has been out there for a while. Googling the term alone gives you a view of that, as do well known projects like Scaling Social Impact at Duke or Ashoka’s work etc. More recently, you might be interested in a recent report over here called Diseconomies of Scale (http://locality.org.uk/our-work/policy/diseconomies-scale/) looking at how best to deliver public services.

    There’s more platforms than I can list here emerging, and huge focus on apps, platforms, co-creation etc from a wide range of funders & providers here. As a membership body, we know ourselves how fast models are changing (radically) of engagement, production, service, design etc. We will see lots more of this, I’m sure you are right.

    Am familiar with holocracy - though I guess the proof will be in the eating (I.e. does it produce results); you might like Lars Kolind’s Unboss too, if you don’t know it - he did similar to Valve a while back and he was very interesting when speaking to a group of social sector leaders I was with.

    Best of luck with it all.

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