Solving the world’s tough, but solvable problems, requires new levels of social innovation. But many social innovation approaches require retooling funder mindsets and business models.
Written by Richard Crespin and Beth Skorochod
Imagine you work for a large international nonprofit, tackling some of the world’s most intractable health problems in some of the most difficult environments. Your team and your donor loved it when you proposed—and won funding—to apply a new social innovation approach to an issue that has seen only incremental change over five decades. Working with outside experts in this approach, you are in the midst of deep engagement with the target beneficiaries, trying to gain empathy for their situation and uncover insights you’ll translate into interventions. It’s going well and your team feels on the cusp of discovering something truly novel. Then it all falls apart.
The donor calls and wants to see what you’ve implemented, uncomfortable with any more time spent in the field without results. They want to see the numbers demonstrating the impact of this new approach. The consultants, aghast, demand more time and refuse to ‘cut corners’ and start designing solutions before they have what they need. Your team, now disappointed, was learning a new approach, and while it wasn’t always easy to shift their thinking, they felt they were getting somewhere, engaging with beneficiaries in ways they hadn’t before. The beneficiaries, who previously felt empowered to design their own solutions, now feel abandoned and excluded.
You try to hold it together, balancing the potential of this new approach with the donor’s demands, your team’s capacity, and ultimately the best solution for your target beneficiaries. But in the end, you return to a more traditional approach—gathering your team to quickly generate ideas and get interventions in the field. You need to show uptake and not lose your funding.
This scenario gets played out in similar ways all across the international development field. Increasingly, development actors have turned to social innovation approaches, often born in the private sector, to disrupt traditional ways of thinking. The appetite for Lean Startup, Agile, Human Centered Design (HCD), and Collective Impact keeps rising. But despite consensus that the world’s stickiest, most wicked problems require these types of new thinking and social innovation, most donor processes simply don’t accommodate them. There is a disconnect among the contracting, funding, and technical mechanisms of development grants that renders them fundamentally at odds with these new ways of thinking.
There is a disconnect among the contracting, funding, and technical mechanisms of development grants that renders them fundamentally at odds with these new ways of thinking.
The Principles of Social Innovation
In his article, ‘Rediscovering Social Innovation,’ James Phillis defines social innovation as “a novel solution to a social problem that is more effective, efficient, sustainable or just than existing solutions and for which the value created accrues primarily to society as a whole rather than private individuals.” Whether employing the process of HCD or the discipline behind Lean Startup, social innovation approaches plucked by development actors share a few common bonds.
1. They are problem driven. For example, rather than designing a program around a clever new floating garbage bin that picks up ocean trash but that coastal communities can’t afford to maintain, these approaches would begin instead with a deep examination and definition of the marine debris issue in the context of the communities most impacted by it, designing around the problem rather than a predetermined solution.
2. They are user-centric and empathetic. To address the issue of post-harvest loss, programmers might immerse themselves in farmers’ day-to-day lives to see firsthand their issues of storage and transport before designing solutions rooted in the needs and context of the farmer.
3. They are inherently collaborative, forging partnerships across sectors, technical disciplines, program teams, and perhaps most importantly, between programmers and beneficiaries.
4. They are iterative and adaptive with a focus on testing and learning. A new clinic experience for couples seeking HIV testing might be prototyped in several communities using reactions and feedback from couples to refine the clinic before broader testing. Each loop of testing, learning, and adaptation makes the solution more relevant and increases actual use.
5. They are tolerant of ambiguity and failure. Non-linear, iterative processes allow for flexibility and change within the design process, and a focus on creating desirable solutions means that some may fail. Approaches demand a flexible environment where failing fast and learning is celebrated, not punished.
Barriers to Innovation
While social innovation approaches seem poised to take over the field of development, as the opening scenario showed, there are obstacles to these approaches achieving their full potential. Some of the very same components that set these social innovation approaches apart present challenges to making them work.
Their iterative nature creates tension with more traditional approaches. Traditional design requires an upfront detailing of risks, benefits, activities, and outcomes. Social innovation approaches resist predefined solutions, following a non-linear path—looping through cycles of design, testing, learning, and adaptation—making measurement more challenging.
Their pace and cost of implementation are not well documented or understood. Multiple iterations often mean increased time in the field and increased transaction costs. Practitioners argue that this additional time and cost ensures solutions are tested, resonate with users, generate buy-in, lower risk, and ultimately save time. But these longer design periods make donors nervous because they seem to delay the time to impact.
Increased collaboration can also mean increased confusion and lack of accountability. The uncertainty that exists in the early stages of a social innovation process can extend to uncertainty among the players about their roles. As projects make more concrete decisions, donors and implementers must communicate about the roles of all involved, what will be delivered, by whom, and when.
Recommendations to Help Innovation Flourish
To harness the potential of social innovation approaches, traditional donors, private foundations, bilateral donors, and others funding development work must rethink their own structures and expectations to enable better outcomes.
- Align contracting, financing, and technical objectives of all awards
Donors have invested in getting their technical and program officers up to speed in understanding these new innovative approaches, but it appears that little investment has been made to educate the contracting and finance officers who approve and oversee them. To align agreements to these new approaches, the technical, financing, and contracting components must be harmonized and all staff supporting awards must understand the concepts and principles behind social innovation approaches. The first steps in aligning the structure and scope of grants to the processes of social innovation are training all key staff and ensuring they are included in the conversation.
- Support a flexible environment for iteration, failure, and learning
When employing approaches where trial and error are critical to learning and improving ultimate solutions, the “f” word cannot be taboo. Failure is a part of innovation and donors must learn to celebrate it. This shift requires donors to create a safe space for implementers to share failures and learnings, rewarding not the fall but the recovery. This must be translated into contractual language that supports “pivots”—the quick recovery and adaptation after learning from an initial test.
- Contract adaptable theories of change instead of upfront logframes
The principles of these approaches simply won’t allow for the predetermined outputs and activities required in traditional M&E plans typically developed at the proposal stage. Rather, projects could begin with a hypothesis or theory of change that can be adapted as insights are generated. If donors can shift their expectations, accepting and contracting for a theory of change upfront with the expectation that a formal monitoring, evaluation, and learning plan will be delivered after prototyping, the process can retain its flexibility and adaptation, while still delivering on M&E.
- Consider new funding and procurement models and timeframes
While cost plus fixed fee contracts are commonly used among traditional donors, deliverable-based models may provide more flexibility to use social innovation approaches. Impact bonds, pay for performance, or fixed price awards could provide space for adaptation and iteration since they focus more on impact and less on process and hitting linear milestones.Donors must revise their expectation that projects will begin implementation immediately. Some donors have experimented with 3–6 month inception periods, allowing organizations to dig into the problem, identify target audiences, and engage them to generate insights before proposing interventions. Other donors have considered a two phased approach with “Phase 1” concentrating on a relevant problem definition, defined target audience, and intervention concepts. “Phase 2” finalizes interventions and implements them. The phases could have separate awards or bring together two different consortia. These shorter timeframes and clear deliverables also support deliverable-based pricing instead of cost plus fixed fee.
- Use backbone organizations
To succeed, these approaches require consistent coordination, communication, and collaboration among project stakeholders. Saddling one implementer with these tasks can cause problems across a consortium. Instead, a separate backbone organization should coordinate stakeholders as the project transforms and adapts. The backbone organization can manage reflection points with stakeholders, including donors and beneficiaries, and can ensure detailed documentation of the process.
Conclusions and Next Steps
If donors truly want to take advantage of all these innovative approaches have to offer, they will need to adjust their business processes to align technical, financial, and contractual requirements. As it stands, most donor contracting and finance officials are incentivized on disbursement, not impact. By making the adjustments recommended above, donors will better align their processes and behaviors to achieve the impact they seek and better position themselves and their implementing partners to succeed and change the world in lasting ways.
Director of Practice, CollaborateUp
Beth leads the firm’s work in inclusive methods for social innovation and development. She oversees work in approaches such as human centered design (HCD) that engage communities and beneficiaries in designing solutions that work for them. Before joining CollaborateUp, Beth spent nearly 10 years with Population Services International (PSI), applying her skills in public health, social and behavior change, HCD, and social marketing to various positions including Communications Technical Advisor, Deputy Director of HIV, and Senior Technical Advisor for Behavior Change, supporting headquarters and more than 50 country offices around the world.
This article is part of a series on “solvable problems” within the context of the UN Sustainable Development Goals. The Global Engagement Forum: Live takes place this October 10–11, 2018, bringing together leaders from across the private, public, and social sectors to co-create solutions and partnerships to address four urgent, yet solvable problems—closing the skills gap in STEM, reducing post-harvest food loss, ending energy poverty, and eliminating marine debris and ocean plastics. Learn more about the Forum here.