Lean Start-Up Approach to Creating Strong Viable Social Change Organizations

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I recently finished reading The Lean Start-Up by Eric Ries.  I like how Ries reinforces some of the principals that I undertook when I was building the software side of my company and launching the different products and services around strategic philanthropy on Place2Give.com.  A few months ago, I had the privilege of hearing a friend and tech entrepreneur, Evan Hu, present at Start-Up Calgary on how he integrated the Lean Start-Up concepts with his tech companies  The way he told his story made me think about how I could apply Lean Start-Up concepts to building social change agencies.

Can you make rapid change decisions within organizations, or at the start of an agency, that are tasked with tackling monumentally complex problems like poverty?  Complex problems that have multiple variables that impact how the problem evolves and how solutions are developed, tested, implemented, evaluated and deployed long-term.

Too often charities and social changes agencies are put into the vicious cycle of lack of funding for solving complex problems associated with the growing demand of those who need these services.  What if we encouraged organizations to tackle one piece of the problem by providing them with the resources to create a minimum viable product (or service) instead of funding a program from soup to nuts with the expectation that deployment would be successful?  What if we allowed organizations to fail forward?

Here is how I see the Lean Start-Up model aligning with social change organizations:

  1. Everyone is an entrepreneur: “A human institution designed to create new products and services under conditions of extreme uncertainty.”  Social changes agencies are continually working under conditions of extreme uncertainty.  Whether it is the uncertainty of funding, or the challenges of solving complex social issues - many of these agencies are made up of people who live on the edge.
  2. Entrepreneurship is management: Because these agencies are living and operating on the edge, the type of person that leads or manages this type of agency has to have entrepreneurial tendencies.  To be able to pivot, move and recalibrate as the market, political environment and social needs shft.  The one road block in this area, is that not only does the management team need to have this mind-set, but the Board of Directors, who are traditionally and by their structure, risk averse, also need to have this approach to business.
  3. Validated learning: I see this as failing forward.  Traditional donors don’t fund charities to fail or as Eric Ries puts it, validate learning.  “Start-ups exist to learn how to build sustainable businesses.”  Adding on to the funding model disconnect, is the fact that at the base of the charity is that if they were actually successful, they will have worked themselves out of a business (solved homelessness, eradicated cancer, diminished childhood obesity, etc.).  So do we want charities and social change agencies to be sustainable or successful so that they can close?  This will always be a struggle amongst policy makers, funders and the agencies that serve our communities.
  4. Build-Measure-Learn: Just as start-ups are to turn ideas into products and adjust as markets dictate, so too should social changes agencies build their products and services to be adjustable to the market.  Policy also needs to adjust so that agencies can “pop-up” and achieve what they need without having to formalize their structure, yet still be able to access the funding support required.
  5. Measuring impact - a new way of accounting: We hear often enough that charities need to be more transparent and accountable. I have written several pieces about this over the years.  Ries emphasizes that start-ups need to have a clear way to measure progress. Social change agencies need to also articulate how they will, “measure progress, set up milestones, and prioritize work.”  Funders need to fund this piece of the puzzle as much as they fund the overall project.

We don’t often talk about charities that fail because we don’t allow charities to fail; charities close, or they merge into a larger organizations, or they de-register.  This language around charity failure can be tied back to how organizations are even created.  As long as you have the ability to fill in forms and prove that what you are building is charitable in nature you can have a charity.  It is not about the ability to establish that what is offered is actually needed in the market.  What if we made part of the charity creation process a way that allows for market to influence whether this organization needs to be in the market in the first place?

The reason why we need to document charity failure is so that we can learn and build more viable solutions.  The ability to create a minimum viable product, see what works, and then fix or scrap what doesn’t.  Donors are shifting how they donate, consumers of social services are shifting in how they access these services and government agencies are shifting their funding priorities, it only makes sense that social change organizations are able to also learn and shift quickly and share that knowledge with others in their fields.

How do you see this model being applied? Do you agree that we can apply these principles to building effective social change agencies?

Comments

The Lean Startup -- A Great Book

A good introduction to the Lean Startup approach to building and launching products for new markets. The Lean Startup by Eric Ries draws upon numerous works that have addressed the dynamics of new markets, discovering what customers really want, fact-based decision making and lean manufacturing. What is interesting is the way Lean Startup brings these ideas together into a cohesive and powerful framework. A framework built around a fundamental insight: building a new products for a new market should be considered a high risk experiment. Or rather, a series of experiments that successively prove (or disprove) whether we are building products that customers actually want. So, make assumptions explicit, test them vigorously, learn, repeat. Iterate through this loop as quickly as possible by deploying cross functional teams that build the product in small batches

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