The foundation, the house, the finishing touches

On my way to work, I walk past a house that’s been empty for more than a year.  The lot was vacant and listless for a while, and then a few months ago they started work in earnest, including demolishing the old house, clearing the lot and laying the foundation. It’s been slow going.

I went away for a week’s vacation, and suddenly the house is up. Not “the house” as in a finished thing, but a three-story wooden structure with walls, a roof, the works.

Now it’s going to take them another six months to finish it.

Those three phases – the pre-work and building the foundation; the framing and putting up of the house; and then doing all the work to finish it – are good reminders of how great teams work and where to place effort.

The pre-work and foundation-building phases are all about the composition of the team: who is on it, the norms of how the team works together; the psychological safety within the team; how (and by who) behaviors that are in and out of line with the emergent team culture are addressed and reinforced.

The framing and putting up of the house is what we typically consider the “work” of the team: the big pieces that are visible and that feel like the team’s formal output.

And then there’s the finishing, which is about getting all the details right: not just laying tile but doing it beautifully; making small adjustments when the door that’s in the plans doesn’t quite work. This is the work of smoothing off all the rough edges to make sure things not only work the way they’re supposed to but that they feel delightful and surprising to the end users. This phase can only exceed expectations if the team members truly care about the product and the end user experience.

What this means is that the work that really matters comes at the beginning – in forming the team and how it works together – and at the end – when the sense of care and ownership bear fruit. Yet more often than not we find it easier to fuss about the bit in the middle, the visible work product that the team is producing.

Great teams – teams with the right people in the right roles, teams with strong and supportive cultures, norms and behaviors – feel like flywheels. Sure, there’s big, hard and heavy work to do, but the pieces are in place to do that work quickly, joyfully, and with leverage.

Corrected link – ImpactMatters newsletter

Yesterday’s post had the wrong sign-up link for our new ImpactMatters newsletter.

The right link is: bit.ly/impactmatters 

To give you a taste: the next newsletter, which will come out on Tuesday, will have results from Acumen’s Lean Data sprint, in which we gathered data from customers of 18 Acumen investees across six countries – our team, incredibly, did all this in about two months.

I’ve been selectively sharing these results at speaking events in the impact investing sector, and as far as I can tell no one else has this sort of data across such a large swath of their portfolio.

It’s pretty exciting, and you can get the details of this sort of thing if you sign up. Enjoy.

Lean Data Podcast

On Monday, Tony Loyd was nice enough to include me in his great series of Social Entrepreneur podcasts. We covered a lot of topics but dug in most deeply on Lean Data, particularly on how we are using it at Acumen to amplify the voice of low-income customers so our entrepreneurs can better serve them.  It was a fun conversation.

(if you’re not seeing the embedded link click here)

 

If this kind of thing is up your alley, you might want to sign up to receive the specialized newsletter we’ve created to share hot-off-the-press insights on what we’re learning through Lean Data. We send it out once every six weeks or so, so it won’t clog your inbox, and it’s full of great stuff.

It’s called Impact Matters and you can sign up here.

 

The Hardest Thing

It isn’t figuring out how to solve the problem,

or deciding what approach will work best.

It isn’t sussing out what tactics to use,

or who will be your partners and your competitors.

It’s not figuring out product-market fit,

and it isn’t even hammering out how you’re going to convince skeptics of your story.

The hardest thing is figuring out what’s really important to you.

The things you want to work for.

The things that are worth sustained energy and sacrifice.

It’s the act of clearing away the dross, of quieting the voices that are the noise, not signal, streaming through your head.

The moment you state your goal is the moment you can’t hide from it.

It’s the moment you have to stop pretending that you don’t know exactly what it is that you are here to do.

A confluence of impact and scale

I spent last week at the annual meeting of the Global Impact Investing Network (GIIN), and I was struck by three trends that could take our sector to the next level.

The first is around taking impact seriously. The second is how different the impact measurement challenge looks depending on where you sit. The third is the acceleration of the rate at which mainstream financial capital is entering our space.

Throughout the GIIN conference, impact — the role it plays in defining our work and how to improve the quality of our impact data — was front and center in a way that I’ve not felt before. For example, one of the first panels kicking off this year’s event was on market segmentation. While segmentation is not a new topic in impact investing, the panel was titled “Market Segmentation through an Impact Lens.” The panelists — from Skopos Impact Fund, Tideline, Athena Capital Management and Omidyar — discussed their research and client-facing efforts to make sense of impact investing from the perspective of impact objectives.

This shouldn’t be brand new, but it is. An orientation to start segmentation with an impact lens runs against the natural tendency to segment investors by asset class or sector strategy, and it’s certainly a far cry from accepting that “intentionality” (as in: my intention is to make such-and-such happen with limited accountability on the data to figure out whether or not real change is happening) is a high-enough bar to set for the sector in terms of impact.

If we could pull off organizing ourselves, as impact investors, by the change we’re trying to make in the world rather than by the investing strategies we’re using to make that happen, that would be a big step forward.

Second, we need much better impact data AND we need to help people who are drowning in too much indecipherable, low-quality data.

I had the chance to participate in two panels focused squarely on advances in impact measurement. What I learned from these panels is that better impact data isn’t enough — there’s a huge desire for simplification too.

At Acumen, our Lean Data work has focused relentlessly on going directly to the low-income customers we aim to serve so we can understand what they have to say. Our objective is to improve the quality of impact data we have by scaling up our capacity to listen to the voices these customers, so we and our investees can better serve them.

While I’m convinced that this kind of listening must to be the foundation of everything we do as a sector, it’s not enough. Listening to my fellow panelists — from Goldman Sachs, Zurich Re, Abraaj Capital and Leapfrog — I heard that big institutions with large, diverse portfolios of impact investments not only desire better impact data but they also need help simplifying and clarifying the reams of impact data they already feel they receive.

Ironically, these large institutions have too much data coming in and most of it’s not very good. Our job is both to improve the strength of the signal and also lessen the noise.

Lastly, it was impossible not to notice that more and more big-name financial players are coming to the table.

The simple fact of having an impact measurement conversation between Acumen and Leapfrog on the one hand (two organizations that are essentially growing startups, with between $100M and $1B in capital under management), and Goldman Sachs, Zurich Re and Abraaj Capital on the other means that there are innovations in impact management happening across the spectrum of impact capital. That’s hugely positive.

Then, at the end of the day, we got to hear Former Governor Deval Patrick and Deborah Winshel discuss the impact investing strategies they began implementing in the last year at Bain Capital and Blackrock. Both articulated their goals to fully integrate impact into the global practices of these uber-blue chip firms, firms that collectively represent more than $4.5 trillion in assets. While it’s early in the journey for both Bain and Blackrock, it’s clear that their actions could have a huge influence with other mainstream financial players and beyond.

As I left the conference and made my way back to New York, I was struck with the feeling that we are entering a new phase in our sector. Having passed through the teething pains of our early days and our loud, sometimes impulsive childhood, we’re ready to start growing up a bit. This means harnessing — rather than just shouting about — the increased momentum building in our space, thanks to the entrance of major new players, while also taking a much more sober and serious look at the ultimate goal of this work, which is to make a real, large-scale and lasting difference in the well-being of people and the planet.

If, in this next chapter, we can find a way to have impact investing go deeper on impact and bigger in terms of scale and reach, we will truly be in a position to take this work to the next level.

[Note: you can also follow the conversation about this post on Medium]

Why the nonprofit sector moves slowly

Recently I heard a telling narrative about the “old days” at some of the big American foundations.

The old-school modus operandi of these foundations (more recently than I’d have thought, closer to 20 years ago than 50) was a program officer locked away in her office for months, drafting PhD-type documents explaining a theory of change and a grant strategy. These documents would wend their way up to the Foundation President who would inevitably send them back with long and detailed critiques, asking for the next draft. Years could pass in this back-and-forth.

The apocryphal version of this story was that by version 16 version of the paper, an exasperated program officer would just send back the original draft….which would then get approved.

We’ve come a long way in the nonprofit sector, but we still are, by and large, slower than we should be.

Part of the cause is the looseness inherent in the kinds of financial transactions we engage in. There’s an organizational culture multiplier around how we act when money changes hands: years couldn’t pass if there were a real customer waiting to buy a real product from that program officer.  “Budgets” are just that – intentions and plans – and they operate with a different logic and profoundly less urgency than accounts payable and working capital. We convince ourselves that we are prioritizing getting things right, when all we’re really doing is letting another month slip by.

Because we mostly lack the tight and consistent drumbeat of traditional financial transactions – of buying and selling – we have to do extra work to create cultures of hard deadlines. These days we talk a good game about moving fast and being nimble, but the pendulum is just starting to swing in the right direction. To keep the momentum going, we need to make sure we ask ourselves questions like:

  • When we have a deadline, what happens when our intention to move fast hits up against our desire to get things right?
  • How often do we break an established process to keep a promise to make a call by a given date and time?
  • When a key decision-maker is unavailable to join a decision-making meeting, does the meeting get rescheduled?
  • Do we regularly track and review the external promises we make and how good we are at keeping them?
  • If we posed a free response question to our customers asking them to describe us, how sure are we that nobody would say “slow”?

Often we’re so busy asking those around us about their process and their results that we forget to look at ourselves in the mirror.

Put the gloves down

What does it mean to say that real fundraising is about building long-term partnership?

It means that some of the most important meetings you have with long-term funders are the ones that cover topics that don’t require their funding support:

The amazing, fully funded project that you’re just kicking off with a few other partners.

The great piece of work that you both know is outside of their formal strategy that you’re really excited about.

The new initiative where you’d value their experience and input.

Some funders are so used to – and so tired of – being pitched constantly that they end up behaving protectively, as if the only thought running through their head is, “how many times will I have to say ‘no’ in this meeting?”  I’ve had funders start sentence after sentence with, “we’re not doing any new funding this cycle” long before I’ve asked for anything. There’s no hope of building a relationship if someone has their gloves up protecting themselves from an onslaught of asks.

Fundraisers can be part of the problem, acting as if that every meeting should include a financial ask, and fearing that they’ve made a mistake if they don’t ask for money each time.

Every meeting should help deepen the relationship and, even better, should give everyone around the table the chance to contribute meaningfully to making positive change happen. Often that’s not about money.

Taking a stance that you’re not constantly, desperately on the lookout for funding is one of the best ways to allow the partners you hope to work with to put down their gloves and actually listen.