Things we’ve done before

The things we’ve done before get less scrutiny. We did them last year (or last quarter, or last month) so when the time comes to do them again, we turn the crank and start.

New things, on the other hand, get all the tough questions.  Why?

Did we know more last year about what needed to happen today than we know today? Probably not.

Rather, the things we’ve done before, collectively, add up to our sense of who we are. Organizationally, we are the sum the things we do – our programs, our initiatives, our product lines – and cutting one of those away creates a sense of loss.

Worse, that loss may arrive special delivery from the outside.  Those close to you – customers, donors, friends – are quick to say, “I miss that thing we used to do.”  But they’ll never bang on your door with nostalgia for the thing you’ve never done.

If you’re in the “creating new things” business, your job is to understand how much the people around you resist white space and how much loss will be experienced by letting go of something familiar. Then your job is to work through these tough, personal conversations, not to pretend they don’t have to happen.

Remember, old versus new isn’t a fair fight based on the merits what makes the most sense today.

5 tough questions

Today is the second annual NextGen:Charity conference.  To commemorate the conference, Ari Teman, co-founder of the conference along with Jonah Halper, asked me to respond to five questions about innovation in the developing world, leadership, faith, blogging, and failure.  Here’s the interview (the link to yesterday’s Huffington Post article is here).

1. There’s a lot of talk about sharing our innovations with the 3rd world — let’s flip that around. What are some of the lessons the “developed world” can learn from the innovators you support (who have to operate on pennies a day)?

Extreme frugality, a relentless focus on customers, the ability to navigate complexity and take nothing for granted. In 2003, Acumen Fund connected with the visionary entrepreneur Amitabha Sadangi who realized that he could reverse-engineer drip irrigation systems originally developed in Israel and make them infinitely scalable and radically affordable to poor customers in India. Amitabha knew that poor farmers would need to see an extreme value proposition – the ability to test the system on 1/8^th acre plots and to see payback in less than a year – and that even so the road would be long and hard to change farming practices. Eight years later, Global Easy Water Products has served more than 300,000 farmers, and Amitabha has a lot to teach entrepreneurs globally about creating the minimal viable product to meet the needs of customers for whom value per dollar is paramount and the willingness to take risk is limited. He’s also about the most persistent man you’ll ever meet.

2. The Acumen Fund has a prestigious Fellowship Program where you develop young talent and you also work with some amazing visionaries — what do you see as the key traits of a successful leader?

We expect the Acumen Fund Fellows to possess a unique combination of traits – operational excellence, financial acumen, and what we call moral imagination, the ability to see yourself in another, to walk a mile in her shoes. Each year we select 10 Fellows from a global pool of 700 applicants from 60 countries, and the Fellows are an amazing group from all walks of life. We’ve had people like Jocelyn Wyatt, who has created IDEO.org to bring design thinking and user-centered design to address problems of poverty; Jawad Aslam, who is now pioneering low-income housing for the poor in Pakistan through his company, AMC; or Suraj Sudhakar who, in addition to his day job, has thrown 40 TEDx’s across the slums of Nairobi. In addition to the incredible combination of skills these Fellows bring to the table, what differentiates them is a deep and abiding commitment to seeing the poor not as passive recipients of charity but individuals with hopes, aspiration, and dignity.

3. On your blog you frequently muse on various faiths’ approaches to giving. How does faith inform your leadership and charity work?

When I started blogging I thought I was going to write about philanthropy and social enterprise, but as I continued my exploration I kept on getting to more fundamental questions of service and giving. While I’m a huge believer in the need for innovation to solve some of the world’s toughest problems, there’s also a deep wisdom that all of the faiths have to offer – we just need to be willing to open up our ears and hearts to what they have to teach. Sometimes I worry that we might get too smart in how we approach solving problems and lose our rooting in this centuries-old wisdom. The notion that giving is part of the circle of life is central to all religions and cultures – it connects us to one another, strengthens community, and is an acknowledgment that if we are in a position to give, then we have ourselves been given a great gift.

4. You mentioned you blogged publicly about your Generosity Experiment to encourage yourself to follow-through. How else do you keep yourself motivated?

It’s incredibly easy to stay motivated when you feel like you’re making a difference – it’s when you’re trying to make a difference and failing that your energy drains away. I think we all crave a better world and the moment you get a taste of helping create that, you can never let it go. I sometimes joke that I never knew what I was getting in to when I started blogging, and it’s just as well – it helps to be a little naïve because if you’re not you’ll never jump in. Whether through the crazy, unexpected success of Generosity Day 2011 or when I watch one of the Acumen Fund investees reach its millionth customer served with a product that really improves people’s lives, I know I’m doing the right thing and that I need to keep working harder and smarter.

5. And the question we ask everyone: What’s your most spectacular failure?

Some of the big failures come from fear – like times when I didn’t have the courage to look someone in the eye and ask them to make a big funding commitment for fear they would say no. Really, though, I’m not sure how I feel about putting “spectacular” and “failure” together. The big, real big failures often aren’t the go-down-in-a-blaze-of-glory variety, they are when you wrong someone, disrespect someone, make someone feel small rather than raise them up – and just as often these are sins of omission rather than commission. Those are the ones that sting.

I promise if you blog daily you are going to fail often.  You have to decide in advance that you’re ready to fail – if anything it’s the commitment to being open to failure that frees you to ship, to push your ideas to the edge, to dream big. And that all sounds great but that doesn’t mean you won’t write posts that don’t hit the mark, because you will.

This idea that failure is rare is what really holds us back. We are perfect so rarely, and if we stick to our guns the rest of the time, we will learn so much less and share so much less than we have to offer.

Your (brand) essence is not an inert element

For many years, as is typical in more junior roles in most big companies, I spent most of my time inside the organization.  Working hard, doing client or customer work, but really on the inside.  From there I had a view of what my company was and what it represented in the world, but that view was mostly informed by whatever the company wanted to tell its employees.

But then I got into the real world: I interacted with customers, funders, competitors; I gave talks on my company’s behalf and saw the reaction people had (good and bad) during and after my remarks; I was required, day in and day out, to understand and distill who we were and what we represented in the world; and then I heard back, just as frequently, whether and how what I was saying resonated with people.  If I listened hard, new truths emerged.

In the words, reactions, challenges, and excitement you hear back, you learn a lot.  You discover surprising things that you knew and that were dormant.  You connect dots in unexpected ways.  You see yourself through other people’s eyes, and have the chance to bring that energy back into the organization.

By spending time right at the edge of your organization, you react to the outside world, and in that process of reaction, your brand and its positioning change, evolve, and sharpen.  Your brand has an active reaction every time it has one of these interactions.

I used to think that CEO’s like Jeff Immelt spent a lot of time with customers just to hear the truth about what GE did and didn’t deliver on in the customers’ eyes.  I’ve begun to understand that it’s only through spending time looking outside that Jeff, or any of us, can figure out who we really are, what our company or organization represents, and what it can become.

 

Innovation isn’t really like apple pie

No one dislikes “innovation” as a concept.  It’s like mom and apple pie (in the US at least) – no one will ever, ever stand up and say, “I’d like us to innovate less!!”

No, that would be too obvious.  Instead they say, “Of course we want innovation but let’s….

…make sure we don’t go over anyone’s head.

…ensure we don’t surprise people, or offend anyone.

…get buy in from all potential stakeholders.

…form a working group to think it through a little more.

…dot every i and cross every t.

…not go too fast.

Sorry but it doesn’t work this way.

Not all innovation is about lone wolves in back rooms – in fact the most innovative cultures are highly collaborative.  At the same time, you have to decide what you value, and be willing to make tradeoffs to protect it; add one thing too many to the mix (that extra approval, that check and balance, that unwillingness to step on a few toes) and you extinguish the flame.

Everyone loves the idea of innovation, but most people are unwilling to take their culture to a place where innovation thrives.

That’s why it’s so rare.

Radical openness and what it means for conferences

I had a surreal moment yesterday, while sitting in the audience at The New York Forum with my laptop open.  I had WiFi connectivity, so, out of curiosity, I logged into the live stream of the panel I was attending.  Indeed, there it was, exactly as I was experiencing it in real time, with just a 5 second delay.

The knowledge that I could have been experiencing that panel from my desk or from halfway around the world shouldn’t necessarily have made me wonder what I was doing (what we all, conference attendees, were doing) sitting in that room.  But it did.  We all came a long way to experience something that we could have experienced – at almost the same quality at almost the same time – without ever leaving the comfort of our homes or offices.

On some fundamental level, we know that it doesn’t make sense to get hundreds of incredible people together and then have them spend 80% of their time sitting in silence listening to panelists. We used to convince ourselves that it was worth it because of the illusion of scarcity and exclusivity: sure I can hear Maria Bartiromo any day on CNBC, but there she is, just 50 feet away from me, probably saying things she wouldn’t say on the air! 

The livestream shatters that illusion.  Anyone can (and should!) watch, so there’s no more scarcity.  And like it or not, scarcity equates with value.

So what do we do now?

Here’s a thought experiment, just to mess with you: wouldn’t it make a lot of sense to pre-record some or all of the “talks” at a conference, make them available (earlier?) to conference attendees and to the whole world, and do away with panels so you can use the conference to let attendees talk to one another.  Or better yet, if you want attendees to be able to hear the “panel,” have a Star Trek-like hologram of the “panel” playing in the front of the room for those who want the 3D experience.

Absent this semi-crazy notion, there really are only three options that really make sense for conferences:

Hold an un-Conference: the Tallberg Forum and the Opportunity Collaboration both have essentially no formal talks – they are gatherings focused exclusively on facilitating connection between the participants.  Note that both of these are held in remote locations, which I’m sure facilitates dialogue long into the night and makes it less likely that people will jump ship early (since normally the closing Keynote by some dignitary keeps people around until the end).

Copy TED: If you are going to have speakers, do what TED does – create a conference structure (who’s in the audience, brand, potential for your talk to be viewed zillions of time if it’s great) that makes it extraordinarily likely that most of the speakers will give the best talks of their lives.  And then build in big chunks of time for interaction amongst the participants – between panels, late at night, etc.  If you don’t want to do a TEDx (for whatever reason), there’s still no harm in borrowing shamelessly from the playbook – it works.

The fireside chat: I don’t know if anyone does this, but here’s a third idea which plays off the strength of going deep with individual “speakers:” an interview-style conversation that’s not a formal TED-like talk, one that feels intimate and is built around audience participation and really exploring the depth of knowledge of the featured guest.   You’d have to have great interlocutors who get the best out of the “speakers,” and would have to add special touches (room design, lighting, etc.) to make it feel really intimate. Or, you go completely in the other direction, SXSW style, and have great people do crazy things they’d never otherwise do (like battledecks, where people present a series of slides they’ve never seen before), so you really get a sense of personality and who they are.

You’ll notice there’s no fourth option, with an up-the-middle-of-the-fairway model in which you get 6 high profile people plus a moderator and try to direct them to have a substantive, meaningful conversation in an hour.  It’s structurally designed to fall short – panels are built to jump all over the place, to stay at a high level, to have panelists take up time explaining who they are, and never to have the chance to dig deep into a topic or a person’s expertise.  Yet despite these inherent shortcomings, it’s the natural thing to do  because that list of speakers is what fills your conference hall, the more you have of them the bigger draw you’ll be, and once you have them signed up, you may as well put them all on the stage together.

What’s interesting is that the radical openness that’s become the new standard for big conferences has done much more than democratize access to everyone who doesn’t attend the conference – it has also radically raised the bar on what is worth sitting down and listening to for 75 minutes (because there’s so much other incredible content out there, much of it generated by the very same people who are on stage at your conference).

The reason people pay between $500 and $1,500 for tickets to hear U2 isn’t because they don’t have access to U2’s music at 99 cents per song.  It’s because of the shared experience, the intimacy, the raw power of being there in the moment – it is an emotional experience that you’re not going to get in your living room, no matter how good your sound system is. (HT to Quentin Hardy for making this great point to me).

Emotional connection, human interaction, serendipitous connections with people you otherwise wouldn’t have met, and yes, doing real business that you couldn’t have done in any other way – these are things I can’t get live streamed at my desk, these are things worth flying across the country for, these are things that will always be scarce.

For everything else, I’ve got a great web browser and a broadband internet connection.

One thing, many things

 

I was recently talking to a banker I know who shared that he occasionally works from home, but it can be frustrating because, due to security concerns, he is not allowed to print any documents when he’s not in the office.

Huh?  Not allowed to PRINT?  This is the more aggressive, more absurd version of companies that screen / limit Web access at work (because, you know, it’s not like people can get online with their smartphones), in the hopes that troves of people won’t fritter away hours on facebook or reading (gasp!) blogs full of idle chatter.

At the other end of the spectrum, all of the most interesting, successful people I know have multi-faceted lives that pull them in all directions.  They run companies and serve on multiple Boards and convene interesting groups of their peers.  They write books or blogs – sometimes directly about what they do and sometimes, apparently, only tangentially related.  They thrive in ambiguous situations that blur the line between work and social and fun.

I know that real constraints exist in the world, that big companies are victim to frivolous lawsuits, that running a 100,000 person company isn’t the same thing as running a 100 person shop.

So fine, let’s operate within these constraints.

But as a boss (or as someone who has a boss), you have a choice to make.  One worldview says it’s your job to control and narrow as much as possible, to monitor and restrict and keep track of shirkers, so that you’re sure that that your staff spends as much time as possible doing “their work” (whatever that means to you).  This is a great approach if you believe that your staff is comprised of glorified, white-collar widget producers, if you believe that you’re putting $X in to pay their salary and that success is getting as many of your employees as possible to produce 1.5X in terms of output.

Man, it’s exhausting just writing that.

Treat people like shirkers and they’ll want to shirk more.  Treat their time like a finite resource that you have to grab as much of as possible and you’ll get the least allowable effort and no inspiration.

What you should really worry about is employees who don’t get great new ideas from the outside; employees who don’t come in rabid and crazy with something they just read on a blog; employees who don’t make random, interesting connections that bring surprising, wonderful people into the fold.

You certainly can’t manufacture creativity and inspiration, but you definitely can wipe it out.

The power and limits of controlled experiments

The Freakanomics blog is running a fun contest asking readers to predict whether providing more factual evidence of impact increases or decreases donations.  Dean Karlan, co-author with Jacob Appel of More Than Good Intentions is running an experiment in partnership with Freedom From Hunger.  Dean wants to understand whether sharing, with donors, cold hard facts about the proven effectiveness of a business training program run by Freedom From Hunger increases or decreases donations.

As context, there is a well-documented study conducted by Deborah Small, George Loewenstein, and Paul Slovic that tests how potential donors respond to generalized factual information about hardship versus the story of an individual girl, named Rokia, in Mali.  The punchline is that the story of Rokia elicits about 2x the donations as does a brief with summary factual information about poverty.

Put another way: stories sell, facts don’t.  (remember, we think with our brains, but…)

Dean Karlan’s experiment is designed to test whether “story + facts” is more or less effective than “story.”   To test this, Freedom from Hunger sent out two mailers.  The control mailer just has the story of Rita, and it starts:

Many people would have met Rita and decided she was too poor to repay a loan.  Five hungry children and a small plot of mango trees don’t count as collateral.  But Freedom from Hunger knows that women like Rita are ready to end hunger in their own families and their communities…

The treatment mailer has different copy:

In order to know that our programs work for people like Rita, we look for more than anecdotal evidence.  That is why we have coordinated with independent researchers to conduct scientifically rigorous impact studies of our programs.  In Peru they found that women who were offered our Credit with Education program had 16% higher profits in their businesses than those who were not, and they increased profits in bad months by 27%!  This is particularly important because it means our program helped women generate more stable incomes throughout the year.

These independent researchers used a randomized evaluation, the methodology routinely used in medicine, to measure the impact of our programs on things like business growth, children’s health, investment in education, and women’s empowerment.

The question is: which mailer will have a higher response?

My guess is that the first one wins (even though this mailer is being sent to repeat donors, who have probably heard this story before – and it’s fair to guess that I’m wrong, otherwise why would they have blogged the contest in this way?).

Whether or not I’m right, I’d like to see a better-designed study. It feels misleading to me to describe this as testing “story” versus “story + facts.”  I’d instead say it’s testing “good letter” versus “only OK letter,” and if my take is right, the generalizability of these results will be low indeed.

This is on my mind because last week I had the chance to hear Esther Duflo speak about some of the examples from her book, Poor Economics.  Many of them are highly compelling – particularly those in which the treatment being tested (e.g. de-worming) is clear and readily measurable.

But the risk of the randomized-control trial rage (which is, very appropriately, a hot and exciting topic in our field right now, and Esther and Abhijit have been champions of high-quality, clear thinking) is that we over-extend our definition of “treatment” that can meaningfully be assessed in this way.  For example, one of the examples Esther cited in her talk was about whether poor farmers were willing to pay enough for a weather insurance product to make the product commercially viable.  In this test, farmers were offered a relatively simple and straightforward product that would pay them a certain amount if recorded rainfall at the weather station dropped below a certain level.  The conclusion, as described by Esther in the talk (and stated more strongly than she does in the book), was that farmers wouldn’t pay enough – and I heard her take this to mean that the insurance market for the poor might not be viable without significant subsidy.

Not having dug into the research – but having heard Esther’s description – I was left worried that in this case, like in the Dean Karlan study about the mailer, we run a real risk of overreaching in the conclusions we draw.  It may well be that market-based insurance for the poor doesn’t work; it may be that government needs to provide a subsidy; it may also be that in a market in which there is a limited track record of insurance, little history of or confidence in payouts, no competition and almost no trust, the study showed that willingness to pay was low – which wouldn’t be in the least bit surprising.

What I’m getting at is that sometimes our attitude about figuring out “what works” in poverty alleviation feels like designing studies, in the 1980s or 1990s, on the future of the tablet market based on intensive study of the Apple Newton and early tablet PCs.  Assuming everything is static, there’s no market.  But of course the whole point is NOT to let things be static – to create the development equivalent of the iPhone and the iPad through relentless innovation and a dogged unwillingness to fail.

This is an important point because at some fundamental level we must ask ourselves how much we believe in the power of innovation.  How far do we push, prod and experiment before we conclude that something does, or doesn’t, work?  In the simple example of the Freedom from Hunger mailer, I’m betting that some drastically better copy would have the desired effect (or a bigger desired effect) of using hard data to increase donations.  In the insurance example, I’d be interested in a lot more product development, market testing, and trust-building with smallholder farmers before drawing any broad conclusions.  And so it goes across the board with all the major interventions in the fight on poverty, from microfinance to girls’ education to de-worming to fortifying food to to HIV/AIDS prevention (where, shockingly, male circumcision is proving to be a very effective way to slow the spread of disease).

I don’t want to come out against testing, rigor, and “proof” – not at all.  We need all of these things, and need to have the ability to ask tough questions, to be willing to let things go quickly when they’re not working, and to over-resource things that are working even if they contradict our initial assumptions.  At the same time, our field – and, specifically, the injection of real innovation into our field – is nascent enough that it feels early in most cases to aspire to draw anything but narrow conclusions about what does and doesn’t work; where the poor are and are not willing to pay; and what interventions will have the greatest impact over time.  We’ve seen this play out most recently and most vociferously in the microfinance space – too-broad claims that it changes everything, and then equally broad claims that it does nothing – when surely the right answer is that when done right it can be valuable, when done wrong it can be destructive.   I’m sure we’ll see this same story play out time and time again, across interventions, across sectors, and across geographies.

My toothbrush was good enough

My toothbrush was good enough.  In fact, it had been good enough for a while.  I didn’t need the Colgate 360 toothbrush, and I doubt you did either.

Admittedly, it’s an impressive toothbrush.  Look at all the features packed into this baby: a tongue and cheek cleaner, multi-function bristles, polishing cups, a raised cleaning tip to “tackle those hard-to-reach places at the back of your mouth,” and (of course) those handy-dandy “raised rubber grips for better grip, and wide thumb grips for better control.”

I’ve got nothing against good oral hygiene.  Please brush and floss daily, with whatever toothbrush works for you.

My point is that it’s obvious that we are WAY down the curve of declining marginal benefits for innovation on the toothbrush as a product.  Do we need a no-slip handle with gel and little knobby bits?  No. I don’t think toothbrushes were flying across bathrooms across America, causing anger and frustration for millions, and leaving mouths full of unsanitary plaque and gingivitis.

Even if the handy-dandy Colgate 360 is demonstrably better than the straight-handled, one-type-of-bristle toothbrush I got for free from the dentist in the 70s, you’ve gotta believe that we are, today, somewhere near the pinnacle of how much better the manual toothbrush can get.

Yet the world is set up so that it makes good sense to keep on tricking out our toothbrushes.  On the back of the 360, Colgate’s share of the toothbrush market has jumped from 28% to 36% in the last two years.  The better brush is paying off for them, for now.

But what will the next 50 years bring?  How much better can our toothbrushes get?  We’re hitting a wall in terms of improvements here, yet that won’t stop armies of our best and brightest from fighting over toothbrush market share for the next few decades and beyond.

So the question becomes: how do we shift the frameworks and the incentives so that more of our massive ability to innovate gets applied to things that – we can all agree – matter more and are harder to tackle?    Because I for one am betting on the power of innovation, much more than more money, as the greatest lever in accelerating the fight on poverty and social exclusion.  Yes, the rise of social enterprise, the entry of the Gates Foundation on the scene, more progressive philanthropy and the overall improvement in the quality of analysis and thinking in our space are all encouraging, but we’re still getting lapped by the toothbrush-makers, the razor-blade improvers, and the folks rolling out ever-more-clever financial products.

So when I’m asked whether I think the social enterprise space has gotten too “hot” for its own good and whether there are too many people chasing too few jobs, I think nothing of the sort.  My hope is that we’re at the beginning of a generation-long trend in which our best and brightest feel a sense of calling, of responsibility, and of service that will fundamentally transform our labor force, how we live our values, and, ultimately, the societies we build here and around the globe.

A big piece of this will be a shift in incentives, in what we value, and in who we hold up as heroes.  The faster we can make this shift, the better, because I for one am not looking forward to the inevitable wunder-razor that no doubt will dominate supermarket shelves in 2050 (thanks Russell!!):

Will innovative philanthropy always be a niche?

In preparation for the Feast Debate that I’m moderating next week, I was having a conversation today about trends in the philanthropic space.  Someone made the offhanded remark, “Well, there’s clearly a trend of philanthropic dollars being harder to come by and philanthropists being more interested in new models and in financial sustainability.”

Are we talking “trend” or “Trend” with a capital “T”?

Here’s how I think about this question, in terms of total dollars and how they are deployed: without a doubt the “trendsetters” in philanthropy (especially individual philanthropy) are the Buffett/Gates Billionaires who have pledged to give away at least half of their wealth and who are, by and large, younger, more active, and more wealthy than the previous generation of mega-donors.  It’s also clear that the talk in professional philanthropy circles continues to be around results, new approaches, more transparency and accountability.

But how people talk in philanthropy circles and forums and conferences and how actual real live philanthropists behave is not the same thing.  And part of me wonders – and fears – that the amount of talk is getting ahead of the amount of change, and at a certain point we have to ask ourselves what we think the future will look like and what we WANT it to look like.

Graphically, if there’s a leading edge of innovative philanthropy today (which there is…and let’s put aside the question, for now, of whether more innovative is more effective), do we expect and hope that 10 years from now there will be a slightly larger, more established group of innovative philanthropists (v1 in the chart below), or do we think we’re engaged in shifting the whole curve?

What kind of future do we want to create – one with a bigger niche of progressive philanthropists or, instead, do we want to see a shift in the center of gravity?  Because the actions we’d take, the measures of success, the audiences we’d address would be very different depending on which future we hope to see.

My hat’s in the ring for the wholesale shift, but if we’re going to get there we have to spend a lot more time working directly with philanthropists themselves – and not only the most active and engaged ones, but all across the spectrum.

Which chorus?

You’re probably hearing one of two choruses right now:

1. “Slow down!  You’re not being practical.  That’s not possible.  I don’t get it and don’t see how we’ll get there.  You need to make things smaller, more clear, more well-defined, more actionable!!”
2. *chirp* *chirp* *chirp* *chirp* (the quiet, soothing, pleasant, cricket-like background noise where no one’s telling you you’re crazy)

Number two feels so much better, is so much easier and cleaner, and the people you like and respect (your Board, your boss, your co-workers, your team) give you their stamp of approval. But hearing nothing but good, approving things most of the time is very dangerous indeed.

You get to decide: is the most important thing hearing from those closest to you that they approve?  Or do you care more about breaking through?  Because breaking through means doing something that they (even the “they” who love and support you) have never done before.

Even though they don’t mean to, those closest to you may be holding you back.

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