This article was originally published on the Harvard Business Review blog and is being reprinted with their permission. The post is written by CASE professor Paul Bloom. Paul’s new book, Scaling Your Social Venture: Becoming an Impact Entrepreneur, was just published by Palgrave Macmillan.
For a social entrepreneur with an innovative solution, the holy grail is scaling it—that is, taking it to a level where the new approach operates efficiently and effectively to achieve significant mitigation of a social problem. Indeed, many are under real pressure to scale as their supporters, not unlike investors in commercial ventures, clamor for higher social returns on their investments. But for every Habitat for Humanity, Mothers Against Drunk Driving, and Teach for America that has managed to scale, there are thousands that have stagnated or failed.
For the past several years, I have been studying the successful scalers to discover how they made the leap from local to large-scale impact. The answer isn’t as simple as we might wish: their leaders have pursued a variety of strategies, and there is no single “best practice” formula for scaling a social venture. But the good news is that there are common elements—seven organizational capabilities that can be developed and combined in different ways to take a promising innovation to the next level. They are:
- Staffing. It’s hard to take a venture to the next level without knowing how to recruit, train, and retain talented people. Perhaps more than anything else, this has been the key to PlayWorks’ successful scaling. It has figured out how to keep growing a staff of great “coaches” to supervise and manage recess in schools all over the USA.
- Communicating. Susan G. Komen for the Cure has excelled here, getting the word out about breast cancer and persuading hundreds of thousands to support its work combatting it.
- Alliance-Building. A great way to grow impact without a large organization is to partner with other entities such as community groups, governments, and corporations. KaBoom! does this to build playgrounds in needy neighborhoods.
- Lobbying. Here, a model is the Campaign for Tobacco-Free Kids, which has accomplished much by persuading legislatures, judges, and regulatory authorities to make tobacco products harder and more expensive for young people to acquire.
- Earnings Generation. Increasing numbers of social programs grow with revenue generated by their own operations. Examples include the social enterprises in the “portfolio” of REDF (Roberts Enterprise Development Fund), which helps nonprofits create viable businesses (in food-service, property-maintenance, extermination, recycling, and other areas) to provide jobs to disadvantaged workers.
- Replicating. Aflatoun has scaled its impact by making it easy for others to copy what it does, providing access to the curriculum materials it has developed for teaching children financial skills to franchise partners all over the world.
- Stimulating Market Forces. The textbook example on this front is Fair Trade USA, which by creating a certification system for “fair trade” goods (that is, sustainably produced commodities like coffee, chocolate, bananas whose growers are not exploited by middlemen) gives consumers market information they previously lacked.
Does a venture need to have all seven of these SCALERS capabilities in place to have major impact? It seems safe to say that, in any scaling effort, improving at least most of them should be a goal. A given venture’s “scaling strategy,” however, can be thought of as the particular emphasis it puts on each of these capabilities relative to the others. And how does a given organization get that strategic balance right? It’s a matter of careful thinking about the implications of the venture’s theory of change and the ecosystem in which it operates.
Before even attempting to scale, the organization should be able to articulate and justify its theory of change—the logic model that shows how its innovation (whether it’s a new product, new service, new way of harnessing human resources, new financing approach, new distribution method, or new legal or policy approach) contributes to mitigation of a social problem. If the innovation is a new pedagogical technique, it must be evident how it leads to lower drop-out rates, for example. If it is a new way to encourage childhood vaccinations, the innovator must show how it improves public health.
With the pathway to better outcomes clearly laid out, the next requirement is for the organization to study its ecosystem to understand how other resource providers, allies and rivals, forces and trends could affect its success. Depending on the “capital” (which can be financial, human, social, political, technological, or natural-resource capital) that others bring to the table, the organization can adjust the emphasis it places on building its own capabilities. Of course, ecosystems evolve, especially as economic climates and cultural norms shift, so this cannot be a one-time exercise.
A scaling strategy, in short, is a plan for creating a special blend of capabilities that fit well with an organization’s theory of change and its surrounding ecosystem. Most social entrepreneurs want to maximize their ROI, even though the “social returns” they seek have more to do with jobs created, lives saved, or cleaner water. A well-thought-out scaling strategy is the best assurance —not only to them but to their many stakeholders —that they have the potential to make a real difference in the world.