Features

When Innovation Goes Wrong

By Christian Seelos & Johanna Mair

Stanford Social Innovation Review

Fall 2016

Copyright  2016 by Leland Stanford Jr. University

All Rights Reserved

Stanford Social Innovation Review

www.ssir.org
Email: [email protected]
 Stanford Social Innovation Review / Fall 2016 27

, organizations often stumble when it comes to turning innovation into impact. As a result, they fail to achieve
Efforts by social enterprises to develop novel interventions receive a great deal of attention. Yet these

their full potential. Here’s a guide to diagnosing and preventing several “pathologies” that underlie this failure.

When Innovation Goes

WRONG
BY CHRISTIAN SEELOS & JOHANNA MAIR innovation works. As a result, they develop habits and practices that
Illustration by HARRY CAMPBELL
render their innovation efforts unproductive.
Identifying these pathologies, we argue, will help social enter-
prises to generate more impact from their investments in innovation.
In this article, we set forth a model for understanding the relation-

A
ship between innovation and impact, and we provide a way to diag-
pervasive myth holds that the impact generated by nose the pathologies that interfere with that relationship. We also
social enterprises is the result of innovation. Indeed, offer insight into how organizations can counter these pathologies
prevailing models of social innovation lead people by developing innovation practices that optimize their effectiveness.
to ask the wrong question about achieving impact in
the social sector. They ask: What are the ingredients REMOVING UNCERTAINTY
of successful innovation? They seek to discover “a magic innovation In 2012, a reporter for The Wall Street Journal wrote an article that
formula” or to define a set of “innovation success factors.” We find cast a critical eye on the obsession with innovation that has over-
it useful to turn this question inside out. Instead of focusing on how taken the business sector. Companies today, Leslie Kwoh observed,
innovation succeeds, we look at the dynamics of failure within the routinely attach the term “innovation” or “innovative” to just about
innovation process. We ask, in particular: What are the factors that any new product or service. “But that doesn’t mean the companies
undermine the impact potential of an innovation effort? are actually doing any innovating,” Kwoh noted. “Instead they are
For the past several years, we have been studying social enter- using the word to convey monumental change when the progress
prises in order to determine what enables them to achieve high they’re describing is quite ordinary.” 1 A similar dynamic operates in
levels of impact. Innovation, we have concluded, is just one part of the social sector, where organizations often assume that they must
a larger social impact creation process. Indeed, we have found that generously sprinkle the term “innovation” throughout a proposal if
innovation plays a minor—yet very specific—role in allowing highly they want to have any chance of receiving a grant. In both sectors,
successful social enterprises to deliver solutions at an appropriate the result is the same: People call every new thing an “innovation,”
scale. In examining less successful organizations, meanwhile, we and the term loses all objective meaning.
have found that what holds them back is not an inability to inno- Around the time when that article appeared, we wrote an article
vate but a failure to embed their innovation efforts within a robust titled “Innovation Is Not the Holy Grail” for Stanford Social Innovation
process for translating those efforts into impact. Review. The article explored the limits of “innovation” as people in
Throughout the social impact creation process, there are a the social sector had come to use that concept. But in the article
number of ways that innovation can go wrong. We use the term we also tried to establish a rigorous framework for understanding
“innovation pathologies” to describe these all-too-common mis- innovation—what innovation is and is not, what it can and cannot
steps. Organizations that actively pursue innovation but fall short do. Crucially, we differentiated between innovation as an outcome
of achieving impact invariably suffer from one or more pathologies. and innovation as a process. People who care about social change, we
These organizations typically have a flawed understanding of how suggested, should stop associating innovation with new products or
28 Stanford Social Innovation Review / Fall 2016

services (that is, with outcomes). Instead, they should regard inno- CHRISTIAN SEELOS is a visiting scholar at JOHANNA MAIR is a professor of organiza-
the Stanford Center on Philanthropy and Civil tion, strategy, and leadership at the Hertie
vation as a process that has distinct characteristics and potentials.2
Society. He is also the Leo Tindemans Chair School of Governance in Berlin and a visiting
So what are those characteristics and potentials? What kind of for Business Model Innovation at KU Leuven scholar at the Stanford Center on Philanthropy
(Belgium) and an academic visitor at the and Civil Society. She also serves as academic
process is innovation, exactly? Since the publication of our previous
Skoll Centre for Social Entrepreneurship at editor of Stanford Social Innovation Review.
article on this topic, we have continued to investigate the nature and Oxford University.
This article draws on material in the authors’
purpose of innovation in the social sector. And here is one critical forthcoming book, Innovation and Scaling for
finding from our research: Innovation processes involve efforts to Impact: How Effective Social Enterprises Do It
(Stanford University Press, 2016).
address—and ultimately to remove—various forms of uncertainty.
During most parts of an innovation process, it’s not clear whether
and when an innovation will succeed. Progress is nonlinear and take a close look at three aspects of the innovation process that
does not follow carefully prepared plans, milestones, or budgets. often involve a considerable degree of uncertainty.
Working through this process is like riding a roller coaster; it’s full Problem formulation | Organizations may incorrectly frame the
of ups and downs and sudden swerves in one direction or another. problem that they aim to solve, and identifying that problem accu-
For organizations that are built to execute plans that follow estab- rately may require several iterations and learning cycles.
lished recipes, the challenge of navigating an innovation process can BRAC, founded in Bangladesh, is one of the largest social enter-
seem overwhelming. Only organizations that cultivate an ability to prises in the world. In the 1980s, it launched a search for ways to treat
understand and eliminate uncertainties will survive the twists and diarrhea, a leading cause of mortality among children in Bangladeshi
turns of innovation. (See “The Innovation Process: Reckoning With communities. The organization settled on a simple, cheap, and effec-
Uncertainty” below.) tive treatment option that took the form of a sugar-and-salt formula.
The core purpose of an innovation process is the conversion of In the beginning, enthusiasm for this solution ran high. BRAC, having
uncertainty into knowledge. Or to put it another way: Innovation is framed the problem as one that involved a lack of awareness and a
essentially a matter of learning. In fact, one critical insight that we lack of access, began raising awareness of the treatment and training
have drawn from our research is that effective organizations approach people to deliver it. As it turned out, however, the organization had
innovation not with an expectation of success but with an expectation not fully considered the broad context in which the problem of child-
of learning. Innovators who expect success from innovation efforts hood diarrhea occurs in many parts of Bangladesh. Before long, BRAC
will inevitably encounter disappointment, and the experience of fail- leaders realized that social norms and power relations are important
ure will generate a blame culture in their organization that dramati- factors that affect how people perceive this kind of problem—and
cally lowers their chance of achieving positive impact. But a focus on how they view potential solutions to it. People who followed tradi-
learning creates a sense of progress rather than a sense of failure. The tional religious norms, for example, cast suspicion on the treatment
high-impact organizations that we have studied owe much of their and prevented their communities from adopting it. Even members of
success to their wealth of accumulated knowledge—knowledge that BRAC’s own field staff did not trust the treatment at first, and many
often has emerged from failed innovation efforts. local pharmacists and doctors also didn’t trust it.
Innovation uncertainty has multiple dimensions, and organiza- In struggling to understand the dynamics at work in local
tions need to be vigilant about addressing uncertainty in all of its communities, BRAC had to deal with problem frame uncertainty.
forms. (See “Types of Innovation Uncertainty” on page 29.) Let’s Figuring out how to collaborate with community members and
staff members to deliver
The Innovation Process: Reckoning With Uncertainty the sugar-and-salt for-
mula involved a series of
challenges that tested its
HIGHER
resolve. Eventually, BRAC
overcame this uncertainty
Training
worked The new
Results
look
and found ways to imple-
without training great ment its solution, and the
Perceived likelihood of success

problems scheme
We found works
a village for organization came away
Let’s the trial It works
try it It does
from this experience with
I have not work valuable knowledge about
an idea Getting I think in some
I know villages I have
the village
what the a fix
work ing w it h v a r ious
elders on
problem is
We have
board
helped
stakeholders.
some
resources Communities
Our field
staff does The boss Solution development |
are skeptical not follow thinks it is
procedures important Even when an organiza-
They tion has an adequate un-
We ignored are not
This power using our
We are
will not dynamics solution derstanding of a problem,
work among It will
facing a
challenge villagers never
work!
it may not be able to access
and deploy the resources
LOWER needed to create an effec-
tive and robust solution.
 Stanford Social Innovation Review / Fall 2016 29

Aravind, a nonprofit organization based

in India, operates a large and highly pro- Types of Innovation Uncertainty
ductive chain of eye hospitals. It focuses on
performing cataract surgery, and it uses a The process of creating social impact involves working to reduce or eliminate uncertainty. By
cross-subsidy model to provide that service replacing uncertainty with knowledge, organizations can create and refine solutions that will be
to poor people at little or no cost. In the late truly effective. Innovators should focus their attention on six forms of uncertainty, in particular.
1980s, Aravind ran into a bottleneck that lim-
Problem frame uncertainty | Do you Consequence uncertainty | Does your
ited its ability to scale up part of its operation.
sufficiently understand the social or envi- solution run the risk of producing negative
Donations of the artificial lenses used in the
ronmental problem that you aim to solve, side effects? Consequence uncertainty
cataract procedure had declined, and the cost
along with the factors that cause that lowers the chance that your innovation
of purchasing lenses from manufacturers was
problem? Problem frame uncertainty low- will produce positive social impact.
prohibitively high. Aravind leaders under-
ers your chance of designing a solution that (It also may threaten the reputation of
stood the problem clearly, but the existing
goes to the root of an issue. your organization.)
resources and competencies of the organiza-
tion were not adequate to solving it. So they Solution uncertainty | Are you able to Identity uncertainty | Does your proposed
had to consider options that entailed a high access appropriate resources and to solution align with your sense of purpose?
degree of solution uncertainty. One idea was configure them in a way that yields a Identity uncertainty lowers the chance that
for the organization to begin manufacturing viable solution? Solution uncertainty your commitment to an innovation will be
its own lenses. But the feasibility and the po- lowers your chance of turning an idea strong enough to overcome setbacks and
tential adverse consequences of enacting this into an effective innovation. to persist through the scaling process.
idea raised serious questions. Did Aravind
Adoption uncertainty | Will people in tar- Managerial uncertainty | Do you have
have the management capabilities to build
get communities accept and implement an ability to oversee innovation processes
and run a manufacturing facility? Could it
your solution? Adoption uncertainty lowers in a productive manner? Managerial
handle the financial risk of investing in such a
your chance that a solution—even one that uncertainty lowers your chance of imple-
project? The founder of Aravind, Govindappa
ostensibly “works”—will take hold among menting and supporting a solution over a
Venkataswamy, initially opposed the idea.
its intended users. long timeframe.
Ultimately, Aravind leaders decided to
create a lens manufacturing company called
Aurolab. They were able to create consensus around this move be- communities, Gram Vikas proceeded to become a major developer
cause it directly promoted Aravind’s long-term scaling strategy. of biogas projects. This innovation was a success on its own terms,
Even Venkataswamy eventually gave his full support to this solution. but it led the organization in a direction that did not align with its
To launch Aurolab, the organization leveraged its reputation and focus on confronting gender and caste issues. In fact, the biogas solu-
drew on a global network of partners. The Aravind innovation team tion increased rather than reduced levels of inequality, because only
provided management capabilities, a lens manufacturing company farmers benefited from it and most community members were not
provided technical knowledge, and a foundation provided fundrais- farmers. So Gram Vikas spun off its biogas program and returned
ing assistance. Today, Aurolab makes a wide range of ophthalmic to pursuing innovating efforts that match its sense of purpose.
products and exports them to 130 countries worldwide.
Alignment with identity | Innovation may lead an organization in PURSUING IMPACT
a direction that does not fit its culture or its sense of its purpose— Viewing innovation as a process—and, in particular, as a process
its sense of “who we are.” of addressing various kinds of uncertainty—has led us to a crucial
For Aravind, the idea of manufacturing its own lenses involved insight: Innovation per se does not create impact. The work of con-
identity uncertainty as well as solution uncertainty. After all, lens verting uncertainty into knowledge requires a significant investment
manufacturing is an endeavor that aligns more closely with a for- of time, effort, and other organizational resources. When that work
profit culture than with the nonprofit, care-oriented culture that is successful, it gives rise to new products, new services, and new
characterizes Aravind. To overcome this uncertainty, Aravind set interventions. But these outcomes merely have the potential to create
up Aurolab as a nonprofit charitable trust that is structurally and positive social impact. If an organization cannot effectively deliver
financially separate from the organization’s hospital operations. innovation outcomes to people who need them, then its investment
Another organization that encountered identity uncertainty is in developing them will be for naught.
Gram Vikas, a social enterprise that brings water and sanitation What enables an organization to create actual impact on the
solutions to rural Indian communities. Its core mission is to reduce basis of potential impact? In a word: scaling. Focused and commit-
levels of gender and caste inequality among populations that it tar- ted scaling—delivering effective products and services to more
gets. In its first decade of operation, Gram Vikas pursued several people and doing it more reliably, more efficiently, and with a steady
innovations that failed to create the kind of impact that it sought. improvement in quality—is what creates impact. An investment in
One day, it discovered that cow dung from a failed dairy-farming scaling allows for the development of effective routines and capa-
project could produce biogas for use in electricity generation. bilities, and it fosters a deep understanding of the problems that an
Responding to an opportunity to create economic benefits for poor organization aims to solve. Such an investment also strengthens an
30 Stanford Social Innovation Review / Fall 2016

organization’s sense of purpose and prevents unproductive devia- that project were disappointing, and Aravind abandoned the project a
tions from its mission. few years later. Its leaders realized that most partner hospitals could
In short, innovation plus scaling equals impact. Innovation is an not productively use the knowledge that Aravind shared with them.
investment of resources that creates a new potential; scaling creates Most organizations that succeed in achieving substantial impact,
impact by enacting that potential. Because innovation creates only therefore, do so by investing in scaling capability. Any organization
the potential for impact, we advocate replacing the assumption that that applies enough effort and invests enough resources will likely
“innovation is good, and more is better” with a more critical view: succeed in creating an innovative product or service. But scaling
Innovation, we argue, needs to prove itself on the basis of the im- up the outcome of innovation presents a much bigger challenge.
pact that it actually creates. The goal is not innovation for its own
sake but productive innovation. FOCUSING ON PATHOLOGIES
Productive innovation depends on two factors: (1) an organiza- Through our study of social enterprises, we have devised a set of
tion’s capacity for efficiently replacing innovation uncertainty with six pathologies—six ways that organizations limit their capac-
knowledge, and (2) its ability to scale up innovation outcomes by ity for productive innovation. From the stage when people first
enhancing its organizational effectiveness. Innovation and scaling develop (or fail to develop) the idea for an innovation to the stage
thus work together to form an overall social impact creation process. when scaling efforts take off (or fail to take off), these pathologies
Over time, an investment in innovation—in the work of overcom- adversely affect an organization’s ability to make its way through
ing uncertainty—yields positive social impact, and the value of such the social impact creation process. (See “Creating Social Impact:
impact will eventually exceed the cost of that investment. But that Six Innovation Pathologies to Avoid” on page 31.) Organizations can
will be the case only if an organization is able to master the scal- greatly improve the impact of their innovation efforts by working
ing part of this process. (See “Creating Social Impact: Innovation to prevent or treat these pathologies.
Plus Scaling” below.) Never getting started | In too many cases, organizations simply
To be sure, some organizations achieve real impact without scal- fail to invest seriously in the work of innovation. This pathology
ing up their innovations. One promising model is Waste Concern, a has many causes. People in organizations may have neither the
social enterprise in Bangladesh that turns waste products into usable time nor the incentive to develop or communicate new ideas. Or
resources. The founders of Waste Concern excel at conducting inno- they may find that their ideas fall on deaf ears. Or they may have a
vation processes but have little interest in managing a large organiza- tendency to discuss an idea endlessly—until the problem that gave
tion. So by design, their innovation work incorporates methods that rise to it has been replaced by another urgent problem or until an
make it feasible for other groups to adopt and scale up their outcomes. opportunity has vanished.
Waste Concern, for example, develops each innovation to the point At some organizations, the costs of deciding not to pursue inno-
where it can create a demonstration site that allows interested par- vation may be hard to recognize. People in established enterprises
ties to observe and receive training on the innovation. The organi- rightly focus on scaling and improving their current products and
zation also places patents on its work to ensure that outside groups services. By doing so, after all, they can use their resources to serve
will go through the training process before they adopt an innovation. more people and to create more immediate impact. But they may miss
In that way, Waste Concern goes beyond simply “transferring” the special opportunities for innovation that closely fit both their organi-
knowledge gained from an innovation effort to an outside entity, and zation’s purpose and its unique resources and capabilities. Organiza-
it maximizes the social impact of its investment in innovation. This tions that never exploit such opportunities risk losing relevance. As a
approach frees up time for Waste Concern’s
founders to do what they do best: start new
rounds of innovation work.
Creating Social Impact: Innovation Plus Scaling
In most cases, though, transferring
innovation-based knowledge to another or-
IMPACT
ganization is remarkably challenging. There SCALING
are two main reasons why it’s so difficult.
First, this kind of knowledge is more con-
textually bound than people typically as-
sume. Indeed, most organizations struggle POSITIVE
when they try to replicate their own inno- IMPACT
vations in a different context. And second, INNOVATION
such knowledge is deeply embedded in the
Time
structure and culture of an organization,
and other organizations that have differ-
ent characteristics are often unable to ab-
sorb that knowledge. In 2011, for example,
Aravind launched an effort to transfer its
INVESTMENT
knowledge about high-efficiency cataract
surgery to other hospitals. The results of
 Stanford Social Innovation Review / Fall 2016 31

result, talented people may start to leave the

organization, and supporters may lose enthu- Creating Social Impact: Six Innovation
siasm for the organization as well. Pathologies to Avoid
The pathology of “never getting started”
has other costs, too. First, effective orga- IMPACT SCALING
nizations use innovation processes to sup-
port talent development. Innovation work
provides staff members with opportunities
Scaling
to be creative, to make decisions, and to see Never
too
getting
little
projects through to completion. Innovation started Pursuing
too many
also provides learning opportunities for lead- bad ideas
ers that day-to-day work rarely offers. And
second, organizations that focus primarily Time
INNOVATION
on scaling efforts risk burning people out.
A minimum amount of innovation may be Innovating
again too
an important instrument of organizational Stopping soon
too
“hygiene.” Innovation gives people a way to late
break out of their daily routine and to explore INVESTMENT Stopping
too
their own passions, and it can be a highly ef- early
fective way to rejuvenate an organization.
How can organizations overcome this
pathology? Aravind explicitly links its innovation work to emerg- organization is able to accumulate institutional knowledge that
ing bottlenecks in its scaling efforts. When operational priorities enables it to create better ideas and to avoid bad ideas. In addition,
drive innovation, new ideas readily gain support and legitimacy. leaders at effective organizations often strive to limit their depen-
And because Aravind has accumulated a wealth of knowledge and dence on external funding sources that might pressure them to
experience through its scaling efforts, linking innovation to those explore unsuitable ideas. (A manager at BRAC shared this proverb
efforts enables the organization to create better ideas and to lower with us: “If you keep your hands in a friend’s pocket, [then] if that
its level of innovation uncertainty. BRAC, meanwhile, is a large person moves, you’ll have to move.”)
and very hierarchical organization that faces particular challenges Stopping too early | In some instances, organizations are unable or
when it comes to initiating innovation. To overcome bureaucratic unwilling to devote adequate resources to the development of wor-
tendencies that can stifle idea creation, BRAC has created a social thy ideas. When resources are scarce and not formally dedicated to
innovation lab. A team of young, experienced people run the lab, innovation processes, project managers will struggle to develop an
and they actively scout ideas from all parts of the organization. In idea and may have to abandon it prematurely. Too often, they end up
addition, BRAC has an extensive meeting culture that allows ideas taking the blame for failure, and others in their organization ignore
to flow across the organization quickly and to gain the attention of the adverse circumstances that caused it. Decision makers then re-
senior decision makers. allocate resources on an ad-hoc basis to other urgent problems or
Pursuing too many bad ideas | Organizations in the social sector to projects that seem more important. As a result, even promising
frequently fall into the habit of embracing a wide variety of ideas for innovation efforts come to a grinding halt.
innovation without regard to whether those ideas are sound. The Another cause of this pathology is the use of project plans that
recent obsession with “scientific” evaluation tools such as random- set forth milestones in a linear fashion. As we have noted, innova-
ized controlled trials, or RCTs, exemplifies this tendency to favor tion progress is not linear. When managers compare a set of project
costly ideas that may or may not deliver real benefits. As with other milestones with the actual progress of an innovation, they often
pathologies, many factors potentially contribute to this one. Funders perceive a huge gap and decide to stop the innovation prematurely.
may push their favorite solutions regardless of how well they under- “Stopping too early” is costly not only because promising opportu-
stand the problems that those solutions target or how well a solution nities remain unexploited but also because it deprives organizations
fits a particular organization. Or an organization may fail to invest of important learning opportunities.
in learning about the context of a problem before adopting a solu- This pathology also occurs when groups accept the first solution
tion. Wasting scarce resources on the pursuit of bad ideas creates that they identify or when organizations push to scale up innova-
frustration and cynicism within an organization. It also increases tions that are not yet mature. Under pressure to demonstrate impact,
innovation uncertainty and the likelihood of failure. they rush to implement half-baked ideas. This form of “stopping
The key to preventing this pathology lies with leaders. Many too early” sharply reduces an organization’s potential for impact.
of the most effective organizations that we have studied share an Effective organizations therefore maintain an innovation orienta-
important characteristic: Senior leaders spend a lot of time in the tion even when they shift into a scaling mode. They never assume
field, where they gain exposure to the reality of the problems that that an intervention is working perfectly, and they persist in their
their organization seeks to address. These leaders also make an ef- efforts to identify problems proactively. Both BRAC and Aravind,
fort to keep managers on board as long as possible. That way, their for example, have senior leaders who engage directly in innovation
32 Stanford Social Innovation Review / Fall 2016

work. Not only do they ensure proper resource provision and main- Q Organizations that are good at scaling often develop surplus
tain high motivation, but they also keep asking the right questions resources that they can use to limit the negative effect that an
about the status of an innovation project: Are we still learning some- investment in innovation may have on overall performance.
thing? Are there occasional promising signs of progress? Answering
“No” to one of these questions signals that it might be time to stop. Innovating again too soon | Too many organizations rush to launch
Stopping too late | Even more costly than stopping too early is new innovation projects instead of investing in efforts to scale
stopping too late. In this pathology, an organization continues an in- inter ventions that they have already developed. The causes of this
novation project even after the innovation proves to be ineffective or pathology are fairly well known: People often portray scaling as dull,
unworkable. This problem occurs, for example, when an unsuccessful routine work and innovation as its more attractive sibling. “Inno-
innovation happens to be the pet project of a senior leader who has vative” proposals thus attract funders more readily than proposals
limited experience. Leaders who have recently joined an organiza- that focus on scaling. Reinforcing this bias is the preference among
tion and who are keen to leave their mark rather than continue what many funders for “lean projects” that reduce overhead costs to a
their predecessor has built are particularly likely to engage in this minimum. These factors lead organizations to jump opportunisti-
pathology. Another cause of “stopping too late” is the assumption cally from one innovation grant to another.
that a project budget needs to be spent. The consequences of this Most high-impact organizations counter this pathology by in-
pathology are clear: Organizations expend scarce resources with vesting heavily in organizational infrastructure and in a capacity for
little hope for success and without gaining any useful knowledge. systematic learning and training. Leaders at these organizations un-
This pathology also occurs when a project becomes “too big to derstand that nurturing management talent and building execution
fail.” If an organization invests all of its innovation funding into a competence are crucial factors in transforming innovation into impact.
single large pilot, it becomes susceptible to the sunk-cost fallacy:
That investment creates an emotional attachment that prevents lead- MAKING A DIAGNOSIS
ers from abandoning the pilot even if it clearly has little potential. Organizations that seek to establish the conditions for turning inno-
An organization can avoid this problem by running several small vation into impact need to identify specific pathologies that hold them
pilots that have different design parameters. This approach also back, along with the factors that cause those pathologies. Our innova-
facilitates low-cost learning and strategic flexibility. tion pathologies framework creates an opportunity for constructive
BRAC, for its part, avoids the “stopping too late” pathology by and strategic conversations about the social impact creation process.
investing both in a dedicated research and evaluation division and We use the framework as a diagnostic tool in a workshop that
in an explicit monitoring function. This organizational infrastruc- we have offered to a number of organizations in both advisory and
ture ensures that BRAC leaders make decisions about innovation educational settings. In the workshop, we typically divide partici-
efforts that are grounded in timely and objective data. pants into three or four groups of 5 to 10 people. We try to keep the
Scaling too little | To repeat an essential point that we made earlier: ratio of senior managers to other participants at 1-to-5. The presence
no scaling, no impact. This pathology—which involves a failure to of senior managers in this exercise sends an important signal that
move beyond the initial stages of developing, launching, and testing they are willing to listen to people at all levels of their organization.
an intervention—is all too common in the social enterprise field. Attending these sessions also allows them to feel the “innovation
Thousands of inspired young people want to become social entre- pulse” of the organization and to learn about ways that they may
preneurs. But few of them are willing or able to build an organization be thwarting productive innovation.
that can deliver solutions at scale. Too many organizations, there- In our research, we suggest that an innovation process unfolds in
fore, remain small and lack the resources and capabilities required four phases: (1) internal idea creation, (2) interpreting and evaluating
for translating innovation into impact. ideas, (3) experimenting and consensus building, and (4) formalization
Our research on social enterprises suggests a counterintuitive and routinization—a phase that corresponds to the scaling process.3
insight: The best way to get good at innovation is to get good at scaling. When we conduct our workshop, we ask each group to focus on one
By building scaling capacity, an organization can advance produc- of these phases. (In some cases, we invite one group to address the
tive innovation in several ways: first two phases in tandem.) The task for each group is to identify and
explore pathologies that affect their organization, particularly during
Q Scaling accumulates knowledge about the context in which an the phase to which we have assigned them. The group that tackles
organization operates—about the economic, cognitive, nor- the first phase, for instance, may talk about a failure to get started
mative, and political factors that affect its target communities. on an innovation process, or about a tendency to generate too many
This deep knowledge enables the organization not only to cre- bad ideas. In another version of the workshop, we ask people in each
ate better ideas but also to create fewer bad ideas. group to consider the entire innovation process and to explore the
Q The experience of scaling up past innovations empowers an full range of pathologies that occur in their organization.
organization to say “No” to questionable ideas because it now Participants work individually for 15 minutes and then discuss
feels less pressure to enact every idea that arises. their findings with others in their group for 60 minutes. During
Q Successful scaling builds trust between an organization and that time, participants are usually able to identify a large number
the people and communities that it serves. That trust in turn of organizational barriers to productive innovation. At that point,
enables the organization to test ideas quickly by incorporating each group presents its conclusions to the full workshop. Partici-
small pilots into its ongoing operations. pants often say that they find the workshop liberating: It directs
 Stanford Social Innovation Review / Fall 2016 33

attention away from individual responsibility for innovation failure and cultural aspects that make up the overall “problem space” that
and toward larger organizational dynamics. you are striving to understand.
For organizational leaders, the workshop has clear benefits. A Formulate hypotheses | Use the knowledge that you have gained
careful and honest diagnosis of innovation pathologies enables an to formulate explicit hypotheses—assumptions about which actions
organization to base interventions on concrete realities instead of would alter aspects of the problem that you have targeted. This
general recipes. Unproductive excuses (“We have the wrong staff,” practice helps you to learn in an intentional and systematic manner.
“Management keeps us too busy”) give way to strategic consider- Document your learning, update your assumptions, and reformulate
ations. And what had been a blame game (“We tried suggestion your hypotheses as new information becomes available.
boxes, but no one offered any suggestions”) evolves into a fruitful Test potential solutions | Explore your hypotheses in the real world.
discussion of organizational design. Develop small, low-cost pilots, and run multiple pilots at the same
time. This approach will allow you to test your hypotheses more
PRACTICING INNOVATION quickly. Pilots can generate useful information about the influence
Once an organization identifies the pathologies that create barriers of various contextual factors, the strength of causal links between
to successful innovation, it can begin to design interventions in a actions and desired outcomes, and the many ways that an interven-
way that will prevent those pathologies from taking hold. Toward tion can go wrong.
that end—and in the spirit of treating innovation as a learning pro- Synthesize findings | Conduct innovation debriefings in order
cess—we recommend that leaders approach each innovation effort to solidify emerging knowledge and to spell out implications for
as if it were a research project. This approach, we have found, is the future innovation efforts. Which pathologies occurred during your
best way to ensure that social innovation will result in social impact. innovation process, and how can your organization avoid them in
Here are some steps that you can take to improve the practice of the future? Which assumptions turned out to be faulty enough to
innovation in your organization. require a thorough redesign of your project? If an innovation suc-
Define a clear objective | Start by asking, “Why are we pursuing ceeds, use similar methods to document your success, and identify
this innovation?” Answers like “We received money to do it” or “Our lessons on how best to scale up your solutions. What are you learning
funders expect us to be more innovative” do not make a good case about the resource requirements for successful scaling, the potential
for investing in innovation. Instead, your answer should explain how for replicating solutions in other contexts, and the challenges that
this innovation will advance your mission and inspire your teams. arise from collaborating with implementation partners? Are there
Otherwise, your organization will not have the stamina needed to unresolved uncertainties that might affect further scaling efforts?
ride the innovation roller coaster, or you run the risk of accepting
solutions that are convenient but inadequate to the problem at hand. BUILDING COMPETENCE
Recall two examples that we cited earlier: BRAC’s work to develop A strategic approach to building a productive innovation capabil-
and implement a treatment for diarrhea arose from an observation ity is far more effective than an approach based on following a
of high rates of child mortality—a problem that was central to the supposedly magic formula. If waving a wand worked, then every
organization’s mission. Aravind, similarly, began to manufacture innovation effort would succeed. By considering the entire social
artificial lenses because that was the most effective way to meet impact creation process, organizations can realistically confront
its commitment to delivering cataract surgeries to poor patients. the need for both innovation and scaling. They can also begin to
Ask meaningful questions | Recast your ideas as research questions take seriously the various pathologies that cause that process to go
about the problem that you intend to solve: “What prevents women wrong. By keeping a close eye on innovation uncertainties, more-
in our region from participating in decision-making processes? Why over, organizations can shift their attention away from the naive
do women remain excluded from economic opportunities?” Such pursuit of success and toward an investment in learning. In that
questions provide a clear focus for your project and enable a pro- way, even an innovation “failure” can generate important knowl-
ductive search for knowledge. Too often, people start an innovation edge that informs the next round of innovation.
effort by positing solutions. Instead, they should undertake a deep Focusing on pathologies builds innovation competence. It
investigation of a problem that they find meaningful. Gram Vikas, as removes unrealistic expectations about the potential of innovation to
we have seen, struggled early in its history to establish a clear focus create impact, and it enables better decision making. It establishes a
for its work. Experts and powerful stakeholders lured the organiza- shared understanding that innovation does not just happen. Indeed,
tion into adopting solutions that had negative consequences both for organizations need to set up systems and practices that legitimize
Gram Vikas and for the communities that it aimed to serve. (“The and enable productive forms of innovation. And senior managers
world is filled with experts [who are] trying to find a problem to at- need to recognize—and then correct for—the ways that they make
tach their solution to,” a senior manager at BRAC once said to us.) innovation difficult for their staff. When they do so, they open up
Draw on relevant knowledge | Survey stakeholders who engage opportunities for creating real social impact. Q
in some way with your problem of interest. Focus, in particular,
N OT E S
on learning from the intended beneficiaries of your project. Then
1 Leslie Kwoh, “You Call That Innovation?” The Wall Street Journal, May 23, 2012.
identify research that covers similar problems in other contexts,
2 Christian Seelos and Johanna Mair, “Innovation Is Not the Holy Grail,” Stanford
and look for data on solutions (including both solutions that failed Social Innovation Review, Fall 2012.
and solutions that seem to have worked). Categorize and analyze 3 Christian Seelos and Johanna Mair, “Innovate and Scale: A Tough Balancing Act,"
the various dimensions of your problem—the economic, political, Stanford Social Innovation Review, Summer 2013.