Impact investing, hybrid structures, the networked nonprofit, collective impact, design thinking — these are just a few of the many innovations currently being developed and implemented to drive social change. They are impressive, and indeed, in many cases, deserve attention and application. Yet I'm also finding that the hype behind so many “new” approaches is creating a bit of chaos. In recent conversations with successful social entrepreneurs and established organizational leaders, my head was spinning with all the questions, directions, and approaches they are being asked to incorporate into their organization’s future. Below is just a sampling of some of the discussions:
“We just met with one of our biggest funders and they are incorporating ‘collective impact’ into their future grant rounds. They really like our organization and they were hoping we would incorporate collective impact into our organizational model. How do I decide whether this is needed?”
“One of our board members just returned from a conference. There was a lot of discussion about hybrid models and the potential for scale. We have a strong earned income stream so she thinks we should add this onto our next board meeting agenda. What are the legal ramifications for moving from a nonprofit structure to a mixed structure?”
“Our development director keeps asking for additional FTEs to manage our social media presence. Is this really going to drive donors to give?”
Clearly, these are complex and messy situations, so my advice is this: Take a step back.
As I have said numerous times before, the scarcest resource is time. We have 24 hours in a day, and what we do with that time is critical for us as individuals, for our organizations, and, ultimately, our customers. Therefore, when leaders get pulled into directions that are not vital to mission delivery, organizational effectiveness will suffer.
The Pareto principle (also known as the 80-20 rule, the law of the vital few, and the principle of factor sparsity) states that, for many events, roughly 80 percent of the effects come from 20 percent of the causes. For those in the social innovation field, finding the 20 percent of activities that are going to give you maximum impact is paramount. Clearly, that means sorting through the list of innovative ideas and not trying to go for all of them.
Whether you’re a business or nonprofit, the frenzy of choices about what approach to take poses both opportunities and threats. That's probably why the statement I have heard the most during my past seven years at the Stanford Graduate School of Business is, “Strategy is as much about what you say no to as what you say yes to.”
This is not a call about resisting change; rather it is a call to deliberate choice and action. As you get pulled in these directions, push yourself and those in your organization to think critically about priorities. If you could only do three things for the next year, would this item make the top of your list? Force yourself to answer.
Find someone to play the “devil’s advocate.” Do not limit your questions to those that will confirm one particular path. For example, you may be inclined to use a simple cost/benefit criteria for the decision on “Will the new FTE on social media bring in more funds than the cost?” However, a devil’s advocate will push you to answer more difficult questions, like “Are we better off with a staff to go after government grants than social media?” and “Beyond financial returns, what are the real measurable benefits that come from social media?”
We all work in an ecosystem of funders, staff, consultants, boards, donors, partners, and customers. It is difficult to go against the trends, push back on key funders, and tell your board members that the latest report from McKinsey does not apply to your organization. Sometimes you just gotta say no.