In a lunchtime talk at the Stanford Graduate School of Business this year, Bill Drayton asserted that empathy is the single most important skill necessary for changing the world. “Those who don’t master applied empathy will be marginalized,” he said, calling for a “revolution” to ensure empathy skills are taught in early childhood alongside reading and math.
In the four years I worked at IDEO as a project leader and mechanical engineer, I learned firsthand how empathy lies at the root of a powerful process for generating innovative solutions to challenging social and business problems. Now an intern this summer with Acumen Fund’s Knowledge and Post-Investment Management teams, I am working with Acumen to envision how an empathy-based process can be employed, not only with customers in the field, but internally to create a global learning organization.
Empathy and Sustainability
Jane Fulton Suri, founder of IDEO’s Human Factors Research team, was the first psychologist to be hired by a design firm. Though staffing a psychologist full time was a risk, Suri proved that empathetic research was the most effective way to move beyond consumers’ explicit needs (what they say) to the latent needs expressed by what they think, feel, and do.
Similarly, by selecting investments that emphasize both social and financial returns, Acumen Fund’s patient capital approach goes beyond meeting the explicit needs of the world’s poor to create lasting social impact. By investing in businesses that serve the base of the pyramid as customers rather than donating goods and services directly, Acumen is fostering an approach to development that meets what Suri might categorize as the customers’ most important latent need — the need for dignity that comes through the power of choice.
In such an investment and customer-focused organization, it can be easy to overlook the fact that the same principles applied in the field need apply internally as well. But Acumen Fund is taking steps to create systems that meet the implicit needs of its global team of administrators and investors.
Empathy as the New Knowledge
In his seminal article on “The Knowledge Creating Company” (HBR, 1991), Ikujiro Nonaka credits the success of leading electronics and automobile manufacturers to the way that they think about knowledge in their organizations. Traditional manufacturing firms view knowledge exclusively as the set of explicit, quantifiable data shared within the organization as procedures and specifications. Nonaka describes how firms, such as Honda, incorporate not only explicit, but tacit forms of knowledge as an element of their corporate strategy.
Honda understands that some of the most critical knowledge within the organization exists in the distributed insights and intuitions of its workforce. It is the responsibility of the management team to create the system for harvesting this holistic data so that it can be available to and tested by the organization as a whole. How they achieve this feat is the most surprising of all: with each project (in Honda’s case, a new car design), the strategy team will create a metaphor to describe the goal of the product to its design team. The metaphor is deliberately inspirational but ambiguous in order to seed discussion around the different interpretations evoked by the diverse intuitions and experiences of its designers. For example, when designing the Honda City, project leader Hiroo Wantanabe used the phrase "theory of automobile evolution” to convey his aspirations for the car. After some debate the project team decided to interpret this slogan to mean “man-maximum, machine-minimum.” This concept was, in turn, used by designers to guide decisions around the shape and mechanical systems of the car.
As Acumen Fund approaches its tenth anniversary, its portfolio continues to expand. Critical to the sustainability of the organization through its growth is the codification of processes that have enabled Acumen Fund to learn from its experiences. What investments constitute best-in-class approaches in their sector? What common themes such as distribution models or IT systems can be shared across investments as best practices?
Acumen helped shape the development of platforms to evaluate the social performance of its investees, and shares these platforms freely with other impact investors. But not every question can be answered by performance data alone. Finding the answers to these questions requires both an ability to maintain transparency into the field across an increasingly global portfolio, as well as the opportunity to synthesize the results into a refined investment thesis. The key to both of these abilities is the same — stories.
How Design Thinking Can Help
Like the metaphors used by Honda to inspire discussion, the Human-Centered Design process is a methodology for seeking inspiration from a diverse set of stakeholders, then sharing stories and interpretations of what was heard as a means of synthesizing the information into key insights and opportunities.
This summer, the Knowledge team at Acumen has conducted over 20 interviews and observations of Acumen investors, administrators, and investees, as well as VCs, designers, and non-profits to inspire concepts for sharing knowledge across the organization and among our investees. Our approach to this initiative followed the leading principles of Design Thinking, namely:
Empathize: Though the Knowledge team has global responsibilities, we are based in Mumbai in order to better identify with the challenges of working in the field. Understanding that each country has its own set of unique logistical and cultural constraints, we solicited participation from investors across five different countries spanning three continents.
Think Experientially: When designing tools for sharing stories across the organization, we did not stop at the virtual interaction, but challenged ourselves to think systemically, from the users’ point of view to ask: When will users engage with these tools? How will they use the tools to seed discussions? How will they know that their stories are being heard?
Be Optimistic: Instead of asking “What’s wrong?” we began by asking “What if?” and created wireframes of knowledge management tools to engage participants in creative discussion.
Acumen has been successfully building an internal Wiki for the last two years using the SocialText platform. But whereas the Wiki to date has been used primarily for uploading and reading documents, with the findings from this study, we are creating concepts for pushing these tools to be used for sharing stories from the field. With any luck, and enthusiastic participation from the Acumen team, the result will be a pipeline of lessons for Acumen to spread to the global community on how to better seed change in the world.
- Tiffany Card, Summer Intern with Acumen Fund - Mumbai