Vikram and I were fortunate to attend the Summer Davos World Economic Forum in Tianjin where we were selected in the 2012 class by the Schwab Foundation for Social Entrepreneurship. It was a great chance to meet all of the social entrepreneurs from this year and prior years and hear about their amazing business models, teams, and passion.
One of the early dialogs that the Schwab Foundation facilitated was around scale and governance. It was a common refrain that we all get told to scale big and fast. We had a dynamic conversation around the idea that many social entrepreneurs weren’t necessarily interested in scaling beyond their current projects, countries, or execution model. For some, going from two to four sites was of questionable value (granted, the sites were large). And it is not for a lack of ambition—I doubt anyone the Schwab Foundation has selected ever lacked for ambition. Rather, it’s because the critical factors for success in many of the social enterprises are the empathetic networks and relationships built in the projects and programs; which aren’t always scalable.
At a high-level, the “what” of many social business models looks like typical ventures: selling software, creating products, creating franchises, creating wholesale distribution networks, or providing healthcare. The “how” of many social enterprises is what makes them able to successfully create impact and value. Nearly every social entrepreneur’s model had some version of hire empathetic staff, listen, spend a lot of time training and following up, and earn trust. A major asset in each organization is our networks of staff, partners, users.
All sorts of organizations discuss concern over dilution of mission and values as they scale. And while these need to be closely monitored in social enterprises, another critical component to be concerned over is dilution of value in relationships. A recent Harvard Business Review article talked about how networks have a natural optimal sizes, and going beyond that size risks diluting the value of the network (in the context of Facebook possibly growing too big). It was refreshing to hear many social entrepreneurs in the discussion voice not only the typical “we have scaling concerns” that everyone does, but also “we’ve thought about it, and we actively don’t want to grow because it would change our value proposition.”
At Dimagi, we have built not only an amazing technology team, but an amazing field team who works with local communities to implement, deploy, and train partners on our technology. A huge value differentiator for Dimagi has always been not just our technical expertise, but also our field work. As we’ve standardized our CommCare implementation plans and training, I’ve already found myself asking frequently “does this training step need to be this long.” But, saving money by providing too little training to users is no different than trying to save money by giving underpowered computers to developers: it is going to cost massively more in wasted opportunity and lost value creation.
Charles Leadbeater spoke at a Gates Foundation event I attended where he talked about empathy vs. systems for scale (minutes 16-20) and talked above the above grid. Most social enterprises I would argue start out in the lower right quadrant of high empathy and low system for scale. As we build systems for scale, we strongly risk being dragged into the low empathy half; once there, organizational inertia and the system for scale itself may make it near impossible to ever achieve high empathy again. Thus, we are seeing that many social entrepreneurs rather than hold scale sacred and hope for empathy, hold empathy sacred and hope for scale.