Key Takeaways: Lean Impact for Scale Workshop

The TRANSFORM Support Hub is a place that entrepreneurs can return to again and again for the resources, support, and connections they need to scale.

Our monthly thematic learning groups bring these elements together in a time-bound way, and in June, we focused on the topic of Business Operations. With support from their peers and the MovingWorlds team, our group of entrepreneurs worked through the TRANSFORM Support Hub Business Operations guide to learn how to choose the right goal setting framework for their businesses, align their teams on a process for strategic planning, and distribute ownership of key business processes and operations.

Each group learning journey culminates in an exclusive workshop from an expert in the field, and this month we had the pleasure of hosting Spring Impact Director, Amy Ragsdale. Her work is all about helping social enterprises and nonprofits test and learn their way to financial sustainability and equitable impact at scale, and in this session, she distilled lessons learned from working with some of the sectors best and brightest to help our community achieve just that.

Check out the practical and actionable tips she shared below!

Common Pathways to Scale

It’s important to remember that scale is different from growth. As Amy explained, “Growth involves adding resources at the same rate that impact is increasing. Scale, on the other hand, is the point at which a business can add resources incrementally, while increasing impact exponentially. And the only way to move from growth to scale is to break out of your own organization’s orbit.” 

There are any number of ways to do that, but in her work with over 300 impact businesses, she’s found that 9 common pathways come up again and again:

Let’s take a closer look at definition, pros, and cons of each:

Open Sourcing

This approach involves creating a resource that others can use (typically, for free) to learn your intervention, solution, or approach and then implement it in their own geographical region.

• Pro: Relatively cheap and fast way to expand your reach
• Con: Little control over how it gets implemented because partners will use it autonomously 

Training

Also referred to as “training the trainer,” this approach involves teaching others to implement your solution through courses or workshops, and is often paired with other pathways (like social franchising.) 

• Pro: Ability to recruit and select your partners, possibility to generate income from training fees
• Con: Up-front investment required to develop clear learning objectives, milestones, and expectations for those partners

Accreditation

This approach involves creating a recognized mark of competence that other partners can earn by meeting certain standards.

• Pro: Highly scalable without significant investment in a central body, provides recurring source of income
• Con: Significant investment up-front to generate enough awareness about your credential that customers want to seek it

Social Franchising

This approach involves packing up a proven model of recruitment, onboarding, and ongoing partner support with standards in place that partners have to hit to maintain their franchisee status.

• Pro: High degree of control over the quality of delivery, can scale rapidly
• Con: Tricky to balance control, motivation, and autonomy in partner management, and requires investment in a central body 

Subcontracting

This approach involves contracting others to deliver your intervention.

• Pro: High degree of control over how the intervention is delivered
• Con: Big financial dependency involved, and harder to scale up across partners because they need to have the prior experience to retain the quality of your brand

Government Delivery

This approach involves working with government agencies to deliver your solution as part of its plans/policies.

• Pro: Leads to the longest term and most sustainable impact 
• Con: Challenging to develop and retain deep partnerships with stakeholders in government

Public Policy

The focus on this approach is on enabling the policy and legal environment your solution needs to scale, and changing the way funding flows towards it.

• Pros: When successful, brings vast scale on regional and even national levels
• Cons: Lobbying decision-makers in government is costly, requires specialized team, and is a lengthy process

Creating/Changing Markets

This approach involves influencing consumers behavior to create demand for your intervention and encourage other suppliers to enter the market as well. 

• Pros: Creates sustainable profit which can be reinvested into the next iteration of the solution, and the integration of customer behavior into the business model helps ensure the solution is adapted to real needs
• Cons: Market demand may not correspond to the need you’ve identified, only possible with real demand and profit making component

Movement Building

This approach involves creating a community of like-minded people and organizations that create campaigns to drive social change.

• Pros: Can enable your solution to spread rapidly, and encourages people to bring their own contributions, skills, and experiences to drive change together
• Cons: Really difficult to get a movement off the ground, and depends greatly on factors like luck and timing.

Keep in mind that these 9 pathways are not mutually exclusive – in fact, Amy has found that “the most successful organizations often use multiple scale up pathways and frameworks at the same time.” So, how do you know which pathway(s) to choose? Look for pathways that hit what Amy describes as “the trifecta of value, impact, and sustainability.”

How to Validate Your Scale-Up Path

Measure What Matters

The only way to know if an approach hits all three is to measure. For each pathway you select, you’ll need to develop the right set of key performance indicators (KPIs) to assess whether it’s actually getting you closer to your ultimate goal of impact at scale. 

So, how do you set KPIs that measure what really matters? Amy’s pro tip is: skip the vanity metrics and instead focus on critical rates. Vanity metrics tend to be absolute numbers – like number of social media likes, or total number of program participants. Percentages, on the other hand, require a baseline – which gives you the ability to track progress over time towards your ultimate goal for impact at scale. Check out the critical rates Amy shared in the image below for inspiration:

Learn Quickly Through Lean Experimentation

Traditionally, most organizations go about implementing new things in a linear way: do research, write a complicated action plan, invest a lot in infrastructure, create protocols and toolkits, have a flashy marketing launch, then cross your fingers and hope the implementation actually works out.

The problem with that approach is that the world rarely works the way we expect it to. It’s really hard to get a scalable model working in this traditional way – particularly when time and resources are limited.

Instead, Amy strongly recommends taking a lean impact approach, which creates learning loops that enable you to test and validate that what you’re doing will work (or won’t work, in which case you can quickly pivot and iterate.)

To test your scale pathways, you’ll go through three steps:

1. Build: Build a minimum viable product (MVP) that only includes the features you need to run an effective test, but still feels real and functional to users who engage with it (even if it isn’t yet.).
2. Test: Run a test that enables your target audience to engage with the MVP. Be sure to establish success metrics from the start, look for early indicators, and get curious about where you might be wrong.
3. Respond: Based on the experiment results, you can then respond in one of three ways:
   1. Iterate and make improvements based on what you learned
   2. Pivot away and try another scale pathway
   3. Scale up and invest more in what you’re doing

Remember, every experiment is designed to test a certain hypothesis. As a starting point, think about some of the biggest risks and unknowns involved in making your approach work, frame it as a hypothesis, and get an MVP into the hands of real partners/stakeholders to see what happens. The beauty of this approach is that it shifts “failure” from a judgment-based experience to a valuable learning opportunity that will only make your final product better in the long run. To learn more, check out Spring Impact’s open source Scaling Impact Toolkit here.

We’re so grateful to Amy for sharing her insights with our community, and for ecosystem partners like Spring Impact. For more support tapping into their tools, business support, and network you need to scale, join us on the TRANSFORM Support Hub!