Devil’s advocates

Kriss Deiglmeier’s latest column, just say no, on her CSI blog focuses in on the need for social entrepreneurs and organisational leaders to really identify and prioritise the most crucial actions to achieve the goals they have. “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.”  

Indeed, Deiglmeier points out that it is just too easy to distracted by multiple calls for your resource and time pulling in all sorts of different directions – the effects on organisational effectiveness can be highly damaging. Hence the importance of leaders to say no as well as yes. She then adds to this with some very practical advice: “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.”

For organisations to do this effectively Deiglmeier suggests they seek out Devil’s advocates to ask the questions incumbents rarely ask. This got me thinking about the state officials and the decision-making that takes place throughout Californian counties. Each one of California’s 38 million residents lives within the boundaries of one of the state’s 58 counties. California’s counties serve a dual role. They provide a vast array of municipal services to residents, including roads, parks, law enforcement, emergency response services and libraries. Counties also serve as a delivery channel for many State services, such as foster care, public health care, jails and elections.

Now, within those counties I bet that path dependency is rife – a ‘this is the way we’ve always done it’ or ‘why would we change that?’ mentality. Surely many of these county service providers could benefit from some devil’s advocates to really challenge current orthodoxies and ask some critical questions about priorities. Who could these devil’s advocates be? Well, why not high-flying students from Californian academic institutes and business schools?

Surely there could be a win-win here – current students could get some additional hands-on time working with Californian administrators and gain new practical understanding of influencing and innovating within the public sector. Equally Californian administrators could build up new networks and bonds with highly skilled students that could support organisational purpose clarity and operational effectiveness in their organisation. Who knows, maybe such a connections programme could spur new spin-out service innovations that could be scaled up state-wide?

Psychology of proposition 29

At the recent science of doing good event at the stanford centre for social innovation Todd Rogers gave a fascinating talk on the psychology of voter turnout. Marguerite Rigoglioso gives a good overview on the CSI site which is well worth a read. Getting the vote out is not just an important issue for presidential candidates and political parties, it is fundamental to the state earning legitimacy (collective trust) from society. If people don’t participate in the electoral process – especially if there is a group effect – then those people and groups are effectively disempowered.

Rogers, in his talk, gave a whole range of useful and simple ideas for getting the vote out (from getting potential voters to commit to a plan to vote, to emphasising a positive norm around voting in a state) However, I was especially interested in a specific study from the 2010 election that Rogers cited looking at the importance of personal relevance and accountability. Rigoglioso notes this study in her post: researchers sent one group of potential voters a psychologically sophisticated mailing encouraging them to vote. Another group received the same mailing, plus in the top right corner a box saying: “We may call you after the election to talk about your voting experience.” Adding that box increased the effectiveness of the mailing in terms of the voting it stimulated by almost half.

That’s a pretty impressive impact! On June 5th voters in California will be asked to make cigarettes more expensive. As outlined in the Examiner today Proposition 29, would raise the state’s excise tax on a pack of cigarettes from 87 cents to $1.87, with the revenue to go toward research on cancer and other tobacco-related diseases. It would go into effect in October and is expected to raise about $735 million in the first year. That is a lot of money, yet I’m not convinced of the personal relevance is being maximised in the design of this proposition. There are more innovative designs of such a fund that could more actively engage and interest society in this proposition – designs which would give the state more legitimacy for this intervention.

Firstly, rather than the $735m going to cancer research by default (which is effectively a californian subsidy for federal & overseas cancer research programs), the fund could be used as a challenge fund for Californian citizens to do something to enhance social bonds and relationships in their own neighbourhoods. Individuals, families, blocs or whole neighbourhoods could collaboratively bid for some seed funding to set up some community activities. Surely this would be more salient to the everyday lives of California, especially those that are at less risk of lung cancer because they don’t smoke. However if Californians don’t bid for the bucks, and there is a large pot of money left over then that – by default – could go cancer research programs. So effectively Californians get first choice on spending, but if society doesn’t actively step up to the challenge by default the unused money could then go to the federal and overseas cancer research programs – a pretty good incentive for Californian communities to get active with their bids then!

Secondly on the campaign mail outs currently encouraging Californians to support proposition, there could be a box in the top right hand corner saying “We may call you after the election to talk about your voting experience and your priorities for spending the $735m fund to strengthen your community.” Based on Rogers research, this should both encourage more people to vote for the proposition as well as shift citizens perception from being a passive recipient of the newly generated fund to an active player in how the funds are spent to strengthen bonds and relationships in their community. Such a re-think of the design of proposition 29, together with a few tweaks to the wording of the campaign mail outs, has the potential to significantly strengthen Californian society. Let’s hope the State reads Rogers research soon!

Frugal innovation sells

Courtney Martin’s latest post on the Stanford Social Innovation Review blog Instagram-Style Innovation in the Public Sector raises one of the most exciting questions for society and the social innovation sector has been grappling with over the past decade, and with increasing vigour since the fallout from the financial crash: “what would happen if we leveraged the ingenuity and resources in Silicon Valley for the improvement and renewal of the rest of the country—starting in D.C., where simple solutions seem all but impossible?”

Martin firstly quotes Annie Leonard, founder of The Story of Stuff (an online video information service), to explain why silicon valley companies such as Apple have had such a competitive advantage in attracting the most talented innovators: “while our “consumer muscles” have gotten a great workout over the last few decades, our “citizen muscles” have grown anemic. We’ve created gods out of entrepreneurs like Steve Jobs, inspiring a fresh batch of the most innovative graduates each fall to aspire to go into the tech industry; all the while, the public and government sectors are starving for their ingenuity and energy.”

Martin goes on to point out that the social innovation sector has failed to sell itself and its rewards to compete with those portrayed by the techies in films such as the social market. Both social innovators in the state and society need to “tell a better story about the rewards of public service and its potential for innovation” and Martin is absolutely right to explain that there is a good story to sell: While helping a dysfunctional state run more smoothly or simply improving the quality of life of the average citizen might not be the kind of innovation that makes you filthy rich, it could make you a game changer, and at the very least, it will make you proud.

Maybe there is a potential lesson for current policy makers – and me! – here. Too often those rapidly-increasing-few of us banging the drum for the mainstreaming of social innovation within the state default to Schumpeter’s theory of innovation: ‘creative destruction’ – a ceaseless cycle of new ideas smashing through previous accepted norms (shibboleths). Energy, enthusiasm and resources all follow lots of new ideas in the hope that a handful will be successfully nurtured, piloted and then scaled up. Lets call this approach the ‘radicals agenda’ You’ll find a lot of radicals fostering excellent partnership working between state institutions and society organisations in order to overcome barriers and ensure their vision (a new idea) becomes a reality. You’ll find a lot of radicals in NYC!

But I’m not so sure if the radicals agenda really is the one to pursue to get the truly creative-minded and technically-gifted people that silicon valley attracts in their truck load. To me – and this is an open question – I suspect most radicals are those disillusioned with the injustices in their society, have an inherent desire to be either politically active or socially active in their community (which is a good thing!) or are just seeking to do social good. If this is the case, then – like the current problem with the political classes being disconnected from the rest of society – social innovation is at risk of being something that is  only for a certain type of person with certain values.

Maybe then state and academic institutions in California keen to promote social innovation to a wider audience should consider pushing an alternative to the east coast agenda. Perhaps we should be looking at the highly successful honey bee network in India whose focus is on ‘Frugal innovation’ – the design of simple solutions to society’s problems. Interestingly the network has a highly diverse membership (many of whom wouldn’t dream of calling themselves inventors, social entrepreneurs or radicals!) and is highly effective at building collaborations through the network (the sort of skills you see being employed in the open-source movement). While not flash, many of the frugal innovations coming out of the network are game changers – perhaps such an approach could connect more effectively with the next generation of creatives and techies that are destined for Apple?

Library crowdfunding

This month the California State Library, opposite the Capitol in Sacramento, is celebrating the 75th birthday of San Francisco’s fabled Golden Gate Bridge. On May 16, the monthly “A Night at the State Library” program will present the 1968 film Bullitt, starring Steve McQueen as a San Francisco police lieutenant and “showcasing an almost 11-minute car chase in which the Golden Gate Bridge is visible”. Brilliant!

These programs, which enhance access to and engagement with great public institutions such as libraries, are a positive contribution the state can make to help strengthen society. They not only promote greater knowledge and learning but, more importantly, also provide opportunities for people to come together, connect and exchange ideas with each other – the very fabric of a good society. This is why the work of the California State Library Foundation (CSLF) is so important – it provides private support (through membership, donations, grant-bids) to enhance the role of the state library as an active partner within society (i.e. Governors book fund, California research bureau work, Saturday hours program, etc)

For scholars of social innovation though, there is surely a huge opportunity here to work with the Foundation to expand entrepreneurial support for those using the library to develop their innovative ideas. Many potential entrepreneurs (regardless of whether they realise they are one yet) do spend time thinking, researching and meeting in Californian state libraries. Some of these may have some outstandingly good ideas, but most of which will never get off the ground for various reasons (i.e. not realising potential market, lack connections to angel investors in the Bay Area, lack critical mass support, etc)

How can the California State Library Foundation help? Well, it could provide an on-line platform for a Californian state library user with an idea to pitch it to the whole membership (all users) of state libraries. The platform would allow members, if they like the idea, to collaborate virtually and provide start-up capital for idea to become a social venture. For example 1000 members could all like a pitch they read about, and the first 500 to sign up $10 each to support the new social venture could each be given 0.1% equity share in the venture (it would be an open question what dividends they are investing for: could be financial or social impact returns).

Obviously such investment platforms are not new – we know them as ‘crowdfunding’ – but they are rapidly becoming more credible with new technological innovation. State institutions – such as libraries – which are in the fortunate position of already possessing access to both potential innovators as well as a critical mass of potential investors should look to exploit this institutional advantage to catalyse more connections, for the benefit of society. This is especially the case given the recent passing of the JOBS Act that now allows crowdfunders to receive equity in small companies

For entrepreneurs using the State library, an in-house crowdfunding platform has three extremely powerful advantages. Firstly, in an era when credit and institutional VC is more risk-averse, the platform provides a much needed alternative to raise seed capital and – given risk will be dispersed across a collaboration of micro-investors rather than concentrated in the hands of a couple of big ones – ideas with greater social returns (but bigger financial risks) are more likely to be funded. Secondly, it provides an instant feedback mechanism for aspiring entrepreneurs and their ideas: if people don’t think it will work they won’t invest – this is invaluable information for entrepreneurs as it signals a sharp return to the drawing board before any more resource is wasted pursuing an unsustainable idea. Finally, it connects the idea with a potential market: the mass of people who see it and invest in it may also provide the first wave of customers / participants for any new product / service.

The CSLF could also move beyond simply facilitating the crowdfunding platform to being an active player in it to. In the UK Adrian Hon, the founder of the online games company Six to Start, has written recently about potential hybrid crowd and public funding models. Essentially the CSLF could take an initial stake in ideas that it thinks would benefit the work of the California State Library and the Foundation’s mission. This would firstly provide an incentive to entrepreneurs to come forward with ideas that could have direct relevance to the library and the Foundation’s mission (as they are more likely to secure funding – individual funders will be more likely to sign up if they see an insitutional investor has taken an equity stake). Secondly it could encourage both the state library and its users to work in greater active partnership as they all have a mutual interest in ensuring their investment is successful.

I think this is something the CSLF should seriously consider – it could have huge benefits for itself, the libraries users, and most importantly Californian society.

Society stabilizers

Both the Metropolitan Transportation Commission and the Association of Bay Area Governments are currently taking feedback on the Plan Bay Area proposal to reduce the speed limit to 55mph on Bay Area freeways. Dropping the maximum limit by 10 mph could reduce emissions 6% by 2035 — the equivalent of taking 300,000 cars off the road. Under state Senate Bill 375, passed in 2008, the Bay Area must reduce its greenhouse gases 7% by 2020 and 15% by 2035.

On the face of it this seems like a plausible idea, and for me it stimulates additional ideas for state policy makers. For example, most commuters want to travel faster than 55mph nearly as much as they want good air quality to enjoy. So the speed limit, rather than being fixed, could become actively conditional on real-time carbon emissions: the higher the emissions each hour on the freeway the lower the set speed limit becomes, and vice versa. This idea would create a sustainable equilibrium between polluters and environment, as well as potentially creating a further (collective) demand for the advancement of low-carbon technology.

For those of us passionate about not just a sustainable environment but also a stronger society, there is a fundamental idea worth looking further at here. It’s the idea of a positive equilibrium between society and the economy. Imagine for a second your annual energy costs divided equally over the 12 months of the year – in the winter months you’ll be using more energy than in the summer months but rather than your personal finances being exposed to the peaks and troughs of seasonal needs they are stable throughout the year because thanks to your fixed monthly payments smoothing out potential debit, as well as credit.

A strong society requires high levels of interaction and social bonds, yet we know that during times of economic growth the temptation for individuals to withdraw from social interaction and community collaboration peaks (“why share when I can buy my own”). Consequentially this weakens levels of community capital required for a strong society – decreasing social bonds and relationship building. Ironically though, in the economic good times people cope by compensating for the trough in social bonds through evermore individual consumption fueled by increased debt. Society then has a false sense of security that both economic and community well-being are both peaking. They are not: individual economic prosperity is simply displacing community collaboration.

So, the catastrophic impacts of reduced community capital in society are most acutely felt  during times of economic downtown. Individuals suffering economic hardship look to society (their communities, their networks, their relationships) for mutual support yet, as demonstrated by the sub-prime housing crash, many of those societal bonds and ties had been dramatically weakened if not smashed during the good times. Many families were left with far fewer options of support within society than they should have had.

Now that California is slowly emerging from recession, and once again we look to the light at the end of the tunnel that is economic growth, perhaps policy makers might want to think more about how they can ensure social bonds in society are stabilised relative to economic growth (think back to the energy consumption peaks and troughs example above). A very tricky area, but the state has a legitimate active role here given what we know is an inherent market failure of the economy to price in long term future shocks to society.

A good first principle value for policy makers would be to identify that isolationism weakens society, while collaboration strengthens it. So in a growing economy, society would benefit from ‘stabilisers’ that reward community consumption over individual consumption. For example, two people in the same neighbourhood could buy the latest flatscreen television and premium cable channels with their increased disposable income. One person may simply want to enjoy it in isolation, which is their choice but does little to strengthen the neighbourhood bonds society needs. The other person once a week opens his TV room up for all the neighbours on his street to come and enjoy a movie together – everybody brings their own food and drink to share and over time the community relationships society needs blossoms.

Now, policy makers should be understanding firstly how they can enable all those people who do want to share with others (the most recent ideas suggested by the leading innovators in this field have involved new ‘platforms’ – think ebay –  which enable strangers to connect and collaborate). Secondly policy makers want to be thinking how to ‘price in’ the difference between those that actively participate for the good of society versus those that prefer to opt-out of community responsibilities (the most recent ideas again suggested by the leading innovators in this field have ranged from ‘community dividends’ – think tax rebates – through to ‘state award ceremonies’ – think medal of valor – and enhanced personal ‘reputation ratings’ – think ebay again)

The challenge to maintain strong social bonds, in spite of economic growth and increasing individual consumption of goods and services, is very hard and innovation like that described above is even harder (given current path dependencies) – there is a huge amount of learning to be done. The potential rewards though for both the state and society – in good and bad economic times – are huge, which is why such bold state innovation should be pursued with both courage and vigour.

Pro-social welfare

This month Michael Norton’s fantastic Tedx talk ‘How to buy happiness’ was posted on the Ted website. The central thesis of Norton’s talk was that money can indeed buy happiness, when you don’t spend it on yourself and he had research to show that ‘pro-social spending’ can benefit you, your work, and other people.

Norton cites a simple experiment done by the British Columbia University which neatly compared two randomly assigned college undergrad groups in Vancouver. Individuals in the first group were each given an envelope with money in it (either $5 or $20) and instructions to spend the money on themselves (i.e. gift for self, bill, expenses) by 5pm of that day. Individuals in the second group were each given an envelope with same amounts of money in it and instructions to spend the money on somebody else (i.e. charitable donation, gift for others) by 5pm.

The researchers phoned the participants at the end of the day to find out what they spent the money on and how happy they were now. Firstly they found that people who spent for themselves bought consumer goods (i.e. make-up) and drinks (i.e. coffee), and people who spent for other people either donated the money (i.e. homeless), or bought a gift for others (i.e. toy or coffee for others to enjoy). Most impressively though the researchers established that those who spent money on other people got happier, whilst those that spent money on themselves experienced no change in their happiness level. The other effect they found was that the amount of money doesn’t matter that much – it didn’t matter whether the individual spent $5 or $20, what really matters was the fact they actually spent it on someone else rather than on yourself.

California Work Opportunity and Responsibility to Kids (CalWORKs) welfare-to-work program serves all 58 counties in the state and is designed to assist welfare recipients to obtain or prepare for employment. We know that many (long term) welfare recipients of state benefits experience low levels of well-being and personal self-esteem and we know, from past studies in California by the nonpartisan Urban Institute act, that in itself is a major barrier to re-entering the labor market.

So, could CalWorks try using the State Aid card accounts (the same card accounts which between 2007 and 2010 were used by benefit claimants to draw $69m of welfare money from ATMs outside of the state – $11.8m alone in Las Vegas) to increase CalWorks recipients spending on other CalWorks recipients? For example CalWorks could partner with Starbucks so that say 2% of total monthly welfare put on that state aid card could only be used in a starbucks buying coffee for someone else. Perhaps this would fuel increased reciprocal exchanges (exactly the sort of actions that we know strengthen neighbourhoods) and help tackle the sort of social isolation / low self-esteem that really inhibits long-term welfare dependants from re-entering the labour market?

Of course there is the risk with such a ‘use it or lose it’ approach to spending public money on someone else that it could lead to both welfare recipients being happy just to lose it, and non-welfare recipients being anything but happy with their taxes going on coffee. However with a bit of imagination, the state could introduce a challenge so non-use of the allocated fund each month would have a negative consequence for all Californians. For example, it could be announced that all the unused funds each month will be transferred to Starbucks branches in Washington DC and be offered up as a subsidy for any Federal government bureaucrat based around Capitol Hill! So perhaps the state could galvanise all of society to support a ‘spend on others’ scheme on the West Coast?  Based on Norton’s research it really could be in all of society’s interest.

Open to innovation

Last month at the Stanford Graduate School of Business, marketing Professor Kate White of the University of British Columbia shared some brilliant studies done in Calgary showing that “communication that cognitively makes sense to people makes it easier for them to understand how to recycle – and therefore more likely to do it.” For those fascinated by the potential of behavioural economics to support society make better decisions that are in the long term interest of all, it is well worth watching on YouTube.

For avid readers of the SSI Review and addicted viewers of Ted talks, such brilliant insights – ranging from the small scale practical to the transformational paradigm shifts – are it seems increasingly accessible and implementable in civil society. However, it would be interesting to know how open state policy makers are to Professor Kate White’s ideas, moreover does such a person with active solutions see the state as an ‘opportunity’ to mainstream the ideas from their research or as a ‘barrier’?

Let’s explore this further. The Department of Resources Recycling and Recovery (CalRecycle) is responsible for waste management and recycling in the state of California. CalRecycle’s vision is to inspire and challenge Californians to achieve the highest waste reduction, recycling and reuse goals in the nation. They have been doing lots of great stuff and the state has an impressive recycling rate of 65%. But they’re keen to do more. So, what mechanism could firstly incentivise Kate White herself to transfer the research into operation to help CalRecycle pursue its vision, and secondly why would the Director of Calrecycle take on the risk and hassle of outsourcing something they do (say their waste management & waste prevention poster designs) when their existing path is already yielding impressive results?

Well, some form of state ‘challenge’ could potentially provide the answer to both questions. CalRecycle saves waste management costs if waste is reduced – this is the main outcome the organisation wants to achieve. So Calcycle could ringfence 10% of its total budget as an incentive fund to people and organisations who can prove their intervention has reduced the amount of landfill waste produced in a given city or county. Now would Kate White, perhaps together with a team of entrepreneurs, now see a potential new business opportunity that could both make money and have a positive social impact? If the answer if yes, then such a mechanism which aligns state incentives with the development and application of social innovation outside of the state would have win-win benifits: both the state and society would be better off.

In the UK the coalition government has been pushing hard to open up more state service provision to non-state providers, however such moves have proved challenging for the incumbents to drive through as outlined beautifully this week in this FT analysis article. It appears the British, rather than focusing on ‘outcomes’, are path dependent on closed state monopolies simply because the stability of such institutions provides a psychological reassurance regardless of  whether it crowds-out social innovation and regardless of the inevitable ‘less for less’ path dependency such managed decline will result in. Far better for the state to embrace new demand-side reforms of their service provision so that supply-side provision is opened up to the mass of innovation and resource that currently exists, or could be activated, in society.