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Failure As Catalyst

January 20, 2016

 

By Lauren Weinstein

The notion that the work of social change necessarily means both scrambling to find funding and endless employee self-sacrifice has never made sense to me. While working at a handful of startups and nonprofits over the past decade, I’ve continually wondered why solving the world’s toughest social challenges remains financially undervalued and tireless to sustain. For example, when I first entered the social impact space, I spent my university years uncomfortably asking friends and family for donations to support healthcare centers in Managua, Nicaragua that relied on bi-yearly deliveries of suitcases full of unwanted U.S. prescriptions to operate.

More recently, I invested months in developing and implementing a much-needed (and wanted) program for vulnerable, rural communities in Nigeria to share feedback with their healthcare providers. But the initiative failed to secure the long-term funding necessary for it to continue mostly because it just didn’t jive with donor priorities at the time. Over and over again I’ve felt trapped within models that relied on handouts from individuals and the enthusiasm of donors for their survival. I became resigned to the belief that, as a service designer, I’d likely never lead work solely informed by genuine need rather than by funders’ interests.

However since joining The Australian Centre for Social Innovation (TACSI), I’ve been fascinated by the organisation’s ability to accumulate meaningful work through flexible funding models — models that allow leading academic researchers, social work experts, and experienced social impact designers to craft project briefs that truly address and solve problems, rather than just implement funders’ flavor-of-the-month solutions. But from my very first week at TACSI, its leaders stressed to me that the organization didn’t always have these opportunities; that only three years ago the organization found itself with dwindling funds, no projects on the horizon, and was preparing to close its doors.

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TACSI Team Members

When Good Work Doesn’t Drive Market Demand

In a world where social inequity is the norm — where 80% of humanity lives on less than $10 a day, and where our governance and public service systems perpetuate cycles of poverty — it doesn’t quite make sense that organizations fighting for justice and social change strain to find projects that pay enough for their organizations to stay afloat and, thus, to continue to do important and needed work. Such is the case because, while opportunities to make the world a better place are infinite, funding for those initiatives is often highly constrained by unachievable timelines and predetermined solutions on the part of funders.

Ann Goggins Gregory & Don Howard call this the nonprofit starvation cycle, where pressure to “take what we can get” forces nonprofits to “underspend and underreport, perpetuating funders’ unrealistic expectations. Over time, funders expect grantees to do more and more with less and less — a cycle that slowly starves nonprofits.”

The value of design and innovation work for the social sector is becoming more well known to funders, and many human-centered-design-focused organizations are working to better justify why good design research and innovation work takes time and is expensive. However, even with increased awareness of “co-design” and “social innovation,” it can understandably feel risky for governments and foundations to invest in new approaches promising yet-to-be-discovered outputs. Especially challenging for donors is taking a chance on newcomers to a particular sector, who have no reputation or track record of success.

Understanding Where We Went Wrong — When Design Orgs Need to Do Ethnography and Innovation on Their Own Business

As TACSI’s chief executive officer, Carolyn Curtis knows the tribulations of selling design-for-social-change work well. She openly admits that TACSI once had a failed business model. A seed-funded innovation itself, TACSI was born experimenting with their own models and processes. The organization’s initial strategy recognized that public services could work better for people if they were designed with the vulnerable communities who rely on those services. TACSI relied on grants to design new public services and sought to “sell” their already-designed solutions to government agencies, donors, and NGOs. They had beautiful packaging of their concepts which meaningfully celebrated the voice of end users. They conducted rigorous research, producing social innovations deeply in tune with the spectrum of beneficiaries’ specific needs.

It seemed brilliant in theory: TACSI was replicating a product design business model in a social services space, delivering answers to the questions decision makers didn’t have time to solve. In meeting after meeting, they approached high-level policy makers and NFP leaders with polished reports and gripping personas, proven outcomes for how effectively these programs helped change the quality of life for Australia’s poorest, even cost-benefit analyses that calculated how much money government would save from using their early intervention service models. But time and again, it was difficult to find sources to implement or fund their programs.

Ultimately, Curtis and her team reached a point where they had no new projects in the pipeline, no backup cash resources, and few meaningful relationships within the governance systems they sought to change. TACSI undertook significant cost cutting measures to buy time — subletting their office spaces to other organisations and workshop facilitation for additional income streams —  knowing this was not going to solve the larger sustainability issue they reduced staff size and prepared to end the organisation which meant halting their already launched solutions that older people and at-risk families were depending on. Most of all, they realized they might have to accept that there might not be “market demand” for helping the people who needed it most.

Curtis explains that in acknowledging that the organisation was on the brink of failure, they were forced to ask hard questions and respond to the uncomfortable answers they received. With six months of financed run-time remaining, they embarked on their own research about their processes — internally. By reaching out to funders and potential partners to better understand their needs, they realized that they needed to expand their focus beyond just end-users to include donors and actors within government institutions. They learned the painful lesson that potential partners and funders saw them as inaccessible and exclusive, offering finished, polished, and packaged service designs that spoke for communities but not to their ultimate clients: government agencies, nonprofits, and philanthropies.

While they fundamentally thought they were doing the right thing, they were actually operating on the assumption that partners and funders didn’t want to be part of the design journey. After hearing one partner say: “We don’t want your products, we want to learn how to design for ourselves,” they realised they had built a business model for a market that didn’t exist.

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Carolyn Curtis, CEO (right)

Creating a Self-Reinforcing, Values-Driven Business Model

Curtis refocused on their end goal: to change intractable social issues. To do that meant TACSI could not be the only ones doing this kind of work. They could not change entrenched cycles of poverty one service at a time in one state in Australia. They would need a critical mass to shift injustice and inequity paradigms, and part of that critical mass needed to be within the systems themselves. They would need to create opportunities for the institutional/system actors to be the designers. They would need to create a space where vulnerable communities and institutional actors could have empathy for one another. And to sustain the work, they would need to foster interest for this kind of innovative problem solving within institutions. This philosophical shift toward inclusivity was what changed the trajectory of their business model.

As a result, Curtis and Director of Co-Design Chris Vanstone restructured their approach to social innovation and business development based on a new theory of change. Rather than trying to change the system from the outside, they decided that solutions needed to be developed from within the system itself. And so they prioritised long-term capability and capacity building of others to do social innovation well rather than positioning themselves as short-term, swoop-in consultants. This required fundamentally shifting their approach in three key ways:

  1. Prioritise empathy for the system
    TACSI’s biggest hindrance to acquiring sustainable funding was a hyperfocus on the end-user and a lack of empathy for the system itself. While of course we always need to design user-friendly services that work for communities, designers also need to recognise that beneficiaries don’t exist in isolation. Any product, service, or system designed for social impact will invariably need to cooperate with (and slowly begin to shift) the realities of larger political priorities and bureaucratic processes. Without understanding systems and what drives their behaviour and decisions – you will never change them so that they work for people.

    2. Invest in building trust and track records externally, and team wellbeing internally
    In trying to let the work speak for itself, organisations can overlook the importance of developing meaningful relationships with current and potential partners who might champion their work moving forward. Developing genuine relationships with partners can provide critical ‘inside’ access and foster new collaborations and recurring partnership/business opportunities.

    3. Drop the expert, process-purist attitude
    Holding tightly to process rigour is important for quality, but it’s critical to know when to let go and prioritise inclusion of partners over perfect products. If your end goal is to shift the way systems operate you’ll need to build capability from within institutions rather than just offer final deliverables. The balance is in maintaining high-quality production and process rigour while including partners in the journey. It’s about meeting people where they are, and whole-ecosystem collaboration.
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Chris Vanstone, Director of Co-Design, TACSI (right)

When You Need to Fail First

In changing their strategy, TACSI started to demonstrate the value of social innovation, and of working shoulder-to-shoulder with communities to redesign public services but alongside government agencies as well. They worked to instill values in the systems they wished to change by spending time demonstrating their worth one small project at a time. Through working with government agencies and supporting them on their design and innovation learning journeys, select government actors began to trust TACSI’s competency and sector expertise, seeing them as real thought partners. Those relationships laid a foundation that allowed TACSI to win two flexible long term philanthropically funded projects with government agencies as TACSI partners rather than donors.

As a result, TACSI’s new business model enables them to co-design new solutions alongside government agencies, NGOs, funders, and communities themselves. Their evolved philosophy invests heavily in people: in relationships with partners, in outcomes for communities, and most importantly in their own staff. Since TACSI 1.0, they’ve sought to prioritize people over products, learning and sharing over expertise, systems change over singular service design, and sector focus over generalism. Investing in continued partnerships and focusing on specific sectors inherently builds trust and a track record of demonstrated knowledge and competency —thereby attracting new business.  

TACSI is a now thriving social enterprise that targets systems change. They have two implemented, scaling programs alongside multiple ongoing projects. TACSI’s growing team is uniquely comprised of social work experts and practitioners as well as industrial, social, and service designers — funding bodies now approach TACSI looking for collaboration opportunities. Success with their peer-to-peer support and coaching model for vulnerable families, Family by Family, has even allowed TACSI to influence and help build co-design innovation teams within government agencies and political bureaucracies.

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Family by Family Staff and … Families

Curtis speaks appreciatively of the failure experience (and resulting lessons) that got them where they are today. She credits the willingness to admit failure and come through on the other side to “really believing in what you’re fighting for” and tells other nonprofits and social enterprises who are struggling to sustain and fund mission-critical project work that, “in the social innovation business, sometimes you need to fail before you’re prepared to ask, and hear answers to, hard questions.” 

While TACSI has outgrown their early mistakes, Curtis expects that the upcoming “huge, and brilliant journey into growth of our own organization will undoubtedly be filled with more failures.” It’s the job of designers and social entrepreneurs to learn, to evolve, to be willing to engage in tough conversations, to practice being humble, and to allow ourselves to fail because failure can be the forcing mechanism needed to learn humbling, transformative lessons — a critical component of the startup journey. Curtis asks rhetorically “ in 10 years time how will we know TACSI was worth it?’ How will we know that our work, our partnerships, our approach our values all led to people living better lives? We won’t have all the answers now, but starting by practicing what we preach, a commitment to learning and honesty are the start.”

“We’re here to change the game, not reshuffle the cards,” says Curtis, elaborating on the idea that we must push ourselves to acknowledge and embrace failure as an inherent part of our responsibility as innovators; a discipline that makes us stronger as we seek to shift society’s resources to the most overlooked problems and empower the real people who face them.

Lauren Weinstein is a multidisciplinary designer and writer whose professional experience includes service design and international development, specializing in participatory systems design for international public service improvement. She is currently a Senior Service Designer at The Australian Centre for Social Innovation; her writing has been published in Design and Culture, Fast.co.exist, and featured on GOOD.is.

Images courtesy of TACSI.

2 Comments

  1. Lauren-If you are interested in pursuing more on the topic of sustainable business models for social innovation organizations I’d be happy to connect. We’ve had a parallel story at DI of starting with a model, flirting with failure, and finding a much more sustainable way to work.

  2. Outstanding article. Thank you for sharing your journey.

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