Why Sector disruptors over Scale
I have been fortunate to work with large organisations of various “archetypes” (topic for another post) over the last few years. While it has been immensely inspiring and a great learning, following are painful trends that are all too common today –
-Most large non-profits have scaled in the country today by codifying their interventions into a “Least Common Denominator” (LCD) model which can be scaled everywhere but loses all its original nuance to create meaningful impact on the ground. Hence, scale is actually achieved at the cost of impact.
-Much like IBM, no one has ever been fired in a CSR team for having funded a large non-profit. Hence the LCD model gets easily replicated across the country creating a closed loop of promoting scalable, low impact models on the ground. This usually means that the entire organisation is structured for effective operations at scale than innovation.
-Large organisations suffer from lack of “oxygen” (quality leadership talent, funding for organisational growth, proven systems). While that is true, one realises that the larger problem are not the externalities but the diffusion of vision internally. Most large organisations are not inspiring places for people to create change and hence are unable to attract talent or bend the market. This usually results in the CEO of the organisation spending 80% of their time on internal issues (at the cost of their health and wellbeing, most times) and 20% on the next frontier of impact and innovation for the organisation.
-As this happens, most avant-garde funders looking for innovation lose faith in large organisations and look for young and upcoming organisations to break this mould. Once funded, the young game changers continue to look for scale (since that is the norm) and end up in the same place as the guard of the past. In other words, we are pouring more water in the same leaking bucket.
-Another side effect of the scale focus is that nascent sectors like Property Rights where there is lack of breakthroughs, not many organisations have achieved meaningful scale. Therefore, most organisations working in these sectors don’t find funding or the attention of the funders.
Which is not to say, scale and impact are mutually exclusive. I am working with a few of them on a daily basis and two defining traits of such leaders who are able to marry impact and scale stand out – The unrelenting commitment to disrupt the sector and the market acumen to making it happen. In other words, it is not their appetite for scale – but their commitment to disruption – that helps create impact.
Large organisations and leaders creating deep impact are defined by two leading traits – The unrelenting commitment to disrupt the sector and the market acumen to making it happen.
Hence, setting scale as the north star metric of success for non-profit organisations in the long term is not only inadequate, it is dangerous because it results in squandering social investments in large scale programs that are designed to create incremental impact, at best. While scale is an absolutely necessary pre-condition, we need to frame success as sector disruption than scale.
So, what are sector disruptors
Sector disruptors change the course of how problems are solved within a sector by fundamentally changing the goal post or the lens with which problems are being looked at. That shift reframes the problem and hence the entire solution space. For instance (and this is not an exhaustive list):
-ASER, Pratham’s Initiative, reframed the focus of Education towards learning outcomes in a manner that was more real than any other initiative.
-Enable India moved the conversation of livelihoods for People with Disability, from being charity to actual business value by mapping the investment in PWD to the GDP of the country.
-SEWA’s livelihood triad (MFS, IDS, LPS) defined the livelihood approach of countless organisations since then.
-Akshayapatra’s approach to Mid-day meals through large scale infrastructure solutions with strong focus on technology and logistics redefined how such a problem can be addressed at scale while ensuring quality.
-DRF set up LABS as a business school model for school dropouts. That template has since created a model for skill development for the entire ecosystem.
-Childline setup 1098 as a national level helpline making phone-based access available to every child in distress across the country.
-CRY pioneered domestic giving among NGOs both through sales of greeting cards and through its retail giving at a scale not seen before in India by an Indian NGO (so much so that many thought they were an international NGO)
There are others including Aravind Eye Care for low cost healthcare solutions, Kaivalya Education Foundation on Middle Management leadership, Goonj on Cloth. These organisations, while not perfect, have had a huge impact on the solution space in their respective sectors.
Another interesting observation is that sector disruption, unlike scale, is not a permanent status. Most organisations in the list above were disruptors in a certain frame in time but today are questioning their relevance within the current social landscape. It truly takes a great organisation to not only stay relevant but continue to disrupt the ecosystem. Also, sector disruption, as a metric, is constantly defined in conjunction with the external environment than in isolation as organisation metric (E.g. Budget of the NGO). Hence a sector disruptor in Property Rights would look very different given the nascency of the space to a sector disruptor in the Education today.
Sector disruption, as a metric, is constantly defined in conjunction with the external environment than in isolation in relation to the organisation. There are no eternal disruptors. Organisations have to earn that right every time with changing times
Making a case for working with existing organisations
There is, rightfully, a strong focus on building the next cadre of entrepreneurs in the social impact ecosystem who have the mindset and DNA for creating large scale, meaningful impact. And my conversations with organisations such as N Core convince me of their commitment to doing it. While we invest in it, there’s an equally strong case to be made to work with existing large non-profits that have the ability and the agency to disrupt the sector more predictably than a bunch of young entrepreneurs. And here’s why –
-Sector disruption requires an organisation to have a certain critical mass for the disruption to be felt by the ecosystem (and not be a tree falling in the forest). Large organisations bring the gravitas and scale to be able to demonstrate disruption with credibility.
-Disruption requires scale. We have a graveyard of disruptive pilots and few at scale because what worked in pilots often are not designed for scale. Large organisations enable the scale at which ideas can be tested and demonstrated.
-While Institutional learning is a double edged sword (and often laces all ideas with cynicism), they are immensely helpful in knowing what are essential success factors and what are sure shot blind alleys. An able leader and the right team will gain immensely from listening to this learning with discretion.
-Finally, disruption requires funding and large non-profits bring the network and the credibility to raise the initial funding. At a time when the idea is audacious, the organisation’s track record strengthens the ability of the funder to put some money.
Let me be clear – Not every large organisation can be a sector disruptor (well, most large organisations cannot). But scale, experience and size are strong enablers for sector disruptors to redefine the landscape – And hence there is a strong case for working with these organisations, with the right leader at the helm, to create sector disruption.
Sattva’s own experience of working with a large organisation in the skill development space demonstrated how, when the right leader and organisation are provided the right strategy, large organisations can demonstrate disruption at a scale where the ecosystem has to notice and acknowledge.
In my follow up post to this, I want to detail the traits that enable large organisations to be sector disruptors and share Sattva’s experiences in being part of this journey. As I mentioned earlier, this is just a conversation starter.
Note: All original insights are thanks to meaningful conversations with Aditya Natraj, Dipesh Sutariya, Shanti Raghavan, Puja Marwaha, Hari T.N, Gayathri Vasudevan, Warren Ang, Rajat Gupta and leadership team at Child Rights and You, Kaivalya Education Foundation, CHILDLINE India Foundation and N/Core. All flaws in translating it to a post are entirely mine.
(Originally published on LinkedIn)