In early February, HBS co-hosted the second Transformative Impact Summit, in partnership with Bridgespan, a leading Boston area consulting firm focused on the nonprofit sector. The multi-day workshop convened 20 organizations from across the globe to actively engage on how their organizations could make the move from unit impact to systems-impact – in other words, how each organization might transform its business model to truly move the needle in addressing some of society’s most difficult problems. This is an emerging paradigm Bridgespan has termed “transformative scale.” A diverse group of HBS faculty members attended the summit, including: Kash Rangan, Julie Battilana, John Kim, Len Schlesinger, Rosabeth Moss Kantor and Lynda Applegate.
A relatively small yet growing number of leaders are pioneering new pathways in search of transformative scale. After years of unit-level growth, such leaders are instead seeking a broader view of impact: leveraging their existing organizational platform to solve social problems. For social enterprises and funders aiming for this kind of impact, there is no “playbook” for navigating the path forward; they are at the leading edge of this work.
Why is this organizational transformation so challenging? As faculty member Kash Rangan discussed with participants, most attending organizations have spent years becoming experts at scaling linearly, for example, from one location to multiple locations (let’s call it “zigging”). However, as these organizations start to think about if and how to accelerate their impact, they often begin to consider moving laterally into strategies outside their current approach (“zagging.”) Such strategies may include engaging in policy and advocacy, providing technical assistance to others, increasing their focus on research and publishing or moving into adjacent services. While potentially complementary, zigging and zagging are not necessarily the same business. Therefore, the shift from a linear to multidimensional scaling strategy raises a myriad of existential, strategic and tactical questions for leaders.
From our research and conversations with participants, we might bucket these questions into two categories:
Should I zag? Is zagging consistent with my mission? Would simultaneous zigging and zagging have a higher ROI than just zigging? Is my organization the right organization to pursue a zagging strategy, even if we believe it is a good thing?
If I’m going to zag, what do I do and how? How do I allocate resources across multiple strategies? Is my organization appropriately structured to pursue these new paths? Do I have the right leadership in place or do we need to transition to new talent? How do I align my funders (and funding!) towards this new vision? How does this affect my brand?
These are precisely the profound questions nonprofit leaders grappled with on campus during the February Summit. For example, we worked alongside one Indian social enterprise debating whether it should define scale as reaching a million plus clients or something broader. We sat with the CEO of a U.S nonprofit who had already made the decision to move from a brick and mortar operation to a licensing strategy but was now faced with the challenging question of if and how to restructure her organization. What new talent would be required and what positions might be eliminated?
While there are certainly no simple answers, we are hopeful that these early pioneers (and HBS research on these leaders!) will illuminate new pathways towards solving social problems at scale. However, even as we are optimistic, we might also caution nonprofit leaders not to give up too early on the value of scaling one’s operations; for many, effective, linear scaling may actually be the best opportunity to reach transformative impact.