Disruptive Logic: A New Paradigm For Social Change

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new social modelsDisruptive Logic:A New ParadigmFor Social ChangeGigi Georges is director of theInnovation Strategies Initiativeat the Harvard Kennedy Schoolof Government. She previouslyserved as State Director forUS Senator Hillary Clintonand as a Special Assistant tothe President in the ClintonAdministration.Tim Glynn Burke is a researchassociate at the Ash Center forDemocratic Governance andInnovation at Harvard KennedySchool, where he coordinatesresearch, content developmentand outreach in the field of socialinnovation. Tim has workedfor youth and communitydevelopmentorganisationsacross the US.Disruptive reform is a heady, alluring tool forchampions of social change, and as GigiGeorges and Tim Glynn Burke point out in aseries of case studies, if done well, it can reapsignificant rewards.As the US grapples with fiscal crisis—facing spiralingdeficits, dangerous levels of debt and the worsteconomic recession in some 70 years—Americansunderstand that all levels of their government must takeaction. Calls are growing louder from across the politicalspectrum for the same spirit of cost-cutting and financialrestraint within government that so many families have hadto embrace.According to a Pew Research Center poll in early 2011,however, even while Americans increasingly recognise theneed to halt increases in spending, many remain reluctant92Social Space 2011

New Social ModelsThis current landscape highlights a difficult tension. On theone hand, the tides appear to be turning on the persistentescalation of public spending in the US, and even broadbased benefit programs like Social Security and Medicareare no longer regarded as sacred cows. Yet, when electedofficials attempt to cut back benefits and entitlements, theyare confronted with counter-tides of organised oppositionfrom those who have the most to lose.For anyone courageous enough to seek to drive majorpolicy change in the face of large scale and seeminglyinsurmountable political hurdles like those faced by USgovernment officials today, we offer some tangible lessonsfrom the world of social innovation.The Power of Social InnovationThese lessons are drawn from our research into theintersection of government and social entrepreneurship. Werecently contributed to a new book, The Power of SocialInnovation, for which we spoke with around a hundredinnovators from the government, non-profits, business andphilanthropic sectors.2These innovators shared important lessons for effectingsocial change. In particular, they emphasise the importanceof opening space for new ideas, trusting citizens to knowwhat is best for them, the value of increasing expectationsfor individual potential and responsibility, and the value of notjust growing an organisation, but working with others insidethe social production system to effect change.While much attention has been paid in the past few yearsto the importance of improving collaboration around publicproblem solving (i.e. cross-sector cooperation, networkedgovernance, “silo-busting”), the innovators we spoke withsaw disruption as a key tool in working to bring abouttransformative change.By disruption, we mean a break from business as usual, andsome type of forceful action to alter the inertia of existingdelivery systems that have attracted powerful constituentgroups but that fall short in serving the need of citizens.Disruption can come in a variety of forms: A new technologyor programme model, new pipelines for volunteer or donorgoodwill, or an outside strategic partner that catalysesdramatic systemic and cultural shifts. But what bindsthese approaches is that disruption in the social sector—in particular, one dominated by government dollars andauthority like we find in the US—is an inherently politicallyrisky endeavour and, as a result, unattractive to politiciansand career public officials alike.By political risk, we mean two things. First is the possibilitythat one funds a new programme or enacts a new policy,and it fails miserably, costs spiral out of control, or it leadsto some tragic outcome like the death of a child under statecare. The second type is the risk of being voted out of officeor becoming the object of attack by constituent groupsthat benefited from, and liked very much, the incumbentprogramme or policy you are looking to defund, or shrink, orreplace with a new one. Why even undertake these efforts ifthe potential cost is so great? In both cases, the payoff, ofcourse, is that an innovation leads to greater social outcomesfor more constituents and, subsequently, earns the supportof a larger portion of the public.To overcome both types of political risk, policymakers canlearn from successful innovators who have intentionallyentered the breach, disrupted incumbent systems, and livedto tell about it. Among those we spoke with, we found threemodels that mitigate, navigate and overcome the politicalopposition to disruptive social innovation: Leadership froma strong champion with substantial credibility/authority;engagement or coalition building among citizens andstakeholders; and the creative use of public and philanthropicdollars to either underwrite financial risk or create newfinancial incentives as political cover.While much attention hasbeen paid in the past fewyears to the importance ofimproving collaborationaround public problemsolving (i.e. cross-sectorcooperation, networkedgovernance, “silo-busting”),the innovators we spokewith saw disruption asa key tool in working tobring about transformativechange.“to embrace specific cuts. There is still not one area ofdomestic federal spending—whether education, veterans’benefits, health care or public safety—that more Americans,when pressed, want to decrease more than they want toincrease.1Lien Centre for Social Innovation93

New Social ModelsTo illustrate each strategy, we explore three cases in whichcivic entrepreneurs have sought to address the political riskthat their innovations presented to the status quo. Thesecases highlight a handful of principles that are important toincorporate when taking big risks, and whose absence canthwart even the best-designed innovations.One quick note before we begin: How is it that theselessons are not only useful for service innovators workingon the front lines of their communities’ daily struggles, butequally so for policymakers who are contemplating highlyunpopular changes in social benefit programmes that willaffect millions of people? As we will see in the followingUS-based case studies, social services and broad-basedentitlement programmes share a purpose: To addresssignificant social needs. Both are funded primarily by thepublic sector and often rely on local actors. Finally, both haveled to the development of well-organised factions that seekto protect and promote the interests of either beneficiariesor providers.Case Study 1: Driving Neighbourhood Change inCentral Los AngelesWe begin with the story of Blair Taylor and the highly influentialnon-profit Los Angeles Urban League (LAUL). It offers aninspiring example of how one can underwrite significantpolitical risk by stepping up as a forceful champion andstrategically building consensus for reform.The local branch of LAUL commands great respect in LosAngeles, where for almost a century it has championedequality for African-Americans. Its educational programmesand employment services reach as many as 100,000 localresidents every year, earning it broad name recognitionand trust within the local community. Yet despite theseimpressive efforts, in virtually every facet of their lives,African-Americans have fewer opportunities than Angelinosof other ethnicities.3When LAUL hired Blair Taylor as its new CEO in 2005, heimmediately challenged not only public services in LosAngeles, but also in his own organisation. Taylor quicklydiagnosed the steady deterioration in the community as theresult of various social service delivery systems—education,employment, safety, health, and housing—acting tooindependently.Many of these efforts, in public safety and education forexample, were beyond LAUL’s control. The very publiclaunch and depressing message of a 2005 report by LAULand local United Way, “The State of Black Los Angeles,”gave Taylor the additional authority he needed to act boldly.And his position at LAUL provided a trusted platform from94Social Space 2011which to take the risk of proposing a bold effort to holisticallyaddress the needs of a troubled community.After months of working with consultants and talking to thecommunity, LAUL committed to Neighborhoods@Work, a 25 million, five-year effort designed to concentrate privateand government assistance in a seventy-square block areacalled Park Mesa Heights. The organisation promised toreport publicly on the progress of their effort.The innovation is a dense set of relationships betweenprivate actors and elected public officials and administrators.But Taylor had to begin by first embarking on the difficultprocess of convincing his closest stakeholders that LAUL’swell-intentioned work had not, to date, produced the desiredresults.Because LAUL’s staff presence and operations were woveninto the community’s fabric over decades of work, theorganisation started with a level of trust within the communitythat elected officials and even the best-intentioned outsiderscould never match. Taylor put this reputation and trust towork. When someone raised the risk of failure as an excusefor not collaborating, Taylor stepped in to assume the risk.For example, one of his first partners was L.A. Police Chief BillBratton. “A lot of people told me this was a crazy strategy,”Taylor said. “Black people don’t get along with the LAPD.These cases highlighta handful of principlesthat are importantto incorporate whentaking big risks,and whose absencecan thwart eventhe best-designedinnovations.“

New Social ModelsYou’ll never make that work.” Taylor’s response to this veryhonest, and likely very common, concern? “Effectively, whatwe’ve done is to say ‘OK, point your finger at us. If we can’tachieve this in five years, you don’t have to go beat up ChiefBratton. You can come right to the door of this communitybased organisation. Blame us.’”4This innoculation against reputational damage also madeit easier for the local business community to participate.According to Taylor, “Corporations say, ‘I’m going to giveyou two million bucks, because if you’re risking the UrbanLeague and you’re putting everything you have on the linefor this model, then certainly we believe that it’s going towork.”5Within three years, through the coordinated engagementof over a hundred local providers from all sectors, the ParkMesa Heights neighbourhood saw a 17% reduction inviolent crimes and an 80% decrease in homicides. Undera unique partnership between LAUL, University of SouthernCalifornia’s Rossier School of Education, and the Tom & EthelBradley Foundation, Crenshaw High School graduation ratesincreased from 41% in 2006-07 to 65% in 2008-09, whiletruancy rates decreased by 10%. Parents who were fleeingthe troubled school have now seen a substantial turnaroundand enrollment is increasing.Case Study 2: Engaging Aspiring Homeowners inWashington, D.C.Blessed with an entrepreneurial spirit, Bo Menkiti has alwayshad a passion for social change. Since 2004, he has operatedThe Menkiti Group as a real estate brokerage firm, real estatedeveloper and community educator to improve access tohome ownership for hundreds of low and moderate incomefamilies, while developing commercial space for aspiringsmall business owners in the neighbourhoods of north-eastWashington, D.C.Menkiti’s success depends on a deep commercial expertiseand an even deeper knowledge of his target neighbourhood.We see The Menkiti Group as an excellent example ofconsensus building among stakeholders—in particular theimportant step in any effort to engage, understand andincorporate constituents’ perspectives in one’s work.Early in the process, Menkiti found that many people inthe neighbourhood lacked basic information about homeownership; so, he incorporated education and outreach intothe responsibilities of his brokerage staff. Making his brokerssalary-based allows them to spend time on increasing“Within threeyears, throughthe coordinatedengagement of overa hundred localproviders from allsectors, the ParkMesa Heightsneighbourhood sawa 17% reduction inviolent crimes andan 80% decrease inhomicides.awareness and access to real estate services in the localcommunity. This in-person education and outreach work, inturn, helps Menkiti both keep his finger on the pulse of thelocal market while attracting new customers.His attentiveness to customers while growing the brokeragebusiness led to a unique understanding that the local supplyof houses for low to middle-income buyers was scarce.“What we began to notice in Washington, D.C. was thatthe growing development had created two tiers of housing.There was high market rate, luxury housing and there wassubsidised housing. But most of the people we were dealingwith didn’t qualify for subsidised housing and couldn’t affordluxury housing.”6The responsiveness that triggered this insight was by design.After years in the non-profit sector, Menkiti relishes therigour and intense competition of the for-profit marketplace,believing that the added pressure forces his firm to developLien Centre for Social Innovation95

New Social Modelsin a more sustainable manner so that it can better serve andunderstand its clients.He had seen among traditional non-profit providers, and evenother innovators, a disconnect with the consumer or client.When a firm does not rely on government or philanthropicfunding, its survival and growth depend on one thing; acutelyresponding to consumers’ needs in an efficient manner.Menkiti calls this “getting back to this core understanding ofthe consumer.”This discovery of the city’s gap in housing prompted Menkitito pursue developing new residential properties “priced forpeople from 40 to 80% of the area median income to be ableto afford it.” He used his own savings and borrowed moneyfrom family to begin a residential development arm.The Menkiti Group has brokered tens of millions of dollarsin sales and developed tens of thousands of square feet ofresidential and commercial space, providing high-quality,affordable housing for more than five hundred people.Menkiti, himself, retains some of his profits to createlong-term wealth-building opportunities for employeesand allocates the remainder to educational, economic,and cultural opportunities for youths and residents in theneighbourhoods in which they work.Finally, Menkiti is an important example because he viewshis clients as a critical part of their own progress, rather thanpassive recipients of his assistance; which explains his dislikeof the word “helping.” “We talk about supporting peoplewho are doing something for themselves. If an individual or acommunity does not bring an underlying asset base or valueproposition to the table, we will be hard pressed to makean impact with them.” A commitment to understandinga community and valuing its potential are early steps insuccessful engagement and organising.Case Study 3: Using Creative Financial ToolsIn addition to securing a strong champion with credibility andbuilding close ties among constituencies and stakeholders, athird strategy is the creative use of public and private dollars.Two powerful ways to do this are to underwrite financialrisk or to offer the potential for new financial investment asincentive to encourage broader public support for pursuingground-breaking solutions to difficult challenges.For example, New York City’s Center for EconomicOpportunity (CEO) operates an innovation fund with aportfolio of more than 40 poverty-fighting initiatives. Underthe leadership of Deputy Mayor Linda Gibbs and DirectorVeronica White, CEO’s twelve-member staff scans the nationand globe for innovations that show promise in assisting thecity’s working poor, young adults and children.96Social Space 2011CEO has 125 million in city dollars, and another 25 millionin private funds, to replicate in New York City models that helplift families and individuals out of poverty with an emphasison personal responsibility. Providers of job training, assetbuilding or other poverty-alleviating service innovations vie forfunds through competitive bidding, and must demonstratein their applications how they would collaborate with othergovernment and philanthropic efforts. CEO then conductsrigorous external evaluations of the selected organisations.If successful, innovations are implemented in an expandedform and if not, they are scaled back or terminated.The programmes CEO funds fill service gaps, meet unmetneeds, and provide opportunities for low-income NewYorkers to gain economic security and independence forthemselves and their families. Often, CEO’s portfolio includescontroversial pilot plans that otherwise would not be fundedand tested. One such case was the CEO-funded conditionalcash transfer programme, a particularly interesting antipoverty effort that rewarded individuals with cash when theymade and kept dental appointments, improved grades, andperformed other positive behaviours.The programme, as expected, turned out to be controversial.Opponents charged that paying individuals for doing whatthey should want to do on their own undermines personalresponsibility. At the time, Deputy Mayor Linda Gibbsdescribed conditional cash transfers as “too controversial,“Menkiti is animportant examplebecause he views hisclients as a criticalpart of their ownprogress, rather thanpassive recipients ofhis assistance; whichexplains his dislike ofthe word “helping.”

“New Social ModelsThe approach would incentivise private sectorinvestors and providers to drive toward results andgives long-suffering taxpayers, who routinely watchtheir money disappear into ineffective programmesand policies, something to cheer about.in our opinion, to start with public funds.” The active supportof the Rockefeller Foundation and other philanthropicdonors played an important role in the programme’spolitical feasibility. As Gibbs put it, the city “engaged thosefoundations as our partners in arms to sell and defend theprogramme, expanding the protective force around it.”7of charter schools or other innovative school managementmodel.9 Many of these changes initially faced significantorganised opposition, but Race to the Top changed thepolitical equation and enabled leaders to overcome resistanceand, in some cases, open the door to unlikely alliances fordramatic reforms.How else can the government use financial incentives toencourage performance oriented risk-taking and innovation?Two current examples initiated by the US federal governmentshow promise: The “Race to the Top” initiative in which thefederal government incentivises public-sector political risktaking in education at the state and local levels, and “Payfor Success” bonds which, as proposed, would incentiviseprivate sector investments in activities that are traditionallyfunded by taxpayers.Our second federal example also hails from the ObamaAdministration. In his 2012 budget, the President proposeda 100 million experiment called “Pay for Success.” Themeasure is subject to congressional approval, but itsphilosophy and approach makes it ripe for bi-partisansupport.Race to the Top is a competitive grant initiative launched in2009 by US Education Secretary and former Chicago SchoolsChancellor Arnie Duncan. In 2010, states across the countrycompeted for a piece of the grant’s 4.35 billion madeavailable through the American Recovery and ReinvestmentAct. With these funds at his disposal and a clean slate forcrafting the initiative, Duncan seized the opportunity to movethe education playing field toward innovation and risk-takingand away from the legacy and compliance based fundingthat traditionally dominated public sector funding.Duncan explicitly designed Race to the

innovation. Tim has worked for youth and community development organisations across the US. Disruptive reform is a heady, alluring tool for champions of social change, and as Gigi Georges and Tim Glynn Burke point out in a series of case studies, if don

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