Sunday, April 9, 2017

Ideas for Social Ventures - adopting innovation techniques in confluence of philanthropy and business

Social ventures pair social benefits from the world of philanthropy with innovation from the business world. Yet, the extensive innovation techniques and methodologies have not been fully re-tooled for the use of social ventures. A methodology known as TRIZ is an example of such techniques. Can it, and other techniques, be better adopted to spark innovation ideas that fuel the next generation of social ventures?

Social ventures are similar to philanthropic organizations, as compared to businesses, in seeking to accrue benefits to society as a whole. Among iconic philanthropic organizations is the Carnegie Corporation, for which the initial endowment was “27 times bigger than the annual federal government education budget” as The Economist notes.”  Its founder Andrew Carnegie wrote in 1889 “The Gospel of Wealth” essay which gives us an idea about what philanthropy should do. He writes “[…] the best means of benefiting the community is to place within its reach the ladders upon which the aspiring can rise.” He recounts parks, works of art and public institutions - indeed Carnegie Mellon University bears his name- as ways for the rich to return “their surplus wealth to the mass of their fellows in the forms best calculated to do them lasting good.” Social ventures also seek lasting good.

There are distinctions, however, between philanthropic organizations and social ventures, including financial sustainability. According to Unite for Sight, which supports eye clinics worldwide, “Oftentimes, charitable organizations survive at the mercy of their donors whose contributions vary with the economic climate.” This applies to huge philanthropies in surprising ways. In “The centarians square up”, The Economist compares IBM to the Carnegie Corporation and reckons that the latter had the greater impact in their first 50 years partly because Carnegie’s funds size relative to the government’s. But as the government’s budget grew, this presented an “economic climate” where Carnegie Corporation’s impact dwindled. Unite for Sight offers this contrast to philanthropy: “Social entrepreneurs manage donor contributions in an effective manner, investing in social ventures which can then generate their own revenues to sustain themselves.”

While social ventures are different from business in their purpose, they are together distinct from philanthropy in the need and drive for innovation. The Economist notes about the Carnegie Corporation “The absence of an existential threat may have made it too comfortable.” In comparison to the business world where IBM operated, technology innovation advanced with competition and a promise to help solve unsolvable challenges. That is why The Economist reckons that IBM had the greater impact in the following 50 years. Social ventures are as innovative in business model and in use of technology. IBM could be providing social good by the mere presence and innovation of its technologies, but that is a byproduct. Social ventures are founded to deliver that social good as their main product.

But the business world has benefited from a wealth of innovation techniques and methodologies that have not caught up yet with social purposes. One of these techniques is TRIZ, the Theory of Inventive Problem Solving. As TRIZ40.com explains, “For TRIZ, systems evolve towards ideality by overcoming CONTRADICTIONS. TRIZ matrix gathers 40 Principles (known solutions) able to overcome these contradictions.” For example, improving (or alleviating) harm to an object while preserving the object’s area can be solved by several ways including the principle of using cheap short-living objects. This is the central idea of cathodic protection; protecting a metal from corrosion by connecting it to a cheaper sacrificial metal.

The TRIZ example stated earlier can be used in a social setting. For example, tourists flocking to the pyramids want to take a piece of it with them. To protect the pyramids, small rocks are brought from the desert to the vicinity of the pyramids. Unknowing tourists happily sneak away those rocks and the pyramids remain unaffected. In a way, some point-of-use water filters design cartridges to treat water, gradually degrading as “sacrificial” in place of a human body. Some social ventures run on that technology.

When analyzing social ventures, one may find that they rely on solving a contradiction. Indeed, during my workshops for social innovation, I asked high school participants to come up with an idea that resolves contradiction between desired values that clash in a certain social setting. However, TRIZ techniques, as well as other innovation methodologies, are not readily applicable to social ventures. You can search in vain for a guide on how to use it in a social setting. To deliver social benefits like philanthropy, social ventures need to innovate like businesses. Conducting research in the confluence of “technical innovation techniques” with social ventures, or even rewriting those techniques to fit this new setting, can strengthen the innovation pipeline for social ventures. It can help entrepreneurs find new ideas and spur a new wave of innovations for social ventures.

What social ventures which you have come across can be explained as solving a contradiction in the TRIZ way? 

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