The Barriers

By taking the four key characteristics of disruptive social innovations in turn, we can spot a number of entrenched barriers to disruptive and breakthrough social innovation.

Barriers to Systemic Social Innovation

Most funders, public managers and politicians tend to focus on the easily visible symptoms of a problem. These often seem to be the most pressing issues, so solving them can win votes, donations, funding; whilst at the same time deliver a feeling of success and of progress. This focus on the external and visible is convenient because it tends to make the jobs of both policy-makers and front-line deliverers easier. So we see vast resources spent on stopping youth binge drinking or preventing town centre violence; regulating bankers’ bonuses; and cutting hospital waiting times. But our social problems seem to persist because the underlying psycho-social causes that lie at their heart have not been transcended. For example: the mental anguish that underlies excess drinking; the disempowerment and disenfranchisement at the heart of gang violence; the emotional and ethical immaturity at the centre of City and Wall Street imprudence; and the addictions (to cigarettes, booze and food) that cause such a strain on the medical system in the first place.

Symptoms are also much more easily measured than root causes. The institutionalised social sector has, by demand or desire, focused on measuring the impact of programs in terms of the number of symptoms that have been removed. Numbers give managers and politicians a sense of security and certainty. They suggest that messy human beings with complex, unwieldy problems can be managed into neat numbers on a spreadsheet. Often they lead us to believe that things are getting better, even when we know from experience that so many problems still exist. As a result, billions are focused on solutions that generate the numbers – or ‘evidence’ – needed to win in the fiercely competitive funding world. This prioritisation of evidence and efficiency above veracity and effectiveness drives resources to projects whose results can be easily seen and, therefore, measured. A great example of this is the focus of international aid donors on ‘disbursement rate’ (how quickly money is spent) as a key determinant of project success.

The things that can easily be seen and measured are usually quite unlike the root causes of an issue; they are outputs, symptoms. As long as we want quick fixes that avoid the messiness of real people’s assumptions, traumas, choices and worldviews we will always limit just how effective our social innovations can be. Thus, as we have seen in the decades since the New Deal and the Welfare State, our social and environmental problems have not disappeared. Instead they tend to be managed until the next administration takes over, or at best, manipulated into other issues somewhere else in the system. Hence it often seems like charities and public sector organisations are in the business of continuing their own self-existence and increasing their budgets rather than in the business of permanently dissolving away problems. As Professor Clayton Christensen and others have writen, “too much of the money available to address social needs is used to maintain the status quo, because it is given to organizations that are wedded to their current solutions, delivery models and recipients.”3 In the anti-psychology and anti-systems thinking cultures of the political elite nobody wants to go on the long and challenging journey to shift people’s hearts and minds, helping them heal inside the root causes of their problems. Symptoms remain the easiest issues to treat. Established best-practice remains the best way to treat it – rather than inventing breakthrough new solutions to old problems.

The influence of the physical sciences, in particular the desire to analyse, split apart and categorise, has also led to a widespread approach to problem-solving that sees each social problem as an isolated issue. The ‘command and control’ type of management so efficient when controlling workers and increasing their productivity tends to falsely divide complex social issues into linear, separate parts that one part of government, or social organization, can focus on. Each non-profit or government department works harder and harder to solve their part of the problem. Yet no matter the volume of resources focused on it, the overall wellbeing of the masses tends to remain constant. Unless the whole person is understood within their cultural context, solutions will always fail to create the breakthroughs we seek. The silo thinking seemingly inevitable in hierarchical structures limits the joined up thinking and creative connections made when things are seen as a whole; and prevents the development of solutions that are designed to fit real people, living varied lives in the complex web of the real world.

Finally, the kind of paradigm-busting thinking that creates systemic innovations usually comes from the edges and margins. This is why established players tend to be ‘disrupted’ by new entrants from the fringes. This is often a visionary entrepreneur – think of Richard Branson vs. British Airways. It is these outliers, who work outside of the silos, that push the conversation forward and create discontinuous leaps in thinking. “Disparate information and its transmission are keys to innovation.” says a Stanford Business School Professor4. Andrew Hargadon, author of How Breakthroughs Happen, says it is through “people or organizations linking isolated groups and industries to integrate previously unrelated viewpoints and technologies to resolve new problems”.

People whose perspective could be critical to identifying and leveraging a disruptive social innovation – the mavericks – are often side-lined and ridiculed within large social organisations. At the same time, solo mavericks such as some social entrepreneurs, can find it very hard to access (and then communicate powerfully with the right jargon and evidence-bank) the policy-makers and funders that could support them, no matter how innovative their ideas. Thus the established paradigms remain intact, ‘group-think’ is solidified, and our problems keep on growing. Endless deliberation and consultation cycles also rarely encourage breakthrough social innovation, as they tend towards lowest common denominator and incremental thinking.

Whilst symptoms are mistaken for root causes, complex interrelated challenges are falsely split apart into linear problems that silo-based managers feel more comfortable managing, and the visionaries are silenced, sidelined or encouraged to work separately there is little hope for breakthrough systemic ideas to come to the fore.

Barriers to Sustainable Social Innovation

There are a number of reasons why there are institutional and cultural barriers to sustainability (in terms of financial, environmental and human sustainability) in the social space. In the USA, philanthropy is the dominant nourishment of social innovation. Wealthy individuals give their resources to professionalized managers to invest in projects, generating a hierarchical system that keeps people in jobs; and charities and non-profits competing (often voraciously) for handouts from a small number of managers. In the UK, and to a lesser extent the US, these managers – together with their counterparts managing public funds for social innovation – form a cabal of a few hundred to a few thousand people who, together, decide the kinds of projects that should and should not get funding (and by extension, define the ruling paradigm). If the dominant discourse in these spaces is one of symptomatic problem-solving (as it currently is), then the end-result leads to safer, incremental innovations that may alleviate but rarely solve social problems. Whilst donor- and publicly-funded social innovations are vital to the reinvention of the future discussed in this paper, it is important that managers responsibly are exposed to fresh and insightful innovation thinking if we want to collectively maximise the long-term impact of scarcer and scarcer philanthropic resources for seeding new ideas and expanding on successful ones until they reach sustainability.

Meanwhile the idea of a social enterprise or social venture, that uses a business engine to deliver social good, is still alien to most people. Left-wing types worry that its is a cynical right-wing plot to force civil society to take over the role of job that government is there to do (redistribution of wealth and welfare services). A majority of people in the social sector remain distrustful of the commercial world (and to a lesser extent, marketing). To many, the idea of making a ‘profit’ is anathema, so much so that it has been renamed as a ‘surplus’ – and even then it can cause much suspicion if included on a business plan or spreadsheet. Financially sustainable social innovations are, to many, further evidence of the increased ‘marketization’ of all forms of public life, and the entry of capitalist values into the ‘sacred’ areas of human suffering and human rights. In some ways they may unfortunately be right, as various politicians and policy-makers might well advocate the relentless march of heart-less, profit-focused market ‘realities’ into the welfare state. However, with a sense of ethics, community and purpose, the business engine of creativity and risk can of course generate real social value and income for a social enterprise.

Finally, many social entrepreneurs and social innovators within non-profits have little experience designing and operating business models that generate a surplus, nor how to monetize the skills, assets and expertise of the organisation in such a way that they can continue to deliver social value without an injection of more funds. Many are unaware of the value that they are creating which could be leveraged. Whilst public and donor funding still dominates the scene, vital creative ingenuity is focused on fund-raising and marketing programs to donors. This reduces the amount of bandwidth available for the kind of delivery model innovation that could permanently free organisations from the sink of fund-raising; and the radical invention of products and programs that could dissolve away problems for good. People are comfortable with the current model and so entire marketing and advocacy set-ups are geared towards maximising donor incomes, not generating social impact through creating breakthroughs in thinking,
Above all, whilst public and foundation funding reigns, innovators are prevented from taking the risks that potentially breakthrough ideas entail. Neither non-execs on foundation advisory boards nor mandarins on public sector funding boards are known for their appetite for risk. This almost inevitably guarantees incremental social innovation. Whilst foundations are often vital for seeding ideas, and governments are key for scaling up those that work, too much focus on raising money from these naturally conservative sources forces social innovators to compromise their vision to the necessities of placating foundation review boards and ticking public sector boxes to stay afloat. This is all the more ironic as so many foundations have been started by mavericks such as Ford, Rockefeller, Soros and Gates. [This last point contributed by Lai Yahaya.]

Barriers to Scaleable Social Innovation

Most disruptive innovations that go on to become genuinely mainstream were designed, from scratch, to be scaleable and accessible. Because of this they are often delivering less complex or premium solutions but to a far wider group than the current solutions do. Indeed, it is often the specific strategy of disruptive brands to reduce the conventional measure of efficacy of a product in order to make it more accessible to those who cannot afford it or have yet to know its value. Think of the less powerful Nintendo Wii that far outsells the technologically impressive Xbox; or the Ford model ‘T’ car vs. the high performance cars of the time. Because breakthrough innovations are designed from the start to be scaleable, it means that a large amount of time, energy and resource must be invested into the design phase to make this vision a reality. One doesn’t get an iPhone overnight. It takes organisational commitment and patience until the right combination of elements is cracked, at the right time, in the right place.

In the social space, the way people design services is usually the opposite to this. A small amount of money is released for a pilot, say with 20 or 100 people. As cash is tight, one makes do, stitching together available resources, often using experts and specialists to do what they can, perhaps for a hefty discount. Services are cobbled together from available tools, with innovators usually working in other jobs and doing the project on the side. Then, if successful (which can take 5 or 10 years to ‘prove’), people get excited and want to scale them up. This is something like the story of the much-lauded Harlem Children’s Zone. But then social innovators are presented with the problem of how to replicate and magnify a once small-scale operation, reliant on skilled people or specific locations and spaces. Such expert-to-user models tend not to be scaled easily, and certainly not cheaply.
Meanwhile. for ideas to be designed for scale, a ‘proof of concept’ [POC] is needed. In the private sector angel funders and VCs exist to help innovators crack their big idea with sufficient funds. This is typically between $100,000 and $500,000. It is the kind of money needed to pay for the innovator and a small team to pursue success, as well as any technology or new materials needed to design something for scale. Once proven, more money can be released to take the prototype to the next level and beyond. In the social space, two major issues occur around this kind of POC funding. The first is risk and reward asynchronies. The second is the way funds are divested from governments and foundations.

Firstly, risk and reward asynchronies. Managers of public bodies, foundations and social institutions (as well as politicians) tend to be rewarded by the absence of any major public or political scandals as opposed to the presence of a radical idea. These leads to a focus on moderately decreasing or managing the social issues in their purloin. The last thing a civil servant or foundation manager wants is to be on the front-page of a tabloid linked to an ‘experimental’ social service that ‘went wrong’. Ten years ago, when NHS Direct was scaled-up in the UK, the sister of Cherie Blair complained to the newspapers that she was given “potentially fatal” advice and that the service was a “placebo for hypochondriacs.” Few institutional innovators can handle that kind of press – it can mean they are side-lined permanently. So the social sector as a whole is actively disincentivized to innovate. This is a major problem that lies at the heart of so much social problem stagnation. In addition, disruptive innovations usually take collaboration to pull off – one person or department is unlikely to pull off a joined up, systemic innovation without the contribution of many other people. Again, public managers and non-profits competing for rapidly disappearing funding are incentivized to keep projects in their own domains and silos, further preventing breakthrough innovation.

Secondly, institutions and government bodies seem unable, or unwilling, to develop ways and means to divest sufficient resources for the vital proof-of-concept stage discussed above. For that kind of money they want to see a fully functioning program, which of course means that they are likely to invest further into incremental social innovations that can deliver this. So we see lovely programs that work in one city or one location rather than a major innovation that could (or could not) change the world forever. In the private sector, venture capitalists know that only 1 in 10 of the companies they back will win big; a couple will do OK; and the rest will fail. But the upside of the big win counteracts the losses. In the social space, funders are terrified of ‘wasting’ that vital $300,000 proof-of-concept amounts, so they back safer projects with ‘proven’, measured results. Therefore breakthrough social innovators are left fending for themselves, perhaps picking up $20,000 or $30,000 here of there, investing their own money, and living on the edge in the hope that they can get an idea up and rolling before financial realities hit. Due to this culture of incremental innovation it also takes longer to get a non-profit or ‘beyond profit’ idea beyond ‘the hump’ than a commercial idea.

Unless policy advisors and funders work out ways to channel that vital ‘money of the middle’ (bigger than seed funding, smaller than major government or ‘venture philanthropy’ investment), they risk wasting the most precious resource in the system – the passion and energy of social entrepreneurs that dream big and put their entire lives on the line to serve the community. Even with the right contacts, strategic tools and collaboration partners, ensuring that a potentially high-impact social innovation reaches critical mass is exceptionally challenging. Without the right political, institutional and philanthropic appetite for scale – and the financial, cultural and practical support needed to enable it – social innovators are reduced to developing incremental, easy-to-sell ideas that can keep them afloat or in a job. Even regulatory hurdles form an obstacle for the newer forms of collective, crowd-sourced and mutual funding routes seen in the commercial space. “What’s required is expanded support for organizations that are approaching social-sector problems in a fundamentally new way and creating scalable, sustainable, systems-changing solutions.”5

Barriers to Self-Organized Social Innovation

In many ways, government as a whole is still premised on a Hobbesian view of human nature: We are all animals, ready to fight and steal unless government is there to protect us. Behavioural science have done their best to back this assumption up for most of the 20th Century. Likewise, many non-profits and foundations still operate on a subtle, but persistent, assumption that there are ‘needy’ people needing their help. Even more problematic, particularly in the US where people are measured by their ability to create success from nothing (the ‘he arrived here on the boat with 50 cents to his name, going on to make billions’ syndrome), poverty is quietly blamed on the poor. This has been seen recently in Los Angeles, home of the highest percentage of homeless people in the country. The traditional poor areas of Downtown began to gentrify a few years ago, leading to a ‘Safer Cities’ program that began to arrest homeless people and by doing so criminalising poverty. By focusing on the broken civic spaces, a symptom not a root cause, they merely pushed homeless people into other areas and into more suffering.

Put together this generates a kind of paternalistic and evangelical philanthropy, where a Victorian sensibility attempts to offer salvation or reform to the less fortunate. It reminds one of the ‘noble savage’ that the missionaries went out to help with our Western ways – and instead decimated their cultures with ‘diseases’ of the body (such as smallpox) and the mind (such as our addiction to booze consumerism and debt). It also naturally leads to the high recidivism rates6 one sees across social welfare programs, where broken people that are committed, out of habit or perceived necessity, to crime, income support, alcohol, drugs, violence etc. are treated symptomatically through punishment, rather than restored to a sense of self-worth . This maintains their disempowerment rather than builds their capacity to self-organize and self-create.

Many disruptive innovations rely, in part, on the intelligence of the user (or end-beneficiary) to contribute their time and ideas to the functioning of the product. Wikipedia, which disrupted the reference book business and decimated encyclopaedia sales, relies on the collective intelligence of users to co-create decent content and act in accordance with shared principles. However, many politicians, non-profit workers and public managers find it hard to relinquish this kind of control to the people they are ‘helping’. NHS Direct, which now fields millions of calls a year from citizens saving government many millions of pounds, was resisted by the doctors themselves, even though now their time it freed up for more serious complaints. Doctors did not like the idea that their hard-earned expertise, from years at medical school and beyond, was going to be put in the hands of telephone receptionists, computer databases, and nurses. It is said that it was initially launched outside of the main NHS organisation as ‘Healthline’, to give it space to create a breakthrough outside of the status quo. Now NHS Direct is quoted as “the largest and most successful healthcare provider of its kind, anywhere in the world”. In many ways, disruptive social innovators must focus on doing themselves out of jobs as soon as they possibly can. 7

Finally, the attitudes and behaviours of funders and many ocial entrepreneurs challenges the potential for self-organised, collaborative innovation. Firstly, just a relative handful of individuals in a small number of countries hold most of the resources for community-led and peer-enabled breakthrough social innovations. By keeping the techniques, contacts, funds and networks closed they limit the flow of innovation that could make all the difference. The importance of open access and the weak ties that allow information to flow from one group to another are vital in effectively developing the collaborations that lead to successful breakthrough innovation. Secondly, the ideal of the heroic social entrepreneur who battles the system to create a breakthrough social innovation is borrowed heavily from the private sector, but the underlying motivations are different. The conventional capitalist mindset focuses on individual drive. Brought over to the social space (through prizes, fellowships etc) and it tends to encourage the creation of new, discrete social enterprises that often replicate the work of other providers and remain too disconnected or small to scale-up effectively. Unless social entrepreneurs are rewarded for collaboration and contribution to other social innovations (as opposed to being glorified after personal success), they will contain to operate as loners, focused on one element of the system that they see clearest. The prevents them from coming together and self-organizing for maximum impact.8