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ThemeSub-themesSummary of literatureReferences
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What is Scale?
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Transformative scaleBradach and Grindle (2014) suggest that 'scale what works' is problematic as it often requires incremental approach that is inconsistent with the mangitude of most social problems. A new path that adopts innovative ways of thinking about scale is required. The authors arge that transformative scale is required. This approach requires paying attention to managing the growth of the organization itself. Bartczak (2014) draws parallels to social movements in the 1960s around gender, class, race and suggests that we are on the cusp of another movement moment - This is a challenge and opportunity for grantmakers. Movement leveraging to acheive impact is challenge because it requires investing money and time to support relationship building, admin functions, etc. and brokering new partnerships.Bradach, J. and A. Grindle (2014). “Transformative scale: The future of growing what works. Nine strategies to deliver impact at a scale that truly meets needs”, Stanford Social Innovation Review and Bridgespan Group, http://ssir.org/articles/entry/ transformative_scale_the_future_of_growing_what_works
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Directional definitions of scale
Gabriel (2014) suggests that scaling is only one of several possible metaphors for growth and by only focusing on this one metaphor we risk overlooking other possible strategies. The report notes that the scaling up metaphor is borrowed from manufacturing industry, where scale up is synonymous with economies of scale. The authors identify several other metaphors that may better describe what it means to grow impact - from upward growth, downward growth, growth in complexity, growth across different areas. Chevrollier et al (2016) distinguish between scaling up, out, deep, across and in relation to the intended impact. Gugelev and Stern (2015) talk about scale in terms of an 'end game', which is the role that nonprofit intends to play in the overall solution to a problem. The endgame focuses on long-term outcomes. Hurley (2016) suggests that organizations can scale up or scale out. Franchising is an opportunity to both scale up and scale out. Riddell (2015) define scaling in reference to specific strategies (scaling up refers to impacting laws and policy), scaling out refers to impacting more people and scaling deep refers to impacting cultural roots). Gabriel, M. (2014) Making it Big: Strategies for Scaling Social Innovations. NESTA, Available at: https://www.nesta.org.uk/sites/default/files/making_it_big-web.pdf.
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Scale as relationalVeglio (2015) suggests that while scale from a commercial perspective can be understood as a combination fo reach, geographic footprint, sales and procurement volume, it also depends on the industry structure and the nature of the inclusive business model. In the context of inclusive business, scale is necessarily related to break-even and return on investment since only commercially viable ventures can scale - Bludel and Lyon (2014) suggest that scale can be understood as not only size but also relational and systemic process. Bradach (2004) suggests that scale should match the magnitude of the problem that the solution is seeking to address : (e.g., 100x impact with only 2x the size of the organization). Blundel, R.K. and F. Lyon (2014), “Towards a ‘long view’: historical perspectives on the scaling and replication of social ventures” Journal of Social Entrepreneurship
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Scale as a processSeelos and Mair (2017) talk about scale as a process that together with innovation can generate impact. Scale requires low levels of uncertainty and high degree of knowledge and routines. Similarly, Cooley (2016) emphasizes that scale is a distinct process from innovation, and often, requires significant organizational resources, strategic planning, to succeed.Seelos, C., & Mair, J. (2017). Innovation and scaling for impact: How effective social enterprises do it. Stanford University Press. Cooley, L. (2016). Innovating is the easy part. Available at: https://educationinnovations.org/blog/innovating-easy-part
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How to scale?
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Pathways to ScaleMulgan (2010) identifies five pathways to scale: advocacy, networks, programs ,franchising and direct control. Merrow (2014) suggests three pathways to scale: Partnership across sectors; making long-term investment to strenghten grantees and supporting promising and proven programs. Weber et al (2015) identify four scaling pathways including: Capacity building; Strategic expansion; Contractual parnerships; and Knowledge dissemination. Ford Foundation describes the following pathways to scale: Developing Public Policies; Fostering Communities of Practice; Influencing market forces; changing power relationships; and promoting social learning. Across each pathway the researchers identify challenges including resource constraints, lack of outcomes, lack of funding support, etc. and identify strategies for overomcing these challenges. The report notes that pathways are often complementary and can be combined to achieve scaling goals. Gabriel (2014) identifies four possible routes to scaling, noting that there are tradeoffs with each with respect to control, innovation, etc. These routes are not mutually exclusive - that is, they can be used in combination with each other: Influence and advice; build a delivery network (franchise, delivery contracts, etc); form a strategic partnerships (joint ventures); and grow an organization (branches, delivery capacity of central team, etc). Bradach and Grindle (2014) suggest 9 pathways to scale: Distribute through existing platforms; recruit and train others; unbundle and scale up parts with greatest impact; use technology; strenghten the field; change public systems; embrace policy change; leverage for-profits; and alter beliefs, attitudes and behaviours. OECD (2016) suggests the following pathways to scale: scaling through expansion; scaling through M&A; diversificaion; replication; partnership; and knowlege sharing. Guglev and Stern (2015) identify six ways nonprofits can achieve an endgame: open source (like AA) replication, encouraging government adoption, commercial adoption, mission achievement and sustained service. USAID 2016 identiifes five models for scale: organic growth with selective outsourcing, multi-stakeholder partnership, licesnsing out open licensing and getting acquired . Berelowitz (2012) focuses on social franchising pathway to scale, through comparison with commercial approach to scale. Franzel and Brooks (2016) explore the link between the innovation archetype and the pathways to scale. The authors explain the relevance of the ‘four Ps’ model of innovation for the development context (Bessand and Tidd): Product Innovation, process innovation position innovation or paradigm innovation. Their research maps the feasibility of pathways to scale. So, for example, competitive markets are good at implementing ideas, but ill-suited to fundamental research. Worsham et al (2018) explore 'leveraging government/influencing public policy pathway to scale - the report describes the various models for working with government to achieve scale, such as procurement, adoption, outsourcing, and provides several examples and lessons from social enterprsies that have leveraged government to achieve scale. Spring Impact Replication Toolkit (2019) explores models for replication across the spectrum of flexibility and control, from dissemination, affilation and wholly owned organization, with several sub-models across the spectrum. Berelowitz, D. 2012. Social Franchising: Innovation & The Power of Old Ideas Co-produced by ICSF, Clore Social Leadership Programme, Social Enterprise UK in 2012. Report USAID. (2016). Pathways to Scale: A guide for early-stage global health innovators on business models and partnership approaches to scale-up. Center for Accelerating Innovation and Impact, USAID https://www.usaid.gov/cii/pathways-scale Ford Foundation. Asset Building for Social Change: Pathways to Large-Scale Impact. Available at: http://www.racialequitytools.org/resourcefiles/fordfoundation.pdf
Accessed November 25 2016. Franzel, L. and Brooks, A. 2016. The system is the innovation: how to support countries to enhance and expand vaccine delivery systems. Worsham et al. (2018). Pathways to Scale. Available at: http://scalingpathways.globalinnovationexchange.org/
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Stages of Scale SIX (2015) suggests four 'stages of scale': 1. Assessment evidence of efficacy and readiness to scale 2. Business model development; strategy for scaling 3. Implementation and roll out and 4. Evaluation and on-going improvements. Monitor Group (2012) suggests four stages of scale are: blueprint; validate; prepare and scale. Gugelev (2014)presents a spiral model of scaling and innovation and suggests that in the early stages of scale organizations must achieve sustainability. The Repeatable Models Framework (Acumen 2014) frames scale as a continuous process of appraisal and learning. London (2016) identifies three distinct stages to scale: Design; Pilot and Scale. While most models are presented as linear, authors emphasize that scaling should be viewed as a lifecycle and often involves several iterations, linkages between the different stages.
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Barriers to Scale
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Cultural barriers (related to funding)
Overwhelming focus on innovation; short term funding structure; lack of incentives for funders to invest in scaling (Bull et al 2014): "The failure to replicate innovative social programs is usually attributed to problems of strategy and management. The fact that dollars seldom follow success is one of the most vexing challenges nonprofit leaders face. At precisely the moment when large amounts of capital would flow to a proven idea in the for-profit sector, funders in the nonprofit sector frequently back away. There are many reasons – donor fatigue, a belief that equity requires spreading money around, hesitance to make “big bets” – but the consequence is that proven solutions to pressing problems do not spread."Innovation as dominant: social enterpreneurs are often more keen to develop their own innovations and solutions acting as change agents than to replicate another enterpreneurs model (McNeill 2011). Bull et al (2014) refer to these as 'attitudinal barriers to scale. In conventional markets, investors encouarge and favour companies that invest in their own operational models and govenrance. However, in the soical sector, this is strongly discouraged by funders - moreover, grantees are not supported and funded in all stages of development - most funders focus on pilots but have 'little concern for what comes next'.
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Capability gapsVeglio (2015) notes that most literature focuses on external market barriers to scale (e.g.,insufficient information, weak market infrastructure, regulations) but internal barriers require more attention - internal barriers include opportunity cost of investment that can have lower expected rates of return in BoP context, strategic and operational misalignment: significant challenges if inclusvie business opportunity is different from the company's other actvities; capability gaps - and recognition that company's capabilities drive performance. Similarly, Gradl (2016) suggests bariers to scale in the context of inclusive business environment include limited knowledge and skills; lack of market information; ineffective regulation; inadequate infrastructure; limited access to finance among the BoPGradl, C. and Jenkins, B. 2016. Tackling Barriers to Scale: From Inclusive Business Models to Inclusive Business Ecosystems. Harvard Kennedy School Veglio, F. (2015). Targeting the base of the pyramid at scale: easier said than done. Thinkers. https://thinkers.in/targeting-the-base-of-the-pyramid-at-scale-easier-said-than-done/
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Lack of scaling intermediariesHystria (2015) suggests that while there can be cost efficiencies to wokring through intermediaries, in the case of smallholder farmers it is often the case that wokring diretly with farmers can build trust and loyalty and reduce risk perceptions and lead to faster growth and more effective strategy to scale than intermediaries. Cooley and Guerero (2015) also emphasize that intermeidation is often necessary to bridge the gap between the innovation process and the scaling process. Intermediaries fulfill important functions such as convening and coordinating stakeholders, access to funding, impact measurement, etc. Cooley, L. and Guerero (2015). The Broken Part of
the Business Model in
Taking Development
Outcomes to Scalehttp://msiscalingup.wpengine.com/
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Institutional contextAcumen Repeatable models (2014) ; Weak or missing value chains; public policy; lack of market demand (the Acumen report highlights several exmaples of how base of pyramid market demand is different than conventional markets - risk for example is assessed differently by smallholder farmers than end-users of a new product in a more developed market. Trust is key to understanding the lack of scale among smallholder farmers (Hystra 2015). Contrary to conventional risk and return relationship, smallholder farmers are vulnerable. More important than risk/reward is a concern with reversibility of a deicsion - farmers are less likely to adopt a new technology or product unless they are assured that they can at least revert to how they originally do things - and this suggests that training and education are critical to mitigate this risk. This will require revising the role of insurance - to be sure, insurance from loss from severe weather is important, however, so too is insurance to address irreversibility of changes from new technologies - Access to credit is also key given the variability in cashflow of farmers. In addition, widespread illiteracy limits the ability of many smallholder farmers to access the right information at the right time, including the availability of new innovations, agriculture techniques, weather forecasts, current market prices and more. Ometto et al. (2018) argue that social enterprises are exposed to mission drift risk when scaling and these organization need not only “spaces of negotiation,” but also “herding spaces” that connect an organization to its institutional context. Gradl (2016) suggests incentive problems include collective action – free rider problems that prevent companies from investing in public goods such as value chain development, etc. Hystria (2015) considers solutions that can add value along the chain, increase cost efficiency and capture value and share it sustianably. Growing Together (2016) suggests that there are several stragies that large companies and funders can adopt to improve value chain of micro-enterprises. Micro-enterprises also form an important part of large companies’ value chains – upstream and downstream - companies and other stakeholders need to move towards a more holistic form of collaboration with the aim of strengthening the broader “market system” in which their value chains and micro-enterprises operate. Ometto, M. P., Gegenhuber, T., Winter, J., & Greenwood, R. (2018). From Balancing Missions to Mission Drift: The Role of the Institutional Context, Spaces, and Compartmentalization in the Scaling of Social Enterprises. Business & Society, 0007650318758329. ACUMEN and Bain and Company. (2014). Growing Prosperity: Developing Repeatable Models. Available at: http://acumen.org/growing-prosperity/ Growing Together (2016) https://insights.careinternational.org.uk/publications/growing-together-strengthening-micro-enterprises-in-value-chains IFAD 2016 Sustainable Inclusion of Smallholders in Agricultural Value Chains Available at: https://www.ifad.org/topic/scaling_up/overview/tags/knowledge_notes
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Scaling pathologiesSmith (2014) suggests that a signfiicant challenge is to stop funds from flowing to ineffective programs - to do so, funders must demand results and continuing to fund weak performing grantees can do more harm than good. That said, this requires an understanding of when a program is ineffective vs. providing enough support to incubate new programs/allow them time to achieve success. Rao and Sutton (2014) suggest that the lack of willingness of some leaders to 'kill an idea' is a challenge - companies are killed by their need to keep getting bigger and the scholars draw on behavioural insights to explain common scaling pathologies -for example, it is hard to give up something that is familiar and that you already have. Acumen (2014) suggests that firms pursuing bad scale had introduced costly complexity by prematurely expanding to adjacencies (new customers, products, geographies or capabilities). All too often, firms have attempted to extend their reach before putting these in place, resulting in unmanageable costs and increasing complexity that can thwart the successful scaling of even the most promising innovation. This is the “bad scale trap” that shrinks margins and undermines firms’ early success. Rao and Sutton also explain the 'scaling fallacy' whereby decision makers are likely to underestimate the time and resources that it can take to scale. The authors also caution that 'specialization is a powerful medicine that msut be careful too much created challenges of communicaion and handing off tasks within orgnaizations and can fuel conflict between groups that end up focusing on what is good for their division rather than what is good for the overall organization. Seelos and Mair (2017) provide overview of six innovation and scaling pathologies that hinge on the idea that scaling requires reducing uncertainty first and innovation requires a degree of uncertainty. Sutton, R. and Rao, H. 2014. Scaling up Excellence: Getting to more without settling for less.
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Drivers of scaling success
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LeadershipRao and Sutton argue that it is very rare that scale success can be attributed to a single leader. A strong team is critical and talent is required across the organization in order to successfully scale. Janus and Threlfall (2015) also argue that leadership is a myth as leading to scaling success - rather, early stage success depends on three factors: teamwork, metrics and access to capital. Chevrollier et al (2016) suggest that 'a new breed of business leaders is needed - leaders that understand both commercial and impactful business'. CASE (2003) finds that among large organizations, having a leader and board with strong desire to grow in new communities played a greater role in expansion motivation. Deiglemeir and Greco (2018) aruge that the leadership skills needed in the earlier phases (innovation) are different than the leadership skills required to overcome the scaling 'chasm'. "Personal charisma and resourcefulness serve an entrepreneur well in the ideation and piloting phase, but as an innovation matures, more specialized skills are required to build a powerful team, manage an expanding board of directors, and broker and sustain successful partnerships." Deiglemeir and Greco, A. (2018). Why Proven Solutions Struggle to Scale Up. SSIR Janus, K. and Threlfall, V. (2016). Three Things Every Growing Nonprofit Needs to Scale. SSIR.
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Design for scale from the beginning
Many programs are developed with features that make them inherently difficult to scale up. London, T. (2016) emphasizes the importance of designing an innovation with scale in mind at the beginning of the process. CooleyHow to design for scale: lessons for ambitious new interventions.
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Strategies for scaleWeber et al (2015) identify four scaling strategies: Capacity building; Strategic expansion; Contractual parnerships; Knowledge dissemination and 11 sub-strategies including expanding capacity, new produts/services; new target group; geographic expansion; network; licensing; social franchise; joint venture; imitation; lobbying; technical support. McNeill (2011) focuses on social franchising - viewed as a low-risk approach to scaling because it allows individuals that have little experience with financial modelling and business planning to engage in scaling efforts. Franchising is positioned in a broader context of scaling strategies - including replication, partnership and affiliation and dissemination. Franchising while considered low risk, requires high degree of coordiantion and resources from the parent organization and this comes with high costs but equally higher levels of control. Hurley (2016) suggest that franchising is an important strategy for scale. The author draws on traditional firm exmaple of franchising, suggesting that there are many similarities. The benefits for social enterprise of franchise strategy to scale is that it allows an organization to leverage foundational work already done by other organizations, and local adaptations can build on and improve the original model. However, franchises are also more difficult to control than other scaling strategies. The report presents a framework for tradeoffs between low risk/low control (franchising) and high risk/high control (expanasion). Another challenge for social enterprise is that investment risk is not always in play for social franchises - which can make it difficult to motivate franchisees. CASE (2003) suggests that franchising leads to better learning and innovation outcomes. Harji et al (2015) suggest that improving economic efficiency of programs through specialization, standardization and incremental productivity can reduce cost per beneficiary and increase possibility of scale through cost-effectiveness.
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Role of partnerships and collaboration Weber et al (2015) note transnational scaling is more often done in cooperation with a partner than as a solo venture. "Given the complexity of the new context and their unfamiliarity with it, European social enterprises tend to prefer operating transnationally with (local) partners. This affinity for cooperation, which is also very widespread among commercial enterprises and often occurs across sectors, is an indication of complementary competencies that should be applied synergistically in transnational scaling." Partnerships among funders is also important. And not just partnerships with other charitable organizations, but also partnerships with government, private sector. Gradl (2016) suggests that without high operating margins or ability to cross subsidize to cover costs companies may not be able to engage base of the pyramid. The authors develop the concept of an ecosystem approach to scale. This approach requires organizations to engage with multiple stakeholders to remove systemic barriers to scale and impact. As such, new models for collaboration between a diverse set of stakeholders are required if scale is to succeed. Key players include individuals, companies government, associations, cooperatives, NGOs, donors, academia and media. The key challenge is getting these stakeholders to coordinate their efforts and cooperate . London and Fay (2016) provide a Partnership Ecosystem Framework as a pratical tool by inclusive businesses to idetnify suitable partners and their role, recognizing that few inclusive businesses are sufficiently vertically integrated to meet their goals and as such partnership is critical. The framework is a quadrant mapping action enabling vs capacity building and enterprise development vs market creation activities.London, T. and Fay, C. 2016 Partnering for Scale: Collaborating to more effectively engage smallholder farmers. Available at: http://wdi.umich.edu/wp-content/uploads/Partnering_for_scale.pdf
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Decision to scale (Assessing readiness to scale) Dees et al (2004) propose a framework to describe how social enterprises should make decisions about whether to scale. The framework includes an assessment of organization's: Readiness; Receptivity; Resources; Risks; and Returns. Bull et al (2014) suggest that funders and charities rarely evaluate whether scale is even desirable - and charities need to spend more time assessing whether to scale in the first place, in the context of their risk appetite against potential benefits of scaling . The authors provide a framework to explain the factors (context) that affect decisions to scale. These incldue: driver of effectiveiness (technology, locak knoweldge, partners, staff leadership); nature of problem (technical vs adaptive complex problem); evidence (large evidence base vs. anecdotal evidence); additional expertise required (low vs high); appraoch (social products, campaign, behaviour change, relationship building); ratio of cost to social benefit (low unit cost to high unit cost) and policy environment (strong policy backing to resisance from public sector). Meehan and Starkey Jonker (2018) propose a framework for assessing readiness to scale, that draws on seven elements - these elements parallel the Peter Drucker model that Seelos and Mair (2017) draw on including mission clarity, resources and knowledge about external environment, and also includes elements such as practicing evaluation, strategy, good governnace, talent. Bloom and Smith (2010) SCALERS model - the authors identify seven drivers of scale in an effort to develop a roadmap for organizations to scale. These drivers include: staffing, communication, alliance building, lobbying, earning generation, replicating and stimulating market forces. Not all drivers must be present to scale, however, the authors find through case studies that in most instances several of the drivers are present at once. Weber et al (2015) suggest that a prerequsisite for successful scale is commitment and readiness, a viable operational model. The authors also identify six conditions for success including management competencies; replicability not only of products/services but of othe structure and processes; mobilize resources; control and dependency; transfer costs (internal and external); and legitiamcy and reputation. Veglio (2015) suggests that while scale from a commercial perspective can be understood as a combination fo reach, geographic footprint, sales and procurement volume, but it also depends on the industry structure and the nature of the inclusive business model. In the context of inclusvie business, scale is necessarily related to break-even and return on investment since only commercially viable ventures can scale. Seelos and Mair (2017) of Red and Green Zones argues that scaling success requires organizations to establish green zones - characterized by low degree of uncertainty and high degree of knowledge and routine. Deiglemeir and Greco (2018) suggest there is a stagnation chasm that results from a lack of funding, talent and leadership and successful organziations must overcome these barriers to scale successfully. Dees, G. and Battle Anderson, B. (2004). “Scaling Social Impact.” Stanford Social Innovation Review. 1, no. 4. (Spring 2004): 24-32. Meehan, W. and Starkey Jonker, K. (2018) Earning the Right to Scale. SSIR Deiglemeir and Greco, A. (2018). Why Proven Solutions Struggle to Scale Up. SSIR
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Funders' Perspective on Scale
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Role of fundersSIX (2015) notes that mos literature on scale is written from the practitioner perspective and not the funder perspective. The report suggests that funders need to pay attention to the different stages of scaling and that there are four stages in particular that funders should support as organizations work to scale. These include assessing readiness to scale; business model development; impelemtnation and evaluation and on-going improvements. Enright (2014) argues that grantmakers must provide flexible capital that is long-term; be open to funding data and performance management; and invest in capacity building and leaders. Merrow (2014) encourages funders to recognize that grantees need long-term support. The author also emphasizes the importance of place-based investors given their knowledge of local grantees which can be useful to inform scale strategies. Smith (2014) suggests that funders should work together with nonprofits to define the intervention expectations around impacts and data collection and evaluation system. Ross (2014) emphasizes that funders must support advocacy and social justice work and not just individual organizations.Merrow, K. (2014). Pathways to Scale for a Place-Based Funder: Take Smarter philanthropy for greater impact: Rethinking how grantmakers support scale, Supplement to Stanford Social Innovation Review. Enright, K. (2014). What Would it Take? Smarter philanthropy for greater impact: Rethinking how grantmakers support scale, Supplement to Stanford Social Innovation Review. https://ssir.org/supplement/smarter_philanthropy_for_greater_impact Social Impact Exchange SIX (2015) Taking Successful Innovations to Scale. Available at:
http://www.socialimpactexchange.org/webfm_send/739. Accessed November 25, 2016
Ross, R.K. (2014). We need more scale, not more innovation: Take Smarter philanthropy for greater impact: Rethinking how grantmakers support scale, Supplement to Stanford Social Innovation Review.
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Catalytic capitalMonitor Group (2012) argues that too much emphasis is placed on impact investment but the lack of investible opportunities means that much of this capital will continue to sit on the sidelines. What is needed is more grant funding to help organizations build sufficient capacity that is required to attract private investment - There is a signifciant gap in funding provision. The authors also distinguish between traditional philantrhopy and 'enterprise philanthropy, which focuses on helping organizations to become ready for capital. Carter (2015) also provides critical perspective on the role of public subsidies for private capital - when benefits to society exceed benefits to the private investor then subsidies are legitimate, however it is far from clear whether this is the case. The author suggests that there are several potential problems with subsidies - and that market failure is not the only reason why public subsidies should be used - even when markets become more efficient, this does not necessarily mean that markets are working in the interest of society - inequality is also important consideration when deciding about the role of subsidies. Monitor Group and Acumen. (2012). From Blueprint to Scale: The Case for Philanthropy in Impact Investing. Available at: http://acumen.org/wp-content/uploads/2013/03/From-Blueprint-to-Scale-Case-for-Philanthropy-in-Impact-Investing_Full-report.pdf Carter, P. (2015). Why subsidise the private sector? What donor are trying to achieve, and what success looks like. Retrieved from https://www.odi.org/sites/odi.org.uk/files/odi-assets/publications-opinion-files/9948.pdf
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Diversity of fundingCardinali (2014) emphaizes the importance of a diversity of funders to scale - blending philantrhopic capital with public dollars - public money is useful for sustaining core work of the organization whereas philanthropic investment is best at funding innovation. Both types are needed to succeed. Jurgens et al. (2018) argue that it is not just a lack of capital to support organizations over the valley of death but a wide range of missing capital forms that are needed to support small and growing business to achieve scale. The report identifies four archetypes of businesses that occupy the 'missing middle' and identifies the type of capital that is needed to support each. Cardinali, D. (2014). Perspectives on the Social Innovation Fund: Take Smarter philanthropy for greater impact: Rethinking how grantmakers support scale, Supplement to Stanford Social Innovation Review. https://medium.com/positive-returns/theres-more-than-one-missing-middle-bd3c8068bb4
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Funding models conducive to scale
Merrow (2014) argues that more co-funding between local and national funders is necessary to establish a robust pipeline of scalable initiatives. Roob (2014) shares experience with True North Fund, which is a capital aggregation strategy to help grantees to scale. The co-investing strategy allows funders to unite around a single growth plan, which can create efficiency for grantees. Such a model requires strong working relationship between co-investors, with an empashis on transparency and accountability. Bartczak (2014) compares grantmakers to 'connective tissue' that is required to bring organizations and networks together to advance a movement's vision. Chevrollier et al (2016) promote the 'club financing' model, whereby funders share risks and due dilligence costs and consultancy fees that are necessary in evaluating a new investment. This is suggested as an alternative to the blended finance /subsidy appraoch. Bull et al (2014) also argue that funders should work more collaboratively with other funders to ensure that grantees have viable options once their grant period has ended. Most articles suggest that there is a lack of attention among funders for scalable models. Walske and Tyson suggests the opposite - that funders now pay signifcant attention to scale and there is risk that the organizatiosn that do succeed in scaling will monopolize funding and undermine other innovative models that have not yet succeeded. Rockefeller Philanthropy Partners (2018) addresses a gap in the literature by providing empirical evidence of the impact of collaborative funding models. The report looks at examples of collaborative funding models and distills lessons and best practices. Javits (2014) suggests market based appraoch to scale can be effective and more research is needed to understand how to combine grant making and business assistance to help enterprises grow. Chevrollier, N., Reintjes, J., and Brandt, M. (n.d.). Scaling Inclusive Business. Retrieved from https://iba.ventures/wp-content/uploads/2016/02/iba_scaling_inclusive_business_lr.pdf Roob, N. (2014). More Resources, More Co-investors, More Impact : Take Smarter philanthropy for greater impact: Rethinking how grantmakers support scale, Supplement to Stanford Social Innovation Review. Wei-Skillern, J. (2014). In Collaboration, Actions Speak Louder than Words: Take Smarter philanthropy for greater impact: Rethinking how grantmakers support scale, Supplement to Stanford Social Innovation Review. Walske, J. M. and Tyson, L. D. (2015). Built to scale: A comparative case analysis, assessing how social enterprises scale. The International Journal of Entrepreneurship and Innovation, 16(4): 269-281. Rockefeller Philantrhopy Partners (2018) Scaling Solutions Toward Shifting Systems: Approaches for impact, approaches for learning,. Bartczak, L. (2014). Leveraging a Movement Moment: Take Smarter philanthropy for greater impact: Rethinking how grantmakers support scale, Supplement to Stanford Social Innovation Review. https://ssir.org/supplement/smarter_philanthropy_for_greater_impact
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Ecosystems for scale
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External ecosystemsBradach (2003) suggests that the ability to replicate will depend on how easy it is to standardize or holding constant the context within which the program operates. It also requires the ability to communicate these standards to others (tacit vs. codified knowledge). The author also suggests that greater standardization makes it easier to engage in network. Ecosystems and partnerships here and relational contracts and trust. Gugalve and Stern (2016) argue that creating a movement requires nonprofit leaders to collaborate, which can be a challenge in the early stages when leaders must also focus on organizational sustianabiltiy. See also Bull et al 2014 - context is 'given' - what is unique about ecosystem article is that suggests they can build their own context and make it more favourable. Gradl (2016) suggests that companies do not need to accept ecosystems as given – they can influence and change – help them to evolve faster. To address the specific barriers to scale in the context of the inclusive business ecosystem, the authors suggest the following strategies: raising awareness among BoP consumers; capacity building research; information sharing (to change behavior); public policy; and contributing to the development of new platforms and intermediaries. This can take the form of private initiative (default); collaborative platform or project based alliance. Partnership ecosystem framework (London and Fay 2016).Bradach, J. (2003). Going to Scale: The Challenge of Replicating Social Programs. Stanford Social Innovation Review, 1(1), 18–23. Gugelev, A., & Stern, A. (2015). What’s your endgame? Stanford Social Innovation Review. http://ssir.org/articles/entry/whats_your_endgame https://www.philanthropy.org.au/images/site/misc/Tools__Resources/Publications/2015/Winter_2015_Whats_Your_Endgame.pdf The replication puzzle: why do policies work there but not here? A four-step framework to avoid making the most common mistakes.
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Internal 'ecosystems'Business Fights Poverty (2018) report suggests ways that companies can create the ecosystem for supporting intrapreneurs, such as incentives, innovation labs, resources for innovation and scale. The report includes several examples from large corporations.Business Fights Poverty and the League of Intrapreneurs (2018) The Intrapreneurship Ecosystem. http://reportregister143.pages.ontraport.net/
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Systems Change and Scale
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Scaling = systems changeMcCarthy (2014) argues that 'a bad system trumps a good program every time.' Sometimes social enterprises should focus on changing the systems before focusing on a specific program. Networks as useful for scaling that requires orgnaizations to adopt system orientation and engaged process and build strong relationships built on trust. This requires funders to consider how their own policies can inhibit trust building among grantees, for exmaple, by issuing competitive RFPs. Schwab Foundation. (2017). Beyond organizational scale: how social entrepreneurs create systems change, pp. 4 – 16. Retrieved from: http://reports.weforum.org/schwab-foundation-beyond-organizational-scale/ Scaling social impact – a checklist, and a warning. Scaling a program against the grain of the system is like rowing against the current.
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Critical perspectivesSeelos and Mair (Fall, 2018) caution organizations about the risks of engaging in 'systems change' efforts without a deep understanding of the complexities and resources and time horizon to see their work through. The article offers a critical perspective that draws attention to the risks of organizations focusing on systems change and proposes two approaches for engaging in systems change work that operate at lower levels of complexity - using two examples of organizations - one that has built another system in order to change the system and a second that isolate a subsystem. The article then propsose some general principles for engaging in systems change work - and areas for further research that is needed to better understand what works. Mair, Wolf and Seelos (2016) present a model of scaffolding to describe how organizations can engage in transforming social systems. Scaffolding involves mobilizing existing resources, stabilizing new institutional arrangements and concealing the systems change with a more technical solution in order to overcome resistance to change. The paper suggests that 'grand challenges' such as addressing inequality, are not necessarily scale-dependent, and in many cases, these challenges manifest locally - yet are still complex, multidimensional and interlinked. The study draws on 10 years of research - Gram Vikas clean water provision, that engaged in scaffolding by concealing the underlying goal of addressing inequality in India. Seelos, C. and Mair, J. (2018) Mastering Systems Change. SSIR Fall Martí, I. (2018). Transformational business models, grand challenges, and social impact. Journal of Business Ethics, 1-12. Mair, C. Wolf, M. and Seelos, C. (2016). Scaffolding: A process of transforming patterns of inequality in small-scale societies. Academy of Management Journal. 59(6) 2021-2044.
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Unintended impactsMarti (2018) explores transformational business models - both intended and unintended consequences. Transformational business models must consider impacts - on not only customers but also fringe stakeholders (a more holistic view of value that considers how value is created for all actors invovled in buisness models). The article argues that most research on business models have focused on the positive impacts and only recently are scholars beginning to examine the negative impacts (such as oppression, depletion and exclusion). Business models for oppression or depletion are often intended and therefore considered morally unacceptable, whereas buinsess models for exclusion are often unintended. The article then considers how business models might positively redefine interactions between different impacted stakeholders. The author identifies four features of transformational business models - engagement (a participatory archiecture); multivocal inscription; scaffolding; and a concern for the 'other'. The paper concludes noting that business models are often transformational - and even those models that attempt to achieve positive social and environmental impacts can also have negative unintended impacts and that more research is needed to understand the mechanisms by which business models transform the lives of not only the targeted stakeholders but all stakeholders that inhabit the structures that are transformed by business models. Martí, I. (2018). Transformational business models, grand challenges, and social impact. Journal of Business Ethics, 1-12.
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Best Practices for Scale
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Principles /Best Practices for Scaling
Rao and Sutton (2014) use analogy of Catholicism and Budhism to illustrate the choices that organizations face when looking to scale up. The two extremes form a spectrum where organizations can choose a combination of flexibility and more rigid replication policies to achieve scale. There is not one 'right' way to scale, however, the authors to identify several 'universal principles' to scaling: including: spread a mindset not just a footpring; engage all the senses ; link short term realities to long term goals; accelerate accountability; scale requires addition and subtraction; slow down to scale faster; and be deliberate and intentional. Bull et al (2014) suggest principles for organizations: first assess the situation; evaluate how their approach works to understand what is required to scale; choose then what to scale, prioritize opportunities based on risk and allocating responsibility; deciding who is best placed to scale. Berelowitz 2012 proposes a framework for identifying success in social franchising models: OPEN elements’ of social franchising. • Ownership – an empowered ‘franchisee’ who feels ownership over their organisation and is highly motivated for it to succeed • Process – systematised processes so that the wheel does not have to be reinvented, but with enough freedom to adapt to the local context • Enhanced network – a network of knowledge, data and innovation sharing between franchisees and the franchise • Name and Brand – a recognised brand proposition that commands respect and notice from key stakeholders for sales or campaigning purposes.
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Bradach and Grindle (2014): cross-cutting considerations for all strategies for transformative scale: be clear about success; focus on well-defined unit of impact; rethink capitalization; innovate to reduce costs; focus on both demand and supply; invest in new capabilities and engage communities.
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Repeatable Models"Repeatable Models entails, among other things, defi ning the company’s core market and distinctive competencies; establishing clear values, operating processes and market entry routines; appropriately hiring, training and managing the performance of employees; and developing and institutionalizing the customer feedback and learning systems that inform management as to whether and how the Four A’s are in place and that guide ongoing efforts for improvement and innovation."
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Scaling trade-offs
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Innovation vs. scaleEnright 2014 suggets that innovation in its own right should not be a goal. Ross (2014) argues that 'we need more scale, not more innovation', and that grantmakers must focus less on innovation and more on growing ideas that work. Technical solutions are not the answer - rather, achieving meanignful scale will require addressing deeper and more structural challenges incluidng power imbalances. Beneficiaries must be part of the solution and defining scale. The author reflects on how philantrhopists have perpetuated power imbalances by continuing to fund innovation at the expense of addressing social problems -funders need to divert funds from technical innovation fix to the much more difficult work of advocacy, campaigns, social structures that lock in and cause the social problem. Seelos and Mair (2017) reconcile the tension between the scaling and innovation processes, arguing that organizations must learn to do both to succeed and draw on well-established management literature (Drucker, Moore, James March exploit/explore), etc) to do so. Dees, G. et al 2002 CASE Working Paper Pathways to Social Impact: Strategies for Scaling out Successful Social Innovations https://centers.fuqua.duke.edu/case/wp-content/uploads/sites/7/2015/02/Article_Dees_Anderson_WeiSkillern_PathwaysToSocialImpact_2002.pdf Ross, R.K. (2014). We need more scale, not more innovation: Take Smarter philanthropy for greater impact: Rethinking how grantmakers support scale, Supplement to Stanford Social Innovation Review.
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Control vs. FlexibilityHurley (2016) develops a framework for understanding trade-offs between control and risk associated with different pathways to scale. High risk, high control strategies include branching. Low risk and lower control includes franchising. Some strategies like knowledge dissemination can have low control but high risk to reputation if information knowledge that is disseminated is not used effectively, There are different types of risk: financial risk; reputational risk; that have different effects depending on outcomes. Weber et al (2015) suggest that the influence of control can be positive for capacity building strategies but in other strategies high control by the founder tends to reduce a social enterprises' ability to grow. CASE (2003) suggests that there is a tradeoff between control and innovation - greater control over an organization through branches but less likely to have new innovations, whereas affiliations are often more innovative but struggle with control issues. Hurley, K. (2016). From Social Enterprise to Social Franchise. Toronto: Centre for Social Innovation. http://socialinnovation.ca/sites/default/files/csi_social-franchise-guide.pdf
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Herding spaces vs. scaling up (mission drift and scale)Herding spaces refers to space that hybrid organizations such as social enterprises use to connect their innovations to institutional contexts (e.g.., meetings with stakeholders, other institutional actors). As organizations grow, Ometto et al. (2018) argue that they require more formalization and standardization of processes (beureactic imperatives), which leads to compartmentalization of the herding spaces - separate specialized spaces - and this contributes to overall lack of ability to maintain focus on the overall mission, as herding spaces play an important function in learning, and in ensuring staff maintain emotional commitment and motivation for the mission. This separation of tasks and functions into distinct and specialized units makes hybrid organizations more susceptible to external pressures (e.g., from funders), which can also contribute to mission drift.Ometto, M. P., Gegenhuber, T., Winter, J., & Greenwood, R. (2018). From Balancing Missions to Mission Drift: The Role of the Institutional Context, Spaces, and Compartmentalization in the Scaling of Social Enterprises. Business & Society, 0007650318758329.
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Scaling deep vs scaling upHarji et al (2015): "Programs that focus on training but if not tightly linked to tangible employment opportunities program would perform better if targeted smaller number of youth another challenge is that the most disadvantaged individuals make sit more difficult and often costlier to assist them". Gender Many IFAD articles mention gender considerations and scale - some warn that scale can have negative impacts on women as it can lead to excluding them from opportunities in areas with weak land ownership rights for women. But it can also empower women.
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Traditional Firm vs. Social Enteprise/Nonprofit
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SimilaritiesBradach (2003) uses private sector franchise model as an analogy for how social sector organizations can scale. Hirzel (2013) argues that social enterprises will not succeed unless they play by the same rules as for-profit seeking enterprises. Rottenberg and Morris (2013) also find that those social enterprises that prioritize their financial goals over social goals are more likely to succeed in scaling up - they also suggest ways to build business models to reduce friction between commercial and social goals. Veglio (2015) suggests that while scale from a commercial perspective can be understood as a combination fo reach, geographic footprint, sales and procurement volume, but it also depends on the industry structure and the nature of the inclusive business model. In the context of inclusvie business, scale is necessarily related to break-even and return on investment since only commercially viable ventures can scale. Bull et al (2014) find that scaling challenges are very similar to private firms . Bull, D., S. Hedley and J. Nicholls (2014), Growing pains: Getting past the complexities of scaling social impact, New Philanthropy Capital (NPC), United Kingdom, http://www.thinknpc.org/publications/growing-pains/
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DifferencesOECD (2016) report suggests there are three key differences between traditional for-profit and social enterprise scaling: maximize social objective (and not profit); specific characteristics of goods and services; and collaborative relationship among stakeholders (many that are directly invovled with governance of teh social enteprise). Austin et al (2006) argue that the main differences include: Market failure (social enterprise often aims to address market failure) ; mission (create social value vs. profit); resource mobilization (social entrepreneurs cannot tap into the same capital markets as traditional enterprises) and performance measurement . McNeill (2011) suggests that in franchising context, social enterprenurs value the socail impact of their enterprise as much as any surpluses that are generated and therefore, misalignment of interests between franchisor and franchisee is possible - incentive challenges that are unique to social franchises. Bull et al (2014) identfiy differences including: tradeoff between 'reach and impact' - also, the structure of social markets is unique - in charitable sector, demand increase do not lead to greater profitability, such that connection between beneficiaries demanding service and funders of the service is much less direct - lack of signaling mechanisms about performance - also, the nature of social sector is not to build new markets and demand, but to eradicate demand.OECD 2016 McNeill Ritchie, S. 2011. Social Franchising: Scaling up for Success: The Shaftesbury Partnership http://www.shaftesburypartnership.org/sites/default/files/pdf/Social-Franchising-Scaling-Up-for-Success.pdf
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Corporate social innovationWorld Economic Forum (2016) Framework for Social innovation; Kayser and Budinich (2015). Scaling up business solutions to social problems; London, T. (2016). The BoP promise. Building businesses with impact and scale.
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Empirical Evidence of Scale Outcomes and Impacts
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Case studiesScaling literature is increasingly drawing on in-depth qualitative case studies - although there is a recognition that studying scale is difficult and takes significant time. Bloom and Smith (2010) use six case studies to illustrate their framework for drivers of scale. Rockefeller (2018) provides short case studies of collaborative funding models. Seelos and Mair (2017) provide in-depth case studies of socail enterprise to discuss innovation and scale. Deiglemeir and Greco (2018) study draws from 10 examples from Stanford University’s Center for Social Innovation; SI-Drive, and Tides.
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Survey evidenceUK survey finds 90% of social enterprises have tried to scale by attracting new customers or clients, and developing new products and services – almost half diversified into a new market and one third into new geographic areas – only 21% could attract new investment, franchising is most significant strategy. Weber et al 2015 survey social enterprise from six European countries to better understand the context and circumstances under whihc scaling strategy will be most successful. CASE (2003) studies social enterprises that scale, finding that while economeis of scale is cited as primary motivation for scale, affiliates and branches do not benefit from economies of scale. They suggest that one reason for this lack fo scale economies may be that the benefits of specialization within units may be outweighed by the extra coordination costs bwetween- units. The authors also find that while organizational learning was not cited as a primary driver of scale, it was a primary benefit - three factors that capture various aspects of learning were consistently rated significantly higher as realized benefits: 'local sites have become more effective by learning from each other', 'more experience has led to more effective programs and operations', and 'more innovation as a result of local experimentation'. CASE (2003) survey data of nonprofits - over 200 responses, used to explore preferred growth strategies and motivations, challenges and benefits. Benefits of expansion: brand and organization learning – brand building and learning lead benefits realized by all respondents regardless of structureWeber, C., A. Kröger and C. Demirtas (2015), Scaling Social Impact in Europe: Quantitative Analysis of National and Transnational Scaling Strategies of 358 Social Enterprises, Berthelsmann Stiftung, Gutersloh, Germany
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Others
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Other Resources
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“The world is scattered with pilot projects trying to work holistically”. Q&A with Karen Levy of Evidence Action, the NGO that delivers solutions to hundreds of millions of people.
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The only scheme proven to end poverty – but too bespoke to scale? Pilots have worked in 99 countries, but that doesn’t mean it can reach billions.
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Data, nudges and design are changing the way we reach scale. Many governments and NGOs lack the ability to capitalise on big data.
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Britain’s Studio Schools: when best practice met political reality. Specifically designed to scale up, the experimental schools soon ran into trouble.
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Reach Up: how a Jamaican early childhood intervention swept the world. A 50-year-old program from Kingston has been trialled in 10 countries.
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How to scale up social impact — the challenge of the 21st century. An introduction to the critical policy questions, controversies and new ideas around scaling.
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https://www.greenbiz.com/article/can-we-use-start-strategies-scale-social-impact
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Cousa, G. 2016 . In Order to Scale Impact, Adapt Insights from US Director Greg Cousa after attending The Skoll World Forum http://www.the-icsf.org/2016/06/10/1702/
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https://ssir.org/articles/entry/the_quest_for_scale
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http://cega.berkeley.edu/events/the-science-of-scaling/
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https://www.nesta.org.uk/report/knowledge-and-learning-for-social-projects-aiming-to-grow-or-scale/
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http://spore.cta.int/en/dossiers/article/there-is-no-blueprint-for-development.html
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https://bernardvanleer.org/news/apolitical-puts-the-spotlight-on-scaling-social-impact/
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Cooley, L. and Linn, (2014). Taking Innovations to Scale. https://www.msiworldwide.com/project/new-scaling-up-paper-describes-lessons-learned/
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