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Constraints to Scaling


Case Study Discussion  Managing Scaling Up Challenges  of a Program for the Poorest: A  Case Study of BRAC’s IGVGD  Program   


What is scaling social  impact? 


Why scale?


Scaling can achieve…   

Social / programmatic purpose  

Financial   

Sustainability of enterprise  Generate surplus money  Donor Power 

Operations  

Impact more clients Accomplish mission

Economies of scale  Efficiencies  / competitive advantages 

Cultural   

Strategic relationships Attracting quality Professionalism / legitimacy / brand   


Is Bigger Better?  Women’s Transition  Project (USA)  

Micro Fond (Mali) 

Mission: transition  women out of addiction  and homelessness onto  productive lives.   Scale: 9 homeless  women + 5 of their  children Services: housing,  vocational training,  counseling, medical, life  skills Cost: $381,060 per year  

 

Mission: foster economic  opportunities among poor  women entrepreneurs Scale: 3,300 poor women Services: micro­financial  services (loans, savings) Cost: $320,000 per year


!!! Scaling a social initiative  is Not necessarily scaling  social impact  > Size = >Impact


When does scaling social  impact require growing the  social initiative or  organization?


When  impact requires … 

 

  

adding more staff (new communities or  new services) multiple locations  financial sustainability based on earned  income (selling more) more infrastructure achieving economies of scale  stronger brand / competitive advantages   


When is small most  appropriate?


When…

Local and/or bespoke solution   Close community connections  High stakeholder engagement  /democratizing change process  Speed of action/responsiveness 


Can you be big and small at  the same time?


Scaling Social Impact Goals        

Increase quantity (breadth) Increase quality (depth) Diversify communities served Diversify service offered  Expand geographically Promote a model Influence public policy Establish a social movement From CASE / Dees (2006)  


Examples 

BASIX 

To expand coverage to provide services and  benefits to more people 

Grameen 

To expand products and services to provide broader  impacts to primary stakeholders 

Microfinancial services 

Grameen phone; Grameen Technology, etc.  

Fair Trade Foundation 

To change behaviours of other actors with wide  social impact 

Fair Trade products  


Opportunities for Scaling


Integration along Value Chain Procuring  Supplies

Fair Trade

Employing Workers

Designing Product or  Service

Producing Product or  Service

Dis­ enfranchised Groups

Delivering Education

Green Techniques

Marketin g to  Target

Micro­ finance

Adapted from Dees (2002)  


Via Services & Markets Market

Existing Services  Existing Market

New Services  Existing Market

(Quantity / Breadth) 

(Diversify service) 

Existing Services New Market 

New Services  New Market

(Diversify community expand geography) 

(Diversify service  and geography)  Service


Strategies for Scaling


Scaling Up: Models 

Organizational 

Overarching structure to mobilise resources 

Program 

Integrated set of actions 

Oxfam

Cats Club / Credit With Education 

Principles 

Guidelines and values to inform action 

Eco Clubs / Net Impact / YEO Dees, Battle Anderson, and Wei­Skillern (2004)  


Scaling Strategies (Internal) 

Increase Effectiveness and Performance  

Organizational Branching / Replication  

Kamurj / CLASS 

Volunteer Engagement Expansion  

ASA / Ashoka / YMCA

Merger / Acquisition 

Capacity building 

Mobilize different locations to deliver services  Habitat for Humanity / Rotary 

Technology Delivery 

Services through technological vehicles 

eChopal

Adapted from CASE (2006)


Scaling Strategies (Affiliation) 

Licensing or Franchising 

Micro­Franchising 

Scojo One Roof / Hindustan Unilever

Partnerships, Alliances and Networks 

Collaboration to deliver new products, locations or  customers 

FFH / NFTE 

Creating networks of independent orgs  

STRIVE / Women’s World Banking  Adapted from CASE (2006)  


Scaling Strategies (External ­ 1) 

Knowledge Dissemination  

Sharing information/resources (internet,  publications, conferences, etc.)  

Technical Assistance 

Social Edge  Virtue Ventures 

Research and Public policy 

Think tank / research center 

WRI / Skoll Centre

Adapted from CASE (2006)


Scaling Strategies (External­2) 

Advocacy and Influencing Public Awareness 

Communications to educate public opinion or  influence action on a social issue Lobbying 

Council on Community Clinics / Housing Works / MV  Foundation 

Spurring Competition through Market  Development    

Competitors: private sector/NGOs/Government Imitators Substitutes  

Adapted from CASE (2006)


Spreading Impact 

Dissemination 

Affiliation 

Creation of network agreements

Increasingly Centralized

Branching 

Information/assistance to support  innovations

Local sites

Internal growth 

Performance / efficiency  Dees, Battle Anderson, and Wei­Skillern (2004)  


Resources and Risks   Scaling  Model 

Internal

Risks

Resources

Efficiency /  Performance

External

Affiliation

Branches

Franchise Licensing

Partnership Network

Dissemin­ ation Advocacy

Cost







Time









Risk of  Failure









Risk of  Losing  control  vision  







UnLtd (2006)   


Cultural and mission implications 

Challenge or change strategic fit   

Mission and program / methodology Stakeholders Social market 

Challenge or change culture     

Small vs. large Centralized vs. decentralized  Informal vs. formal  Reactive vs. proactive   


Organizational Implications 

Investments and/or capacity building to  scale:       

Managerial skills Metrics Accountability Board development  Infrastructure  Delivery structures: hierarchy or flat MIS  

Formal processes / procedures / planning Transparency  


Financial Implications  

Costs of scaling  Capital for scaling 

Limited capital or funder preferences encourages  opportunism (distraction / mission creep) Access to capital may dictate method, scaling  strategy and speed of scaling (i.e. grant/equity,  debt, etc.)

Trading / earned income can threaten grants  financing   


External implications 

Partnership 

Government relations / laws 

Availability of partners and their issues may  shape/influence scaling strategy Time/investment required for partner and  network relations  Legal and regulatory environment may  restrict certain scaling options

Supply chain 

Gaps or weaknesses in supply chain may  require development and/or investment  


Scaling Framework


Purpose of scaling 

Why scale?    

Social Impact? Mission fulfillment? Stakeholder / donor pressure? Sustainability?      

Economies of scale Income / profit Cost efficiency Strategic relationships Legitimacy / brand  Attract more donors


Mission and Goals 

How does scaling align with, or is  limited by, the mission?  What are the goals of scaling?  

Social impact Sustainability

Compatibility of scaling with  organizational culture? 


“Products” and Market 

What are you scaling? 

What are the needs of social market?  

 

Services/products, methodology, information,  organization, program, principles   Specific/niche General/comprehensive

What is the size of the market? How is demand assessed? 


Sustainability 

What is the sustainability model for scale?    

Who pays? (customer)  

How will sustainability be achieved? What is the anticipated funding mix?  Fundraising strategy as it relates to scaling?  What are the financial characteristics of the  market? Are payer and client different? Dependence on one “customer” (i.e. government  or donor) or several customers?

Access to capital for scaling? 

Type, size and duration?  


Operational & HR Requirements  

What are the operational requirements?    

How will scaling be managed?   

Systems / procedures / policies?  Infrastructure? Do you have the “right” leadership to scale? Board and board development? Flat or hierarchical delivery structure? Middle management and/or specialize staff? Partnerships, etc.?

What and how will you measure scaling  innovation?  


Risks and Special  Considerations? 

Legal / environmental obstacles or  restrictions? What are the risks     

Clients? Stakeholders? Environment? Community? Brand?

How are risk and special considerations  addressed in scaling strategy and business  model?    


What kind of growth?


Organic Growth  Money Capacity Infrastructure 

Time


Progressive Growth  Money Capacity Infrastructure 

Time


Step Growth Money Capacity Infrastructure 

Time


Which Scaling Strategy? Methodology

Internal

Affiliate

External

Performance/ Branches

Franchise / licensing

Dissemination /  Advocacy

Customized

Social Market  Local / esoteric  Complicated  Operational  need Infrastructure

Niche/replicable

I.P.; knowledge

Specific needs Targeted geography

Broad; not bound  by geography  Knowledge­ based  Systematized Low costs

Requirement s Financial  Req. HR

Comprehensive

Partner­based Specialized

Medium to High

Medium costs

Individual Leader

Professional Management 

Administrative

Value

Implementation

Process/product

Information

Culture

Closed; centralized

Decentralized

Open

Type of  impact

Depth, Breadth  Services; comm.

Promote model; geography  

Movement Public policy


Organizational Factors for Scaling  Central 

Affiliate Simple; proven

External

Business Model 

Complex

Easy to explain

Startup Costs

Medium to high  Medium 

Low to medium 

Internal Controls 

Medium

High

Low

Time for success

Short

Medium

Long

Human resources   Comprehensive Specialized

Targeted

Governance

Strong

Strong / diverse

Loose

Type of growth 

Organic / Step

Step

Progressive

Clarity of Vision 

Difficult to  communicate

Clear; shared  across partners 

Simple /  Interpreted

Measurements

Complex / small Clear / attractive  

Elusive / quantity


Market Factors for Scaling  Central  Market Need  Small numbers &  deep needs Customer  Demand

Affiliate

External

Large / broad  Broad; low depth  Specific/niche need of need

Needs defined by  Needs driven by  NGO; Clients can’t pay clients / partners

Needs driven by  clients / users

Legal environment

Enabling; critical for  Enabling;  Not critical for  success  provisions for  success  Economies of  Little­ customization partner   Yes through partner  Required  scale  Some ­ branching   infrastructure possible Clear niche /  Geography or client;  Yes; well defined  Exists with  advantage  not clear advantage concept/model  competition  Purchaser /  funder 

External funder or  third party 

Client or partner  

Funder or user


Success Factors for Scaling   

    

Viability / sustainability  Leadership potential  A large market need well served by social  entrepreneur’s offering Strong social programs  (core competencies)  Favorable legal environment Competencies of the management team Appropriate funding available Compelling, easy to specify, proven model  (affiliation)   


Scaling Plan 


Where is your organization  now?


Life Cycle Changes Maturity Growth

GROWTH

Introduction

Growth Survival Decline

Start up

TIME


Development Stage…  Start Up

Growth

Maturity

Vision Structure

Short­term

Long­term

Open­ended

Pilot, small,  flexible

Institutionalised, opportunistic

Sustainable, Strategic

Governance

No board

Managing board

Governing/ fundraising board

Management

Entrepreneurial

More formalised  roles

Professionalised

Operations

Concept development

Full programme  development

Operational expansion

Finance

Small grants,  private funds

Major grants, self  Institutional  financing lending, equity

Impact

Low

Medium

High


What is the social impact  you are trying to create? 

Setting Goals for Scaling 


Which Scaling Strategy?


Internal Scaling Strategies     

Increase Effectiveness and Performance  Organizational Branching / Replication  Merger / Acquisition Volunteer Engagement Expansion  Technology Delivery


Affiliation Scaling Strategies Licensing or Franchising  Micro­Franchising   Partnerships and Alliances   Networks 


External Scaling Strategies Knowledge Dissemination   Advocacy  Influencing Public Awareness 


How will you grow? 


Funding Needs?

Investor Perspectives, Tuan, Emerson, Roberts Foundation 2000


Introduce Scaling Questions  Homework

HUD Social Enterprise Pilot  

 Services: housing, vocational training, counseling, medical, life skills  Availability of partners and their issues may shape/influence...

HUD Social Enterprise Pilot  

 Services: housing, vocational training, counseling, medical, life skills  Availability of partners and their issues may shape/influence...

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