The Twittersphere is abuzz about the latest article in Harvard Business Review, Why the Lean Start-Up Changes Everything, by Steve Blank. “Lean Start-up” (which was coined by Eric Ries in his book) is the alternative to writing a business plan before starting a venture. Instead, it is a hypotheses-driven approach for finding a sustainable and scalable business model. It includes three steps – developing the business model (build), eliciting customer feedback (measure), and developing the product intentionally (learn). While we love this notion, especially for social enterprises (see next week’s article on Social Enterprise 101), it is not 100% transferable to the sector without some modification. We adapted the model for the social sector with the following six steps:

  • Step #1: Isolate Problem(s) – Many social sector organizations start with the notion of “what if?” Passionate individuals see a need in the social sector and want to fill the void. After first identifying the problem, the next important step is to get to the root cause of the problem. Ask yourself: Why does the problem exist? Are you addressing the symptoms or the actual problem? Why isn’t anybody else addressing it? Once you have answers to these key questions, you can then develop your overall hypothesis around the social solution, also known as a theory of change.
  • Step #2: Form goals, target population, and outcomes – Next, it is important to fill in the details on how you will achieve your theory of change. Ask yourself: What are the goals of the program/organization? Who will you serve? How will they be served? What do you hope to achieve over time? How does it lead to impact? One of the most helpful tools to build your framework is a logic model.
  • Step #3: Learn about existing practices – Once you have your theory of change and logic model (as you see it), conduct secondary research on your idea to uncover what others nationally are doing. You may believe your idea is unique, but it is just as important to confirm this hypothesis. Research: What works with the target population? What research exists around your idea? Are there promising and/or best practices? What can be learned from others? Once your research is complete, consider revising your theory of change and logic model.
  • Step #4: Scan local environment – Now that you have a better understanding of the need and execution, conduct an environmental scan of other nonprofits, government agencies, and businesses to understand what others locally are doing, and to find possible partners and funders. Find out: Who is also working with the same target population? Are others providing a similar idea – either in execution or outcome? How are you alike or different? What funding exists to support the idea? Once your scan is complete, you’ll have a better idea of whether there is a market for your idea and if your idea is fundable. If the market isn’t promising, you might revise your idea and/or consider ways to partner with others on the unique aspects of your idea.
  • Step #5: Assess internal capacity – Now that you know what it takes to be successful, conduct an internal review of your capacity to execute. In your research, you have found what works, what is fundable, and how you are different, so you by now understand your unique value proposition and possible business model. Decide: Is it worth pursuing? Is it consistent with your mission? Are you the best equipped locally to pursue? How will it impact current work? Do you have the resources and/or expertise to pursue? If the idea has a market, but you are concerned about internal capacity, consider ways to partner or share your idea with others. Sometimes is it more practical and efficient to incubate an idea within an existing organization than to start an idea and an organization at the same time.
  • Step #6: (Re)design most impactful, complimentary program – Once you have covered all the above steps, your idea will be initially “pressure-tested.” You can then turn your idea into action by developing the most meaningful delivery of the program for your community. Then, once you start the program, it is important to support continuous improvement to redesign the program as needed.
Lean start-up was invented to help existing companies and start-ups go to market more quickly and deal with rapid change more efficiently. The social sector is feeling this pressure as well – to innovate, to create impact, and to become sustainable. We hope the sector will employ this isolate-form-learn-scan-assess-(re)design process as an enhancement to the build-measure-learn cycle and enjoy more rapid prototyping and meaningful results.
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