Fashion magazine and bloggers are constantly rating what is in and what is out. (In case you are wondering, fuchsia is in, pastels are out.)  The social sector has the same discussion – based on the conferences this spring (SkollSocial Enterprise Alliance Summit, and Social Impact Exchange) the trend appears to be that innovation is out and impact is in. While this dichotomy brings attention to an important issue facing the sector, it does little to explain the rationale behind the trend – and the rationale makes all the difference.

Our founder, Suzanne Smith, is known for saying in her seminars “we don’t live in an either/or world anymore. We live in a both/and world.” She explains that genius isn’t about adopting one philosophy or another, but instead understanding (and hopefully getting comfortable with) the tension and learning to successfully navigate it. This tension can be between profit and mission for social enterprise or innovation and impact for social entrepreneurs.

Innovation is important for the social sector, but is often misunderstood. We define innovation as “something or some way different that has the potential for impact.” We emphasize that innovation isn’t always related to something brand new; in fact, it is often mistaken for earlier forms of invention or creativity. When it comes to actually applying innovation, we are big fans of “adaptive innovation,” which is borrowed from the commercial world’s continuous cycle of create-learn-repeat. Sometimes the smartest and most impactful way to be innovative is not to invent something new, but to reapply an idea in a new way. For example, cell phones themselves are not innovative anymore, but the use of cell phones to diagnose diseases in developing countries is.

Impact is also important for the social sector. We have said before in past blogs, that “impact is the new bottom line for the social sector.” While the concept of impact had little meaning in the last decade, impact means more now with rapidly advancing social sector research and increasing demand for evaluation. While it is a paradigm shift for the sector, it means our progress can be exponential. Another benefit of impact is that it leads to additional sources of capital via impact investing and social impact bonds.

We now know so much about what works. And, when we don’t, people are working hard to innovate, evaluate, and take impactful innovation to scale (e.g. Social Impact Exchange S&I 100). The tension is knowing the difference and evolving toward impact when research shifts. The same organization can have one program where best practices are well-established and should be followed to maximize impact, but also have another program where best practices are virtually non-existent and evaluation is key to figure out what works. In that case, it pays to follow national research carefully to evolve your program as new information and research emerge to increase your chances at impact.

So, is impact in and innovation out? No, that is a false choice. We are reminded of the Edison quote – “genius is one percent inspiration, and 99 percent perspiration.” In the social sector, we should modify it to “social genius is 20 percent innovation, and 80 percent impact.”

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