NextBillion - An Initiative of the William Davidson Institute at the University of Michigan

The work of companies like Yelp and Amazon has transformed the world of business through the creation of an ongoing process of dialogue and response. These “feedback loops” empower consumers and enable companies to innovate, allowing them to constantly provide new and better products and services that directly address consumer interests. Well-functioning private markets excel at meeting customer needs based on their continual feedback.

But with social change organizations similarly desperate to find fitting solutions for the people they are trying to help, it’s curious that they haven’t been able to tap into this methodology. Why can’t social change organizations implement feedback programs that are equally effective? Is it possible to create similar mechanisms that require social change organizations to listen to what communities want—and then act on what they hear?

In 2012, the United States provided $30 billion in official assistance to developing countries—equal to the revenues of a large Fortune 100 company. Additionally, philanthropic giving by foundations, companies, and individuals to initiatives within the US was around $300 billion. But unlike the customers of a Fortune 100 company, consumers of this aid usually do not have an avenue for providing feedback in the form of “sales data.” Social change programs are by and large designed by “experts,” often with very little input from community members. This is analogous to Apple engineers trying to develop a new iPhone with very limited market data about what customers liked and didn’t like about the previous models. We can be sure that there would be no iPhone 5s without such consumer feedback. And the lack of such feedback in the social sector has prevented global development initiatives from innovating as quickly as Apple.

A network of social change organizations, including Ashoka, is taking a deep look at the sector to identify what’s missing. We call this network “Feedback Labs,” and so far we’ve identified three core requirements for change:

1. Create pathways for broad-based feedback.

The prevailing mindset of the development community is “We know what people need, we know how to deliver it, and we are here to give it to them.” Experience has demonstrated that this is simply not true. At a minimum, the systems need to be in place so that people are technically able to provide feedback. Citizens also need to feel that what they say will make a difference in the programs and, importantly, that they will not suffer retribution for speaking up. We must also take special care to ensure feedback from the women, the very poor, and other often-marginalized groups in society.

2. Combine the wisdom of the crowds with the knowledge of experts.

Effective feedback loops promise to increase the power of regular people, but local decisions can often benefit from the perspectives of experts who have a deeper knowledge of specific development topics in addition to experience implementing similar programs in other settings. The goal of new feedback loops should be to create more open and more informative conversations between citizens and experts about what investments and services would have the biggest impact on well-being.

3. Build strong incentives to act on feedback.

To be effective, feedback loops must be “closed”—they must result in altered decisions and behaviors from aid providers, governments, and implementing agencies. Project managers at the World Bank and other development organizations often are pressured to have as many projects approved by the board as possible and to implement them within a limited time frame and budget. But how can we create feedback loops that are designed to give managers incentives to slow implementation when it is necessary to correct problems? Iteration of programs based on feedback from citizens should be rewarded by leaders, boards, and peers. Because when feedback loops are functioning as they should, they result in the greatest affirmation of all—programs that make richer and more lasting improvements in people’s lives.

Dennis Whittle is executive chairman of Ashoka Changemakers. He was co-founder and CEO of GlobalGiving and, earlier, principal economist at the World Bank where his team created the Development Marketplace.

Elizabeth Christopherson is the president and CEO of Rita Allen Foundation.

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This is the first in a series of essays on the power and potential of feedback loops to dramatically increase the social benefits of development assistance (read the second post here). It accompanies a call for projects related to feedback loops in an Ashoka Changemakers competition, Closing The Loop: Feedback for Results. This work is being catalyzed by Feedback Labs with support from the Rita Allen Foundation.