Scale vs. Systems Change: Three Ways Impact-Led Organisations Can Achieve Both
Social enterprises and other impact-led organisations — and the social impact sector more broadly — are increasingly recognising that scaling a solution does not always result in lasting change. These businesses and organisations often scale their direct interventions without addressing the root causes of the problems they hope to solve. In so doing, they fail to disrupt the system as a whole, and the challenges they’re addressing remain unresolved. This realisation is driving a growing, sector-wide focus on systems change.
This may seem to place impact-led organisations in a dilemma, forcing them to choose between scaling their own work and attempting to change the broader system. But systems change and scaling a solution often involve interlinked goals that can be approached concurrently. So if these organisations have the right funding, mindsets and support, they can successfully pursue both pathways to make a meaningful dent in societal problems.
Harambee Youth Employment Accelerator (Harambee), a social enterprise in South Africa tackling youth unemployment, is a powerful example of this. Previously, Harambee exclusively offered a demand-led skilling program delivered directly to young workers, which focused on training them in soft skills as well as specific skills for given jobs — an approach that allowed it to enable over 950,000 jobs and other earning opportunities. To build on this impact, it now simultaneously offers a systems change-focused model, in which it works alongside industry and government to create an inclusive hiring environment in which employers are incentivised to hire young people. Harambee knows that its experience with direct service delivery gives it the expertise and credibility needed to influence and support government and employers. By working closely with these stakeholders to build an enabling environment for young workers, the enterprise aims to ultimately make a much bigger dent in the problem of youth unemployment.
In our work at Spring Impact, the 100x Impact Accelerator and Harambee, we’ve seen that it’s possible to scale a solution and achieve systems change simultaneously, if organisations embrace the right approach. This involves three key components: defining an end-game, leveraging lean experimentation and rethinking success metrics.
Defining a Clear End Game
The first component is defining a clear end game, i.e., determining the most effective way to scale your impact. That’s what 100x — the world’s largest impact accelerator for social ventures — does whenever a new organisation enters its accelerator programme. This process involves helping founders to first consider what needs to happen to disrupt a system, and then to determine what role their organisation can play in that critical work.
One way an organisation can frame potential impact scaling ambitions and end games is to think of them as scaling “up, out or down.” Scaling “up” involves influencing power structures such as governments, markets or larger international institutions, with the intention of changing the “rules of the game.” Scaling “out” is all about multiplying the reach of solutions, such as through open sourcing, franchising or other means of establishing widespread access to these solutions. Scaling “down” is best understood as influencing hearts and minds: changing culture and societal norms and understandings through methods like awareness-raising campaigns.
From day one, Harambee’s end game has been to support the government’s efforts to solve the problem of youth unemployment at a systems level in South Africa. This meant it prioritised working with a government partner early on to test its model at scale. And years later, when an opportunity emerged during the COVID-19 pandemic to become a government service provider, Harambee didn’t hesitate. It temporarily turned its contact centre, staffed by young people for the purpose of supporting youth job seekers, into a call centre that supported the national Unemployment Insurance Fund’s COVID-19 payouts. This represented a complete shift from Harambee’s core business, but it offered a powerful way to build trust and credibility with the government, and to get an insider view of how government systems work — something that’s essential for the enterprise to achieve its end game. In addition, this project enabled Harambee to experiment with the introduction of an in-bound call centre channel, which has since been permanently adopted.
Leveraging Lean Experimentation
The second component is lean experimentation. Spring Impact, whose mission is to support organisations in scaling up their social and environmental impact, has articulated this approach in its mantra: “test, don’t debate.” It encourages organisations to go out into the real world early and frequently to understand whether their assumptions about their customers, beneficiaries or other stakeholders are actually valid. Organisations that practise the discipline of tracking the data they’ve collected through the lean experimentation process — i.e., the tests they’ve conducted to validate their assumptions in the real world — are better able to navigate the uncertainty, evolving situations and emerging challenges that are inevitable in social impact work. These organisations can then respond to this data by either iterating, pivoting or scaling.
Harambee is renowned for lean experimentation, which it is able to do because of its proximity to its stakeholders. Via its call centre, which is staffed by previously unemployed youth, Harambee makes contact with young people an average of 3,500 times each day. This provides the enterprise with a rapid feedback loop to test new ideas, and allows it to capture huge volumes of data on young people’s experiences in trying to access the labour market, which helps reveal how the system needs to change to best serve them. One key to making this approach successful is for the organisation to keep its focus on the problem, and not fall in love with its current solutions. It’s essential to continuously iterate solutions, based on what the problem requires.
Rethinking Success Metrics
The third component involves rethinking success metrics. To achieve systems change, organisations need to move away from the sort of “vanity metrics” that are often involved in scaling a solution (e.g.: the number of people reached), which overwhelmingly incentivise organisations to focus on proving they are already doing good work.
Instead, the social impact sector must prioritise metrics that encourage the testing and learning necessary for effective systems change. Key impact metrics that Harambee focuses on in its systems change work include “what different mindsets are we seeing among employers?”, “how engaged is the government in the problem of youth unemployment?” and “are there enough incentives in place for employers to hire inclusively?”
The Challenges of Seeking Both Scale and Systems Change
Embracing these three components to scale a solution while seeking systems change doesn’t guarantee that the journey will be easy. Systems change is slow, uncertain, complex and hard to control, which means striving towards this goal often requires a radically different way of thinking and working. Harambee has felt this keenly: It has always been an agile and responsive organisation, proud of its operational excellence — but working on systems change has required its team to slow down and embrace the challenge of influencing things they do not control. Despite these challenges, Harambee has seen some promising results from its efforts: Its model to connect young people with learning and earning opportunities has been adopted at a national level in South Africa, and it is an anchor partner in the country’s plan to address the youth unemployment crisis.
Pursuing scale and systems change simultaneously also presents challenges for raising capital. While many philanthropic funders want to support entrepreneurs’ efforts to create systems change, very few provide the core, multi-year, patient, flexible funding that makes it possible. And impact investors, who need to see a clear road to profitability, often perceive systems change as a distraction from building a sustainable business model.
We should not underestimate just how hard it is for impact-led organisations to focus on these dual missions of scaling a solution and changing a broader system. But if organisations adopt a lean impact mindset, set a clear end-game and reimagine their success metrics — while (critically) receiving the right kind of funding and support — it is possible.
This article was produced following a side event co-hosted by Spring Impact, 100x Accelerator and Harambee Youth Employment Accelerator at the Skoll World Forum 2023. Thank you to the Skoll Foundation for bringing together so many incredible leaders and change-makers for a week in Oxford, to Marmalade for generously hosting the Skoll ecosystem events, and to everyone who made the time and effort to join our event at the Forum.
Emma Colenbrander is the Director at Spring Impact; Nell Lemaistre is the Head of Programme at 100x Impact Accelerator; Kasthuri Soni is the Chief Executive Officer of Harambee Youth Employment Accelerator; Sharmi Surianarain is Chief Impact Officer at Harambee Youth Employment Accelerator.
Photo courtesy of Singkham via Pexels.
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