Organizational and institutional innovation on and around societal challenges

Johanna Mair

Milano

September 3rd 2015

The journey of social innovation

Advance knowledge on social and economic progress by combining rigor and relevance to study organizations that tackle societal problems

• Understand field dynamics

• Understand how a context ticks and the opportunity space for organizations

• Understand discourse, meaning and practices

Research on Social Innovation as „problem-driven“

Theory

Phenomenon

Research Process

• Focus on problems - more likely to find new organizational forms and other societal innovation

• Casing – defining the boundaries of the phenomenon

• Find gaps in our theories • Interrogate concepts, refine

theories and make them more robust

• Apply available theory and knowledge

• Go out of our methodical comfort zone

• Iterate in a less patterned way between research questions, theory, and data

• Explore the emergence of an alternative practice of philanthropy and position its novelty in relation to the institution it challenged

• Study venture philanthropy as a novel and controversial practice

Understand field dynamics

Background

• Venture Philanthropy Organizations set out to “revolutionize” the way of giving; more specifically they challenged the established model of organized giving.

• Venture Philanthropy (VP): an approach to charitable giving that applies venture capital principles – such as long-term investment and hands-on support – to the citizen sector

• We analyzed the trajectory of VP in Europe real time and in-situ . Were puzzled by the dynamics we observed, i.e., over time the contestation over models vanished and advocates of both models started to join forces: common projects, create new methods, or develop shared aspirations.

• Not a case of retrospectively making sense of dramatic change or replacement of one model but an opportunity to capture more mundane processes accounting for how fields evolve and as in our case transition from opposition to mutualistic co-existence.

Stylized models of organized giving Traditional philanthropy Venture Philanthropy

Actors Grant Making Foundations Venture Philanthropy Organizations

Decision maker Board / foundation manager Intermediary (fund manager)

Professional background Not-for profit and public sector Venture capital and business sector

Domain Philanthropy/Social Sector Business

Defining practice Make grants to a large number of

projects in an effective way

Invest money and provide hand-on

advice based on business skills to

non-profit organizations and social

enterprises

Source / bundling of resources Endowment Fund - Wide range of investors

Purpose Social change Efficient organization or sector

Meaning of a gift

Reciprocity between giver and

receiver

Pretend free gift

‘Camouflaged paternalism’

Unapologetic about no free gift,

claim partnership

Institutionally diverse models …. what it means to give and how to give

How do field evolve? Unpacking Institutional processes

• Situating the phenomenon in current theoretical debates.

• Organizational theory’s take: the entry of new institutional model, consisting of a distinct repertoire of prescribed practices and underlying assumptions, values and beliefs, in an established field of activity.

• Rivalry, competition and contestation within fields as the dominant image.

• Origin of contestation resides in distinct “institutional logics” associated with professional backgrounds that imply distinct cultures with shared meanings and practices (Zilber, 2002; Tilcsik, 2010; Thornton, 2002).

• Logics as extra-local forces make it difficult to capture the micro-processes involved in the dynamics of field evolution (McPerson & Sauders, 2013).

• Revive long research tradition of Interactionism (Barley, 2007). – Focus on actors, interactions and situations;

– Institutions as a product of and resource for interaction and negotiation in everyday life

– Institutionalization as a process and importance of recursive processes

The “casing” of our phenomenon

The entry of venture philanthropy (VP) as a new model of giving in Europe: Applying venture capital principles –long-term investment and hands-on support– to giving.

Openly rationalized approach to giving encountered opposition from organizations following a traditional philanthropy model, who perceived the new model as either implicit or explicit criticism of the practices and the set of values and beliefs of their model.

Our research question:

How can initial conflict among two institutionally driven models evolve into mutualistic co-existence?

Analytical strategy

Focus

• Events as relational spaces -- Interaction among dissimilars to push field projects

• Convening – actively organizing an event

– analyzing who, why, about what, where and when

Stages

• Data collection (observations, interviews, newsletters, archival data)

• Coding of data (preliminary patterns and themes) – field dynamics unfolding

• Developing of narrative with convening and events as relational spaces providing the empirical anchor

Narrative

1. Opposition in the field of Organizational Philanthropy – Initial conditions

2. Process of field transition – Neutralizing differences

3. Mutualistic co-existence – Collaboration and mutualistic outcomes

Year 1990s, 2000-2005 2006-2009 2010-2012

Key events VP takes off in United States,

principles spread to Europe

First VP organization set up in

Europe

Five venture capitalists set up EVPA.

Initial exploratory conference.

EVPA opens for membership

First annual conference.

First trustee from TP appointed.

Second annual conference.(1 day)

First invitation only workshop. (2 days)

Third annual conference. (2 days)

First member-only workshop on performance measurement. (2

days)

Member-only workshop on fundraising .

Fourth annual conference. (2 days)

Member-only workshop on setting up a VPO. (2 days)

Member-only workshop on performance measurement. (2

days)

Second invitation only workshop. (2 days)

Fifth annual conference. (2 days)

Invitation-only workshop, Venice, (2 days).

Workshop on financing instruments (2 days).

Sixth annual conference (2 days).

Invitation-only workshop, Venice, (2 days).

Workshop on performance measurement, (2

days).

Seventh annual conference (2 days). Invitation-

only workshop, Venice, (2 days).

Workshop on performance measurement,

Dublin, (2 days).

Eighth annual conference (2 days).

Data sources

and scope

Retrospective data collection:

Newspaper articles, practitioner

papers, historical accounts from

interviews, EVPA strategic plan, EVPA

newsletters (61 pages of material)

Conference program, powerpoint

presentations, independent reports,

participant lists (137 pages)

Primary field work:

Conference observations (2006-2009)

Conference program, presentations, independent

reports, participant lists, news articles, field notes (753

pages)

Workshop observations (2006-2009)

Programme, presentations, participant lists, verbatim

notes (586 pages)

Interviews (2007-2008) (167pages)

EVPA founders (3)

VPO directors (6)

GMF (2)

Philanthropy expert (1)

Formal and informal interviews with 124 workshop and

conference participants.

Archival sources (753 pages)

Newspaper articles, practitioner papers, historical accounts

from interviews, EVPA directory, EVPA newsletters

Deep immersion in VP:

One of the authors started working for EVPA,

collecting data on a continuous basis

Data and sources

Findings

• Opposition in the field of Organized Philanthropy

• Making Models Accessible Front Stage (critical to overcome

opposition)

• Deconstructing Models Back Stage (critical for mutualistic co-

existence)

• Interplay between Front stage and Back Stage (propels social

dynamics and neutralization of differences)

– Reframing the models

– Refining the practices

• Toward mutualistic Co-existence – Combining practices in joint projects

– Creating new and common methods

– Developing shared aspirations

Findings

Evidence for mutualistic relationships Mutualistic existence Exemplary quotation

Joint projects

Combining different but

complementary practices

Common methods

Combining practices from diverse

sectors into new methodologies

Shared ambitions

Developing common goals by

adding a layer to key practices

Preserve meaning of practices and combine in common projects

Esmée Fairbairn Foundation has also recently entered into a partnership with Impetus Trust (a VPO) […]

Impetus Trust acts as the lead investor, utilizing its strengths to conduct due diligence on investees and

provide supportive development assistance to them. EFF brings knowledge of the criminal justice sector

and the organisations that work within it. In the area of offending in the UK, EFF has significant sector

knowledge. (EVPA publication: Strategies for Foundations (Metz Cummings & Hehenberger, 2010)) (21

paragraphs coded in newsletters)

Strip meaning of old practices and assemble new practices

Noaber Foundation realized the need to ensure that their social ventures keep their focus on the social

mission. This involved building in remuneration schemes that would link any financial return to investors

to the social impact achieved by a portfolio social venture. If the company doesn’t meet its impact

targets it is not allowed to pay dividends to its shareholders. (EVPA publication: A guide to venture

philanthropy for venture capital and private equity investors (Metz Cummings & Hehenberger, 2011) (12

paragraphs coded in newsletters)

Enhancing the meaning by adding higher purpose

Once they started to consider the issues around the social sector, they realized that if they wanted to

make an impact on a social problem, and that after all is the reason for working collectively, to make an

impact, then even five million was a drop in the ocean... In order to make an impact, in order to swing

the needle on something, they had to pick one particular issue - so they picked young people's full

potential... (Interview with VP director) Effecting “systemic” change (10 paragraphs coded in newsletters)

Addressing specific social causes (15 paragraphs coded in newsletters)

Achieving social impact (10 paragraphs coded in newsletters)

Affecting government policy (8 paragraphs coded in newsletters)

Reframing models

Joint Projects Common Methods Shared ambitions Refining

practices

No interaction between models

PROCESS OF FIELD TRANSITION

Opposition Mutualistic co-existence

Time

Front stage : Convening events creates public spaces

where the model is made accessible

Back stage : Convening events creates

protected spaces where the model is deconstructed

Neutralizing differences Interactions between dissimilar actors

Contributions Advance ongoing conversations in organizational theory

• Challenge traditional “logic” arguments : conflict cannot be overcome because practices of models are specific to the divergent professional logics of the groups

• Show that situated - front stage and backstage - interaction among members of groups advocating for institutionally distinct models can revoke this specificity

• Accentuate institutional processes of gradual transition (instead of muscular image of radical change or replacement)

Broaden discussions on role of events in marking field trajectories

• Highlight the importance of back stage and events as relational spaces

• Emphasize the role of convening (take into consideration motives)

• Illustrate how to study recursive processes and endogenous capability of fields vs exogenous shocks

Enrich research on organizational philanthropy

• Point to collective processes of rationalization in philanthropy

• Focus on social dynamics resulting from interaction

• Avoid left censored research on institutional processes - In situ and in vivo research

Contribution

Theory

Phenomenon

Research process

• Identify gaps in our theories

– Attend to underappreciated process of transition in fields—microprocesses

– recursive nature of process and process of collective rationalization

• Importance of convening and the role of events in marking field trajectories

– Remind us of the process of „negotiating“ the type and the way we tackle of social problems

• Methodical roads less travelled

– Quality of data depending on the trusted relationship with key players in the field

Understand how an environment ticks and the opportunity space for organizations

• Reassess the magic of markets as tool for social and economic development and take local realities as our starting point

• “How can I go to the market? I am a woman!”

• Clarify market-building processes in institutionally complex contexts

Background and motivation

• Image of institutional voids as spaces empty of institutions. – Key market institutions originate in state action and rules (La Porta et al., 1998;

North, 1990) … if absent or weak a compensatory social structure is needed to spur market formation and functioning (Khanna & Palepu, 1997).

– “Institutional voids” are presented as inhibitors of Western-style markets and solutions favor the transfer of institutional technology over local experimentation and recombination.

• Sociologists and anthropologists emphasize the abundance and complexity of institutions and focus on the people participating (and not participating) in markets (Banfield, 1958; Geertz, 1978; Zelizer, 2010).

• We know little about how institutional voids are constituted, how do they relate to existing institutional arrangements and how do they matter for local populations.

Market Building in and around Voids

Two broad questions guiding our empirical analysis

1. How do institutional voids arise in institutionally complex settings, with what consequences for market access and participation?

2. What organizational and other activities work these voids to build inclusive markets?

Research design and setting

Instrumental and extreme case study applying qualitative techniques

Bangladesh’s institutional arrangements a telling analytic case:

• 6% economic growth, yet half of population below poverty line

• Despite formal constitutional and political guarantees for equal status market access and participation - as social and economic life - is limited amalgam of secular and religious “rules”

The Organizational case of BRAC a rare case:

• Present in 70,000 Bangladesh’s villages

• Started as a small scale relief and rehabilitation project in 1972

• Different strategies and orientations co-exist (Korten, 1987)

• Experiments with market based mechanism to alleviate poverty since 1990

• Core programs span diverse areas (economic development, education, health, social development, human rights and legal services)

Institutional Interfaces: Property Rights

• Local norms and practices interact with Western conceptions of market institutions. Coding this interaction as simply “weakness” or “absence” of modern market institutions misspecifies the situation and underrecognizes the significance of the institutional plurality.

• Institutional voids are situated, intermediate outcomes of contestation at institutional interfaces…. dynamic spaces reconfigured by conflicting and contradictory institution flux.

• Institutional voids offer a better understanding why and how market exclusion occurs

… provide a starting point for policy-related efforts to build inclusive markets: “It may be possible to work with such alternative institutions as are available, and build on them” (Dixit, 2004: 4).

On Institutional Voids

Four focal programs as cases

Analytical coding to generate theoretical themes

First order codes Second-Order

Constructs Aggregate Theoretical

Dimensions

• Creating spaces for equals

• Creating spaces for unequals

Tying up with government systems

Teaming up with social service providers

Demystifying

Adopting artistic traditional performances

Facilitating conscientization

Knowledge of repertoires

Creating spaces for equals

Creating spaces for unequals

Building on local means of issue resolution

Making use of customary sources of support

Creating spaces for

interaction

Expanding resource systems

(Re)defining local

arrangements

Developing sensemaking

capacity

(Re)combining norms and

traditions

Redefining market

architecture

Legitimating actors

Contribution

Theory

Phenomenon

Research process

• Collect and analyze original data to theorize about markets and market building in unconventional settings

• Challenging long-standing imagery about institutions

– institutional voids as analytical spaces to examine social and economic exclusion

– Collective hope of creating inclusive markets - legitimated arenas for interdependent social and economic activity where formal possibilities align with practical access across gender, race, religion, and social class.

• Identify key activities of an intermediary organization, unfolding on behalf and with the people affected.

• Move focus of investigation from “a society of organizations” to “organizing for

society”

• Unpack heterogeneity of organizing models associated with the practice of

Social Entrepreneurship

Understand meaning and practices

Background and motivation

• Practical and theoretical meaningful typology – Analyzing what social entrepreneurial organization’s do, how and why they do it. But also attend to meaning.

• Four stylized models differentiated by form of capital leveraged: Political, human, economic, and social

• Each associated with a principle that serves as justification for proposed solution and anchor for course of action

• Stimulate future research by prompting more empirically informed and theoretically meaningful questions

Specifying the Components of Model

Surface relations between categories of issues, actors and types of activities … …meaning structures (DiMaggio and Mullen, 2000; Mohr

Guerra-Pearson, 2010)

• Re-defining the problem: issues such as poverty are multidimensional and typically do not exist in isolation which reinforces category-breaking.

• Identifying the Target Constituencies: need to account for the individuals or groups that are important in achieving change.

• Selecting Activities: deciding on activities that engage the target constituency in the change process.

Justifying the Proposed Solution

• Different logics of justification corresponding to SE’s own rationales for choosing a certain course of action.

• Rationales are influenced by a set of quasi-universal principles or ‘‘orders of worth’’ ( Boltanski and Thévenot, 2006) on which actors rely to justify their beliefs, opinions, and actions.

World Worth rests on

Inspiration nonconformity, a typical way of acting is to dream and rebel

Domestic the trust and respect for tradition and kinship, a typical way of acting is to preserve and to reproduce

Fame other people’s opinions, a typical way of acting is to exert influence and achieve signs of public esteem

Civic the collective interest; individual human beings are relevant when they belong to a group or are representative of a collective, a typical way of acting is mobilizing people for a collective action

Market the mediation of scarce goods and services and price serves as a mechanism to evaluate these scarce goods, the typical way of acting is competing and spotting market opportunities

Industrial efficiency, productivity and operational effectiveness, typical ways of acting are implementing tools, methods and plans

…serve as calculative devices and make action possible by reducing uncertainty (Stark, 2009)

Data and Methods

• 200 profiles of SE Organizations (SEO) from Ashoka and the Schwab Foundation.

• Analysis of texts (declarations of models) of the entire population of SEOs selected by Schwab Foundation (98 SEOs) as well as a random sample of 102 SEOs selected by Ashoka.

• Content analysis to generate categories of issues, constituents, and actions for each SEO.

• Cluster analysis to identify distinct types of social entrepreneuring models.

• Discriminant analysis and ANOVA to check the robustness of cluster analysis.

• Closed Coding to identify the principles.

• ANOVA to relate clusters and principles.

Content Analysis

Almost half of the SEOs (42.5%) tackled more

than one issue

55 % focused on one constituency, rest on

two or three

Only 28 % perform solitary action

Political Capital Citizen’s endowment, empowerment and political identity • IHRDA – Institute for

Human Rights and Development in Africa

Economic Capital Money and other material resources • Honey Care

Human Capital Individual’s’ knowledge, skills and acquired expertise • Soul City

Social Capital Network of relationships though which individual can mobilize power and resources • Tap Root Foundation

Results of Cluster Analysis

Entrepreneuring Models and Principles

Worth results

from other

people’s

opinion

Worth rests on trust

and respect for

tradition and

kinship

Worth inheres

in collective

interests

Worth results

from mediation of

scarce goods

and resources

Worth is based on

efficiency, productivity,

and operational

effectiveness

Contribution

Theory

Phenomenon

Research process

• Landscape of SE not composed of uniform models

– Social entrepreneuring models vary in which type of capital they leverage and how they justify.

• SE models have one commonality: rely on a principle reflecting an industrial logic of justification.

– SE models are distinct from the larger population of organizations addressing social issues through their declared attachment to do so effectively and efficiently.

• Inform future research and invite for reflection on meaningful performance mesarues as well as different processes of social change

The journey continues ...