July 14, 2011

Adaptive Strategy in Philanthropy Pt III: All That and a Bag of Chips

This is the third post in a three-part series. See the first post, and the second post.

By: The Bridgespan Group

This week’s inspiration is brought to you by a bag of pita chips.

Here’s the story I read on the back of the bag: "Stacy worked out of her sandwich cart in Boston, baking up tasty, seasoned pita chips to give her loyal fans while they waited in line. The chips soon became more popular than her sandwiches! Today, Stacy’s idea is still winning people over…" And it turns out she now has 150,000 "likes" on Facebook in addition to being distributed nationally via outlets like US Airways and Costco.

As I crunched on my chips at 30,000 feet, I wondered about the conversation Stacy had with her investors as she shifted her business from being a sandwich cart to manufacturing and distributing pita chips.

I imagine they didn’t question her commitment to excellence in sandwich-making. I imagine they didn’t insist on their desire to invest only in sandwich- or meal-making operations, or things sold by cart. I imagine they were delighted that she’d flexibly adapted her strategy towards selling pita chips and not sandwiches, based on clear feedback from her customers, and that she’d found a path to profitability.

It was a quick leap from there to imagine Stacy as a nonprofit CEO, trying to convince her donors of her new strategy. How many philanthropists would have made the leap with her? Would they themselves have had an adaptive enough strategy to focus on innovation and continuous improvement toward a common purpose (feeding people successfully), or would they have been overly focused on a particular intervention that they’d liked and committed to (restaurant carts rather than retail sales), regardless of the outcome?

In my experience, philanthropists frequently struggle with how narrowly to define their strategies. At what level do their grants have to add up to more than the sum of their parts? How can their strategies be adaptive but still bounded? Define your strategy too narrowly, and you miss the opportunity to shift investment to successful pita chips. Define too widely, and you become a jack-of-all-trades, but master of none.

So as a philanthropist, are you more interested in the intervention or in the underlying purpose?

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