A broad strategy for digital transformation of the charity sector using six questions

Where are we now and why can’t we stay here?

Behind the curve

The charity sector’s use of digital is far behind the curve of society.

The blue line represents the diffusion of innovation (Everett, 1962) across society. To the far left are the early adopters of new technologies, with the majority of people in the middle, and the laggards to the right where the blue line meets the black zero line. This includes the adoption of all kinds of innovation, but mostly those we refer to as ‘digital’, from using Uber to watching Netflix to buying the latest iPhone. All of these innovations go through this adoption curve.

The green line represents the charity sector’s adoption of ‘digital’. It follows the same curve as the blue line and shows how some charities are early adopters and some are laggards. If we wanted an example we could look at charity sector websites using responsive design. When responsive design first became a possibility businesses with customers that were beginning to adopt multi- device behaviors would have been the first to redesign their websites so that it could be viewed on any device. Some time later the first few charity sector organisations would have redesigned their websites to be responsive, then more until the majority were responsive, and to today where the laggards are still yet to make their websites responsive to different devices.

The orange area represents the people in society that are adopting the innovation at the same time the charity sector is using it. The further behind the curve of society that the charity sector is, the fewer people there are to engage with. 

The white area within the green line represents the total lost opportunity from the charity sector using that innovation. 

A risk-averse approach of waiting for a dominant design to emerge (Utterback and Abernathy, 1975) and be adopted by the majority before using the innovation reduces the overall number of people that can be engaged with.

Given the increasing pace (McGrath, 2019) at which new innovations are introduced it’s likely that the charity sector will fall further behind over time.

Where do we want to get to and why is it the right place to go?

Keeping pace with change

The charity sector needs to get to the position where it can keep pace with the rate of innovation adoption in society.

The orange area shows the increased number of people (compared to the diagram above) available for the charity sector to engage with through newly adopted innovations if the charity sector is closer to the adoption curve of society.

The adoption curve shows that not every organisation in the charity sector has to adopt new innovations at the same time. Individual organisations can make reasoned decisions about if and when to adopt a particular digital technology or practice as long as the sector as a whole has some early adopters exploring the new innovations shortly after wider society begins to.

If we accept the assumption that the charity sector serves the needs of society through connecting people, essentially acting as a resource distribution mechanism, then the more people that can be engaged to provide resources (money, time, skills, etc.) and the more people that can be engaged to utilise those resources to improve their lives, the better our society becomes. Keeping pace with change in society enables the charity sector to better serve society.

How are we going to get there and why is this the right way to do it?

From investing in capital to investing in knowledge

Capital investment and return involves large upfront investment with diminishing returns over time. Knowledge investment requires ongoing investment with increasing returns over time.

The red line shows investment and return in capital resources such as buildings and purchased technologies which require considerable upfront spend with diminishing returns over time. The pink line shows the investment and returns for investment in knowledge, including regular formal training and informal upskilling which require more constant (and probably increasing) investment with increasing returns as the knowledge is applied. For illustrative purposes, both the investment and return are shown as single lines.

As has been demonstrated (Goldin and Katz, 1998) technology adoption (in an organisation and a sector) usually results in the distribution of ‘number of people’ and ‘level of digital skill’ shifting from more people with lower skill levels to fewer people with higher levels of skills.

Knowledge can only be held within people, hence an investment in knowledge is an investment in people. Some tacit knowledge can be codified as transmissible information to pass onto others. People with more knowledge about digital innovation are better able to respond to changes and ensure the sector keeps pace with society.

From being tied to technology to using loosely coupled products

Being constrained to enterprise technologies offered by well-established companies because of the presumed reliability they provide will shift as confidence in the security, reliability, usability, speed of deployment and interconnectivity of new consumer-focused products grows.

Charity sector organisations have often struggled to make technology choices that allow them to use new innovations in microservices architecture, jamstack principles and no-code products. As an example, the dream of having one large CRM to enable better data-driven fundraising only works if data quality is a reality. The shift away from ‘one big system’ could allow fundraising teams to adopt their own lightweight CRM products knowing that when a better product is launched next year there will be an API that can pass data between them and enable the fundraising team to quickly adopt a new product. As a new breed of products begins to appear that are designed to allow organisations to cross the boundaries into the digital spaces of people outside the organisation, charity sector organisations will expand their thinking about how they use technology products.

Charity sector organisations will become more comfortable with the low commitment ‘sign-up quickly and throwaway when a replacement comes along’ approach to using technology products just as consumers across society are.

From delivering projects, products and services to developing business models

From optimised-for-production pipelines of projects, products and services charity sector organisations will move to developing optimised-for-consumption platform business models that facilitate self-reinforcing value exchanges.

These platform business models will be part of open innovation ecosystems that share resources and make the boundaries of organisations more permeable in the pursuit of keeping pace with the innovation adoption in society.

References

Everett, M. R. (1962) Diffusion of Innovation. The Free Press. A Division of Macmillan Publishing Co., Inc. 866 Third Avenue, New York.

Goldin, C. & Katz, L. (1995) The Decline of Non-Competing Groups: Changes in the Premium to Education, 1890 to 1940. NBER, Cambridge, Massachusetts.

Utterback J. M. & Abernathy W. J. (1975) A dynamic Model of Process and Product Innovation. The Journal of Management Science.

McGrath, R. G. (2013 UPDATED 2019) The Pace of Technology Adoption is Speeding Up. Harvard Business Review.

Weeknotes #208

This week I did;

The internet is open 24/7

Every website on the internet is available twenty four hours a day, seven days a week. One of the measures of success for a website is its up time. But what do you do when you want your website to have opening hours and not be available at certain times. It’s not an easy thing to achieve, especially with limited time and no budget. But we did it. Our tech guys came up with a single sign-on solution that only authenticates users between certain hours using API calls and cron jobs. I was impressed. Being able to control access at certains is part of our journey in understanding how to ensure the safety, security and privacy of young people in online environments. I guess most people think we’re just building another bit of tech to solve a particular problem but I spend a lot of time thinking about how it all fits together and what we can learn to achieve our vision.

Charity Service Model Canvas

I started experimenting with ideas for a Charity Service Model Canvas. Canvases are useful tools for seeing the big chunks of things all in one place, and done well they help ensure that balance decisions about whatever is being designed are made. So, for the Charity Service Model Canvas, the Needs connect to the Outcomes (are the outcomes of the service going to meet the needs), the Activities connect to the Resources (what resources are you going to need to provide those activities), in fact all of the boxes connect to each other. I thought about creating a Miro template for it so that people could use it when designing a service. Why haven’t I? Because I don’t know how.

The role of charities in the Democratic Society system

I wrote about some of my ideas about how the three domains of a democratic society system interplay and how the charity sector can choose to fit in to have an impact on society. I see our democratic society system as being made up of the three domains of state, market and civic, and look from a systems-thinking point-of-view at how they have mechanisms that are constantly interplaying with each other as checks and balances in the system. Each domain has particular organising modes which are used to empower and disempower members of society, and charities are one particular type in the civic domain that is useful where people want to organise around a particular issue or cause but need a means of centralising certain processes. 

How the cause-agnostic charities of the future will be innovators for the state and the vanguards of social change for good

I also wrote about an idea of a vision of charities in the future where they play a very different role in society to now. Rather than being focused around a particular issue or cause charities in this future would act as innovators-for-the-state and utilise their civic domain skills of organising people, fundraising, understanding social problems and developing solutions to solve social problems before handing over those validated solutions to the state to run, driving forward social improvements over time. 

Digital Trustees

I joined the Tech For Good Live event about Digital Trustees. I couldn’t stay for all of it but what I did hear was really interesting. I particularly liked the description of a digital trustee as someone who thinks in user-centred, data-driven ways, rather than being knowledgeable about technology. It’s almost like ‘digital’ is shorthand for modern ways of thinking, which I absolutely think it should be (that’s why I don’t always agree with the ‘don’t use the D word’ school of thought).

Got style

I started stiles.style. It’s either an ode to the nostalgia of the British countryside, a critique of the inaccessibility of the British countryside for less able people, or just something to amuse me on my walks. I can’t quite decide.


Some stuff I thought about this week:

Power in the civic domain

I think it’s right to challenge the established way of doing things. But the more established something is the harder it is to challenge without falling into the same traps as the thing you’re challenging.

In the civic domain power should flow to the people. That’s a value some hold dear, and an assumption that is hard to validate. Why should power flow to the people? Which people, all people, even those that disagree that power should flow to the people and have advantage over those suffering inequalities? Do we assume that if the people have the power society will be more equal? If so, what makes us assume that, is it based on any evidence or is it an ideal? 

The criticism that charities hoard power when they should be distributing it to the people is another opinion held by some. And the obvious conclusion that follows is that to solve this kind of problem the opposite situation should be created.

Charities are the way they are as a byproduct of the system they are in. They have whatever power others perceive them to have (because of course power is in the hands of the beholder and/or non-beholder) because of the structures of civic society. It’s not as if lots of charity CEOs got together one morning and said “let’s take the power from the people”. Charities are the way they are because that’s how the funding system works, and that’s how government regulations work, and that’s how the economy works. We can’t change charity and expect it to still work in those systems.

If we want to change how power flows in the civic space then telling communities that they should have the power because we jumped to the solution without really understanding the problem, just replicates the same power imbalance. It’s Pirsig’s rationality factory. So how deep do you go to understand power structures, and then how on earth do you approach building something different?

Products and services

What’s the difference between a product and a service? A product exists whether you use it or not. A service only exists when you are using it. A washing machine is a product, it still exists whether you are washing your clothes or not. AA breakdown cover is a service, when you aren’t using it it’s just a lot of men driving around in yellow vans. Let’s see how long that distinction lasts in my long running (actually, not that long) saga of trying to figure out the difference between products and services.


And some people tweeted this week:

Creating social change

Natasha Adams tweeted about creating a radical vision for the social change sector that is actually accountable to the communities it claims to serve. This is the tweet that started me thinking about some of the things above about power. When I see things like this I always have two thoughts; that action towards solution without understanding the problem can cause more problems than solutions, and aren’t we lucky that there are people in the world who are ‘do-something-now-ers’ to contrast those of us who are ‘think-about-it-and-probably-never-do-anything-ers’.

Acceleration

Lesley Pinder tweeted about charities who have set up accelerators outside of their normal structures. This is really interesting to me (I’m thinking it might be the topic of my dissertation) because more and more I think the best way to build new organisations (which is what most organisations really need when they talk about digital transformation) is to create a small splinter organisation that works to solve the same problems as the old organisation but in new ways and then transition people so that the new organisation grows as the old one shrinks and is replaced.

Charity sector facing financial catastrophe

Emily Burt tweeted about the financial catastrophe facing the charity sector. Seeing what was going on for charities at the time in a thread like that makes for shocking reading, but often, even seeing the writing on the wall doesn’t instigate action, especially if you’re not used to reacting quickly. Yes, the current financial situation almost every charity faces is going to result in a massive shock to the sector and society, but if charities don’t get better at acting faster, or can’t because of the system they are in, then that is a much greater and more far reaching catastrophe.

Strategy for change

Jason Yip tweeted “Strategy is non-iterative only if you assume a static environment and/or non-thinking adversaries”. Yes.