My Facebook feed is filled with sponsorship asks and birthday fundraisers. I turn on the TV and there’s another telethon – I knew it was coming because my son’s worn fancy dress to school and took in a tray of cupcakes for yet another charity cake sale. When I shop I’m regularly asked if I want to add on a charity donation. I’m tired of these constant requests to reach into my pocket! So I took a radically different approach to raising money for charity. And I failed.
There’s increasing evidence that the traditional charity business model is being disrupted. It’s becoming harder to generate new income from mass fundraising. And new competitors are emerging to deliver social impact. According to Deloitte, 87% of Millennials believe that companies should do more than generate profit. In response, a new economic category is growing at lightning speed where profit is closely linked to social purpose (e.g. Belu, Elvis & Kresse, Change Please).
What does this mean for the future of the charity sector?
When I started as Director of Innovation at Cancer Research UK (‘CRUK’, the largest fundraising charity in the UK), my priority was looking for radically different ways of raising money – funding rather than fundraising. Because we didn’t know what our approach should be, I decided to test-and-learn the operating model while working on real projects. I brought together three hugely talented, extremely motivated and very different people to work as Co-Founders – Ben, Mel and Claire.
One of our starting hypotheses was that if we explored triple-bottom-line business models – ones which deliver social, user and financial value – we could generate revenue while making a real difference to people’s lives. After all, CRUK’s ultimate aim is about beating cancer, not about raising money.
The team worked on obesity, the second highest preventable cause of cancer after smoking. Over 7 months, the team:
- Mapped out the obesity space and tightened up their customer group and value proposition – single mums living in deprived areas, looking to provide readily available healthy snacks to their kids at nursery pickup.
- Tested a traditional innovation lab approach, found that this wouldn’t create opportunities with the scale we needed – and so pivoted to a ventures approach, focusing on system-level solutions.
- Forged strong relationships in networks of experts outside the sphere CRUK usually operated in – they found that a ventures approach allowed CRUK to play a powerful ‘convener’ role, bringing diverse and novel partners together around a system-level problem.
- Ultimately developed three venture concepts and started identifying potential partners for further testing for usability, feasibility, viability and scalability.
But 7 months into the project, CRUK’s Executive Board decided they couldn’t give the project the senior level support it needed. And so the project was closed down.
We failed – why? What changed? What could we have done differently?
These are questions I’ve asked myself over and over. And here are the lessons I have learnt.
Some of you will quite possibly still make the same mistakes … I’m not going to pretend that I wasn’t given some of the same advice! But hopefully some of what I say will make a difference…
1. Change in leadership is a problem for riskier innovation projects
I’ll cut straight to it – we had A LOT of change in the CRUK Executive Board.
There’s so much evidence that successful innovation programmes are championed from the very top of the business. Many organisations shared their learnings about disruptive innovation and something that came out repeatedly was that you need unfettered CEO support with around two years of total aircover and trust whilst you work things out, fail things and learn which KPIs drive the right kind of progress.
Yet we had a change in CEO (including a period without a CEO) at the most crucial stage when we were establishing the project. And we had a change in CFO too.
Our project didn’t survive this change in leadership. And from talking to other people recently, I now know that very few projects like this do survive a change in CEO.
2. Innovation strategy needs to be integral to organisational strategy
You need to be really clear on your innovation strategy and how this aligns with organisational strategy – there needs to be a clear mandate on what the innovation team is expected to deliver and the problem areas it should be working on.
The strategic decision to focus on more transformational innovation came out of the fundraising strategy. But this wasn’t reflected in the organisational strategy, which didn’t talk about new business models or how the different parts of the charity would be integral to developing new funding streams.
3. Building the team is key
Ben, Mel and Claire are very different in terms of their experience, ways of working and ways of thinking. This was one of the most powerful things about them as a team. But it also made it challenging for them to work together.
The team created a role for Claire called the “head doctor”, recognising the importance of investing time in building the team. They did lots of work on building psychological safety; conflict resolution; resilience; effective decision-making; aligning their skills and language; and resilience.
4. Keep a constant external perspective
They both have fantastic networks and ensured the team was constantly externally focused. They helped us pull away from CRUK cultural norms – they challenged the team to think and work differently and held up a mirror when there was evidence that something from the CRUK culture needed to be “unlearnt”.
They also coached the group of senior leaders whose role was to champion the team and clear internal blockers.
In theory, Dan and Tom should have brought credibility to the project but I don’t think this worked. The whole Executive Board should have been exposed to this external perspective and probably needed coaching around this. This chimes with what we’ve heard from other organisations.
5. We failed to get the interface right
One of the areas where we received very different external advice was around how the unit should interface with the rest of the organisation – from being totally separate to ultra-transparent and shades of grey in between.
So this was an area where we decided to experiment. We learnt about the pros and cons of several different approaches but I don’t think we ever got it right.
We tried me being a single point of contact between the team and the organisation. This was very liberating for the team and enabled a rapid pace of experimentation and learning. But it was hard to build their credibility when they weren’t visible. And I struggled to tell their story effectively because my knowledge of what they were doing was never up-to-date.
So we tried to bring the team closer to the charity and created a “storyteller” role. But we found ourselves in a chicken-and-egg situation – the more stories we were asked for to demonstrate progress, the more progress slowed.
Towards the end, we started a confidence survey of Executive Board members. These metrics were helpful as we knew that they needed to be much higher for the unit to be successful. It would have been really helpful to measure these from the beginning.
6. Metrics are really tough
We knew metrics were important – the team needed to know what was working and what wasn’t – we needed to optimise our operating model. We also needed to demonstrate progress and whether the investment the organisation was making in innovation was paying off.
Whilst we agreed success criteria for the first 6 and 12 months – and more-than-met these – I think using metrics that weren’t recognised by senior leaders was a problem. And I think this was one of the challenges of the change in leadership – because what had been agreed as “success” before was not necessarily what was seen as success when it actually came to making the decision.
7. The team needs to be motivated to give huge amounts of themselves
One of the things that often comes up when talking about intrapreneurship is the challenge of rewarding and motivating staff – how do you create the same hunger that exists in a startup?
This wasn’t really an issue in this team. I think it’s because the team were all massively motivated by the objective of beating cancer and of looking at new sustainable business models for doing this.
Over the years, recruiting people into a range of charity innovation teams, I’ve learnt that this motivation for the cause is vital. When I’ve recruited people who don’t have it then it hasn’t worked out. I think this is somewhere that charities are really lucky. The end objective is social impact – and where that’s a driver for people, then financial incentives aren’t important in the same way.
8. Know what you need to be successful and ask for it
We were right to push for a decision on the future of the project and were honest about the level of senior sponsorship it would need to be successful. We knew there was a chance that this would mean the end of the project – but also that the project couldn’t be successful without it.