Today marks the start of a next chapter for me professionally: I’m launching a new social enterprise, called 60 Decibels, that I’ve co-founded with Tom Adams. Our goal is to reboot social impact measurement, to make it useful for people who are doing the work of building social businesses and NGOs. We want to help them serve customers better and, in so doing, create more social impact.
Our thesis is simple: understanding social impact should be based on listening directly to people.
60 Decibels will take forward the Lean Data approach, which was first built at Acumen to solve our own impact measurement challenge and has already been used by more than 200 non-profits and social businesses in 34 countries.
Imagine if we truly held ourselves accountable to the people that impact capital and philanthropy are meant to help, by systematically including their voices in how we assess impact.
(And, for those of you who don’t work in this sector, it’s worth articulating the counter-factual: yes, it’s true, today, when we ‘measure’ impact in impact investing, most of the time we don’t actually talk to the people whose lives we aim to improve. Crazy, huh?).
My belief is that if we can get this right, we have the potential to make a massive shift in the world.
Everywhere, the cracks in capitalism are being exposed. That’s leading to backlash against “plutocrats,” it’s creating waves of populism, and it’s generating calls, in some circles, for a new model of capitalism: one that creates wealth without being so extractive, one that balances the needs of shareholders, customers, suppliers, employees, and the planet.
But how are we going to put the needs of customers, suppliers, employees and the planet on more equal footing?
Our bet, with 60 Decibels, is that it starts with voice: that by listening better, and by amplifying voices that are currently left at the margins, we can create a system that’s more in balance.
The in’s and out’s of how I think we get from here to there is a longer conversation. (You can get a sneak peek here at the 60 Decibels website, where we’ve written a white paper that’s equal parts manifesto and social impact data). The short version is that 60 Decibels helps companies that are in the business of creating social change listen to their customers. We leverage the power of technology and mobile phones to make it easy to listen to anyone, anywhere, and hear from them about their lived experience. And we move fast, getting results in weeks (not months or years), because that’s the only way we’ll be relevant to the people doing the real work.
So, if you’re in the business of social change and have found social impact measurement to be challenging, burdensome, complex, or frustrating, let me know, maybe we can help.
And, if you’re wondering, 60 Decibels is the volume of human conversation.
So far, it’s been a lot of fun, it’s really challenging, and we’re just getting started. We have a team of 30 amazing people in the US, UK, Kenya and India and we’re working with customers all over the world.
And, in terms of this blog, I’ll still be here every week sharing what’s on my mind. I expect that, gradually, the content of the posts I write will shift slightly. That’s nothing new—it’s been happening since I started blogging in 2008, as my bullseye has moved from fundraising and sales, to generosity, to leadership and the work we all need to do to be grounded, effective agents of change.
A closing thought: in many ways, this blog is a chance for me to think out loud about the issues I find most important, most challenging and most meaningful. That exploration is an important part of my own evolution and growth. To the extent that I’m ready to take on this next challenge, that is due in no small part to what I’ve been able to figure out, week in and week out, through the dialogue that unfolds here on this blog.
None of that would be possible without you showing up and continuing to read and respond. So thank you.
Here’s to the next chapter. Thanks for continuing this journey with me.
Every day, more than 5 million new cellphones are sold. That’s more than 10 times the number of babies born each day. We are barreling towards a world where a cellphone will be in every pocket by 2020, and a smartphone in every pocket soon after that.
This revolution is making the unimaginable real— in the near future, we will have the opportunity to start a dialogue with literally every person on the planet. This new two-way conversation, where everyone participates, will pull billions of people into the mainstream by connecting them with one another.
Since starting this work in 2014, one of the most important lessons we’ve learned is that a cellphone in every pocket is just a starting point. The art of every Lean Data project is in the questions we ask. Ask the wrong questions, and you get back little of value. Ask the right ones, and you can move from data to information to actionable insights.
Great questions connect with customers and give them an opportunity to share their voice. But crafting a great question is no easy task. The slightest shifts in word choice can affect understanding; the smallest differences in intonation alter perceptions of sincerity. All of these nuances can bias the data and diminish its value.
For example, in trying to understand the usage of solar home systems in Kenya, we started with the question, “How often are you currently using (product/service)?” After testing this question over SMS, we received feedback suggesting we omit the word “often” and make the question more simple and direct. We quickly amended the question to “When do you use (product/service)?,” provided sample multiple choice replies, and received a higher level of understanding.
Getting questions right is not a new idea. Indeed, Angus Deaton’s recent Nobel Prize was largely the result of his foundational work on designing household surveys. What’s new is trying to gather rich data over a cellphone. While you can run an effective focus group with a loose guide of topics and you can cover a lot of ground in a 90-minute one-on-one interview, a typical SMS survey is limited to 10 questions and 150 characters per question. These constraints are a powerful pressure-cooker for the questions we ask. We’ve got to make every word and every question count.
So what makes a great question?
For us, a great question is one that is easily and consistently understood by customers. It’s one that makes the complex simple. And it’s one that yields insight around what matters to the customer and the social enterprise trying to serve them.
One of the biggest challenges in impact measurement and international development is understanding not just the breadth but the depth of impact. In Acumen’s case, depth is defined by the degree of change in their well-being a customer experiences from one of our investments’ products or services. For example, we know that a solar light is a better solution than a kerosene lamp, but exactly how much better and why is tricky to figure out. This isn’t an academic exercise for Acumen or our companies. Ultimately, we need to understand our customers’ needs to know where to direct our capital to drive the greatest impact, and without impact data we are simply flying blind.
Because we work across multiple sectors addressing a number of the problems of poverty, our challenge extends beyond just figuring out the quantitative impact of owning a solar light or sending a child to a low-cost private school. Our goal is to go one step further and understand the qualitative difference in value that our customers experience when comparing the various products and services available to them.
Can we really compare the impact of a year of schooling to owning a solar home system? We’re not sure, but we think it’s worth a shot. We believe that trying to understand these comparisons from a customer’s perspective will push us to listen harder and deeper, and it will test the limits of our ability to get rich data through mobile phones.
We asked ourselves if we could create a question or a set of questions that get at this topic directly, helping our customers share what they value most and why.
While a single question to cut through the complexity of our work seemed far-fetched, we knew that similar attempts have been made before. Twelve years ago, Frederick F. Reichheld, Rob Markey and Bain & Company developed the Net Promoter Score® (NPS). According to the Harvard Business Review, the NPS “substitut[ed] a single question for the complex black box of the typical customer satisfaction survey.” Today, it’s become widely adopted by the Fortune 500 as one of the most effective ways to measure customer loyalty. Just as NPS provides companies with a method to effectively judge performance and generate qualitative customer feedback, we wanted to create a single, unifying question to compare social impact.
We started by asking ourselves whether the NPS question — “How likely is it that you would recommend [product/service] to a friend or colleague?” [1–10 scale]” — could serve as a good proxy for how much impact a product had for our customers. We wanted to test this by asking NPS questions together with our depth of impact questions to see if products with a higher NPS also had a higher depth of impact.
We piloted this approach in Kenya and India in two surveys, and the initial results were not as promising as we had hoped.
Despite the proven success of NPS with more affluent, educated customers, the question didn’t seem to perform well with our customers who are typically poor, have limited formal education and little experience with surveys. In follow-up conversations, we heard that the 0–10 scale was hard for them to understand and the hypothetical “would recommend” language didn’t translate well.
Lean Data surveys are short and inexpensive to conduct, so it’s easy to test and refine questions. We experimented with four different versions of the question before landing on a question, inspired by NPS, that seems to perform well: “Have you ever recommended product/service to a friend?” We also played with three different answer scales and arrived at a workable solution. Instead of a 0–10 scale, customers choose between three responses: “Yes, I’ve told many friends;” “Yes I’ve told some friends;” or “No, I have not.”
Once we saw the effectiveness of this question, we wanted to go further, to learn not only whether or not customers recommended a product but also the drivers of meaningfulness of that impact. Drawing on the concept of Constituent Voice developed by Keystone Accountability, we developed a second question, asking customers to respond from “strongly agree” to “strongly disagree” to the statement: “There have been changes in my home because of (product/service).”
In the early tests we’ve run, we’ve seen correlation between reported depth of impact and the strength of agreement to this “meaningfulness” question. For example, owners of solar lights who “strongly agree” with the statement reported an 83 percent reduction in expenditure kerosene, while the customers who said “agree” only reported a 69 percent savings on kerosene. These are just preliminary results, but we’re starting to see that this question might allow us to compare across different interventions, so that customers can tell us what they value the most and why.
While we’re still fine-tuning both of these questions, the progress we’ve made is exciting. Low-income customers are enthusiastic to engage in dialogue, and we are seeing that it’s possible — if you work at it — to develop new questions that capture rich, meaningful data about the wants and preferences of this emerging set of customers. At the end of one of our surveys, one happy customer expressed her satisfaction with the service she received at a health clinic and then added, “I really enjoyed being interviewed.” Clearly, we’re on to something.
While Lean Data is, today, being used mostly by startup social enterprises, our work in learning to ask the right questions over mobile phones is universal. The low-income customer of today is the low middle-income customer of tomorrow. Hundreds of millions of people in the developing world are poised to improve their well-being, but this depends on how well we, as a society, listen to them and adjust our efforts to meet their needs.
So much of this rests on the simple act of caring enough to ask the right questions.
For a period of about five years, whenever we’d go out to a restaurant either my wife or I would order the dish with the garlic mashed potatoes. They were so yummy and creamy and decadent, with heaps more butter and garlic than we’d ever dare cook in at home. It pretty much didn’t matter what the main dish was.
Once garlic mashed potatoes began appearing on every menu, the allure went away. But the power of the surprise, the power of the side dish, hasn’t. As in, I just ate a take-out bowl of lentil chili, and at the bottom of the bag I discovered a completely unexpected corn muffin, which was really good. Not great enough, on its own, to make me go back next week nor (better still) so good that it’s really worth talking about, but still pretty darn good and worth remembering.
The thing about the garlic mashed potatoes or the corn bread is that they allow you, for once, to define the terms of the game. You rarely get to set expectations – expectations mostly arrive in force when your customers show up – meaning you’re usually running as fast as you can to meet/not meet:surpass those expectations. But with a side dish, with an unexpected surprise, you have the luxury of competing in a category that your customer didn’t even expect. It’s like applying for a job that hasn’t been posted yet: yes, you still have to be amazing, but it’s a heck of a lot easier to blow people away when they’re not busy systematically comparing you to the other 500 people whose names came in over the transom.
The garlic mashed potatoes is the best handwritten note your customer got all week (they haven’t received any), the phone call when everyone is busy filling their inbox. It’s showing up in person when everyone else is calling; giving a presentation with no slides when everyone who came before you bored them with a thousand bullet points; doing something wildly generous when you really, truly, have nothing to gain. It’s not being different for difference’s sake – garlic mashed potatoes are still dinner, after all – it’s doing something fabulous and unexpected that’s relevant to the core story you’re telling them.
Go ahead, why don’t you whip up a hot, piping batch of garlic mashed potatoes?
The line at my local Chipotle looks like this each and every day at lunchtime, with 20+ people on line and more streaming through the door. And each time I’m there, I’m in and out in 7 minutes or less.
Conversely, there’s a lovely little bakery across the street from my office called Amy’s Bread. Most everything there is delicious (though wildly expensive), and I’d be there once a week if it weren’t for the fact that if Amy’s has anything more than four customers working their way through the line at the same time, their system grinds to a halt and it can take 10 minutes to get a salad and a piece of bread (let alone a hot pannini – 15 minutes or more!).
What’s going on here? The fact is, it’s easy for us to spend our time time and energy focused on what went wrong: the customer that got away, the sale that didn’t close, the photo that we sent that didn’t pop as much as it should have, the pitch meeting that got off track and ended before it really started. What about the value we can create by making sure that everything goes just right when things go exactly the way they’re supposed to go?
What do we do when we come across a funder (customer) for whom our story completely aligns with their worldview, someone who jumps in quickly with both feet ready to help in a real way? Do we go above and beyond to make her experience more extraordinary, more remarkable, and more worth talking about than her wildest expectations? Or, right after “closing the sale,” do we run around after the next potential customer or, worse, are we too busy breaking a sweat doing backflips for our loudest, most disgruntled customer – never mind that they might be the wrong customer for us – that we don’t pay enough attention to anybody else?
Step 1 is figuring out who, exactly, we are trying to serve, what their worldview is, the emotional change we expect to happen when they come in contact with our story, and what action we would like them to take when we’ve succeeded in making that change.
*phew* we say. Success. We did ALL of those hard things.
Yes, it’s success, and it’s just the start. The most important, value-added part we can do is to make sure that our perfect customer is beyond delighted after they become our customer.
Chipotle knows exactly what to do when 10 hungry people walk through the door on the hunt for a hot, fresh burrito.
Are you also ready to delight your best customers when they say “YES, I’m buying what you’re selling”?
As impact investing goes more mainstream, there is a growing chorus suggesting that impact measurement might be the providence of academics and idealists.
(as in, “…we have spent too much time and too many resources discussing impact measurement and trying to measure outcomes. Is an individual who needs eyeglasses better off if she has access to them? If you are wearing a pair while reading this article, you know the answer. There are myriad basic products and services such as eyeglasses to which the majority of the world’s population does not have access and which, if they did, would allow them to live significantly improved lives. So let’s move on and not overburden those initiatives focused on underserved communities with academic questions. They already face plenty of challenges trying to deliver what they promise.”)
Now, the argument goes, the real investors have arrived, so we can do away with all of that impact measurement mumbo-jumbo. If companies succeed and grow, if capital is getting deployed and returned, and if more capital is coming in, then we know that we are succeeding. The rest is just noise.
That argument would make sense if impact measurement is undertaken as an academic, ex post process in which those on the periphery of the system peer into its beating heart, extract data, and attempt to define whether or not those at the center are creating sufficient impact. Who are they to judge?
Indeed, let’s avoid a scenario like that at all costs. In fact let’s avoid any measurement system in which the main goal is to produce data that isn’t, at its core, useful to operating companies in their interactions with end customers.
However, let us also avoid quick, easy caricatures about what measurement is and could be.
To walk through an example, let’s begin with the assertion that any company that qualifies as an impact investment is creating some sort of direct benefit for end customers or other key stakeholders (e.g. creating jobs).
So, we might ask, who wants to know if this hypothetical company is creating impact?
Sure, a wonky social scientist would love to know. She’d hope to understand if someone who buys a solar light or who hooks up to a mini-grid stops spending money on dirty, dangerous, expensive kerosene. If she doesn’t, then there’s less impact than one would hope.
The good news is that while the academic would love to have answers to these questions, we wouldn’t and shouldn’t answer these questions primarily for her. Because the same questions she has are core questions driving the success of the business. Any company that has an iota of sales and marketing DNA will need to understand answers to a basic set of questions:
Are customers buying solar lights as a replacement to kerosene or as a supplement?
How much less do customers spend on kerosene as a result of having a new source of light?
Are lights are used primarily late at night in homes, for kids to study, or out in the fields?
And on and on….
Similarly, a company selling drip irrigation kits has no choice but to find out whether end customers achieve the 2 to 3x yields that the company gets on demonstration plots. A company selling drinking water needs to understand if customers are contaminating the water before they consume it (which means that a marketing message around better health ultimately won’t deliver). And of course a company offering vocational training and job placement will definitely need to know how many graduates they place, how graduates’ incomes compare with the money they made before the program, and which training programs have the highest yield on job placement rates and salaries.
All of which is to say that understanding impact is a key driver of business success for any company selling a new product or service to an underserved market. And the companies that are first to realize this will be best positioned to meet the needs of their customers and deliver products that create the most value.
Put another way, understanding impact starts with questions like:
Who are we serving?
Why are these customers buying this product? (what problem does it solve for them)
How are they using the product?
How does this product compare with what they did before?
What benefits do they hope to realize when using this product?
Are they realizing those benefits?
Why or why not?
If we recognize that conversations about impact start and end with the end customer, we will sort out the way forward. Whereas we will continue to stumble out of the gate if they we miscast these efforts as pitting investors’ priorities against those of companies. Companies will increasingly need this data, and, recognizing that this data must and will be collected, we as a sector will miss an opportunity if we don’t agree at the outset to use a common set of standards – so that as the data is collected, it can be aggregated in ways that allow for easy comparison.
The idea that we have the option to opt out of understanding impact is akin to arguing that we can build large-scale, successful new enterprises without understanding our end customers in any real way. It’s absurd. Our opportunity is to understand, in a much deeper way, the intersection of a company, its products, and a customers’ well-being. The better the customers are served, the better the company will do, and the flywheel will start turning. If we lack data on impact, we’ll never start walking that path.
Irrespective of how much you care, about how hard you try to imagine every little thing your customers might need or want, until you are a buyer of your own product you’ll never fully understand what pieces it has and what are missing. This means:
Using a new app for weeks until you figure out that the slow startup time actually matters in frequent use cases.
Trying the self-checkout line to discover that buying produce is a nightmare.
Creating presentations using Powerpoint to discover that the seven commands you use the most are on seven different menus, and three of them are buried two levels down.
Having your team member pitch you as if you were a potential donor to see what questions actually come up.
And of course giving to your organization – and to a bunch of others – to see what sort of communications you get how they make you feel.
The difference between a good experience and a great one is in the little things that are just right; and these are almost impossible to see from far away.
I hadn’t seen this video until now. It’s a 2006 spoof/thought experiment about what would happen if Microsoft designed the 2005 iPhone packaging (Step 1: rename it to “Microsoft iPod Pro 2005 XP Human Ear Professional Edition (with Subscription). The final reveal comes at 2:30 in the video, but it’s the build that really packs a punch.
We hear all the time that we can’t delight anyone if our products are created by a committee. Indeed, we nod knowingly at how everyone else falls into that trap.
But do we have one person whose sole job is to cut away absolutely everything (everything!) that’s unnecessary to achieving the vision, to delighting the customer?
N.B. there are two non-negotiable prerequisites in the prior sentence:
Knowing who the customer is
Having a vision of what you want her experience to be
Of course in the long term you don’t need just one virtuoso or visionary, but you do need a first time when you put out a product that makes a lot of important people within (or outside) your organization upset, because you’ll have put something out into the world that isn’t for everyone.
(And yes, sometimes we – you, me – end up being the committee. Oops.)
18 months ago I got a fancy work bag as a gift. Within a year, the little ring holding the strap to the bag broke; a few months later the second one broke.
I finally made my way to their store in Soho in New York’s West Village to see if they’d fix or replace it. Sure, they said. It would take about a month to repair, and would cost me $150…to replace two little metal O-rings.
If you’re from the US you probably remember, way back when, when LL Bean was famous for taking back ANYTHING and always being willing to repair it or replace it. This was long before the web or Facebook or social media yet, despite a lot more friction around messages spreading, that story spread – like the one about the guy who had 30-year LL Bean duck boots that finally gave out, he sent them in to LL Bean, and a brand new pair arrived, no questions asked.
This contrast got me thinking about what we see when a customer takes the time and the effort to bring back something that didn’t work or disappointed her. Sure you could think her as a cost to be minimized. You could make sure that the clerk she speaks to doesn’t have the authority to make a call to do something to help her, and you could definitely write a policy that’s going to minimize unwanted returns from people trying to scam you.
Or you could see her as someone who cares enough about your product to come back, someone who’s ready and willing to be wowed or disappointed right at that moment, someone who may as well be holding up a sign that says, “THIS IS YOUR BIG CHANCE: turn me into an evangelist for your extraordinary service!”
So of course you show that person the door…?
I don’t care much about the bag. But it did get me thinking about the rare opportunities we have to really keep our promises. It’s hard to imagine, even for folks in the nonprofit space, cases where a “lifetime moneyback guarantee” wouldn’t win you legions of loyal fans who will shout your story from the rooftops.
It’s not just the right thing to do, it also will pay off handsomely in the end.