GERGEN & CHATTERJI: Finding path to expansion

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By Aaron K. Chatterji and Christopher Gergen

OPINION/ANALYSIS:

The U.S. Department of Education recently unveiled a $650 million fund to support innovation in America's schools by supporting local programs with a track record of raising student achievement -- as well as investing in programs that show promise.

The logic is simple: The best way to solve society's biggest challenges is to encourage, identify and validate new policy initiatives. Once we know which programs are successful, we should be able to easily expand the program to the rest of the country the way McDonald's rolls out a new hamburger that has tested well in select geographic markets.

Unfortunately, creating social good is not as easy as making Big Macs. That's why the most recent craze among social entrepreneurs and those who support them is about how to "scale" their impact.

Take TROSA, a successful organization in Durham, N.C., that provides residential treatment and job training for recovering addicts. The organization runs several earned-income ventures, including a moving company staffed by residents that generated $5 million in 2007.

Graduates of the program leave with a car, a savings account and housing. TROSA clearly has developed and nurtured a good idea. But if they were looking to scale, how would they spread that idea to the rest of the nation?

From our research and experience, there are a few factors that make social enterprises difficult to grow. First, they often are founded by one-of-a-kind leaders like Mike Feinberg and Dave Levin.

While these leaders are the reason you have heard of KIPP schools, they can't be in more than one place at a time. When it comes time to expand their organizations, it is often difficult to find others who can match the intensity and inspiration of the founders.

Another reason social enterprises are hard to scale is they often grow within a supportive community, the particulars of which cannot always be replicated in another place. Whether it is a supportive city council, a local business champion or a willing cadre of volunteers, there are many factors that might make a particular organization successful in a particular place at a particular time. Simply borrowing the name of a successful organization does not give it roots in a new community.

Finally, as University of North Carolina professor Jim Johnson shares, we tend to treat successful programs like a "buffet," taking only those ideas we like and ignoring others, leading to imperfect replication and oftentimes, failure.

Moreover, without the right tools to measure social impact, even seemingly successful social entrepreneurs may not know exactly what the drivers of success for their own organization are, making it nearly impossible to scale.

How can we overcome these hurdles? First, just like Fortune 500 companies, social entrepreneurs need to invest in managerial training so they have the right people to grow the organization and measure and scale impact.

Next, social enterprises might wish to borrow a page from successful franchisers such as McDonald's and make a stronger effort to brand their organizations around a certain set of programs that are bundled tightly together by design.

Social entrepreneurs might even wish to franchise their brand with explicit agreements that dictate which programs must be conducted and how, the same way McDonald's instructs its franchisees from Bangor to Beijing on the one right way to make french fries.

Of course, growing organizations should allow for some flexibility, so their local affiliates could still offer programs tailored to address local needs, but understanding the "non-negotiables" is critical.

While we are advocates of harnessing the magic of our local "laboratories" for new ideas, we also recommend that more money and time needs to be spent in figuring out just how to scale the good ideas we already know about.

Whether through training, better branding or new business models, the challenge for tomorrow's social entrepreneurs will be more than just coming up with a good idea, it also will be in navigating the challenges to scale their impact.

• Aaron K. Chatterji is an assistant professor at Duke University's Fuqua School of Business and a fellow at the Center for American Progress in the District. Christopher Gergen is director of the Entrepreneurial Leadership Initiative within the Hart Leadership Program at Duke University's Terry Sanford School of Public Policy.