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Management in Practice

Do international development organizations need to be in the innovation business?

Neal Keny-Guyer '82, CEO of Mercy Corps, talks about his organization's formula for innovation: local leadership, rigorous metrics, and a willingness to adapt and change in mid-project.

Savitri Devi Chaudry, a member of the Disaster Preparedness Committee in Kailali, Nepal, part of Mercy Corps' Disaster Risk Reduction program. Photo by Miguel Samper for Mercy Corps.

The scope and complexity of problems facing the billion poorest people on the planet can seem overwhelming. While progress has been made, incremental efforts may never reach a solution. Because the issues are so intractable, Neal Keny-Guyer argues that the true job of international NGOs is to innovate. While there will likely never be a silver bullet to end poverty, scalable solutions that draw on the power of markets can have significant impact. Keny-Guyer describes building those solutions through an iterative process that brings out the insights and creativity of locals through the tools of design thinking. With support from organizations like Mercy Corps, communities address problems that they identify, track results, and develop cross-sectoral partnerships that can grow and support long-term capacity building.

Q: Why does Mercy Corps focus so heavily on innovation?

No matter how big your organization is, you're never going to solve the problems of the world by yourself. That really struck me in Afghanistan. At the peak, our programs had a staff of 1,000 and a $40 million annual budget there but, in the greater economy, it wasn't a blip. Yes, we helped an impressive number of small-hold farmers in rural Afghanistan, but it's not clear, even at that scale, if it's going to really move the needle, because so many things have to line up in terms of government policy, security, and bigger-picture economic issues.

Local NGOs can provide essential services. For an international organization, our niche ought to be bringing broad innovation through partnerships, approaches, strategies, or systemic ways of doing things. There are no silver bullets. If there were, we'd be employing them. But, if you can consistently create a culture that brings in new ideas, that has the potential to provide some of the solutions that have evaded the relief and development community for a long time. That's why we focus on innovation.

Q: Where do the innovative ideas come from?

The best thinking from community development—what now goes under the name of human-centered design thinking—is that in most cases the best ideas come from the people living day-to-day as close to the challenges as possible. The best ideas for clean water, the best ideas for how to increase community income—they come from the people impacted.

Local leadership in the NGO is critical to facilitate that process. They can help with accessing and developing those ideas. They have the ability to understand culture, traditions, and history, to know what's happened before. Deep understanding of context combined with helping people think in fresh and creative ways—that drives innovation.

Q: Given Mercy Corps' prioritization of innovation and local solutions, how do you make sure there's replicability with the best programs?

Mercy Corps focuses on those places where conflict, poor governance, and poverty all collide. There are some exceptions on the margins, but 90% of our work is with the bottom billion.

Again, there is no silver bullet, but you've got to get at least these two things right: local governance and local economic development. Without those it's so hard to sustain any gains in health, education, or social welfare. When we do see real progress in these fragile environments, then we're really trying to write that up and push it out.

With a number of areas that are really big for us—for example, food security—we've got programs that link together every aspect of food security from early nutritional intervention through agriculture development. There we're rigorously trying to track our approaches, our results, our successes, our failures. We've got partnerships with universities, so that as lessons get learned they get systematically pushed out across Mercy Corps, and occasionally beyond.

Then the other area is you highlight the folks who are really succeeding by telling stories about what they're doing. There's a theory around positive deviants—in communities where all the people are coming from the same background and there are high rates of malnutrition except in one or two families—if you study those positive deviants, you begin to see what they're doing differently and have them take a lead to push out behavioral change to the community. Well, we try to do that within our own organization as well.

Q: How does Mercy Corps develop leaders inside the organization?

When I started this work way too long ago, it was almost all expats from western countries with a heavy American component. It's completely different now. Overall, 95% of our staff are local. For those working as global international staff, less than 50% are from the West.

Like any other sector, you want to be able to tap into the best talent, the best ideas, and the most optimal resources no matter where they are. Increasingly, the talent is local but you've got to systematically build global organizations that have the best people top to bottom. I really do think whoever gets that right is going to have a strong, enduring organization.

You're both trying to build and capture local leadership in the communities where you work and then you're trying to identify who wants to and has the potential to work on a global platform and then you nurture and develop their leadership capacity.

Q: The field has seen a shift from narrowly targeted projects to a broader focus on capacity building.

A community never just has a water problem or a well problem. What you really want is an ongoing process in which a community can come together with some version of a private sector, with some version of a public sector, in an ongoing way to solve problems, build capacity, and improve the quality of life. Yes, at various times you're going to focus on water. At other times you may focus on reducing infant mortality or boosting small farmer incomes, but, to get the long-term change, all this has to happen in an integrated context.

The folks who specialize on a specific thing need to partner with groups that build process and organizational capacity, ensuring that key people in the community have the skills and the leadership to leverage those specific, targeted efforts in a broad, integrated way.

We're all trying to be careful that it just doesn't become the latest buzzword, like sustainable development, but the concept of resilience can be important. It borrows from various disciplines but it's really about systematic, holistic thinking, iterating, and problem solving in communities.

Q: How do you make choices about where you focus your resources? When you have success locally, do you try to build on that success or expand?

It's an issue that is really left in local hands as they set the strategy. We have this notion called the three I's of leadership. The first I is that leadership is really about ideas and innovation. Second, it's about influence, because without that you can have a great idea or innovation but it may not go anywhere. That means thinking through what networks, what groups of people, what institutions do we really need to have relationships with in order to have real influence? Then the third is impact. For us impact is, “Can we measure the results of what we're doing? Can we demonstrate that there's learning? Can we see a pathway to scale?”

If we've done a good job with the three I's, the country director or the program director will make the right decision in terms of going deeper or expanding.

Q: How do you explain these choices to donors?

What you always want is a partner that's willing to go in knowing that while you start out with certain goals about outcomes and impact often you will learn, adapt, and iterate along the way. That's what happens in the best programs.

One of the great things about the emergence of design thinking and the concept of resilience in the development space is it gets us away from rigid frames and into a world in which you want to be able to adapt and change. You still have to be as rigorous and strategic as you can be, but no matter how good your baseline assessments and initial plan, chances are you won't get it all right with the first iteration.

If you cultivate the right kind of relationship with donors, by and large, they are open to that. Now, not every donor's going to go that way. Some get locked in. But I'm encouraged in that we see more and more donors beginning to move in that direction.

As an example, we all know that a focus comprehensively on women has more return on investment, in terms of community development and social impacts, than other areas of focus. As a woman gets more empowered through literacy, numeracy, or other skills, as her income increases, she is more likely to spend that on improving schools, healthcare, and then ultimately on the community. If you've got a broad focus on women's empowerment, many donors will be flexible around iterative changes to a program as it is put into practice. But, in our experience, that's still more of an art form than a science and you can never underestimate the importance of seeing a donor as a partner, not just as a funder.

In a talk with Master of Advanced Management students at Yale SOM, Neal Keny-Guyer discussed the importance of finding innovative partnerships between the nonprofit and for-profit sectors. Watch the video.

Interview conducted and edited by Ted O'Callahan.