About Scaling

The notion of scaling gets much attention both in the social innovation literature and at incubators and accelerators. In the side text on this page, we have gathered a selection of quotes from various sources.

From those sources we can draw a number of insights:

  • The ultimate purpose of scaling is to increase the social impact of the social innovator’s initiative.
  • Scaling is achieved by offering additional services or products to existing beneficiaries, by reaching more beneficiaries in the current market, or by expanding into new markets.
  • Scaling does not necessarily imply an expansion of the innovator’s own staff and/or revenues; scaling may also be achieved by relying on partnerships.
  • Ideally, scaling is achieved without having to increase resources and costs at the same rate as the increase in social impact.
  • In some instances, achieving a minimum scale is a prerequisite for operating efficiently and economically, i.e. to have a sufficient financial surplus to cover the organisation’s fixed costs.
  • While scaling, the social innovator must not stray away from his/her social mission.
  • Scaling should only be undertaken after the concept has been proven in the original market.
  • Scaling is a continuous process, and not an end-state.

The BENISI scaling journey

Based on these insights, we designed the BENISI Scaling Journey consisting of four stages: Readiness, Design, Implementation and Follow-up & Evaluation:

Figure 1 : BENISI Scaling Journey

In the Design stage, two separate questions are addressed: whether to collaborate with partners, and whether to adapt the business model. Depending on the answers to these two questions, the social innovator can follow one of four scaling strategies.

Figure 2: Scaling strategies in the BENISI program

1. Capacity Building

The social innovator develops a suitable business model generating revenues (for public sector: securing public funding) in order to scale. This strategy is typically followed by social innovators who want to grow bigger in the market where they are already present.

Capacity building is investing in your own organisation: expanding the current activities in their current form to enhance efficiency, productivity and/or performance, and thus increase social impact. Some people call it ‘doing more of the same’ since the scaling involves the same target group, the same product or service, and the same location. More capacity can result in benefiting more people, or the number of beneficiaries remains the same, but with an improved quality. In principle, no new knowledge or skills are required. However, this type of scaling is often underestimated in terms of effort and the change needed. Building more capacity means more resources are needed. This might also implicate the role of the founder: it this person willing and able to manage a team?  This phase is often considered as the foundation stone of the social innovation. Once the organization has built its own robust capacities it can explore scaling out to new markets.

2. Branching

The social innovator is operational in a particular country or geographical region and is looking to scale up to other countries or geographical regions by developing branches. The mother entity owns and manages all branches.

Branching is all about developing your concept in new places and markets, in such a way that the founding organisation keeps control as the ‘mother organisation’ and creates new local entities, called ‘branches’. These different branches can be managed without a specific legal form, or with a specific legal structure: a group with a holding structure. Although there is certain hierarchy, giving large management autonomy (finance, operations, strategy etc.) to the branches is perfectly feasible, if desired. This path allows you to expand, but with a level of control and centralised management. Because of the large investment needed and the high risk-taking, this strategy is generally used by large organisations, and less by social innovations.

TIP!
It is important to standardize your core offering across branches: it ensures same level of quality when scaling and resource planning for growth.

3. Dissemination of Knowledge

The social innovator wants to spread his experiences, knowledge and know-how. The social innovator enables a different team to replicate a successful social innovation in a new context by using an open-source or similar approach.

In order to maximize your social impact, without expanding your own organisation or make long-term commitments, social innovators can decide to make their knowledge available. Other interested innovators can decide to pick the knowledge up, without being restricted by the original concept. No formal links, no sharing of brand name is needed. This means that the founder is willing to share his knowledge without keeping control, and accepts that his original concept will evolve over time. Although this is an ‘easy’ and less expensive way of scaling, not all social innovators are keen to open up their intellectual property to others.

Dissemination of knowledge is mostly done on a voluntary basis, to inspire other. However, according to the project, it may be a lot of work to reflect and codify the key aspects of the innovation in a way that it can be disseminated and used by others. In such cases it’s not that obvious how one can just ‘give it away’. However while social innovators mostly have an open mind set and a willingness to share and collaborate, we see that revenue generating social innovators tend to keep a certain control on their knowledge and expertise. Dissemination of knowledge is more common in informal social innovations.

We saw that dissemination of knowledge is the most appropriate scaling strategy for public sector innovations. Because of their territorial focus, owners of a social innovation (e.g. a city) are not well placed to do the scaling themselves. A platform for promoting public sector innovation could be a tool to disseminate and match these type of innovations with potential receivers who may be interested in transferring the experience in their area.

4. Affiliation

The social innovator develops a network of legally independent structures that adhere to the principles set by the innovator’s original entity. While the innovation is adapted locally, the partners use licensing, franchising or similar formulas to benefit from previous successful implementations by the original innovator.

Using the affiliation strategy, new organisations are initiated sharing the main principles of the ‘mother organisation’ (mission, values, activities), with limited legal relationships. Both organisations have their autonomy, few constraints and control. The initiative is a two-pronged affair: a mother organisation that is willing to share and scale, and the new organisations who has the desire to implement. It’s up to the new organisation to encourage, support and provide assistance, and position itself as a ‘network head’. Crucial aspects in this strategy are the maturity of the mother organisation and financial stability; new organisations have to find the resources to launch.

A special case called ‘social franchising’, occurs where the degree of control and legal relationships are stronger. In some examples no fee is required from the new organisation due to the search for external funding.

TIP!
Strong branding and clear licensing or credentials for knowledge are important to provide recognition to generate of knowledge.

Related Cases

WEEE in Prison

Dia14

Compuritas

Dia15

Allia

Dia16

Le Mat

Dia17

Views on scaling

Scaling Strategies – Avise
Scaling describes a ‘process’ and not a ‘state’. Thinking in terms of scaling indicates that one is observing a reality in change.

Scaling Social Impact in Europe – the Bertelsmann Stiftung
Scaling is the most effective and efficient possible increase in social impact created by a social enterprise based on its operational model, with the goal of satisfying the demand for the relevant product or service (Bertelsmann Stiftung 2013). This definition focuses on the increase in social impact and not necessarily on the relative growth of the social enterprise itself.

Handbook of tools and methods to support the scaling of Inclusive businesses – GIZ
An inclusive business is operating at scale when it achieves a new level of impact, through increasing significantly: the geographical reach of its services, the number of beneficiaries, its revenue, and/or its staff size.

PATRI Framework for Scaling Social Impact
Scaling essentially refers to a form of growth. However, there is an important distinction. Growing typically involves adding resources at around the same rate as adding impact or revenue. The implications are primarily operational. If you’ve already increased reach to more people, more cities or even more countries, but your operating costs have gone up in a generally correlated way, then what you’ve really done is grown rather than scaled. Scaling differs in that it involves adding impact at an exponential rate while adding resources at an incremental rate. Although scaling is also commonly approached from an operational perspective, it typically has significant implications for design, not only in terms of the solution being scaled, but also for the way it is delivered. (…) Growth is typically the first stage on the path to scaling. Once you’ve developed and proven a solution, then the next stage is to grow your reach in a direct and controlled manner in order to understand the process as well as the transferability of your solution.

The Open Book of Social Innovation – Nesta and the Young Foundation
At the scaling stage there are a range of strategies for growing and spreading an innovation – from organisational growth, through licensing and franchising to federations and looser diffusion. Emulation and inspiration also play a critical role in spreading an idea or practice. Demand matters as much as supply: how market demand, or demand from commissioners and policymakers is mobilised to spread a successful new model. This process is often referred to as ‘scaling’, and in some cases the word is appropriate, as the innovation is generalised within an organisation or the organisation itself expands. But scaling is a concept from the mass production age, and innovations take hold in the social economy in many other ways, whether through inspiration and emulation, or through the provision of support and know-how from one to another in a more organic and adaptive kind of growth.

The BENISI sample

Choosing the right scaling strategy is very straight forward once you have clarified the partnering and adaptation questions.

If we take a look at the BENISI sample, consisting of 303 social innovations, we notice that the most ‘popular’ scaling strategy was capacity building with more than the half of the organisations. This is usually a sign of ‘early growth phase’. One third of the organisations implemented the dissemination of knowledge strategy, while 23 percent opted for branching and 19 percent for affiliation. It is important to note that some of the social innovations implemented more than one strategy at the same time.

Furthermore, we notice that social innovators in the public sector scale less than those elsewhere, probably because there is no mandate or incentive for them to share social innovation with other public actors (in other territories).

In general, there is no “one size fits all” strategy, and agility is important.

As a final note, we should say that scaling is a choice that the social innovator should make based on personal motivation. Some may prefer to remain a small local organisation. Others may not yet feel ready to scale up. In the chapter ‘Am I ready for scaling?‘ we explain how to find out whether you are ready.

Comments or suggestions

0 Comments

Leave a reply

Your email address will not be published. Required fields are marked *

*