Following a great article I saw last week, I have been thinking a lot about the need for innovative entities in the international aid and development sector. The article, “Where’s the Revolut(ion) of Development Banking? It’s Time to Disrupt Multilateral Finance” argued that the World Bank has failed to serve its mission of eradicating poverty and a new multilateral bank model is needed to disrupt those (drawing on the example of neo-banks).
The idea of disruptive innovation being greatly needed in the development sector more broadly is not a new one, but it is one I have been exploring for a while. Many of the issues highlighted in the world bank article, also face donor organisations, NGO’s and Managing Contractors, including “significant path dependencies, legacy issues, and political baggage.“
Whilst there is certainly room for these players to do better, it would be unrealistic to assume that these behemoths could turn into agile, tech-savvy, and entrepreneurial organizations anytime soon. Innovation research tells us that truly disruptive innovation — the kind that can transcend development finance orthodoxy— must be pursued outside established organizations.”
Dominic Hofstetter – Where’s the Revolut(ion) of Development Banking? It’s Time to Disrupt Multilateral Finance
Disruptive innovation, creating new products or services that disrupt the existing market and establish a new market, is a key approach, in breaking down existing models and starting again from what the core issues are. In the development sector, disruptive innovation is critical to creating more effective solutions to global problems.
Often we think of innovation in development in terms of program delivery, or specific logistics or programmatic approaches, but whats missing is looking at innovation to focus on disrupting the foundations of how the development organisations themselves operate, are run, and think. From HR, to finance, to ownership and strategy.
Why Disruptive Approaches are Needed
In the development sector, traditional approaches to problem-solving have, arguably, been ineffective in addressing many of the challenges faced by communities. Existing organisations often rely on outdated models that have not evolved with changing times, leading to limited effectiveness and impact. Additionally, organisations often have large bureaucracies that hinder innovation and limit their ability to respond to the changing needs prevalent across the world.
To address these challenges, I believe that disruptive innovation is necessary. Developing and showcasing completely different approaches and ideas to how development can be delivered and managed, creating more effective solutions that are better suited to the needs of communities. These organizations will be more nimble and adaptable, allowing them to respond quickly to emerging needs.
What it Could Look Like
Disruptive innovation could take many forms in the sector, but there are three focus areas that organizations can consider to develop disruptive approaches:
- Collaboration: Collaboration is a key area for disruptive innovation. Organizations can work together to create new partnerships that leverage each other’s strengths and resources. While collaboration already occurs, organisations face significant constraints in how deep and relevant the partnership can be based on their structures. Managing contracts may struggle to devolve control over programs that they are responsible for based on how their systems and processes operate, and the contracts they have developed. By building, from the start mechanisms and processes for true collaboration, the current hierarchical approaches can be disrupted and changed.
- Ownership: Organisational ownership and strategy are another area that is prime for disruption. Forming organisations from the start with true shared ownership, working directly with communities to develop the structures that give voice and control will go a long way to building a sustainable future, improve resilience and shared wealth. By involving communities in the design and implementation of these organisations, more effective and sustainable solutions, better suited to the needs of communities, are more likely to be unearthed and developed.
- Technology: While usually I hesitate to include technology in lists of innovations (just because its what most people think of so I try to highlight others), there’s no doubt that technology can be a powerful tool for disrupting traditional operating models. Organizations can use technology to develop collaboration platforms, program management tools, reporting frameworks, financial transfers etc. that operate rapidly, across cultures. While many large organisations already have those, often there is significant challenges in deployment of the services, cross border functionality and integration. Building organisations as technology driven platforms from the start allows processes to fit with the technology, rather than a patchwork of technology to fit with the legacy processes. With deeper tech integration, MEL becomes integrated into the whole organisation, for programs to finance efficiency.
Increasing Impact for Communities
But the most important aspect of seeking disruptive innovation is to develop more effective solutions to better address the needs of communities. The legacy models we have at the moment create barriers to this, which are often invisible, or seem so large they can’t be overcome. Starting afresh in the how we operate gives an opportunity to review these models.
Why it needs to be whole new models
Innovation within organisations is always bound by processes and legacy. Disruptive innovation, to complete rebuild the understood foundations of how devlopment organisations operate, by necessity, needs to come from outside. Innovation research often shows that innovating within leads to small changes, or little change. While new technology or models, free from the legacy issues, are able to grow and scale quickly.
Often I hear from Donors that they seek innovation but also want security, contractors want innovation but know that less risk is the focus for their clients (donors). Risk is the biggest concern, but I believe earnestly that if we can co-develop new models, the level of risk will actually be lower and the level of impact much higher.
But, until such a model is developed, it’s hard to showcase how it has worked. Disruptive innovation seeks to start from the ground up, so tweaking existing models will never be able to demonstrate the same impact.
There’s a fantastic book by Clayton Christensen, Efosa Ojomo, and Karen Dillon called “The Prosperity Paradox: How Innovation Can Lift Nations Out of Poverty” which has a number of fantastic examples of disruptive innovation to create whole new markets in the Global South. Whats missing, is taking these same ideas and applying them to the very organisations and ecosystems we have built to deliver and manage aid.
Developments core organisations (Donor/NGO/Contractor) and approaches have all developed over time into large behemoths and can be trapped in their paths. Creating a struggle to align with the changing times we face and limiting effectiveness and impact. Stepping back and creating new organisations from the ground up that are aligned with the current and future purposes, and utilise technology, collaboration, and ownership are the best avenue for disrupting and changing our system.
But, until we can develop new operating models, developments core objectives, to create world without poverty and need, will remain out of reach.
Joel Bird
Founder – InDev Media and Keprah
InDev Insights is a platform for sharing new ideas, analysis or proposals for the Global Development sector. It seeks to bring to the fore the ideas and thoughts across the whole devleopemnet sector, from communities through to government.
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