June 26, 2017

Are you delivering services or are you providing value?

More social organisations need to ask themselves whether their services benefit the people they aim to help. Nasreen Dhanji and Roshan Paul talk about how you can refine existing models to make them more efficient and impactful.

2 min read

Innovation—the creation of new ideas, products, and services—has become increasingly important as a source of energy and funding in the social sector.

Traditional nonprofit business models are being questioned, the rate of global change seems faster than organizations’ ability to keep pace, and there is a growing sense that the old ways of solving problems no longer work.

But when it comes to sectors like health, education, or business incubation, how might anyone provide something truly new? Can you set out to change the way a sector works?

An Approach for Evaluating Innovation

‘Value innovation’ is a strategic approach that can help organizations create and deliver unique, differentiated value rather than engage in direct head-to-head competition. This approach aims to help innovators achieve two things:

  • Create a leap in value for consumers (or beneficiaries) by eliminating compromises that the sector forces beneficiaries to make and by introducing new elements that entice non-beneficiaries to begin consuming an organization’s offering.
  • Reduce organizational costs associated with delivering greater value by eliminating factors the sector takes for granted but that no longer have value.

Value Innovation in Practice

We started by asking each organization: What do you really do? What stood out right away was that nearly everyone answered in terms of services (what they provide), not value (what customers want). But being more disciplined about understanding value can improve your ability to innovate.

The next step was to put these offerings in context, comparing them to other products and services in the field. A simple matrix called the Four Actions Framework allows us to determine what to eliminate, what to reduce, what to raise, and what to create to provide more value relative to others in your industry.

Lessons for Organizations Everywhere

We believe organizations across a range of different sectors can benefit from this analysis.

  1. Focus on value, not services. Most organizations are internally driven, focusing on the services they provide rather than on the needs of their beneficiaries.
  2. Navigate a fragmented industry. In most sectors, there is a lack of coordination and collaboration between players. Improving this could result in a systematic progression from market research and ideation, to product design and testing, to seed capital, to scaling up.
  3. Strategic partnerships around a mutual target audience. Many organizations have access to audiences that a larger stakeholder would also benefit from.
  4. Add value to intrapreneurs. The ‘intrapreneurship’ movement—where people drive change from within a large organization—is actively looking for ways to learn from entrepreneurs.

This is an excerpt from the full article, which can be found here.

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Stanford Social Innovation Review

Stanford Social Innovation Review (SSIR) is published by the Stanford Center on Philanthropy and Civil Society at Stanford University. It seeks to advance, educate, and inspire the field of social innovation by seeking out, cultivating, and disseminating the best in research- and practice-based knowledge. SSIR informs and inspires millions of social change leaders from around the world and from all sectors of society—nonprofits, business, and government.

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