By Lauren Counts, Senior Director, Strategy, Innovation, and Impact Management
Mission-driven organizations face down some of the world’s biggest challenges – systemic poverty, inequality, and racial inequity, to name a few – as a matter of business practice. Certainly these are not easy issues to tackle; they require bold thinking and brave action in order to create transformative change for those underserved communities that experience these inequities.
Through innovation, we can uncover solutions to these challenges. Thinking outside of the box, beyond the status quo, can open opportunities for catalytic investment in communities that need the most support. Some great examples from mission-driven organizations are innovations in fintech, which have helped companies deliver financial services to the under- and unbanked. But innovation can be intimidating. External uncertainties could negatively impact outcomes. What if we invest staff time and resources in something that turns out to be a failure? How can we be sure that we are making the right decisions?
At Capital Impact, all staff are involved in the innovation process, using the organization’s values to guide creative thinking.
As a Community Development Financial Institution (CDFI) engaged in financing community organizations and social enterprises for social impact, Capital Impact Partners manages the risk of embarking on new opportunities through an intentional innovation process, beginning with concept development through market research to design and implementation. Going beyond familiar places and products helps expand our reach to new customers and markets. So how do we do it?
Innovation takes time, resources, and most importantly, commitment. We rely on each of our core values to incorporate innovation into our everyday work.
Brave: Innovation relies on bravery. A new idea may challenge existing assumptions about the way Capital Impact, and the CDFI sector as a whole, has always done things. There can be many unknowns: working with new partners, launching a program in a new city, and various other risks. But with risk can come reward. There is no greater reward than transforming the landscape for communities that have experienced structural and historical disinvestment, and empowering them to take advantage of opportunities that they have not had the benefit of in order to achieve their full potential.
Innovation can be difficult, but creating an environment where all ideas are welcome opens up possibilities for improving community outcomes.
At Capital Impact, we cultivate a culture that fosters innovation, where any team or staff member feels empowered to start the conversation, to raise the possibility of exploring a new opportunity. Sometimes innovation is exciting; at other times, it is uncomfortable. Having a formal innovation process, which helps us move ideas from concept to market research and design, gives us the space and confidence to explore new opportunities.
Creative: Innovation is that spark of an idea, asking “what if we….?” – which takes ingenuity. Being innovative doesn’t necessarily require continually thinking outside the box. Sometimes creativity means reimagining an existing activity or product, thinking about its potential impact if implemented with different partners, or with modifications that create a new desired outcome for communities.
I have learned that we need to make time for creativity. Unstructured thinking time, from casual conversations to team brainstorming during strategic planning, give us the time to stretch our thinking. Visioning exercises are an important part of our strategic planning process. At Capital Impact, we think about what impact we hope that a particular investment or product would have a few years into the future. Questions we ask include: What are our offerings? Who will we serve? Without burdening ourselves with the “how” in the moment, bold ideas develop.
Putting the needs and opinions of our communities first is a critical element of ensuring that innovation benefits underinvested communities.
Inclusive: Capital Impact is committed to fostering a culture of open dialogue and active listening. This starts at the idea stage – being open to new concepts and approaches – and continues throughout market exploration and design process. In particular, we want to incorporate ideas emanating from direct community needs, giving underserved communities access to exactly what they need in order to thrive.
Tenacious: The point of innovation is to bring new ideas into being. Tenacity allows us to bring these ideas to fruition, despite barriers or temporary setbacks. Fortunately, our staff and partners in community development are dedicated to our mission of creating communities of opportunity, breaking down barriers to success in the process. Addressing systemic poverty and inequality is a marathon, not a sprint.
Building healthy communities – where equity and inclusive growth are available to all – requires open-mindedness and innovation. Traditional thinking will not solve the problems that communities across the country experience today. In our 2020 vision, we laid out a new path for our organization, one that required us to expand our thinking, as well as lending and programmatic efforts, in order to spread equity and justice in the communities that we serve. Through that framework and beyond, Capital Impact will continue creating spaces and frameworks where innovation can thrive, helping organizations drive social impact for those most in need.
To hear how our innovative thought process translates into impact-focused lending and programs, stay tuned for our upcoming innovation blog!
