By John Kania, Mark Kramer, & Patty Russell
The practice of strategic philanthropy has advanced
substantially over the past two decades, yet even
its most committed theorists and practitioners—we among them—have often been disappointed by
the results. We have helped hundreds of funders
and nonprofit organizations commit to clear
goals, data-driven strategies, heightened accountability, and rigorous
evaluations—all core principles of strategic philanthropy that
increase the odds of success. And yet, as we have watched funders
and their grantees struggle and often fail to reach their ambitious
goals, we have repeatedly felt a nagging suspicion that the conventional
tools of strategic philanthropy just don’t fit the realities of
social change in a complex world. We have now come to the conclusion
that if funders are to make greater progress in meeting society’s
urgent challenges, they must move beyond today’s rigid and predictive
model of strategy to a more nuanced model of emergent strategy
that better aligns with the complex nature of social progress.
The more foundations embrace strategic philanthropy, the clearer
its limitations become. As practiced today, strategic philanthropy assumes
that outcomes arise from a linear chain of causation that can be
predicted, attributed, and repeated, even though we know that social
change is often unpredictable, multifaceted, and idiosyncratic. It locks
funders into a rigid multi-year agenda, although the probability and desirability
of achieving any given outcome waxes and wanes over time.
Rigorous evaluations attempt to isolate the impact of solitary interventions
without effective models of dissemination. And the forced simplicity
of logic models often misleads funders to overlook the complex
dynamics and interpersonal relationships among numerous nonprofit,
for-profit, and government actors that determine real world events.
Despite these shortcomings, strategic philanthropy can be effective
for certain types of problems. Complexity theorist David
Snowden described the differences among problems that are simple,
complicated, or complex. A simple problem can be highly ambitious:
Building a hospital is not easy, but it follows a well-understood formula.
Given the necessary resources and expertise, one can reliably
predict the cost, timeline, and end result with high accuracy. Complicated
problems, like developing a vaccine, may take many attempts
before a successful formula is developed, but each successive attempt
builds on prior knowledge and experience, and once the formula
is discovered, it can be repeated with equally predictable results.1
Complex problems, such as improving the health of a particular
group of people, are entirely different. These problems are dynamic,
nonlinear, and counter-intuitive. They are the result of the interplay
between multiple independent factors that influence each other in
ever-changing ways. The health of a population is influenced by the
availability and quality of health care, but also by economic conditions,
social norms, daily diet, inherited traits, familial relationships,
weather patterns, and psychological well-being. The interplay of
these factors creates a kaleidoscope of causes and effects that can
shift the momentum of a system in one direction or another in unpredictable
ways. Each intervention is unique, successful programs
cannot reliably be repeated with the same results, and learning from
past efforts does not necessarily contribute to better future results.
Strategic philanthropy works well for simple and complicated
problems, toward which the vast majority of philanthropic funding
is directed. Many funders support programs like after-school
tutoring and institutions like hospitals, which help alleviate the
consequences of complex societal problems in education and health
without directly addressing the problems themselves. But strategic
philanthropy also emphasizes the need to eradicate the root causes
of society’s complex problems without recognizing that a different
and more emergent approach is required.
One philanthropic organization that successfully used an emergent
approach to tackle a complex social problem is the Rockefeller Foundation. Beginning in 2008, the foundation launched a five-year,
$42 million initiative to stimulate greater investment capital that
could “improve the lives of poor and vulnerable citizens around the
world” through impact investing. At the time, the field of impact investing
was small and disorganized. Over the next four years, despite
the 2008-2009 worldwide financial meltdown, $6 billion of new investment
capital went into impact investments. Three-quarters of
this growth could be tied directly to Rockefeller’s efforts, effectively
leveraging the foundation’s dollars one hundred to one. The foundation
also had significant policy influence on the governments of the
United States, United Kingdom, Canada, and Australia. For the first
time, international development agencies began to use impact investment
as a promising new tool. All told, the Rockefeller Foundation
played what one evaluation report called a “decisive role” in activating
a global movement that continues to grow even as the foundation
shifts its support to newer forms of innovative finance.2
The Rockefeller Foundation accomplished all of this without an
initial formal theory of change or logic model that predicted specific
outcomes. Instead, the foundation followed an emergent approach,
co-creating its initial strategy with dozens of other organizations,
strengthening the global ecosystem that determined the outcomes
they sought, and continuously modifying its strategy as the staff
sensed opportunities to amplify positive developments along the way.
Emergent strategy does not attempt to oversimplify complex
problems, nor does it lead to a “magic bullet” solution that can be
scaled up. Instead, it gives rise to constantly evolving solutions that
are uniquely suited to the time, place, and participants involved. It
helps funders to be more relevant and effective by adapting their
activities to ever-changing circumstances and engaging others as
partners without the illusion of control. It is messy and challenging,
but far more realistic about the role foundations can play in social
progress. Before exploring in more detail the emergent approach to
strategy, it’s important to first understand why the predictive model
so often fails to make progress against complex social problems.
Distinguishing the Simple from the Complex
In 1999, Michael Porter and Mark Kramer (one of this article’s coauthors)
published the article “Philanthropy’s New Agenda: Creating
Value” in Harvard Business Review, asserting that foundations have
the opportunity and the responsibility to create social value beyond
the mere purchasing power of their grants. We suggested that they
could do so by selecting the best grantees, signaling other funders,
improving grantee performance, and advancing knowledge and practice
in their fields. We urged foundations to become more strategic
by focusing on a clear and limited set of goals, conducting thorough
research, framing a hypothesis for how best to approach the problem,
and developing an evidence-based process for learning from
results. Those recommendations echoed and complemented the
core elements of strategic philanthropy espoused by other thought
leaders who have before and since contributed to the growing body
of knowledge about philanthropic strategy.
In the fifteen years since that article was published, however, our
experience working with clients has taught us that although this guidance
is helpful in addressing simple and even complicated problems,
it is insufficient when tackling complex problems. Our three subsequent
articles in Stanford Social Innovation Review—“Leading Boldly,”
“Catalytic Philanthropy,” and “Collective Impact”—articulating the
need for adaptive leadership, a problem solving approach, and highly
structured cross-sector collaborations—were all early attempts to
confront the challenges of developing
strategy under conditions
of complexity.3
Foundations, of course,
spend much of their time and financial
resources tackling simple
or complicated problems, many
of which are embedded within
larger complex problems. In fact,
some of philanthropy’s landmark
achievements have come from
solving complicated problems
through a progression of scientific
advances, such as the Aaron Diamond Foundation’s efforts to
develop the first successful treatment for AIDS, or the Ford and Rockefeller
foundations’ agricultural research that produced the “green
revolution,” estimated to have fed more than one billion people. Interventions
such as these are triumphs of strategic philanthropy, saving
a great many lives and making a substantial difference in the severity
or scope of a complex problem such as disease or hunger, even though
they fall short of solving the root causes of the complex problem itself.
Many foundations can continue to do a great deal of good by using
the traditional tools of strategic philanthropy to address simple
and complicated problems. Unfortunately, foundations have rarely
been clear on when the line has been crossed from the simple and
complicated into the entirely different world of complexity. Funding
under-resourced schools is not easy, but it is still a simple challenge,
and more resources are likely—although not usually sufficient—to
help students succeed. Improving the performance of teachers is a
complicated challenge: A teacher’s performance is affected by many
variables, and we have no well-established metrics of teacher quality.
Given sufficient research into best practices, however, the essential
variables and metrics can be identified, understood, and improved.
But when one moves from the goal of training teachers to the goal
of improving student achievement across an entire educational system, one has moved squarely from the complicated to
the complex. Student achievement is influenced
by myriad interdependent factors such as school
leadership, economic and family circumstances,
peer dynamics, role models, and even nutrition.
Single-point interventions may address one or
more of these simple or complicated problems,
but foundations will inevitably encounter complexity
when they attempt to scale up their successes.
Scaling up an intervention by spreading
the adoption of new practices across a system is
an inherently complex challenge. Each school
operates in a unique context determined by its
resources, history, leadership, social dynamics,
and countless other factors that prevent solutions
in one school from being repeated reliably
in others. This is one reason that funders are frequently
able to launch successful interventions,
but much more rarely able to scale them up.
The shift from improving teacher quality to improving educational
outcomes, or from a single success to systemic change, may
seem merely a more inspiring way of framing the foundation’s ambitions.
But when foundations take seriously the achievement of their
goals and seek to measure their progress, they find that the difference
between these two goals is profound, and the conventional approaches
to philanthropic strategy and evaluation no longer produce
the hoped-for results. The core elements of strategic philanthropy
are still useful: Having clear goals, thorough research, a hypothesis
for how to approach the problem, and a way of learning from results
all increase the odds of success. But the idea that a foundation can
intervene in a complex system on the basis of a simplified logic
model and reliably expect to achieve its intended outcome creates
a false hope that misdirects strategy development and execution.
As difficult as it is to make progress against complex social problems,
foundations are far better suited to do so than are other institutions
because they operate on a long time horizon, insulated from
financial and political pressures. Yet for many foundation leaders
and board members, dealing with complexity is alarming. In our
experience, most foundations that address complex problems go
to great lengths to avoid attempting to understand or account for
this complexity in their work. Their behavior is entirely understandable.
The responsibility of stewarding philanthropic funds leads
to a natural desire for defined time horizons and predictable outcomes
that can be evaluated and attributed directly to the funder’s
intervention. Foundations that limit their ambitions to simple or
complicated aspects of complex challenges will be able to operate
within these constraints.
Foundations that seek to address complex problems directly, however,
need a new set of tools. They also need leadership with a tolerance
for uncertainty and the determination to pursue their objective for
long periods of time, through many apparent advances and setbacks.
From Predictive to Emergent Strategy
To address the uncertainty of complex problems, the field of philanthropy
needs to shift from a predictive model of philanthropic strategy
to an emergent model that better fits the complexity of social change. McGill University management professor Henry Mintzberg
was one of the first to capture the dynamic of an intended strategy
bumping up against complex realities, triggering a further evolution
in strategy. Mintzberg called this “emergent strategy.”4 (See “How
Emergent Strategy Works” below.)
Emergent strategy accepts that a realized strategy emerges
over time as the initial intentions collide with, and accommodate
to, a changing reality. The term “emergent” implies that an organization
is learning what works in practice. Organizations that are
intentional in examining how their strategy plays out in the context
of surrounding events will learn what parts of their intended
strategy went unrealized, what parts are deliberate, and what parts
were emergent—the result of both their actions and the actions of
others—that lead to a newly realized strategy. And this newly realized
strategy will continue to evolve, incorporating aspects of both
deliberate and emergent strategy.
Emergence is where rigor and flexibility meet, as it inherently
challenges strategic organizations to be both rigorous and flexible.
Emergent strategy still requires that a clear strategic intent guide the
funder’s actions, but it acknowledges that specific outcomes cannot be
predicted. Emergent strategic philanthropists will continually strive to
react to changing circumstances, so flexible and textured frameworks
such as system maps must replace the linear and one-dimensional
logic model as the primary means of clarifying strategy. Emergent
strategy also requires a constant process of “sensing” the environment
to ensure that resources are applied where opportunities are
greatest. Sensing also enables a more intuitive understanding of how
various parts of the system are changing in relationship to one another
in response to unanticipated interventions and exogenous events.
Emergent strategy accommodates three core principles of complexity
theory that must inform the next evolution of strategic
philanthropy: co-creating strategy, working positive and negative
attractors, and improving system fitness.
All actors, including funders, are participants in the system they
seek to change. The behavior of one organization affects all others;
therefore strategies must be co-created and must co-evolve among
multiple organizations rather than be developed separately.
Although complex systems do not follow predictable patterns,
sources of energy or convergence within the system, known as attractors,
can be observed and influenced. Funders can amplify positive
attractors that move the system toward their goals or dampen
negative attractors that move the system away from the desired goals.
In complex systems, one-time solutions often have limited
value because they cannot be counted on to spread or produce repeatable
results. Instead, increasing the fitness of the system as a
whole—improving the knowledge, effectiveness, and resilience of
all participants, not only grantees, but other organizations including
the foundation itself—is a much more powerful way to support
sustainable change. Increasing fitness enables solutions to arise from
anywhere in the system to meet the circumstances of the moment.
Such a model of emergent strategy and the principles of complexity
science may sound hopelessly beyond the reach of strategic philanthropy
today. Yet we are already seeing a number of foundations
shift from predictive to emergent strategy as they seek to address
complex problems. In the sections that follow, we’ll examine how three
foundations are exploring the frontiers of emergent strategy through
co-creation, working the attractors, and improving system fitness.
Co-creating Strategy
Complex problems and their solutions are influenced not just by
grantees, but by the behavior of many different nonprofit, for-profit,
and governmental actors as each entity pursues its own strategy. No
funder has the resources to compel all other participants to follow
its preferred strategy. This is
why strategy must be co-created
and co-evolve among multiple
organizations, rather than be
shaped independently.
The Rockefeller Foundation’s
effort to develop the field of impact
investing provides a good
example of how a foundation co-creates
a strategy. From the beginning
the Rockefeller Foundation
worked closely with dozens
of field leaders outside the foundation.
Antony Bugg-Levine, the program officer who led the effort,
began by convening the field’s leaders at the Rockefeller Foundation’s
Bellagio conference center in 2007, where the term “impact investing”
was first coined and where the recommendation was made to undertake
the initiative. A second convening in 2008 collectively generated
the strategic framework that guided the foundation and its allies in
building the field.5 Not only did this co-creation of strategy enable
the foundation to develop a more robust strategy for itself, it influenced
the strategies of the other organizations as well, showing them
many opportunities to benefit from and support each other’s efforts.
The strategy continued to co-evolve for the life of the initiative.
Thirty different organizations served as core allies of the foundation,
creating a densely networked web of interlocking and overlapping
relationships through their boards, committees, and memberships.
These core allies, and an additional 70 organizations that also championed
the effort, included both grantees and non-grantees from
all sectors: for-profit and nonprofit investment funds; nonprofit organizations and associations; research institutions, universities,
and consulting firms; other private funders; financial intermediaries
and institutions; international development organizations; government
agencies; and even the US Federal Reserve.
The Rockefeller Foundation’s program staff spent much more
time working with this network of organizations than it did directly
making grants. They also engaged fully as participants within the
system by promoting impact investing through conference presentations,
private meetings, and media interviews. In addition, the
foundation recognized the need to create a legacy organization—the Global Impact Investing Network—to continue the work of informing,
mobilizing, and coordinating the field as the foundation’s
own role receded. Bugg-Levine has continued to play a leading role,
moving from the foundation to run the Nonprofit Finance Fund and
co-authoring a book on impact investing.
The Rockefeller Foundation also gained unexpected benefits from
fully embracing its role as a participant in the broader coalition by
forging connections with major development agencies, government
agencies, and other foundations around the world to which it can now
turn for support for its other initiatives. The foundation was, without
doubt, the moving force that caused the field to blossom, and yet it
did so as just one participant among many interdependent organizations
in co-creating a shared strategy and reaching common goals.
Working the Attractors
Complex systems are not predictable, but they do exhibit patterns
of momentum. By paying close attention we can identify when
energy within the system is moving in a specific direction toward
what, in system dynamics, is called an attractor. In social systems
attractors can be people, ideas, resources, or events that lead the
system to move toward or away from the funder’s goal. These attractors
cannot necessarily be predicted or replicated, but funders
and other change agents who seek to influence a complex system can
sense the emergence of these attractors and take action to amplify
or dampen their effects in order to increase the likelihood that the
system will shift toward their desired outcome.
Funders who have engaged in policy advocacy understand this
concept well. One cannot reliably predict whether a given intervention
will produce the desired policy change, but one can sense
ever-changing sources of positive or negative energy in the political
environment that create opportunities for timely leverage. This concept
of sensing and leveraging opportunities, without any certainty
about the outcome, is at the core of emergent strategy.
The Rockefeller Foundation’s shift to emergent strategy follows
a similar course from predictable interventions to sensing and amplifying
momentum within the system. When Judith Rodin became
president of the Rockefeller Foundation, she realized that the approach
to strategic philanthropy that had served the foundation
well for its first century no longer fit modern realities. In her words,
“Our value-add as a foundation is very different from 75 years ago.
Then we were filling a void, and we had to put our own labs in the
field, do the basic science, the delivery, and the whole value chain
in order to construct a solution. Today, the foundation’s resources
are most useful in rewiring connections between existing players
within activities that are already under way...taking advantage of
changes that are already in motion.”
BUILDING RELATIONAL TRUST
An often overlooked element in improving
system fitness is attending
to the human interactions and relational
dynamics at the heart of a
complex system’s ability to evolve and adapt.
The predictive model of strategic philanthropy
frequently assumes that rational solutions offering
better outcomes will automatically be
embraced across the system. The health of
relationships between organizations and individuals
in the system is often the missing link
in explaining why programs and interventions
ultimately succeed or fail. This often holds true
for simple and complicated problems, but it is
a far more influential factor under conditions
of complexity.
Anthony Bryk, now president of the Carnegie
Foundation for the Advancement of
Teaching, spent ten years working at the Consortium
on Chicago Schools Research examining
the changing quality of relational dynamics
in 400 Chicago elementary schools. This work
led Bryk and his colleagues to create a metric
called “relational trust” to categorize the social
exchanges among students, teachers, parents,
and school principals.
They discovered that the myriad social
exchanges that make up daily life in a school
community fuse into distinct social patterns
that can generate significant organization-wide
outcomes. Collective decision-making
with broad teacher buy-in, for example, occurs
more readily in schools with strong relational
trust. In contrast, the absence of trust can
provoke sustained controversy around even
such simple problems as the arrangements for
a kindergarten graduation ceremony. Strong
relational trust also makes it more likely that
reform initiatives will be diffused across the
school. Ultimately, Bryk and colleagues found
that the level of relational trust was a more
powerful discriminator between improving
and non-improving schools than other dimensions
such as curriculum design or new teaching
practices. Schools with improving levels of
relational trust recorded increases in student
learning of 8 percent in reading and 20 percent
in math over a five-year period.
Relational dynamics are one of the primary
reasons that interventions in complex social
systems are so unpredictable. They explain
why building system fitness can accelerate
the spread of evidence-informed solutions
to meet specific situational needs.
The process of capitalizing on “changes that are already in motion”
is one way of describing the amplification of positive attractors.
For the Rockefeller Foundation, spotting these attractors required
the foundation to develop a variety of sensing mechanisms closer to
the ground. Says Rodin: “We created a search unit with a ‘searchlight’
function that funds developing world institutions and entities with
more nuanced and textured perspectives from which we can learn.”
It was sensing mechanisms like these that first showed the growing
momentum and potential of impact investing, and throughout
the life of the initiative continued to guide the foundation on how
to amplify positive shifts and dampen negative ones.
Although the Rockefeller impact investing initiative did not have
a formal theory of change, the consensus of the Bellagio convening
produced agreement on four desired outcomes that served as a flexible
guiding framework throughout the five-year effort: catalyzing
collective action platforms, developing industry infrastructure,
supporting the scaling of intermediaries, and in later years, contributing
to research, advocacy, and policy change. The flexibility
of these objectives gave direction to the foundation’s efforts but left
room to adapt to changing circumstances as the situation required.
Although these intended outcomes remained in place throughout,
Rockefeller’s resources shifted dramatically over the four-year
life of the initiative. In the first two years, the foundation focused
70 percent of its funding on scaling up the leading intermediaries,
such as Acumen. As organizations previously on the periphery of
the initiative began to be more aware of impact investing, the program
team put greater emphasis on research that could attract new
players, collective action platforms that could provide new ways for
other organizations to become involved, and advocacy efforts that
had more chances of succeeding. In fact, the foundation shifted 75
percent of its funding to those areas in the final three years. Similarly,
the initial focus on institutional investors as a logical way to
achieve scale gave way to a focus on high-net-worth families that
seemed more open to experimenting with impact investments.
By 2010, the program staff realized that public policy change was
an essential component of the strategy that had been initially overlooked.
Both the Obama administration in the United States and the
Blair and Cameron governments in the United Kingdom were open
to policy change because of the financial crisis and were ideologically
aligned with the impact investing approach. Recognizing this
as a new attractor that could be amplified, the program staff shifted
resources and formed an Impact Investing Policy Committee, which
ultimately led to more than $2 billion of government funding. This
opportunity could not have been anticipated during the very different
political and economic situation that existed when the initiative
began, but the foundation achieved substantial impact by sensing
opportunities to amplify or dampen attractors within the system
as it adapted its approach over time.
Improving System Fitness
Emergent strategy focuses on strengthening the systems and relationships
that can generate solutions, rather than on constructing the
solutions themselves. The ability of a system to adapt and ultimately
reach its goals depends on the overall “fitness” of the entire system.6 As
circumstances change over time, the system must continually evolve.
Its success depends not on any single configuration, but on its fitness
to adapt to the changing circumstances and the end goal. Many things
make up a system’s overall fitness, including shared visions of success
within and across sectors that enable mutually reinforcing innovation,
positive relationships between organizations and individuals that enable
effective practices to spread, regular communication, and the resilience
of players within the system in adapting their practice to changing
conditions. System fitness also includes the degree of alignment and
relational trust among participants, which can accelerate the adoption
of new ideas. (See “Building Relational Trust” above.)
A good example of what improving system fitness looks like in
practice is illustrated by the way that former New York City Mayor
Michael Bloomberg used his office and his foundation to address the problem of climate change. Beyond funding specific interventions
in New York City, he focused on developing system fitness among
his peers, the mayors of major cities around the world.
HOW TO MOVE TO AN EMERGENT MODEL
Most foundations that shift from a predictive to an emergent model will need to
complement this shift with changes in how they create strategy, structure their
organization, evaluate impact, and develop leadership and culture. Below, we
suggest some likely evolutions in each of these areas.
Strategy-setting frameworks and processes | Today’s strategy-setting activities
often fail to incorporate the dynamic nature of
complex systems, miss the interdependence
of players affecting an issue, and underappreciate
the human dynamics that accelerate
or impede change. No one decision-making
framework can capture all the dynamics of a
complex system. Nevertheless, greater use of
systems maps, stakeholder network analysis,
cultural frames, and story-telling frames such
as scenario planning—combined with an orientation
to hypothesis testing and prototyping
(via methodologies such as human centered
design)—can provide more useful frameworks
for strategic decision-making that addresses
complex problems.
Organizational structures and systems | The command and control governance
structures that exist in many foundations today
cannot be used to implement an emergent
strategy. In their place one needs to create more
flexible accountability structures that allow
staff to take the initiative as conditions demand.
This means that boards must continue
to set goals and budgets but step back from
expecting staff to follow a detailed multi-year
plan with predictable outcomes. It also means
that evaluation methods must take a developmental
approach that focuses on learning and
sensing opportunities, not just on evaluating
the outcomes attributable to specific interventions.
Foundations must also invest in relentless
“sensing” activity—developing the ability,
structures, and systems to scan for how various
forces intersect and interact with one another.
Active sensing takes time apart from grantmaking.
To make sure that it happens, foundations
can create structured time for staff to reflect
on not just what is going on with their grantees,
but also what is going on with the broader set
of conditions affecting strategy—probing for
actions or events that are causing ripples in
unexpected ways due to the interdependent
nature of the many players involved.
Leadership and culture | Successful leadership
in situations of great complexity prizes
inquiry over certainty. Effective leaders of
emergent strategy must be capable of creating
the context and culture in which real learning,
reflection, and evolution can occur. Leaders
must build a culture that continually invites
staff, grantees, and other system stakeholders
into collaborative problem solving. Lines
of inquiry that help unpack the complexity include:
What are other funders doing that affect
the ecosystem in which we work and how do
they affect our own strategy? How are organizations
that are not our grantees reacting to
our interventions? What unanticipated interventions
and exogenous events are changing
the conditions in which we work?
Bloomberg came up with this approach in December 2009 while
attending a conference of mayors. While the leaders of the world’s
greatest nations were deadlocked in the Copenhagen 15 climate
change conference, a group of mayors from two dozen of the world’s
largest cities met in a tent nearby. Originally formed by the mayor
of London and seven other cities as the C-8, the group grew to be
renamed the C-40, and it has since grown to include the mayors
of 63 major cities. The mayors, too, were concerned about climate
change—after all, 80 percent of global greenhouse gas emissions
come from cities. But what most impressed the mayors that winter
day was the fact that, despite snow and darkness, one out of three
Danes commuted to work on a bicycle in dedicated bike lanes. Seeing
this phenomenon, many mayors looked for ways to get more of their
constituents out of the car and onto a bike. The mayor of London
decided to install bike lanes when he went home. Bloomberg decided
to install them as well, and Los Angeles added 330 miles of bike
lanes the following year. Rio de Janeiro and São Paulo realized that
bikes could not only reduce pollution, but enable people who were
too poor to afford public transit to commute to jobs, so they added
lanes, too. Within three years, 34 cities around the world added tens
of thousands of miles of bike lanes. But that was just the beginning.
Bloomberg saw the power of the C-40 and decided to increase
the system’s fitness. Bloomberg Philanthropies provided C-40 with
$6 million in annual funding, tripling the organization’s budget and
increasing its staff to 43. The C-40 team began to work closely with
the mayors and especially their staffs to coordinate their efforts,
pooling their knowledge of what initiatives had worked, showing
each other how they might use their mayoral powers to reduce carbon
emissions by controlling traffic, public transit, building codes,
utilities, parks, and the like. Today, all 63 cities have climate action
plans, and collectively they have undertaken 4,734 discrete climate
actions that are on track to reduce annual CO2 emissions by 1.3 billion
tons by 2030, a stunning global impact for a $9 million annual
budget. Bloomberg’s leverage, in this case, comes from improving
system fitness, rather than from funding, evaluating, and replicating
individual solutions. Improving the interactions and relationships
within a system by sharing knowledge, comparing results,
and stimulating competitive instincts is what continues to drive
a profusion of locally tailored climate change solutions to emerge.
A Compass Instead of a Map
Whereas emergent strategy is a relatively new practice at the Rockefeller
Foundation and Bloomberg Philanthropies, the J. W. McConnell
Family Foundation has been practicing emergent strategy in many of
its program areas for almost two decades. The McConnell Foundation
is one of Canada’s largest and oldest private family foundations, with
program areas that include health, education, community development,
sustainable food systems, immigrant integration, and the arts.
The foundation eschews the development of thick strategic plans
that attempt to map out every detail. John Cawley, director of programs
and operations at McConnell, is quick to point out that this
doesn’t mean staff and board aren’t guided by strong strategic direction.
“The difference,” says Cawley, “is between having a compass and a map. A map assumes that you’re going over terrain that somebody
has been over before.” A compass, on the other hand, keeps one
oriented toward the ultimate goal regardless of the unanticipated
obstacles and detours that may appear during the journey. Each step
taken is decided in the moment, on the basis of past experience and
the unique combination of circumstances then present. Although the
path is unknown, the goal remains clear. As Zia Khan, vice president
for initiatives and strategy at the Rockefeller Foundation, explains,
“Clear goals allow for flexible strategy.”
Such an intentional yet flexible approach can be found in the Mc-
Connell Foundation’s Sports for Development initiative. Research
found that sports are a powerful force in building social capital
and community resilience among children and teens, especially in
disadvantaged communities where strong schools and after school
programs are scarce. McConnell established an initiative within the
foundation called Sports for Development based on this research
and immediately reached out to others to co-create their strategy.
“The first thing is not to assume that we alone are going to have a
plan,” says Cawley. “It’s going to be co-created by the people we’re
bringing around the table. It is much more nerve-racking but ultimately
more interesting when you co-create strategy.”
McConnell’s work focused not only on supporting specific organizations,
but also on investments in system fitness that built the
connective tissue between players in the field and accelerated collective
knowledge sharing and problem solving. Many unanticipated
opportunities emerged throughout the course of the initiative, such
as challenging limitations in federal charity laws, creating a “sport for
change” Web platform, providing organizations and networks with
training, and supporting the development of new business models.
To build more effective connections between community and
national sports leaders, McConnell supported the Sport Matters
Group—a network of more than 30 sports organizations that collaborate
with municipalities, academics, councils, and other local
entities to promote community sports activities. The network also
collaborates in jointly conducting research on the value of a physically
healthy lifestyle and advocates sport as a means to encourage
community development nationally. As a result, sports organizations
across Canada that are devoted to youth development are now part
of a stronger system that enables them to learn together about what
works and speak with a united voice. The foundation has seen an extraordinary
return on its investment. When the economic downturn of
2008 led to the federal government’s stimulus plan, the Sport Matters
Group was already organized to advocate for sports infrastructure in
deprived communities. It estimates that some $3 billion has been invested
in the construction or renovation of sport facilities as a result.
Brave New World
Albert Einstein once said, “Everything should be made as simple
as possible, but not simpler.” In strategic philanthropy’s earnest
desire to become more disciplined and rigorous, there has been a
tendency to demand and impose simple solutions to complex problems.
As a result, the board and staff decision-making structures,
organizational design, evaluation methods, and leadership style of
foundations that embrace strategic philanthropy today are, to a great
degree, anchored in perpetuating the development and implementation
of simple solutions. What’s required of both staff and board in complex situations is the ability to take nuanced steps toward solutions,
guided by a dynamic compass without relying on a static map.
For emergent strategy to take hold, changes must take place in the
organization of how strategic philanthropy happens. (See “How to
Move to an Emergent Model” on page 32.)
As we rethink strategic philanthropy to address complex problems,
we can draw useful insights from science and commerce, the
same fields that influenced earlier stages of strategic philanthropy,
although in different ways. If strategic philanthropy first borrowed
from physics to establish clear cause and effect, we now must look
to biology to understand interdependent systems and the process
of evolution in which success depends on continuous adaptation.
From the field of commerce we borrowed the management principles
of business to incorporate more discipline into our work. Now we
must look to behavioral economics, which exposes the less rational
psychological factors that govern so much of human behavior.
As strategic philanthropy shifts from predictive to emergent
strategy, we see tremendous potential for staff and boards to see
more clearly their relevance and connectedness to the people they
wish to serve. And yet we also acknowledge the daunting demands
placed on individuals within organizations that choose to pursue the
emergent strategy model. This work requires heavy doses of humility
combined with doggedness, reflection combined with constant
action, and openness to change combined with dedication to intent.
All this must be undertaken with the same commitment to rigorous
analysis and honest assessment that strategic philanthropy and
evaluation first brought to the field. The need for these qualities may
require new types of people to carry out the work of strategic philanthropy.
And perhaps it will also draw out to a greater degree these
qualities among people who work in strategic philanthropy today.
There is much that is uncertain in this evolution but also much that
is exciting and energizing. If you work in strategic philanthropy and
plan to adopt emergent strategy as your approach, we expect that you
may be challenged as never before. We also expect that you will come
into contact with a great many others experiencing the same challenges.
Don’t retreat from the field, but take heart. Find inspiration in
Miranda, the indefatigable heroine of William Shakespeare’s Tempest
(an apt term for the state of the world today). Uncertain, but taken
with the promise of a new way of living, she exclaimed with wonder
and amazement, “O brave new world, That has such people in’t!”