Innovation at Acumen: Putting the 'adjacent possible' into practice

SAN FRANCISCO — Sasha Dichter, chief innovation officer at Acumen, believes the most useful definition of innovation is what is described as the “adjacent possible” and it is one that would-be innovators in the development sector should pay close attention to. That theory holds that the best ideas tend to come from a recycling and combining of the possibilities that are already available at any moment in time. Consider the printing press, an example of adjacent possible innovation described in the bestselling book “Where Good Ideas Come From.” Each of the elements of the printing press were developed long before, and it was adapted from a screw press, which was being used for wine. At Acumen, a nonprofit that invests in companies that are responding to problems of poverty, Dichter works with what he describes as an adjacent possibility set: A commitment to tackling poverty, proximity to the problem, and understanding of social impact. “Most of the ‘innovating’ we are doing, for lack of a better word, has to do with process improvements,” he said. “Philosophically, there are two different contexts for these sorts of roles. One of them is how do we take a mindset and orientation and culture of learning and shifting and changing and formalize that and put more resources behind that? The other is, ‘We don’t really innovate, so we need a change agent to bring that into the culture.’ My role at Acumen is clearly the former.” After leading business development at the organization, Dichter became Acumen’s chief innovation officer six years ago. Now, he leads all of Acumen’s work beyond its investing, including Lean Data, which helps organizations gather relevant impact data, the Acumen Fellows Programs, a one-year leadership development program, and +Acumen, which offers online coursework on social change. While Acumen is best known as a nonprofit global venture fund, the organization never intended to limit itself to investing patient capital in entrepreneurs working on solutions for poverty, he said. Dichter called Acumen a “living breathing learning” organization so that the boundaries of what it does can shift. He said this makes his work overseeing new product and program development easier than it might be for chief innovation officers at organizations without a culture that supports change and new ideas. “The idea generation phase, which I think most people think innovation is, to me, that is the easy part,” he said. “The question is: How do you build from there, and what are the pushes and pulls of creating value for the right stakeholders, and how do you figure out what you need to know now and what you need to know later?” When Dichter talks about innovation, he often describes the work as responding to pushes and pulls. The best example of that at Acumen is Lean Data, he said. The initiative began as a response to needs at Acumen, but now serves others in the sector, including Omidyar Network, the Bill & Melinda Gates Foundation, and the United Kingdom’s Department for International Development, he said. “We believe knowledge in the social sector is a lot harder to come by and shared a lot less than it needs to be given the complexity of what we do.” --— Sasha Dichter, chief innovation officer at Acumen “Despite everything we’ve invested in, I didn’t feel like we had a system in place to make us smarter about social impact,” Dichter said of part of the motivation for building Lean Data. “It’s in our DNA to do it, but we hadn’t created a learning system.” Lean Data leverages low-cost technology like SMS and voice response to gather the social performance data that matters and to help organizations shift their mindsets from reporting and compliance to value creation. “If you’re in the business of trying to make change in the world, this balance of what you share and what you keep is obviously a fine line to walk,” he said. “We believe knowledge in the social sector is a lot harder to come by and shared a lot less than it needs to be given the complexity of what we do.” Part of what +Acumen does is to take traditionally private sector approaches like lean startup and human-centered design and bring them to an online learning platform designed for the social sector. “We believe the best thinking in the world should be available to and customized for and made relevant to changemakers,” he said. Acumen is an operation grounded in what he describes as a bottoms-up approach to solving problems of poverty, and as the organization invests in companies and change makers, it will continue to share its work as part of an effort to try and influence others to go beyond aid in their approach. Dichter described the innovation process as an upward trajectory. The idea is to have a product in the market that is good, while also trying to make it better. Whether something has existed for a short while or a long time, innovating is a constant cycle of gathering feedback, learning, improving he said. Major tech firms such as Apple, Google, and Amazon do not have separate innovation departments, but rather build a culture that enables teams to build on their adjacent possibility sets, he continued. “Do you learn, do you evolve, are you responsive?” he said, noting the questions NGO leaders need to ask themselves if they’re hoping to be innovative. “Since we’re in the business of problem solving, what do you do when you realize you aren’t solving the problem? Do you shift or do you not?” He acknowledged the challenges that face professionals in international development as compared to software development. They include how donors rather than beneficiaries pay for services in the aid sector and it has a funding cycle where organizations tend to make three- to five-year promises that they have to deliver on. The upside of the growing number of innovation labs in the social sector is the recognition that the sector needs to shift. But the danger is that slapping innovation onto your branding makes organizations feel like they are solving a problem, when really the key is to become adaptive and flexible and responsive, whether or not anyone on your team has innovation in their job title.