Learner Paper: The Mechanisms of Social Innovation: Creating Knowledge and Developing Leadership via Process

Learner Papers / January 2011

Stacy Townsley

Introduction: Perspectives on Change

Stacy Tonsley

My research interest centers on how we can bridge old and new social structures in addressing societal needs. Social entrepreneurship (SE)—also referred to in this paper as social innovation—is possibly one type of ‘bridge’ social structure. The definition of social entrepreneurship varies, although all conceptions at least implicitly center on valuing creative or innovative action toward a more equitable and just society. It can broadly be viewed as a process of identifying opportunities, organizing resources, and providing leadership to change underlying dynamics and generate social value. An assumption I hold is that social innovation supported in a sustainable way offers a pathway for transformative change. A better understanding of the role of context in facilitating change helps inform SE-related initiatives and contributes to building “a solid and realistic case for what social entrepreneurship could mean if it were adequately supported” (CASE, 2008, p. 9).

A process-based definition of social innovation addresses the “how” and to some degree the “who” of transformation. Edwards’ (2010) multiparadigm categorization suggests my research interest can be illustrated through a relational exchange lens, which emphasizes “exchanges that occur between two structures or processes to facilitate growth, development, and adaptive change” (p. 126). Transformation from a relationship exchange perspective is about the flow of energy and resources between different developmental levels and systems. These flows/exchanges form the communication patterns that define human systems (Wilber, n.d.; Brown, 2005) and thus, by extension, are indicators of social development and progress.

Context and culture play important roles in influencing relational exchanges. A relational exchange lens incorporates an interpretive (constructivist) approach to understanding how meaning is created within a given context (Day, Harrison, & Halpin, 2009). Sense-making—and presumably associated actions—are products of interaction with one’s environment. From a constructive-developmental perspective, dealing with increasing complexity helps to expand our capacities for change. Through holding more complexity we expand our consciousness and capacity for constructing meaning. Through holding complexity we can potentially effect organizational and societal change. Some scholars (e.g., Beck & Cowan, 2006) refer to this changing capacity as movement along a spiral of developmental stages, while others (e.g., Kegan, 2000, Merriam, 2008) describe an ongoing, lifelong process of ‘transformative learning,’ which “represents a fundamental change or shift in our understanding of ourselves or our relationship with the world in which we live” (Dirkx, 2008, p. 15). To this generally agreed-upon premise of transformative learning theory, I would add that such a change or shift is a process that not only builds upon our life experiences, as Kegan (2000), Beck & Cowan (2006), and other constructive developmentalists emphasize, but also unlocks inherent (spiritual) capacities within us. In the Bahá’í view, service to humanity—the action of doing—is one of the primary influences unlocking individual capacity, and thus is an important path for transformative learning. And although researchers are not exactly sure what ‘triggers’ moves from one developmental level to the next (Harris and Kuhnert, 2007), awareness and action are viewed as a means for growth and development for both individual and society (see, for example, Bahá’í International Community (1989) for a discussion of the rational soul in the context of socio-economic development). Other scholars (e.g., Wilber, 2001; Cacioppe, 2000; Merriam, 2008) also have underscored the importance of spirit in engaging and generating learning and change within the workplace and society in general. Merriam states, “The mind, body, spirit, emotions, and society are not themselves simply sites of learning; learning occurs in their intersections with each other” (p. 97).

Examining social entrepreneurship/social innovation from a process-based, relational exchange perspective—rather than from an outcome-based focus that seems prevalent in the SE literature reviewed thus far—offers a richer picture of possibilities for change. Building on the premise that relational complexity and associated action generates cognitive and spiritual capacities for growth and development, this paper looks at the mechanisms of social innovation as way forward for both societal and leadership development.

Overview and Mechanisms of Social Innovation

Interest and focus on the concept of social entrepreneurship as a force for societal change has emerged within the last 20 years, gaining more attention over the last decade with the growth of SE support networks such as the Ashoka and Skoll foundations, government-sponsored social innovation funds in the US and Great Britain, and increased academic inquiry across multiple disciplines. At the heart of much of the discussion surrounding SE is how best to support SE initiatives as a potential vehicle for transitioning from old cultural and corporate/profit paradigms and structures to the development of new capacities and social arrangements. The SE literature discusses challenges in the financial and social support systems for social entrepreneurs, including the need to further develop SE-oriented capital markets and financial instruments, as well as legal and tax structures designed for the “hybrid” (between for-profit and nonprofit) structures often employed for SE, and to increase awareness and understanding of SE (e.g., through public knowledge dissemination and educational programs in colleges and universities) (Dees, 2010; Di Domenico, Haugh, & Tracey, 2010).

Arguably the most expansive approach in the literature is viewing SE in terms of system-disrupting innovation, a conceptualization championed by Ashoka, which describes social entrepreneurship as “changing the system, spreading the solution, and persuading entire societies to take new leaps” (www.ashoka.org/social_entrepreneur). Phills, Deiglmeier, & Miller (2008) contend that social innovation is a more useful term than social entrepreneurship or social enterprise in capturing the nature of social change underscored by proponents such as Ashoka. Areas encompassed by this approach include civic engagement, community-centered planning, habitat conservation plans, and international labor standards. One of the best-known ‘system-disrupting’ examples cited by Ashoka and others is Muhammad Yunus’ Grameen Bank, which helped spread the micro-lending movement worldwide.

A heightened global focus on sustainability issues and recognition of social and economic networks and impacts pave the way for an increase in SE-labeled activity. According to CASE (2008), “most proponents believe that there is something new about the current approach to social entrepreneurship” (p. 9). Rethinking practice and attitudes within a more systemic framework appears to be key, with “the deliberate crossing of sector boundaries in search of more sustainable solutions” (p. 9) as a touchstone for action. The notion of finding a more balanced focus between economic and social objectives is embedded not only in formal SE innovation but in the wave of sustainability initiatives at all levels of society as well, from the environmental “greening” of home and office, to raising awareness of the importance of work/life balance, to the recognition of supply chain impacts on social and financial systems across the globe.

Understanding SE as an innovative, value-creating process (rather than simply an outcome) facilitates consideration of the mechanisms involved in bringing about positive social change. Such mechanisms are seen as distinct from any one particular source of social value and are according to Phills et al. (2008) bolstered by the “cross-fertilization” (p. 40) of the nonprofit, government, and business sectors in response to the increasing complexity and global scale of issues in recent decades. These authors identify three critical mechanisms of social innovation:

1) Exchanges of ideas and values;

2) Shifts in roles and relationships; and

3) Integration of private capital with public and philanthropic support (p. 37)

The three mechanisms of social innovation identified by Phills et al. (2008) are at their core dialogical processes, increasing access to resources and fostering mutual consideration of all involved parties. Giving credence to the CASE (2008) observation that something is “different” about current approaches to SE, Phills et al. suggest “the mechanisms of social innovation—the underlying sequence of interactions and events—change as a society and its institutions evolve” (p. 39). Their suggestion acknowledges at least implicitly a relational exchange dynamic, but stops short of a constructivist view that cross-sector fertilization actually contributes to the growth and development of individuals and society as encounters with increasing complexity spur greater capacities. Individual development occurs because of—and sometimes in spite of—environmental contingencies (Cacioppe & Edwards, 2004).

“Fit” Within Integral Framework

While the social cognition and adult development ‘piece’ appears missing from the SE literature, SE scholars and practitioners recognize the importance of examining the internal and external environment, or ‘ecosystem,’ which includes consideration of the social/political, economic, physical, intellectual, and cultural resources and settings of a social entrepreneurial endeavor (Bloom & Dees, 2008; CASE, 2008). Some authors such as Bloom and Dees (2008) and Trexler (2008) suggest effectiveness of SE-related endeavors can be improved by not only addressing ecosystem inefficiencies and challenges but by seeking to understand how the ecosystem as a whole creates and sustains the targeted social problems in the first place. The internal/external environment focus is similar to Wilber’s (2001) four-quadrant AQAL model, which, Beck (n.d.) notes, is “an essential framework for accelerating the development of people and cultures” and without which, “fragmented, isolated, ad hoc, piecemeal, and single quadrant solutions will fail to make a significant difference” (p. 9).

The three mechanisms of social innovation identified by Phills et al. (2008) cover to some degree the four quadrants of Wilber’s (2001) integral model. One interpretive mapping is as follows: exchanging ideas and values can be a four-quadrant, subjective (UL, LL) and objective (structural) (UR, LR) dynamic; changing roles and relationships involves changes to behavior (UR) and power structures in the LR, manifesting strongly in the LL, and; resource combinations mostly reside in LL. The mapping could expand to an eight-quadrant model (Volckmann) depending on the level of analysis, from individual social entrepreneur, to, for example an individual social venture or community of practice of individuals and/or organizations.

Cross-fertilization, the “Included Middle,” and Change

Closely related to the cross-fertilization of ideas, roles, and resources underlying the mechanisms of social innovation is the concept of transdisciplinarity discussed by McGregor (2009). She states complex problems require trandisciplinarity knowledge; “Transdisciplinarity is a new knowledge about what is at once in between, across and beyond different and individual disciplines….it strives for a different kind of knowing (epistemology) based on cross-fertilization, complexity, and emergence” (p. 1,7). The “in between” is referred to as the “Hidden Third” or “included middle,” where individuals’ perceptions of reality co-mingle. The dialogical process inherent in the “included middle” mediates, negotiates, and transforms value positions and conflicts of interest; this idea parallels what Brown (2005) refers to as the ethical process, a powerful force for shaping the communication patterns of an organization or other human system. The logic of the “included middle” is inclusive and “enables people to imagine that the space between things [e.g., civil society and other sectors]…is dynamic, in flux, moving and perpetually changing” (McGregor, p. 6). New transdisciplinary knowledge and intelligence is created—synergy happens.

McGregor (2009) suggests that the use of the logic of the “included middle” allows people to innovate “far-reaching solutions to the world’s pressing problems” (p. 7) and helps ensure evolution of knowledge. Indeed, McGregor asserts, “people need to generate and collect transdisciplinary knowledge if they hope to sufficiently and morally address” human conditions such as poverty (p. 13, emphasis added). Her conclusion underscores the importance of knowing and understanding the ecosystem of a social problem, as discussed in the SE literature, and supports a valuing of a process-based, relational exchange-focused view of social innovation. As Kezar (2001) notes, several studies have begun to examine the role of social interaction for understanding change and “illustrate that a central component of change is providing vehicles for people to alter their mental models, leading to new meanings and activities” (p. 100).

The work of Wilber (n.d.), Beck and Cowan (2006), Merriam (2008) and others suggests, however, that the vehicle of cross-fertilization or a coming together in the “included middle” is a necessary but not sufficient component for change. Recognizing limitations imposed by people’s level of developmental ‘readiness’ and meeting people where they are developmentally is useful in gauging steps required for change. Wilber, for example, cautions

the idea that we can ‘dialogue’ ourselves into ecological awareness; or that if we merely ‘learn’ a new paradigm; or if we replace the mechanistic Newtonian-Cartesian worldview with a holistic worldview—all of those approaches are considerably off the mark…they are not cognizant of the stages of consciousness development that are necessary in order to be able to hold a truly worldcentric, holistic, integral worldview in the first place (p. 35, emphasis original).

From a relational exchange perspective, an emphasis on developmental readiness suggests expectations for incremental changes and innovations are more realistic than the catalytic, system-shaking social innovation championed by SE-related organizations such as Ashoka. In considering the pace of change and individual readiness, as well as the developmental benefits of introducing complexity, what might the process of ‘change’ look like? What, exactly, does the process impact and how? Also, while generalizations of mechanisms for change are useful in studying how SE functions within a developmental context, the consideration of such mechanisms should be uniquely approached within different cultural/social systems. Cultural differences frame not only varying definitions of SE but of “success” as well; in the US, for example, success is often linked to achievement of the individual or individual organization. In other cultures, the collective is viewed as the appropriate unit of analysis for success (CASE, 2008).

In Pursuit of Social Innovation: Leadership Development and Role

Answering the questions of change process requires consideration of leadership as part of such process. Certainly, leadership is implicit in the ‘how’ of change. With regards to my specific topic of social entrepreneurship/innovation, one assumption I have is that leadership is especially important given the underdeveloped support systems for cross-fertilization of nonprofit, business, and government sectors. Leading for social innovation certainly is not a ‘lone-wolf’, ‘hero entrepreneur’ situation, although though some media portrayals of successful social entrepreneurs (e.g., Muhammad Yunus with Grameen Bank) discount the networks of support and collaboration behind the highlighted success. From a process-based, relational exchange perspective, leadership is a cross-sector phenomenon, where “nearly everyone takes on both leader and follower roles” (Day et al., 2009, p. xiii). Nested within the dynamic of leading and following is the meaning-making related to developmental levels and capacities to deal with complexity. Getz and Gelb (2007) explain that leadership, then, is also:

the activity of getting people to tackle tough problems…Exercising leadership frequently means getting people to face the internal contradictions of the situation being addressed, to examine the unconscious processes, patterns, and mental models related to effectiveness, and, especially, identifying aspects of truth put forward from limited perspectives (p. 1).

The intentional cross-sector fertilization undergirding social innovation is essentially a systems-building or “scaffolding” (Volckmann & Bellamy, 2009) endeavor that accomplishes the mechanisms of innovation and likely fosters leadership development as well. Volckmann and Bellamy describe scaffolding as a technique that involves people in activities that are “normally out of their reach” (p. 9) and that contributes to leadership development because it “enhances the experience of collaboration and exchange across organizational or community boundaries” (p. 28). Such collaborative exchange addresses “individual and systems lines of development, while recognizing that the hardest things to change—the soft and illusive aspects of the individual and culture—can be surfaced and addressed” (p. 29). Cross-sector collaboration for social innovation appears to be a similar phenomenon, albeit more from a macro, leadership culture level than an individually-focused leader development level. Tapping into social, financial, and other support networks across organizational boundaries offers capacity-building opportunities for small-scale as well as larger organizations, and introduces greater complexity of thought and action in addressing the targeted social problem. These actions likely help foster a “climate” for leadership development, although scholars note the lack of studies on the nature of social systems that produce leadership (Rooke & Torbert, 1998; Day et al. 2009; McCauley, Drath, Palus, O’Connor, & Baker, 2006).

One of the organizational leadership “tasks” outlined by Beck & Cowan (2006) and Cacioppe (2000) is the alignment of vision, purpose, structure, and actions of an organization with developmental stages (the spiral of development). Enhancing communication and knowledge flows are at the root of a relational exchange process. In discussing building effective cross-sector collaboration for social innovation, Phills et al. (2008) suggest specifically examining internal and external policies and practices that impede the flow of ideas and relationship-building. Creating effective policies and practices suggests being “in sync” (aligned) with different levels of followers within an organization so that, from a cultural viewpoint, the collective can relate to such policies and practices (McGregor, 2009). Using the concept of democracy as an broad example of a set of policies and practices, Beck (n.d.), warns of the futility of “imposing the form that fits a specific stage or zone on the Spiral onto other strata” (p. 5), pointing instead to the usefulness of “scaffolding of solutions” and arranging them according to the stages of social development (p. 8).

Perfect alignment through even a scaffolding approach would certainly be a leadership challenge (if not an impossibility). However, the “heavy handedness” of the social system offers a pathway outside of perfection, according to Wilber (n.d.), as the social system (the LR quadrant) “affects people no matter what level of interior development they have (p. 131, emphasis original). Thus, a focus on building robust communication networks within a social system can be one of the most beneficial and far-reaching purposes of leadership. Day et al (2009) and Getz and Gelb (2007) support similar conclusions. Indeed, in the integral and SE literature reviewed, ‘communities of practice’ are commonly referred to as a means to offer support and facilitate developmental movement. Communities of practice also assist in the creation of new knowledge, through the dynamics of cross-fertilization and the “included middle” discussed previously. Within the SE community the ability to replicate SE knowledge (create “blueprints”) is a concern raised by many, and is one that steers efforts by support organizations such as Ashoka, whose “mosaic” and Citizen Base Initiatives aim to identify general patterns that explain, guide, and increase the impact of SE endeavors (Meyskins, Robb-Post, Stamp, Carsrud, & Reynolds, 2010; www.ashoka.com). Other SE-related organizations, such as the Skoll Foundation, Schwab Foundation, and Echoing Green appear less pattern/blueprint-oriented—based on review of their websites—but do utilize storytelling and networking as ways to foster supportive communities of practice. The Ashoka and other communities of practice of collaborative, socially innovative people may offer useful research opportunities for examining the relationship of social systems and leadership development.

A Closer Look at Developmental Stages and SE

The outcome—rather than process—focus of much of the SE literature reviewed lends itself to an emphasis on individual social entrepreneurs’ behavior and a ‘hero’ view of leadership. A constructivist development view of the people who engage in social entrepreneurship/social innovation is lacking. Given the overarching objective of SE activity to effectively reorganize resources and structures as a means toward a more equitable and just society (a very YELLOW outlook), it might be of value to explore whether the mechanisms of social innovation are the purview of second-tier thinkers, as transformative leadership literature might suggest, or whether the mechanisms and relational exchange process serve as ‘mediators’ to accommodate a range of dissimilar developmental levels. In other words, does the leader/leadership (culture) have to have second-tier thinking to enable the mechanisms of social innovation? While I could not find specific answers to this question, research suggests effective implementation is primarily second-tier. Harris and Kuhnert (2007), for example, examine the relationship between leadership development levels and leadership effectiveness and suggest leaders at higher levels of development are “more effective in a number of leadership competencies” (p. 47). Rooke and Torbert (1998) state, “the Strategist/Leader stage of individual development is the first stage at which a leader can initiate personal and organizational double-loop learning (Argyris & Schon, 1974, 1978) in a potentially effective fashion” (p. 12). Rooke and Torbert (2005) further add that “Strategists typically have socially conscious business ideas that are carried out in a highly collaborative manner. They seek to weave together idealist visions with pragmatic, timely initiatives and principled actions” (p. 72). Similarly, research suggests correlations between personal and organizational stages of development (McCauley, 2006; Rooke & Torbert (1998, 2005).

Conclusions and Research Implications

Examining social innovation from a process-based, relational exchange perspective offers insight into the dynamics underlying the collaborative mechanisms associated with social innovation. Exchanging ideas and values, shifting roles and relationships, and integrating public, private, and philanthropic resources contribute to an integral framework for change that particularly impacts culture and context, and, accordingly, individual and collective growth and development (depending on the scale of change one chooses to view). The cross-fertilization of ideas, roles, and resources parallels the dynamics of transciplinarity and the creation of new knowledge and synergies. However, change spurred through cross-fertilization is likely moderated by participants’ developmental readiness; thus expectations for incremental changes and innovations are more realistic than the catalytic, system-shaking social innovation championed by some SE proponents. Leadership as a cross-sector collaboration is almost certainly nurtured through social innovation processes, although scholars (e.g., Day et al, 2009, McCauley et al., 2006) indicate a dearth of research on the relationship between social systems and leadership development. Research suggests effective implementation of the mechanisms of social innovation requires second-tier thinking (Rooke & Torbert, 1998, 2005), but it is unclear whether the social innovation mechanisms themselves (or, to be more exact, the process of implementing the mechanisms) are generators of sufficient transformative learning and growth to trigger next-stage development.

Research Boundaries

If I were to pursue dissertation research on the topic of social innovation and leadership, ultimately I would focus on the LL and LR quadrants of the AQAL framework—the culture and systems that facilitate leadership development and innovation, or the how of transformative change. Using a relational exchange lens, my focus would also be more on the collective leadership dynamic rather than the individual leader/social entrepreneur’s traits and behaviors. As such, the methodological framework would not necessarily include first person (subjective) perspectives, although at this point, I am uncertain of the usefulness of different methodological approaches (for example, Edwards (2010) and Wilber (n.d.) differ in their views of action inquiry). Some of the questions that have arisen in this paper (e.g., link between second-tier thinking and implementation of social innovation processes) would necessarily shift the research to more of a first-person, individual-based focus. Regardless of how I ultimately would frame the research question and approach, the integral model is a helpful reminder of all of the possible influences and stakeholders (and then some) concerning my topic that I will need to address.

My own worldview, of course, shapes how I perceive and convey information. For this paper’s research, for example, I found myself drawn to much of Wilber’s work; his statement: “a profound motivation of doing adequate structuralism is to help individuals and cultures move from egocentric and ethnocentric stances toward more worldcentric waves of compassion, care, and consciousness” (n.d., p. 103) struck me as one of the “hidden” motivators of my interest in my paper topic. It is easy to be “sucked in” simply on moral grounds to all that sounds collaborative, learning-centered, and socially just, but an integral perspective helps build a broader foundation for reasoned research.

And thus, the exploration continues!

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About the Author

Stacy Townsley has served as an administrator at a small college in Kansas since 2005. Prior to joining the higher education field, the majority of her professional career was in federal government working on Latin American policy and analysis. Stacy is in the 2nd year of a Ph.D. in Organizational Systems at Saybrook University and has a growing interest in social innovation, transformative learning, and integral theory. Stacy holds a Master of Arts from the University of Texas at Austin and a Bachelor of Arts from the University of Tulsa. Stacy may be reached at stowns1@cox.net