Podcast Summary: How to Scale Innovation – Podcast with the Global Development Lab’s Ann Mei Chang

Host: Rajesh Merchandani (Center for Global Development)
Guest: Ann Mei Chang (Chief Innovation Officer and Executive Director, U.S. Global Development Lab)
Date: June 20, 2016

Overview

In this episode, Rajesh Merchandani sits down with Ann Mei Chang to explore why many promising innovations in global development fail to reach the scale necessary to combat problems like extreme poverty, and what changes are needed in the sector to bring solutions to billions instead of thousands. They discuss obstacles to scaling, the importance of understanding customer demand, the complexities of outcome-focused funding, the role of open innovation, and lessons the development sector can draw from the private sector and technology companies.

Key Discussion Points & Insights

1. What Does "Reaching Scale" Mean?

[00:45–01:47]

• Ann Mei Chang's definition:
  • Scale must be relative to the magnitude of the problem (e.g., a billion people in poverty), not a fixed number.
  • "Reaching scale to me means some level of adoption through governments, through replication, through individual enterprises to really reach a substantive portion of the population that could use it and could benefit from it." – Ann Mei Chang [01:22]
• Scaling can involve adoption across sectors, governments, or clusters of innovations – not just one product or enterprise.

2. Why Aren’t We Reaching Scale in Development?

[01:47–03:06]

• Tough environment: Poor infrastructure, lack of resources, instability in developing countries.
• Sector focus skewed: Too much emphasis on coming up with new ideas and gadgets, not enough on "the 99%" – the refining, iterative, operational grind needed for wide adoption.
  • "Squeezing out the last cents in your supply chain is not as interesting ... but it’s necessary if we want to have the impact that we want to have." – Ann Mei Chang [02:36]

3. Core Barriers to Scaling Innovation

[03:16–06:10]

• i. Customer Demand:
  • Solutions focus on what developers perceive as needed, but insufficient attention to whether end users see the problem, want the solution, or will adopt it.
  • Products and services must be tweaked and refined to fit actual user needs.
• ii. Financial Sustainability:
  • Many innovations fade when grant funding ends; need for models that generate revenue or integrate with supportive governments.
  • "Grant funding always ends. It's sort of a law of physics, almost." – Ann Mei Chang [04:33]
• iii. Operational Maturity:
  • Founders may be great innovators but lack the skills or willingness to operationalize and scale.
  • Need to bring in operational experts, new leadership, or sell/partner with organizations that can scale.
  • "What that means often is being humble enough to ask for help." – Ann Mei Chang [05:24]

4. Complexity of "The Customer" in Development

[06:10–07:13]

• In development, “customer” can mean end users, governments, or donors, each with different incentives.
• "Sort of navigating that creates a much more complex environment to be able to optimize for providing the best product for your customer." – Ann Mei Chang [06:51]

5. Shifting Focus from Outputs to Outcomes

[07:13–09:17]

• Donors often pay for outputs (e.g., number of schools built) rather than outcomes (e.g., learning improvements).
• Measuring and paying for outcomes would be ideal but is challenging.
• Desal Prize Example:
  • Grand challenge to create an efficient solar-powered desalination system.
  • Winning MIT student team produced nearly twice as much potable water as traditional methods.

6. Open Innovation, Prizes, and Changing the Status Quo

[09:17–12:44]

• Grand challenges and prizes are tools to invite broader innovation beyond large established contractors.
• "We believe that we'll come up with better solutions by tapping into the ingenuity of people from around the world ... because the best ideas often come from unexpected places." – Ann Mei Chang [10:21]
• Moving from small pilots to integration:
  • Global Development Lab creates pathways for these open mechanisms (e.g., Broad Agency Announcements) to enter mainstream USAID programming.
  • Hope that open innovation windows become a standard in future programs.

7. Integrating Innovation Within USAID

[12:44–14:44]

• The Lab is positioned as a pillar bureau within USAID, working alongside sector and regional bureaus.
• Provides tools, evidence, and support for other USAID missions to adopt innovative approaches.
• Example: 20 missions recently convened to learn about integrating innovation and partnerships.
• "Part of our job is to build the evidence base to show where they can really make a difference ..." – Ann Mei Chang [13:39]

8. The Challenge of Local Context and Scalability

[14:44–16:13]

• Innovations rarely fit every context; understanding metrics and real-time performance is crucial.
• Without timely feedback, organizations waste time/money on failing solutions.

9. Real-Time Data vs. Traditional Evaluation

[16:13–17:32]

• Continuous data feedback (like Google’s hundreds of daily experiments) enables rapid improvement.
• "I wouldn't even call it evaluation because evaluation seems very heavyweight. It's more like real time data feedback system." – Ann Mei Chang [16:51]
• Development organizations need lighter, ongoing metrics, not just big, infrequent evaluations.

Notable Quotes & Memorable Moments

• On the unglamorous work of scaling:

  • "The long hard sleep of taking those new ideas and really refining them ... It's not as sexy ... But it's necessary if we want to have the impact that we want to have." – Ann Mei Chang [02:18]

• On funding models:

  • "Grant funding always ends. It's sort of a law of physics, almost." – Ann Mei Chang [04:33]

• On breaking out of the usual suspects:

  • "Through our traditional processes of procuring development solutions ... it's usually only the usual suspects ... so we're trying to lower that barrier to entry." – Ann Mei Chang [10:27]

• On the ultimate goal for donors and development:

  • "The holy grail of development would be if we could pay directly for outcomes rather than output. It's hard ... but I think it would be ideal." – Ann Mei Chang [07:36]

• On learning from technology companies:

  • "Google runs hundreds of experiments on its homepage every day ... that kind of data feedback loop allows tech companies to ... make rapid progress ..." – Ann Mei Chang [16:54]

Key Timestamps

• 00:45 – What is scale in development?
• 01:47 – Why isn’t development scaling – the “99%” problem
• 03:16 – Three core barriers: customer demand, financial sustainability, operational maturity
• 06:32 – Complexity of “the customer” in global development
• 07:31 – The challenge of outcomes-based funding
• 08:17 – Grand challenges and the Desal Prize example
• 09:28 – Prizes as one piece of an open innovation strategy
• 11:26 – Integrating open innovation within USAID
• 13:07 – The Lab’s position within USAID and its role
• 14:44 – The importance of adapting to local context
• 16:13 – Real-time data vs. evaluation; learning from Google

Summary

Ann Mei Chang makes a compelling case that solving global challenges requires not only powerful new ideas but also relentless operational focus, nuanced understanding of users and customers, new financial models, and a culture of constant iteration and openness to learning. The episode concludes with a call for development organizations to emulate the data-driven, user-focused approach of the tech sector—and for donors and funders to create the space for such approaches to flourish.

For more, visit: cgdev.org