Thursday, May 25, 2017

Why, in whole systems, is it so hard to move from papers to action?

This is a shorter version – full version of the above is available here:  full version.

One of the strangest experiences in whole systems change in the public sector is observing how much energy is spent writing papers that are not acted upon, attending meetings that don’t make decisions, and holding workshops that lead to elaborate diagrams but no agreement to proceed.

Ron Heifetz [1]coined the phrase ‘work avoidance’ to describe the way leaders are distracted from the difficult conversations that need to take place if we’re to achieve ambitious outcomes in tough times. Work avoidance is quite the opposite of laziness, indeed to avoid the real leadership work we often exhaust ourselves with back-to-back meetings, and slave over hundreds of pages of data and vast action plans.

Work avoidance, says Heifetz, can take a number of different forms:

It can feel discomfiting to talk about deep feelings and intentions when we are used to an impassive managerial style in our meetings. It can seem like ‘not proper work’ to discuss fears and worries. A flurry of meetings gives a reassuring sense of activity, while difficult conversations can get stuck, or go backwards for a while. But real leadership takes time and self-conscious effort – it involves telephone calls, and meetings in coffee shops, reflection and self-examination, looking into our own hearts to find our values and priorities. It can seem destructive to challenge work avoidance activity, since people are clearly working very hard. Finding ways to do so without blaming individuals is an important part of leadership. But, just as an experiment, if you suspect your ‘system’ is locked into work avoidance, try some of the following:

This is an extract from a longer article that can be found on our website. For more information about OPM’s work on system leadership – contact Sue Goss, Principal in whole-system change and integration – sgoss@opm.co.uk, 020 7239 7800

[1] See, for example, Ron Heifetz: Leadership Without Easy Answers, Harvard University Press, 1994

 

Tuesday, May 2, 2017

The impact of learning and sharing on the development of Social Impact Bonds

In this third blog of my 2017 series inspired by my advisory visit to Japan, I reflect on the importance of international learning and sharing for improving Social Impact Bonds (SIBs). While honoured to have been an expert advisor to colleagues in Japan over the past three years, helping the country take its first steps to develop SIBs; I have also benefitted hugely from the opportunity to learn from them and others.

Here I reflect on the impact of international learning and sharing on two specific areas, based on my Japanese experience.

Role of government

In a previous blog, I argued that governments have key roles to play in supporting the growth of SIBs (and social investment more widely). As I shared the UK lessons during the Social Impact Forum at Yokohama City, I also heard from Australian colleagues who put forward a similar view. What was notable was the fact the New South Wales Government in Australia has actually issued a social investment policy committing to two SIB transactions per year. While the UK Government has been hugely supportive of SIBs, the support has been enacted in different ways. We do not have a specific policy committing us to a specific number of SIBs per year. As Australian colleagues noted, this policy really focusses minds and has mobilised everyone to work together. The machinery of government has been aligned to support this, for example by building in evaluation; by developing policy reviews and analyses; by assessing the effectiveness of known interventions in priority policy areas, etc.

Japanese colleagues, reflecting on their (still very recent) experience, observed that while the Japanese government has made certain overtures indicating interest in SIBs, they have been far less proactive and engaged in stimulating growth, compared with Australia and the UK. It has been very challenging to engage with central government, leaving local governments and their non-profit organisation partners to try lobbying for change while attempting to make things happen on a very small scale.

This comparative approach enabled us to work closely with Japanese colleagues to share specific recommendations for engaging with central government, while also drawing in lessons from related developments and how these have successfully captured the imagine of governments, such as Climate Bonds.

The purpose of SIBs

Another area where the comparative approach surfaced important issues for scrutiny is the motivation behind SIBs. While much of the discourse in the UK, US and Australia is underpinned by a strong ‘savings’ narrative, Japan seems to be more minded to develop SIBs that are focussed squarely on improving wellbeing even when this may not lead to any discernible savings for the public purse.

In challenging the dominant discourse around SIBs, Japanese colleagues tapped into a creative seam of thinking around constructing SIBs on a very different foundation. We were able to share specific models of how this may be done, proceeding to advise Japanese colleagues about the implications for outcome metric selection and outcome modelling. At the same time, this re-focussing enabled us to build a stronger narrative and practice around more meaningful user-defined outcomes in the UK, counter-balancing the more dominant system-defined outcomes approach. I have certainly woven this into my work with Northern, Eastern and Western Devon Clinical Commissioning Group on their SIB to tackle alcohol dependency.

Conclusion

One of the downsides of working in the SIB field is that although we all assert that “things change very quickly”, we have yet to demonstrate willingness to share experiences, learning and data. Indeed, I have often encountered strong opposition towards sharing, under the guise of “commercial and/or political sensitivity”.

At the same time, we all call for transaction costs to be reduced as the current high costs make it difficult for SIBs to be sustainable. Surely one of the ways to bring down transaction costs is for better sharing of information and experiences so that others do not have to reinvent the wheel every time a new SIB is being developed. This glaring contradiction does not escape me and many others. It is time that we have the courage and humility to learn and share more widely.

Dr Chih Hoong Sin, Director, Innovation and Social Investment

Tuesday, May 2, 2017

The impact of learning and sharing on the development of Social Impact Bonds

In this third blog of my 2017 series inspired by my advisory visit to Japan, I reflect on the importance of international learning and sharing for improving Social Impact Bonds (SIBs). While honoured to have been an expert advisor to colleagues in Japan over the past three years, helping the country take its first steps to develop SIBs; I have also benefitted hugely from the opportunity to learn from them and others.

Here I reflect on the impact of international learning and sharing on two specific areas, based on my Japanese experience.

Role of government

In a previous blog, I argued that governments have key roles to play in supporting the growth of SIBs (and social investment more widely). As I shared the UK lessons during the Social Impact Forum at Yokohama City, I also heard from Australian colleagues who put forward a similar view. What was notable was the fact the New South Wales Government in Australia has actually issued a social investment policy committing to two SIB transactions per year. While the UK Government has been hugely supportive of SIBs, the support has been enacted in different ways. We do not have a specific policy committing us to a specific number of SIBs per year. As Australian colleagues noted, this policy really focusses minds and has mobilised everyone to work together. The machinery of government has been aligned to support this, for example by building in evaluation; by developing policy reviews and analyses; by assessing the effectiveness of known interventions in priority policy areas, etc.

Japanese colleagues, reflecting on their (still very recent) experience, observed that while the Japanese government has made certain overtures indicating interest in SIBs, they have been far less proactive and engaged in stimulating growth, compared with Australia and the UK. It has been very challenging to engage with central government, leaving local governments and their non-profit organisation partners to try lobbying for change while attempting to make things happen on a very small scale.

This comparative approach enabled us to work closely with Japanese colleagues to share specific recommendations for engaging with central government, while also drawing in lessons from related developments and how these have successfully captured the imagine of governments, such as Climate Bonds.

The purpose of SIBs

Another area where the comparative approach surfaced important issues for scrutiny is the motivation behind SIBs. While much of the discourse in the UK, US and Australia is underpinned by a strong ‘savings’ narrative, Japan seems to be more minded to develop SIBs that are focussed squarely on improving wellbeing even when this may not lead to any discernible savings for the public purse.

In challenging the dominant discourse around SIBs, Japanese colleagues tapped into a creative seam of thinking around constructing SIBs on a very different foundation. We were able to share specific models of how this may be done, proceeding to advise Japanese colleagues about the implications for outcome metric selection and outcome modelling. At the same time, this re-focussing enabled us to build a stronger narrative and practice around more meaningful user-defined outcomes in the UK, counter-balancing the more dominant system-defined outcomes approach. I have certainly woven this into my work with Northern, Eastern and Western Devon Clinical Commissioning Group on their SIB to tackle alcohol dependency.

Conclusion

One of the downsides of working in the SIB field is that although we all assert that “things change very quickly”, we have yet to demonstrate willingness to share experiences, learning and data. Indeed, I have often encountered strong opposition towards sharing, under the guise of “commercial and/or political sensitivity”.

At the same time, we all call for transaction costs to be reduced as the current high costs make it difficult for SIBs to be sustainable. Surely one of the ways to bring down transaction costs is for better sharing of information and experiences so that others do not have to reinvent the wheel every time a new SIB is being developed. This glaring contradiction does not escape me and many others. It is time that we have the courage and humility to learn and share more widely.

Dr Chih Hoong Sin, Director, Innovation and Social Investment

Monday, April 24, 2017

Unleash the creative potential of Social Impact Bonds

In a previous blog based on my latest advisory trip to Japan, I noted that Japan is currently ‘translating’ the SIB model in order for it to be implemented in a way that is appropriate to its specific social, economic, political and cultural context. I have encouraged Japanese colleagues not to simply think that SIBs are and always will be what they currently look like. Instead, they should approach it creatively, making it work better for all. There is a risk that an innovation, such as SIBs, may be abandoned because of disillusionment with early versions of it, which may not have fulfilled the creative potential that may be on offer. Here, I describe four reasons why I think current SIBs have only scratched the surface of what may be possible.

Outcome payers

In the UK, we have become rather lazy with our terminology. I often hear people swap ‘commissioner’ for ‘outcome payer’. In doing so, there is a real risk that we limit the way we think about who outcome payers can or should be. Apart from public bodies, who else may be interested in paying for outcomes? What types of outcomes may they be interested in paying for?

If outcome payers are ever only going to be public sector commissioners, then we need to question whether SIBs are indeed channelling ‘new’ or ‘different’ funds. After all, if all outcome payments to investors are ultimately made by public sector commissioners, then the monies will only ever come from direct taxation.

Transaction costs

Read any publication or attend any conference on SIBs, and you will head the refrain: “SIBs have high transaction costs”. Again, rather than simply accept this as an immutable fact, I challenge the market to design these costs out of future SIBs. We have good evidence that this is possible, at least for some types of transaction costs. For example, we know that vested commercial interests can cause some intermediary organisations to develop SIBs that are unnecessarily complicated. Similarly our evaluation of the Essex County Council SIB found that when the various players are more concerned about minimising risks to themselves, they can end up with a contract that is too complicated and therefore imposes ongoing costs. As our experience in Essex shows, these can be designed out of a SIB even after it has gone ‘live’.

Who bears the risks?

An attraction of SIBs is that we introduce a new group of stakeholders called ‘social investors’ into the picture, who have higher risk appetites and are socially minded. However, the fact that 7 out of the 10 SIBs in the US have over half of their values guaranteed by philanthropic organisations really causes us to question who is really bearing the risk? Are we attracting the ‘right’ types of investors into the market or are we distorting the market to suit certain types of investors? In addition, there is also evidence that some social investors can try to pass on some of the risks to service providers, for example, by providing part of the capital as a loan rather than as revenue. We must therefore be clear about who bears what risks, and whether these models are true to the ideal of the SIB aspiration.

Is it all about savings?

In a blog I wrote last year, I argued that SIBs do not have to be about savings, and showed different ways of constructing alternatives. SIBs are about social outcomes. To reduce social outcomes to only those that generate financial savings for the public purse is highly limiting. This, again, draws attention to the limitations of thinking of ‘outcome payers’ only as ‘commissioners’. Even amongst commissioners, financial savings do not have to be the only motivator. We need to ask ourselves the question: “Outcomes for whom?” when we design SIBs. If we never ask service users what success looks or feels like to them, then what message are we sending out about SIBs? Whose interests do they serve?

Conclusion

Current SIBs have barely scratched the surface of what may be possible. Rather than allowing them to ossify into what they currently look like, we should challenge ourselves to keep pushing the creative potential of the idea of a SIB. In the process of doing so, we must never lose sight of outcomes and how they can be meaningfully defined.

Dr Chih Hoong Sin, Director, Innovation and Social Investment

Monday, April 24, 2017

Unleash the creative potential of Social Impact Bonds

In a previous blog based on my latest advisory trip to Japan, I noted that Japan is currently ‘translating’ the SIB model in order for it to be implemented in a way that is appropriate to its specific social, economic, political and cultural context. I have encouraged Japanese colleagues not to simply think that SIBs are and always will be what they currently look like. Instead, they should approach it creatively, making it work better for all. There is a risk that an innovation, such as SIBs, may be abandoned because of disillusionment with early versions of it, which may not have fulfilled the creative potential that may be on offer. Here, I describe four reasons why I think current SIBs have only scratched the surface of what may be possible.

Outcome payers

In the UK, we have become rather lazy with our terminology. I often hear people swap ‘commissioner’ for ‘outcome payer’. In doing so, there is a real risk that we limit the way we think about who outcome payers can or should be. Apart from public bodies, who else may be interested in paying for outcomes? What types of outcomes may they be interested in paying for?

If outcome payers are ever only going to be public sector commissioners, then we need to question whether SIBs are indeed channelling ‘new’ or ‘different’ funds. After all, if all outcome payments to investors are ultimately made by public sector commissioners, then the monies will only ever come from direct taxation.

Transaction costs

Read any publication or attend any conference on SIBs, and you will head the refrain: “SIBs have high transaction costs”. Again, rather than simply accept this as an immutable fact, I challenge the market to design these costs out of future SIBs. We have good evidence that this is possible, at least for some types of transaction costs. For example, we know that vested commercial interests can cause some intermediary organisations to develop SIBs that are unnecessarily complicated. Similarly our evaluation of the Essex County Council SIB found that when the various players are more concerned about minimising risks to themselves, they can end up with a contract that is too complicated and therefore imposes ongoing costs. As our experience in Essex shows, these can be designed out of a SIB even after it has gone ‘live’.

Who bears the risks?

An attraction of SIBs is that we introduce a new group of stakeholders called ‘social investors’ into the picture, who have higher risk appetites and are socially minded. However, the fact that 7 out of the 10 SIBs in the US have over half of their values guaranteed by philanthropic organisations really causes us to question who is really bearing the risk? Are we attracting the ‘right’ types of investors into the market or are we distorting the market to suit certain types of investors? In addition, there is also evidence that some social investors can try to pass on some of the risks to service providers, for example, by providing part of the capital as a loan rather than as revenue. We must therefore be clear about who bears what risks, and whether these models are true to the ideal of the SIB aspiration.

Is it all about savings?

In a blog I wrote last year, I argued that SIBs do not have to be about savings, and showed different ways of constructing alternatives. SIBs are about social outcomes. To reduce social outcomes to only those that generate financial savings for the public purse is highly limiting. This, again, draws attention to the limitations of thinking of ‘outcome payers’ only as ‘commissioners’. Even amongst commissioners, financial savings do not have to be the only motivator. We need to ask ourselves the question: “Outcomes for whom?” when we design SIBs. If we never ask service users what success looks or feels like to them, then what message are we sending out about SIBs? Whose interests do they serve?

Conclusion

Current SIBs have barely scratched the surface of what may be possible. Rather than allowing them to ossify into what they currently look like, we should challenge ourselves to keep pushing the creative potential of the idea of a SIB. In the process of doing so, we must never lose sight of outcomes and how they can be meaningfully defined.

Dr Chih Hoong Sin, Director, Innovation and Social Investment

Wednesday, February 22, 2017

Independent evaluation of the Essex Multi Systemic Therapy Social Impact Bond

For the past three years OPM has undertaken an independent evaluation of the Essex County Council Multi Systemic Therapy (MST) Social Impact Bond (SIB). The Social Impact Bond delivers MST to children and young people at risk of being taken into the local authority care.  The Social Impact Bond has been managed by Children’s Support Services Ltd, a Special Purpose Vehicle, established by Social Finance.

The purpose of OPM’s work has been to evaluate the potential added value that can be achieved through local authority and other commissioners using Social Impact Bonds as a mechanism for financing the delivery of new services.  Specifically, whether the use of a SIB impacted on the implementation of MST and whether significant value was added to either outcomes or performance.

The evaluation highlights many instances where the use of the SIB has been seen to add value to systems and processes and indirectly to overall performance.  It also draws attention to some additional costs and complexities which may result from operating through a SIB and how these can be mitigated.  Drawing on a variety of quantitative and qualitative evidence and insights, OPM have now summarised their findings and used this to inform a set of recommendations applicable to organisations that may be considering developing SIBs of their own.

In addition, OPM have drawn on the evaluation findings to develop a new guide on ‘Top Tips for developing and implementing a Social Impact Bond’ – an interactive document for commissioners, providers, funders and managers.  While summarising the Essex experience and including examples from Essex to illustrate specific points, this also brings in themes from the wider evidence base, with the aim of distilling lessons that have wider applicability.

The Essex SIB was the first local authority commissioned SIB to be established in the UK and the experience and findings reflect its innovative nature.  It was launched in 2013 and will be operational for five years, concluding in 2018. Two teams from Action for Children have delivered an MST intervention to approximately 260 young people to date resulting an in an approximately 80% rate of successful care diversion.   MST is an evidence-based programme that seeks to improve parenting and rebuild positive family relationships, enabling families to manage future crisis situations themselves.

 

 

 

 

 

Monday, October 17, 2016

Social investment toolkit for service providers

We know from our extensive engagement with service providers that a growing number are interested in exploring Social Impact Bonds or other forms of social investment to help them secure longer term contracts or to scale up their services. The £80m Life Chances Fund offers new opportunities for service providers to engage in outcomes-based contracting through a Social Impact Bond model. However, many do not know where to start and may be know how to decide whether a Social Impact Bond is appropriate.

In line with our values as a public interest company, we have produced this simple and free-to-download Service Provider Toolkit aimed at helping service providers think through whether a Social Impact Bond may be right for them. It also includes 10 Top Tips and signposting to other resources.

We would like to thank Michelle Farrell-Bell, Regional Director (North-West) for Teens and Toddlers, for her insights and feedback on an initial version of this toolkit.

Monday, September 12, 2016

Social Impact Bonds in Japan

Japan’s first steps in developing Social Impact Bonds

April, 2017

I am in Tokyo for a third year running, this time to find out about the experiences of the Yokohama City Social Impact Bond (SIB) pilot. It has been a real privilege working with a diverse group of stakeholders from the outset as they initially learned about the UK experience in implementing SIBs, and then took steps to develop and test a model for Japan. I have written previously about specific learning shared with Japanese colleagues. In this blog, I make further comparisons between the Japanese and UK experiences.

Travelling well?

SIBs originated in the UK and have since spread to many other countries. It is easy to understand why the idea of a SIB is so attractive to governments internationally. It purports to only ‘pay for success’ and holds the promise of helping governments save money.

Japan contributed to the OECD’s Social Impact Investment Taskforce’s work to better harness the power of entrepreneurship, innovation and capital for public good. The Japanese Ministry for Education, Culture, Sports, Science and Technology has been funding a five-year study by a consortium led by Meiji University, while three other Central Government departments have expressed interests in developing SIBs. The Nippon Foundation has also played an intermediary role in coordinating three small-scale early pilots in 2015.

It is fair to say that as SIBs developed within and beyond the UK, there has been a constant process of adaptation. Each country has had to do a considerable amount of ‘translation’ to enable the model to be implemented in its particular national, regional and local context.

Japan, similarly, is trying to figure out an appropriate form of SIB that suits its unique socio-political, economic, and cultural milieu. For example, voluntary sector organisations tend to be small and hyper-local; there is a lack of participative governance in terms of the structure of central and local government relationships; and despite the huge national debt the government has no problems accessing cheap capital.

It is therefore naïve, and frankly wrong, to think that there is a singular SIB model that can be transposed with ease.

What might help?

Japan, drawing lessons from the UK, recognised the importance of stimulating the development of a social investment market. Taking a lead from the model set by the UK in creating Big Society Capital (BSC), Japan recently passed the Dormant Bank Account Act whereby a portion of the money will be transferred to a foundation independent from government who will act as a wholesaler (like BSC) in which money is lent or invested in social investment intermediary institutions who go on to invest in frontline social sector organisations. There is also interest in setting up impact bond funds, akin to the ones in the UK.

However, it is not sufficient if governments only see their role in terms of providing the money either to pay for outcomes or to grow the social investment market. In Japan, we hear that the pilots have struggled with being able to identify the right outcome metrics and being able to conduct measurement consistently and robustly. This area seems under-developed in comparison with the UK where the government has invested significantly in developing the evidence base for outcome measurement and for pricing outcomes.

The UK government has also set up the Government Outcomes Lab: a partnership with the Blavatnik School of Government at the University of Oxford, to support commissioners to better engage with outcomes contracting.

There has been legislative change that support development in this area. For example, the social investment tax relief aims to attract individual social investors, complementing Big Society Capital’s effort at growing the market of institutional investors. The Public Services (Social Value) Act additionally requires public bodies in England and Wales to give due consideration to improving local economic, social and environmental outcomes through commissioning.

I will be encouraging participants at the Social Impact Forum at Yokohama City on 22 April 2017 to consider the specific forms of support that should be put in place, and who might be responsible for doing what, to enable SIBs and social investment more generally to flourish in Japan, and in ways that truly bring about social outcomes.

Dr Chih Hoong Sin, Director Innovation and Social Investment – he has been expert advisor to the Japanese Government since 2014 who are keen to explore the potential for implementing Social Impact Bonds in Japan.

 

Pre-2017

Background

The Japanese Government, as part of the Social Investment Group on the G8, expressed an interest in exploring the potential for implementing Social Impact Bonds in Japan in a way that was sensitive to local contexts.

What did we do?

Dr Chih Hoong Sin was invited to share lessons learned from the UK with a Japanese contingent that visited in November 2014. He was subsequently invited by the Japanese Government visit Japan to advise representatives from central and local governments, and charitable foundations, in March 2015. This involved numerous meetings with various stakeholders, covering  diverse aspects such as resourcing; outcome measurement; the role of local voluntary and community sector organisations; implementation, etc. He was further invited to share learning with a second Japanese contingent that visited in October 2015, with a third visit scheduled for September 2016. He was invited back to Japan in April 2016 to advise Japanese colleagues and to speak at a national conference.

Outcome

The work led directly to Japan taking the first steps in setting up feasibility studies in three prefectures. These were launched in July and August 2015, and funded by the Nippon Foundation. Dr Chih Hoong Sin continues to advice Japanese colleagues, particularly in their first year of implementation. Chih Hoong is currently also providing expert advice for the Yokohama SIB – Japan’s first SIB. Chih Hoong has written a series of blogs about this activity.

Monday, September 12, 2016

Analytical support to the Newcastle Ways to Wellness Social Impact bond

OPM Group has been asked by Ways to Wellness, the Special Purpose Vehicle (SPV) set up to implement the Newcastle Social Impact Bond, to provide specific analytical support to help them understand ‘what works’.

Background

The Newcastle SIB is the UK’s first health SIB and is very high profile. With four providers delivering the intervention, and supported through an SPV, they have been collecting significant amounts of data on activities, outputs and individual-level outcomes as measured by an Outcome Star.

What did we do

Ways to Wellness approached OPM Group to provide them with expert analytical and advisory support to help them organise and manage the data in a way that will support learning and improvement. This further involves helping them improve their internal data management systems and IT, as well as developing a coherent analytical framework.

Outcome

Although the project is ongoing, we have already provided specific recommendations for data management systems and have helped Ways to Wellness develop a series of hypotheses to be tested. We have also made emerging sets of recommendations on service-user segmentation.

Monday, September 12, 2016

NEW Devon CCG outcomes-based commissioning demonstrator for alcohol dependency

OPM Group has been providing commissioner advisory support to North Eastern & Western (NEW) Devon Clinical Commissioning Group (CCG) to initially explore the feasibility of an outcomes-based commissioning approach for tackling alcohol dependency. Following the feasibility study, OPM has been asked to support the CCG to develop a full business for a Social Impact Bond.

Background

NEW Devon CCG (with partners Devon County Council, Plymouth City Council, SW Academic Health Science Network, University of Plymouth, Royal Devon and Exeter NHS Foundation Trust, Plymouth Hospitals NHS Trust, and Exeter CVS) secured a development grant from the Commissioning Better Outcomes Fund to explore the feasibility of an outcomes-based commissioning approach for tackling alcohol dependency. This is seen as a demonstrator project, and will inform wider commissioning practice in the region.

What did we do?

We have been providing commissioner advisory support for the feasibility study, with additional lead responsibilities for outcome and financial modelling. Following the successful completion of the feasibility study, we are invited by NEW Devon CCG and partners to continue supporting the development of a full business case for a Social Impact Bond to tackle alcohol dependency. This includes project management support, specific lead responsibility in further financial and outcome modelling, support for provider engagement, and support for investor engagement.

Outcome

The feasibility study was completed successfully, with the Executive and Finance Committees at the CCG approving work for a full business case. We contributed to a learning and reflection session and have been sharing the lessons learned with other colleagues within the CCG and partner organisations.