Social Innovation Podcast

We discuss the unicity and value add of practices unique to social entrepreneurship and the ability to drive focus on purpose of business.

We talk about the trend of increasing popular momentum not the least in financing impact but the need for patient capital and stimulation of supply of project pipelines as well as stimulation of demand for social enterprise products and services.

In this episode, the national coordinator for mental health, Ing-Marie Wieselgren from the National Association of Regions and Municipalities, discusses the state of mental health in Sweden and what we can do to improve and innovate for a mentally healthier Sweden. This episode is in Swedish. A catch up episode in English will follow.

Norrsken Foundation CIO Tove Larsson expands on investment themes, trends and the challenges of impact investing

Social democrat and chairman of Norrköping municipality Lars Stjernkvist speaks about municipalities innovating approaches to social investments and social innovation.

Andreas König CEO of Just Arrived and Just Tech talks about innovating with tech for labour market integration of migrants coming to Sweden.

Kristian Ranta of MERU Health discusses the opportunities and challenges of innovating in clinical mental health and how MERU created its own innovation platform to validate new solutions.

Annica Johansson from Reach4Change* expands on how impact is measured in social enterprises and how to take measurement beyond tedious reporting toward an everyday resource for improving business and learning. *upon release of this episode, Executive Director at Effektfullt

Martin Siltberg from Sana Labs speaks about how artificial intelligence can improve education and even crack scale language training for migrants integrating in new societies.

Erik Fernholm, CEO of 29k talks in this first of two episodes about the need to democratise personal growth and development to drive sustainability in society. 29k seeks to make cutting edge personal development available globally for under 1 USD per person.

Johan Oljeqvist is the CEO of Fryshuset, one of Sweden's most successfulnon-profit organizations. They have mastered the art of hybrid organization and governance, simoultaneously being a member based non-profit, a foundation, a profitable business and a lobby organization.

Johan makes the case for how to build and grow from your values as an organisation and what it takes to live your values when they come into conflict with society and stakeholders.

His advice is to get to know the target group you want to serve and any other clients you work with, get to know them deeply and make sure you have people people who have the ability do develop relationships and gain trust.

Being a hybrid organisation, part nonprofit, part business, part partner to public sector can be confusing for the rest of society and requires a lot ot work but also allows for collaborating in different ways, building diverse income streams and becoming less dependent on individual clients or stakeholders support. This is key to be able to take risks and survive speaking truth to power and stakeholders - instead of becoming risk averse and choosing not to do your best to serve your target group.

Since the episode was recorded sustainable bonds have advanced further! 17% of all bonds in SEK are now green and more sustainable bonds (green and social) have been realised.

The case for social investments in welfare/government

The social contract of welfare is under strain and public confidence in the services provided by government is wavering. There is a need to drive more efficient use of public resources in order to more cheaply drive impact and outcomes as well as freeing up public resources to adequately cover critical needs. Social investments as a phenomenon are growing as a potential solution to evolving problems in welfare and public service delivery. Social investment can drive early interventions that save government resources downstream in the development life cycles of welfare problems. Government services are not proactive enough to catch welfare problems before they become complicated. Legislation requires public services to react when problems become visible but there are no direct incentives to stop problems from developing in the first place. Sweden is innovative in that many municipalities (80ish) that have allocated money into "social investment funds" to try to fund early interventions. Private investors participating in public social investments can share financial risks, provide support in governance and management of implementation and navigate markets of solutions and service providers.

Social impact bonds / social outcomes contracts

Traditional procurement drives much to strong focus on activities rather than results and outcomes leading to the potential for public buyer and private/non-profit service provider incentives to diverge. A new trend in public procurement is contracting on outcomes to align incentives of public, non-profit and private actors around specific measurable outcomes. Social outcomes contracts / Social Impact Bonds are a new experimental type of contracts between public and private/non-profit service providers and private investors to try new operating models to solve social problems. Intermediaries are brokers of relationships and project management experts that help private, non-profit and government parties to align and find agreement on social investments. Public sector organizations are generally not capable of analyzing needs and potential solutions of complex welfare problems. Further they have a terrible track record of following through on projects that run for more than 1 year and especially get sloppy around evaluation and lessons learned from implemented projects.

Potential areas for social innovations and investment

Labor market integration Social integration of migrants Prevention of health problems, mental health notably Any issue area where the responsibilities and specifications for functional solutions span across public sector silos or across public, private and non-profit sectors. This is the Achilles heel of the public sector, the inability to organize across silos or across sectors.

Finding for a co-founder, starting up with a friend Deciding to leave a full time job for starting a business Learning about the mental health and personal development market Customer conversations leading development of business and product Aligning business and values, knowing the WHY Testing different business development ideas and pivoting with experience, three roads become one International expansion, a lucky break into the Netherlands Dating investors, ask for advice not money

Episode artwork photocred: Yolanta Birkhane

In this fourth episode Malmö University academic Fredrik Björk unpacks the history of social innovation. Is social innovation really something new, or just a rebranding of old traditions of evolving society? What if effective altruism and impact entrepreneurship is just old school social engineering and neo-colonialism in emperors clothing?

This conversation discusses how impact business meets the forefront of the development of tech and government. We discuss how business for impact can best be made. And what obstacles it is likely to face along the way.

Hampus is one of the most profiled angel investors / VCs in Sweden, having built TAT, The Amazing Tribe and sold it to Blackberry he and the TAT team turned their attention to building a vibrant startup ecosystem in Malmö, Sweden.

He is passionate about the potential for tech innovation to improve society but be takes issue with the hype around social enterprise and social innovation and he is skeptical about the exceptionalism and political correctness of the movement developing around tech for good.

Business is business and a business venture want to be a business first, before it is social. ?You have to understand what kind of animal you are giving life to and be prepared it may not be the animal you intended, you have to make sure you can live with the animal you breed.?

Hampus frowns on the holier than though ethos of social enterprise, in the end its a business and you will have to make a clear decision on what you will give and what you will take for yourself. The movement of social enterprise seems to pretend that it can do without hard choices and that business for good will be win win win by design.

But Hampus is adamant about a positive role for tech in society and its potential to uproot and change failing systems like healthcare. Data, data, data, he believes is the key to success for tech in society. If tech companies can amass data that show a clear case for change and can provide data that informs incremental evolution, it may just convince the bureaucratic old guard to play ball, for example in the public sector

Why does social innovation fair so poorly in contributing to education in modern Scandinavian welfare?

?Kognity is worth a closer look for the lessons it gives in how to win the mandate to innovate education.?
During the course of my years as an impact investor I have discovered a little-known market for grass roots innovation around the education system in Sweden, especially focusing on basic education up to secondary. Non- profits and entrepreneurs are doing work on improving school environment, extra-curricular activities and the content and tools of education itself.

While its more rapidly developing private sector sibling, EdTech (educational technology) has made it into the limelight with billions of venture capital pouring into the sector, this grass roots innovation around basic schooling deserves a closer look. In my judgement, the sector is invisible because it is underdeveloped. It?s underdeveloped because it has serious issues moving product and business development toward product market fit in a reasonably speedy manner.

Granted some great and powerful work is of course conducted at scale with social innovation developing education, with reproductive health, financial literacy and basic access etc. with millions of lives are being impacted in especially developing markets. But this is not the case with basic education in Scandinavia. Certainly the challenges to education in modern welfare are different. However, access, equality, resourcing and individualisation are still far from achieved.

This is one reason why the latest episode of the Social Innovation Podcast is so interesting???because it offers some clues and keys this grass roots social innovation in education can leverage to grow and develop a more competitive offering work towards claiming a role in shaping the future of education

In this second episode I, Henrik Storm Dyrssen, speak to Karin Bjerde, Head of Strategic Growth at Swedish EdTech start-up Kognity. She tells the story of growing a digital textbook and learning environment SaaS company into 90 countries, including developing (LDC) markets. The challenges of selling software to schools abound but Kognity has persevered in experimenting. It has learned the lessons of what does not work and come through to articulate a value proposition that works. One that makes them a partner to develop educations in the schools and markets they serve. That?s worth a closer look!

The case for disrupting basic education?

Kognity?s philosophy is that basic education is one of the most powerful levers to enable socioeconomic inclusion and advancement. That?s true in most corners of the world, Scandinavia included.

?By 2030 we will have 1 billion more youth in secondary education, that requires 1 million new teachers, and that, in a time when 40% of UK secondary school science teachers want to leave the profession 5 years into the job.????Karin Bjerde.
Kognity identifies basic education as a challenge of scaling access. Similarly, it can be noted for example that the number of Swedish language teachers required to deliver language training to the population of migrants that have arrived over the past years amount to double the current cohort of qualified teachers. That means a challenge of magically producing around 30 000 Swedish teachers, yesterday. This is not likely to happen. The case for innovation is clear. We need to do more with what we have. We need to think differently to meet the sheer volume requirement of language training. It?s worth noting this is in a language training market where immigrants report learning very little in formal SFI (Swedish for immigrants) programs, more frequently citing lessons from online resources. In the absence of public and private educational sector innovation, life finds a way, for language training in Sweden, that?s currently YouTube.

The case for technology, to meet the sheer scale of demand, is self-evident. The philosophy of Silicon Valley style tech innovation however, is ?work fast and break things?. With education, as with other social sectors, there is a real risk of working fast and breaking people, or teachers for that matter. One of the most common apprehensions that Kognity meets in its daily sales work is the teacher asking, ?are you here to take my job away??. That makes a case for evolving rather than disrupting education in the pursuit of innovation.

?The imperative is to use tech to evolve rather than disrupt education, work fast and break things does not apply????Karin Bjerde
How to sell to schools and their stakeholders?

?Schools do not generally have coherent digital strategies, digitisation is piecemeal and unsynchronised. Most schools see digital as hardware instead of the intentional combination of hardware and software which is where the real potential for value lies. Giving a child a laptop doesn?t make education digital or better. Teachers have been burned by bad and unsynchronised technological plays, with 12 different logins and no idea of how to combine and implement the 12 different technologies. ????Karin Bjerde
How do you sell educational software to teachers and schools apprehensive about the role of technology potentially complicating and disrupting the status and practice of teaching? Karin?s message is that disruption does not fly as a value proposition. What?s more, basic schooling is part of a larger educational system, with stakeholders like school leaders, private-, public- and non-profit organizations that run schools and politicians that govern the mandates and resourcing of education, not seldom with local differentiation as a consequence.

The key for Kognity has been to focus on making the challenge easier, focusing the sale on simple value propositions that are more easily brought home for all the stakeholders involved but especially bringing onboard teachers and making them ambassadors for the product. Teachers have a powerful role of influencers, as a collective, both locally as employees and nationally as organised in unions. Addressing their concerns and speaking to their needs made the breakthrough for Kognity.

?Departing from the basic textbook allowed us to get into the classroom, and then we can work on developing from there.????Karin Bjerde
The first break through was focusing on a simple product, one that everyone around a school ecosystem can understand, the textbook. This meant articulating a value proposition of digitising textbooks, both reducing cost, enabling quicker and cheaper upgrades of educational material and speaking to teachers and principals and school organisation leadership in a language they were already speaking, managing budgets and organising delivery, acquisition and implementation of educational material. This made the technology both a tangible value as well as a less scary proposition. Kognity articulated its proposition as helping teachers to teach and students to learn in a more efficient way, by digitising textbooks. The secondary value proposition of individualising the learning experience and the teaching approach then comes on the back of the more basic value proposition of digital educational content.

?Schools don?t generally have dedicated budgets for innovation, it?s easier to speak to priorities being made every day rather than asking school leaders to develop new ones.????Karin Bjerde
The lesson here for social innovation in education is speaking to established needs and budgets to get in and adding the more qualitative propositions on top of something simple and easy to buy and argue for. Innovators trying to improve school environments and extra-curricular propositions would do well to study this and explore how they can move the sale and primary value proposition closer to everyday core priorities for teachers and school leaders. Opportunities here include student health and teacher training and development, underserved needs with stretched budgets, clear cases for innovation.

?Quite frankly, it?s not generally in the mandate of school leaders to drive educational innovation????Karin Bjerde
Innovating and developing technology together with educators rather than for schools and investors

?Be the drivers of your own direction with a sustainable business model, it takes away some of the pressure from venture capitalists????Karin Bjerde
Building a tech-based product that requires up front investments runs the risk of bringing investors on board early that may or may not mix well with the longer-term intentions of the founders and the team. The team has to grow with the product and business but so do the investors. Shareholders come with a different set of priorities than founders and team members. In the best of cases these are well aligned both by way of direction, time horizons and implementation strategy. More often than not, relationships with investors don?t work out quite so aligned and smooth. By shipping and selling from an early stage Kognity bought itself some latitude, a better negotiation position and some clout by way of data and metrics that speak for themselves and can act to discipline and focus conversations with investors. Similarly, a classic challenge in the non-profit sector is becoming beholden to constant fundraising (40% of management time in non-profits is dedicated to fundraising) and putting the organisation at risk of adapting to funder-agendas to the point of mission drift from original strategy and inclusion of agency of the target groups served. Becoming economically sustainable from an early stage buys some serious latitude and wiggle room to articulate and retain the driver?s seat of strategy in the hands of founders and the team.

?A big challenge is that the educational community still view technology as a threat, something that takes away your job or reduces the teacher to a desk worker, this is the consequence of years of poor technology implementation. The question people ask is ?are you going to replace me?? ????Karin Bjerde
Overcoming the first hurdle of making the sale and getting in the door opened up for the next series of challenges for Kognity. They discovered that technology had a bad reputation among educators and was mostly perceived as hardware for the sake of hardware rather than a value proposition of improving teaching and learning. When it comes to software, the situation is usually a myriad of programs with little synchronicity, leading to administration and technological trouble shooting taking time and frustrating teachers. To overcome this Kognity spent extra resources on high touch implementation to train and support teachers in adopting, using and making demands on the development of the technology. Here the tech adage of shipping early and iterating rapidly to adapt the product to customer feedback proved useful to develop the product to fit the demand. It also helped to build relationships with educators and empowering them to influence the tools they were using on an everyday basis. Further, the choice was made to adopt a dual strategy for product development. This meant a global technological platform and backbone complemented with local adaptation of educational content. This was made easier by focusing the first sales on a partnership with IB (International Baccalaureate) schools across the world, a private educational system leveraging the same educational content across the globe. This allowed the team to focus first on developing the technological backbone with little variation in content, in order to then continue to optimise the backbone and shifting resources to developing and adapting content for localised variation.

?We spend a lot of resources on supporting customer implementation, making sure to get it right. Taking customer support from just reactive to proactive training and supporting the teachers to understand what value the functionality creates for them, say reduced time spent on marking papers???is essential to succeed with the implementation. ????Karin Bjerde
The ace up the sleeve for Kognity is of course the potential to generate enormous amounts of priceless data on real time every day teaching and learning, down to individual interactions between a teacher and a single student, up to a global ecosystem of teaching. This enables early stage product development, proposing and making changes based on real life data on how teachers and students use the technology. It also has the potential for longer term value creation in building a strategic treasure trove of information on how education is being conducted. This information could be commercialised as a product in its own right to help schools and educational authorities understand in what is happening in classrooms as well as across the entire education systems of individual countries.

To scale or not to scale?

?Scalability doesn?t look like Uber in education, which is and should be different from country to country, one size fits all would become one size fits none. We have a glocalized solution, a scalable backbone platform but tailored content to different client groups and markets????Karin Bjerde
This strategy clearly makes some sense, but it also poses some challenges. Scalability not the least, the core value proposition of EdTech is hampered by the degree of differentiation required to serve a universe of local variations in educational needs and practices. One can argue that Kognity is taking a risky bet that can land it in stretching itself too thin and over time diluting the quality of locally adapted content. The strategy hinges on maintaining a balance between high touch adaptation and implementation and the more universal propositions of a digital tool with automatic data-based individualisation of the learning and teaching experience, generating data for intelligence and optimisation. One might expect Kognity to continue to focus on market segments similar to IB where variation is limited across markets. Alternatively one can imagine them seeking to reduce the cost of variation by for example enabling bottom up production of local content, piggybacking on the established culture of teachers adapting and sharing teaching materials. It?s still to be seen how Kognity will fair in this challenge. This also opens up Kognity to competition for dominance on the content side. One can imagine national champions taking pole position in developing local content and curriculums, seeking to leverage more universal technological backbones like Kognity?s merely as an infrastructure for delivery. This could see Kognity retreating in the value chain to a pure SaaS (Software as a service) provider with a brand neutral ?white label? platform delivering digital content produced by others.

?Disruption is not a value proposition for educators, a sector with many stakeholders and interdependencies in the production of education means simply replacing parts of the value chain hard, rather evolving individual elements of the education process is easier to win support for.????Karin Bjerde
Managing for impact???on data and values

?Our mission is to help teachers teach and students learn in a more efficient way. We don?t have double bottom line, but the values and vision are very present in the company. Our interpretation of impact measurement is that the product has to add value to sell, so if it is selling and we have recurring customers we must be creating value????Karin Bjerde
Kognity clearly has a mission to evolve and improve education. But how does it make sure it does just that? Kognity, relies on recurring sales as a proof of value creation. Does that help Kognity to manage for impact? Clearly perceived added value on the part of educators is important for an EdTech product, but lets? unpack this.

Kognity wants to make teaching and learning more efficient, that?s great. The assumption is that more efficient education will lead to better resource utilisation, namely, that teachers can focus on teaching and the few teachers we have and will be able to train over the coming years will reach further. Does that assumption hold? As a thought experiment, let?s say each school has 10 teachers. Let?s say that Kognity frees up the time of 2 teachers (20% increase in efficiency) by removing administration and supporting the classroom experience. What will happen to the 20% capacity created? If teachers are overworked, they may simply relax more. That may make their work environment more sustainable, reduce stress and sick leave as well as staff turnover. Teachers not so pressured may find time to add extra qualitative value to the teaching they already do, making it more fun, helping students more. The less stressed teacher may ask for more teaching hours, another class to teach, increasing the capacity of the school. Hypothetically Kognity could have both qualitative and quantitative positive impact both on teaching and learning. But how would they know? The next time a principal renews a Kognity license contract, how does Kognity know the basis of that decision to be impact, if so what impact or something else?

Without creating data and metrics around what qualitative and quantitative gains that happen in Kognity schools and comparing those with non-Kognity schools, we won?t know. Control test group trials are expensive though. An easier option may be following the road of micro-finance, the pioneering industry of social enterprise, that went from trying to prove positive impact to focusing more on proving the absence of negative outcomes, i.e. proving the absence of negative trends rather than proving directly attributable positive results. This can be achieved against existing priorities of school leaders, like reducing turnover, educator stress levels, student stress levels, student pass rates etc. This means picking metrics that have a negative trend trajectory and seeking to achieve a stalling or turn of negative development into a positive one. That does not result in granular understanding of the nature of positive impact but rather a binary yes or no whether Kognity has a positive effect on the educational environment. Achieve the same negative trend turn in 30 different but comparable schools and you have a statistically significant (central limit theorem) positive effect. The risk here is that Kognity can be serving 100 000 schools and make great money without improving education at all. This is simply because sales can be generated from secondary values with unproven correlation with educational efficiency, like for example pupils enjoying work in a digital environment or teachers appreciating less manual administration.

Kognity has a great resource in its hands to drive impact management, data, lots and lots of data. It can leverage this data from the daily usage of its platform to inform it?s understanding of what?s happening in schools. One can assume that Kognity already has a lot of this data but that its early days for interpretations and conclusions and that different data points and metrics probably point in all kinds of directions still. To clean this up, working through Kognity?s Theory of Change and setting up the cause-effect assumptions of impact can help to articulate the metrics needed to create impact proofs of concept. Inputs (resources) are used for Activities (production) that lead to Outputs (delivery) after which we can observe Outcomes (trend in target group results) that can be analysed for attributable Impact (what outcomes come from Kognity?s activities).

The debate around impact measurement has evolved over the last 10 years from an academic and lay man obsession with articulating and proving impact to the investors and practitioners of impact seeking to inform the understanding the different elements of the impact value chain / theory of change and managing impact business with that information in complement to financial metrics. By managing Kognity on financial metrics like recurring sales, the organisation runs the risk of mission drift and decision-making that inadvertently prioritises business over impact. The litmus test for any impact organisation is having a governance and management process that allows it to answer the following question????If you have 10 000 USD, and you can spend it on increasing sales, margins, product quality or customer experience, what information and principles do you have that makes that a logical decision rather than a matter of negotiated opinion or simply, a default decision in favour of short-term business?? This means having values articulated clearly enough to inform calls on what priorities the organisation will make in regular business and organisational decisions. It means having data and metrics that inform the status of production and delivery of both business and impact as well as the outcomes for target groups. Ideally, anyone in an organisation, simply given this information, can tell you what decision the organisation will make.

Social innovation is the practice of solving social problems with new methodology to achieve economically sustainable, scalable and measurable social impact for the target groups suffering social problems.

The Social Innovation Podcast seeks to demystify and give you an insider?s perspective on social innovation as it is developing in Sweden and Scandinavia.

Overarching questions

What is happening to the Scandinavian social contract in response to social innovation? Where, how and by whom is the real impact being generated and scaled? What will be the roles for public, private and non-profit sectors as social innovation develops? Where are the opportunities developing, what sectors, social problems and actors are leading the charge? What are the best practices developing for entrepreneurs and innovators in innovating, realizing and scaling social innovations?

I'm your host, Henrik Storm Dyrssen, and I've spent the last 5 years building the sector for social impact investment in Sweden. I built Leksell Social Ventures, the first social impact investment firm in the market and leading the work on the first "social impact bond"/"social outcomes contract" in Norrkoping Municipality.
With us on this journey we have Lekell Social Ventures, the sponsors of this season, and Hugo Morse, Head of LSV since January 2019 to add colour and commentary to the dialogue in this podcast.

Sectors and social problems in focus

Education, digitization, individualization Mental health, identification, early intervention, digitization Socioeconomic integration of migrants, language, education, labour market entry

Themes and questions discussed

Social impact investment, investors, investment structures, trends, angels, venture capital, philanthropy, ESG commercial finance, grantmaking, public sector support Trends in cross sector collaboration, public private and non-profit Impact methodology, measurement, managing for impact and innovating on root causes. Social investments public sector early intervention in social problems and the need for collaboration and innovation.

Example interviews

Johan Oljeqvist - CEO Fryshuset non-profit Lars Stjernkvist, Chairman municipal council Norrköping, public social investments Kristian Ranta - CEO MERU health, mental health digitization Hampus Jacobsson - Angel investor, tech4good Andreas Konig - CEO Just Arrived, labour market integration Karin Bjerde - Head of Strategic Growth, Kognity, Edtech Lars Mac Kay - Head of sustainable bonds, Danske Bank Fredrik Björk - Researcher Malmö University Erik Fernholm - CEO 29k, democratizing and digitizing personal development Tove Larsson - CIO Norrsken Foundation, tech4good investing Martin Stiltberg - Sana Labs, AI and Machine Learning for language education Annica Johansson - Global Head of Impact, Reach for Change, impact measurement