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And the Prize Goes to...incentive2innovate
Robert Katz, 15 Jun 09


Incentives.  Results.  How to align incentives to achieve real results is one of my many takeaways from the past 2 days, which I spent at the incentive2innovate conference, a non-traditional gathering of big business types, entrepreneurs, policymakers and non-profits.  Interestingly, the event wasn’t focused on a particular set of outcomes (end poverty; clean up the environment, etc.); rather, it offered a set of non traditional tools that practitioners can deploy in order to get where they’re going more quickly and effectively.

I have to admit, it was a bit strange to have an “innovation conference” held at the United Nations.  This was reinforced by the first speaker, Amir Dossal (Executive Director of the UN Office of Partnerships), who admitted as much, saying “very seldom do we discuss innovation.”  Despite the UN’s standard operating procedures, Dossal quickly and easily connected with the audience, suggesting that the UN sees its mission as poverty alleviation, whereas the assembled group sees the same mission as wealth creation.  Semantics, yes, but important nonetheless – you need to have the right tone if anything’s going to change. 

I was surprised by the venue (which, coincidentally, is perhaps the only place in New York where you can smoke inside).  I was also surprised by the organizers and sponsors – what does the XPRIZE Foundation have in common with British Telecom, the John Templeton Foundation and the United Nations, anyway?  Turns out, they share a commitment to open collaboration, incentivized competition and as Matt Bross from BT said, to “accelerat[ing] the participation of the next billion people into the global economy.”  So far, so good.

Despite that statement, incentive2innovate was not a conference focused on market-based approaches to poverty alleviation; there were sessions on innovating with the commons, building innovative workplace cultures and more.  Still, a few key sessions stood out to me from a base of the pyramid perspective.

First, I was glad to hear from McKinsey and Co., whose Social Sector Office recently published a study entitled “And the Winner Is…” (PDF) examining the ways social sector organizations are using prizes and competitions to incentivize change.  I was intrigued when panelists Paul Jansen and Jonathan Bays suggested that “prizes pay for results, not attempts.”  According to their study – which I strongly recommend downloading for free – prizes are effective ways to focus a community, mobilize new talent, build skills and mobilize capital.  I thought of how TechnoServe’s business plan competitions work to stir up great ideas, and how Changemakers uses collaborative competitions to drive innovation in the social sector, and this all made sense.

Of course, paying only for results can be problematic.  We need to fail to learn, and I would hate to see the social sector move too far towards prize-based awards, since it acts as a strong disincentive to re-try after failing.  There’s a middle ground, which McKinsey understands, and I think this report is an important step in pushing the social sector to think creatively about how to incentivize innovative thinking.

I made a note to share the McKinsey report around the Acumen Fund office.  I’m also sharing links to various Innocentive competitions.  If you don’t know, Innocentive is a huge (160,000+ people) community of problem solvers that come together to crowd-source solutions to tough issues.  From a perspective, Innocentive is actively exploring a number of developing country problems.  These include ideas around branchless banking, dry latrines, solar-powered routers and much more.  They’ve received funding from the Rockefeller Foundation to use this out-of-the-box thinking, and a quick look at their web site shows that they’re getting (and only paying for) results.

While the entire event was worthwhile, I had eagerly anticipated the event’s final panel, uninterestingly titled “Global Development & Partnerships.”  Despite the dry title, the content was fantastic.  First, kudos to moderator Michael Green, a DFID refugee who teamed up with Economist editor Matthew Bishop to co-author Philanthrocapitalism: How the Rich Can Save the World.  (Side note: Bishop moderated the panel on which the McKinsey prize report was presented, and pointedly asked about the role of prizes to spur market-based approaches to poverty alleviation – go Matthew.)

Green corralled a good group – Amir Dossal from the UN Office of Partnerships was back, along with Carol Armistead Grigsby from USAID’s Office of Development Partnerships.  Grigsby has been instrumental in pushing USAID to think outside the box – not only when it comes to partnering with business, but in using new tools and approaches to develop ideas.  Their recent Development 2.0 challenge – out of the Global Development Commons initiative – asked the USAID community to find innovative mobile technology applications for development problems.  The winners and runners up are all out of the typical USAID box – which is an important first step for the agency as it tries to capitalize on the momentum around innovative approaches to persistent problems.

Joining Dossal and Grigsby were two NextBillion allies and uber-innovators in their own right: Andreas Widmer and Charlie Brown.  Andreas is the co-founder of S.E.VEN Fund (Social Equity Venture Fund), a relatively new organization that has burst on the scene with a number of cool prizes and programs to spur market-based approaches to poverty alleviation.

In his brief remarks, Andreas identified three key areas of S.E.VEN’s work:

  1. Define poverty differently: “Being poor is to be excluded from networks of productivity and exchange.”
  2. Look for leapfrog ideas
  3. Focus on appropriate technology – the mobile phone and ICT are not the ubiquitous answer to all development problems (by this point in the conference, it seemed as if the mobile phone could cure cancer and mint money…the hype was suffocating.)

Charlie Brown, meanwhile, is part of the old guard, having worked at Ashoka for a number of years.  But that doesn’t make him staid, or complacent.  Rather, Charlie is taking his Changemakers division of Ashoka and continuing to shake things up, asking his community to:

  1. Frame the right problem
  2. Participate in the marketplace of ideas
  3. Take ideas through to real impact – which means more than the $5000 prize a typical Changemaker winner receives

It was great to see this panel on stage; it was a shame that, as the last panel of the day, they spoke to a half-full room.  (No offense, but I bet the crowd would have benefitted more from these guys than they did from some of the earlier keynote speakers.) 

All together, the incentive2innovate conference was an important framing: how can we use incentives (prizes, awards, etc.) to drive solutions to some of humanity’s most pressing problems?  And how can we create innovative environments – inside our organizations and outside, with our customers and communities – to make those solutions big and meaningful.  I was glad to step outside my typical market-based approaches to poverty alleviation bubble and meet people from other worlds, many of whom are thinking aggressively about how to do things differently.  If that’s the change that comes from i2i, then we’re all in good shape.

For more coverage on the conference, be sure to check out Matthew Bishop and Michael Green’s blog post.

Braden Kelley over at Business | Strategy | Innovation captured two great interviews with the Innocentive founder and CEO as well as with Changemakers’ Charlie Brown. 

Finally, check out the Twitterverse’s coverage of incentive2innovate – search #i2i.

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