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Why Risk is a Precondition for Human Services Success

Limiting the Risk of Innovation While Reaping the Rewards


The unprecedented challenges facing human services leaders today require innovation, transformation and modernization. But how can organizations develop innovative human services solutions when the price of failure is so high—not just in terms of the political and financial costs, but in the human cost of the very lives that social services programs exist to help?

When public money is at stake, the risk of failure is only acceptable when it is essential to avoid the significant cost of long-term inaction, when the downsides are mitigated and when it plays a part in a wider transformation agenda. In human services, risk as a path to innovation must be managed well—but risk itself is inevitable.

The ideas in this point of view reflect perspectives from the 2012 Human Services Summit: Outcomes and Impact, a gathering of human services leaders, industry experts and academics at Harvard University in October 2012.


Maintaining the status quo is not an option in human services as the current system simply cannot be sustained. The pressures on the system are just too great. Organizations must contend with growing demand, shrinking resources, demographic shifts and systemic challenges to their business models—and more of the same is expected in the future.

Policy outcomes will naturally deteriorate in line with budget cuts unless genuine waste is cut out of the system or the money is spent differently. For all human services organizations, to retain or improve the impact of current welfare spend, remaining funds will need to be spent differently and that requires innovation.


By definition, to innovate is to experiment, take risks, and accept the risk of failure as a natural and necessary part of the process. Even Thomas Edison—one of history’s great innovators—failed countless times before perfecting the light bulb.

With people’s lives, taxpayer dollars and political reputations at stake, human services organizations have little appetite for the risk of failure. To them, failure is about tragic mistakes and irreparable damage to the public’s trust. As such, the fear of failure sometimes stymies innovation. However, the grand irony is that risk aversion can trap human services organizations in the status quo—which is the surest route to long-term failure.


Human services organizations must work to move past the uncomfortable truth that innovation rarely happens without some failure. Only then can agencies begin to minimize the risk of failure in the innovation process. These five actions provide a starting point:

  1. Commit to specific outcomes—and monitor and measure from the start.
    Political environments are inherently not conducive to supporting the risk of failure. Moving past the limitations this creates means that organizations need established strategies to identify and communicate specific outcomes, acknowledge failure early and provide an agile path of correction.

  2. Focus on small changes that can make a big difference.
    Exploring adaptive leadership, Ron Heifetz has looked to lessons learned in nature to understand adaptability in social systems. He discusses the transformational quality of small variations, citing the one percent difference in the DNA of humans and chimps as an example. This analogy suggests the value of smaller, lower risk change in human services.

  3. Use analytics to identify and invest in the most promising innovation targets.
    Predictive analytics can help organizations gain insight from data to focus the innovation agenda around the best opportunities for outcomes.

  4. Pursue pioneering financing options that offset the risk of failure
    Traditional human services funding streams are under strain—and the community is in dire need of an infusion of new capital. Pay-for-success contracts tie performance of a desired social outcome to compensation for investors.

  5. Look outside the human services community for new ways of working.
    There has never been a better time for human services agencies to tailor other industries’ innovations to their needs. An advantage here is that the first-mover industry has already born much of the inherent innovation risk, which is a positive for risk-averse public sector organizations.

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