Understanding the differences between commercial and social innovation | Part 1 of 2

Photo by Roman Kraft

I recently met someone interested in doing social innovation who was adamant there no differences in how we approach commercial and social innovation. Having worked across both, I disagree.

Assuming the same approach provides equal value and is equally fit for purpose across both contexts is problematic. In particular, when it comes to identifying how inequality is produced and reproduced, ensuring the psychological safety of participants, our cultural competency (or lack thereof) and the urgency of doing good, really well.

Innovation and design-led methods, while successful in many commercial contexts are on their own inadequate in addressing complex and wicked social challenges.

If we’re to roll-out the same toolbox to address very different kinds of problems (commercial problems often being linear with clear and discrete stakeholders, whilst social issues are often complex, wicked and diverse in their stakeholders), we run the risk of creating more, not less harm. Wasting time. Wasting money. Diminishing trust.

While some goals overlap, commercial and social innovation often have very different goals. With different goals in mind, there’s a need to adjust our approach accordingly.

This article is a work in progress and follows the development of my thoughts on the topic. It’s the first of a two-part series that explores the topic.

Six Key Differences

  1. Social innovation must confront disparity, there is no imperative for commercial innovation to do the same
  2. Social innovation relies on social capital and trust, we cannot easily buy trust or participation
  3. To develop communities and individuals, we must move beyond transactional methods for researching and collaborating
  4. Collaborative design methods need adaption for trauma, low self-efficacy and psychological safety in a social innovation context
  5. Innovation methods alone are insufficient in addressing complex issues
  6. When it comes to tackling social isolation, the innovation process can be an intervention in itself

1. Social innovation must confront disparity

When it comes to social challenges, disparity can show up in health, social, economic and educational outcomes. In Aotearoa and Australia it often shows up for our indigenous communities far more than it does for others. For some of us, our ZIP code determines our health outcomes.

Photo by Mathias Herheim

In commercial innovation, there’s no requirement to be aware of or address disparity. Generally, commercial ventures seek markets that will generate the greatest profit. While commercial innovators often think carefully about reducing access barriers to products or services, rarely do they recognise or concern themselves with how disparity is produced, and reproduced. In order to begin recognising this, social innovators are aware of their own privilege.

If we’re not confronting disparity, we’re not doing social innovation.

We fail to address disparity in social innovation when we try to design for everyone, a mass market. A big part of identifying and addressing disparity is ensuring we hear from and design with those who experience the most of it.

People aren’t ‘hard to reach’, services are hard to use.

We must privilege their experiences as legitimate. We cannot discount them as being “bad decision makers”, “lazy” or “difficult”, as I’ve heard used frequently to talk about people going through a transition, or who have on-going needs that differ to our own. This rhetoric has shown itself clearly in the recent experience of New Zealand politician Metiria Turei.

Commercial innovation rarely focuses on extreme cases or extreme users, commercial innovations typically seek critical mass to drive commercial success. By contrast, social innovators are interested in where we can create the most impact, reducing disparity for those who need support most.

A deliberate focus on reducing disparity for a certain group isn’t exclusion, it’s radical inclusion.

2. Social innovation relies on social capital and trust, trust is hard to buy

In commercial innovation we often rely on recruitment agencies and the use of consumer panels to find people to gain insights and get feedback from. We can buy participation, and often the outputs and outcomes of our work don’t suffer. We continue creating products with mass appeal, successfully implement services and channels that are usable and delightful for a broad range of people we’ve never met.

In social innovation, you only get as much as your trust has bought you. Creating solutions, and well delivering solutions often hinges on how much social capital we’ve built (networks of trust and willingness to cooperate). In particular, if solutions are to be community-led, community-owned, organisationally owned and delivered, peer-led or iwi-led.

I’ve never met an individual, community or leader in a social innovation context who was happy to have a well developed decision neatly packaged up and ready for their investment and implementation, without having walked alongside it through development and iteration.

In social innovation we typically don’t and shouldn’t use recruitment agencies or panels. Often, we’re looking for extremes. Those who experience the most disparity, the greatest isolation. Who aren’t always connected with formal services or supports. Other times, we’re seeking examples of positive deviance.

Instead, we find people through natural networks, through creating meaningful relationships in communities and often through community brokers. We gain participation and a willingness for cooperation through deliberate time, attention and care put aside for relationship building, whanaungatanga. Particularly in innovation consulting, ‘relationship time’ is the first thing to be cut from a budget and deemed as ‘unnecessary’.

Building relationships isn’t about fixing people or starting from hearing about problems. Instead, it’s about witnessing their lives with compassion on their terms. As Parker J. Palmer shares “the human soul doesn’t want to be advised or fixed or saved. It simply wants to be witnessed”.

Different to commercial innovation, within social innovation we have an opportunity and a need to begin building capacity, and setting the conditions for social change from the moment we begin the innovation process. We cannot wait until after insights have been found, ideas discovered, tested and refined. By that point, we’ve missed a significant opportunity to build capacity and ownership. We’ve taken off on our own canoe. While solo expeditions might work in a commercial setting, they are disastrous in a social context.


In addressing social challenges, social capital is an essential ingredient to our success, helping to mitigate the risks of our well-intended efforts falling flat. Trust is hard to buy, it must be earned.

Through our innovation practice we can build or diminish social capital.

3. To develop communities and individuals, we must move beyond transactional methods for researching and collaborating

Commercial innovation methods often engage with participants in a transactional manner. I recruit you, you share your perspective, I say thank you, give you a monetary ‘thanks’. We part ways, often never seeing each other again. Sometimes, you might come back to see a prototype. Again. Thanks, token, goodbye.

Within that approach, there is little opportunity to positively influence a person’s self-efficacy, self-image, or deepen skills related to understanding their lives, as well as how they might make changes as individuals, families and communities. In contrast to a transactional approach, I consider this transformational. The work of social innovation is the work of transformation, not transaction.

Photo by Sabri Tuzcu

When we focus on transaction, our understanding of people’s lives lacks depth. We’ve barely scratched the surface and we’ve not invested in a relationship that can offer so much to those we work with, our work and our own being. Transformative experiences enrich our lives.

Social innovation isn’t just the process of addressing unmet social needs, but also a way of enabling people to address the challenges that emerge in their own lives.

In contrast to commercial innovation, social innovators often simultaneously play the role of project leadership and capability building. Capability building is a key outcome of social innovation.

Summary and an invitation

Innovation and design-led methods, while successful in many commercial contexts, are on their own inadequate in addressing complex and wicked social challenges.

This is the first of two articles that explore this topic. Follow me here, or Twitter to be notified of the second article.

I’m curious, what’s your experience? What differences have you noticed? Where do you think similarities lie? Where have efforts to apply commercial methods to social challenges failed, been successful? Let me know