The following is a conversation between Lauren Smith, Co-CEO of FSG, and Denver Frederick, Host of The Business of Giving on AM 970 The Answer WNYM in New York City.
Denver: There are a number of mission-driven consulting firms in the philanthropic and social change arena. Many of them do excellent work, but there are just a few who are truly thought leaders, whose insights and practices not only help their clients but inform the entire sector how they can go about their work more creatively and effectively. On that very short list, you would find FSG. And it’s a pleasure to have with us this evening, the Co-CEO of FSG Lauren Smith.
Good evening, Lauren, and welcome to The Business of Giving!
Lauren: Thank you so much for having me. It’s a pleasure.
Denver: A question I know you get asked very often is: What does FSG stand for, and how did the organization get started?
Lauren: Somehow, I imagined that you might ask that because I get asked that. I do, in fact, get asked that frequently. FSG stood for Foundation Strategy Group. When the firm was founded about 20 years ago, the work was primarily focused on providing strategic consulting to foundations who wanted to have meaningful and lasting social impact.
Over time, the firm expanded the clients with whom they worked, in terms of who they wanted to be with, in terms of making the kind of social impact– to include corporations, to include place-based initiatives. So the Foundation Strategy Group morphed to just simply FSG.
…if you want to get after a deep, complex, intractable problem, you’re going to need multiple perspectives and multiple kinds of folks involved in solving it. So Collective Impact essentially was just that – multi-sector, collaborative process for developing effective change at the systems level.
Denver: You have pioneered a number of concepts that have really helped transform this social arena, and perhaps we can touch on two of the very best, starting with Collective Impact. Share with us the thinking behind this approach.
Lauren: I think that what’s so meaningful about Collective Impact is that it really just synthesized or codified what people understood to be true in the social sector, public health sector, sort of across the field, which is that if you want to get after a deep, complex, intractable problem, you’re going to need multiple perspectives and multiple kinds of folks involved in solving it. So Collective Impact essentially was just that – multi-sector, collaborative process for developing effective change at the systems level.
So that was what happened. I think that the key elements there around developing a shared agenda, so people have to get together and feel like, “Hey, we understand, and we define the problem in the same way.”
It’s shocking how much people feel like they’re in the same room, having the same conversation, but they’re just not because they have different conceptions of the problem.
Denver: One playbook.
Lauren: It’s shocking how much people feel like they’re in the same room, having the same conversation, but they’re just not because they have different conceptions of the problem. And then other elements, like having mutually-aligned and mutually-reinforcing activities and focus so that you and I don’t have to do the same thing; but let’s be aware of what we’re doing so that we can build on the other’s work and not be, at best, just doing parallel play, but at worse, potentially competing or undermining effort.
So, there’s a number of elements about it, but I think that it really resonated with people because it made sense, and it was really trying to, as I said, synthesize or codify what a lot of folks in the field have been really seeing.
Denver: And a very important element of that, which you guys really insisted upon, was that backbone organization to sort of make sure the trains run on time.
Lauren: It’s interesting you call that out because we were fortunate to recently have an evaluation of about 25 or so Collective Impact efforts across the country – some of which we participated in, and most of which we didn’t.
One of the things that the evaluators found was that exactly what you said – the backbone role, having someone whose job it is to think about the whole enterprise, and to not set the agenda, but to create the container and to create the space for all those other actors to work effectively – that for the folks for the Collective Impact areas that had achieved meaningful results, the backbone was a really important one.
Denver: You need someone to make sure that people do what they say they’re going to do.
Lauren: Yes, and to help them see the connections across their work.
Denver: It’s so sad sometimes that people don’t ever want to fund the backbone organization, despite how vital it can be.
Lauren: Yes. I think you’re right. I think part of the thing is that people can be seduced or sort of intrigued by what seems shinier, or more interesting, or perhaps fancier. But it’s the nitty-gritty work of getting the people together, making sure the meetings happen, identifying partners that maybe haven’t been involved that need to be involved… that’s roll-up-your-sleeves kind of work, and it is essential.
Denver: Another important concept that got started at FSG by Harvard Professor and Co-Founder Michael Porter is Shared Value. What is that?
Lauren: Shared Value is really the premise that businesses can achieve a business impact and can make profit and do well by doing good – that is by achieving and addressing social issues or social problems.
Denver: And it was revolutionary at the time when this came out.
Lauren: Yes, because I think the idea then was: If business wants to address social problems, it has to do it through its charity or through its sheer just giving, as opposed to “Hey, we could make it part of the core line of business to address something that’s a challenge for the society.”
Denver: Interesting. And along those lines, you folks recently released the CSR Strategy Roadmap, and that’s a step-by-step guide to CSR. In that report, you say that CSR portfolios have changed dramatically in the last five years. In what way have they changed?
Lauren: I think in a number of ways. One is I think that there has been a shrinking of the distance between the folks that are thinking about CSR and the folks that are thinking about the internal business strategy for the corporation.
So, whereas before they might have been kind of isolated – you do your thing, and we’re doing our thing; and maybe they interact, maybe they don’t
Denver: The holiday party, maybe.
Lauren: Right. Exactly. Whereas now, I think that businesses and corporations are much deeper and understanding how they can, in fact, be mutually reinforcing and improve the overall functioning of the business.
And I would just give as an example of that, there’s a burgeoning interest in businesses creating a culture of health. So there’s a number of efforts underway right now where business leaders are thinking about and considering: How do we contribute to the overall health and well-being of our communities, our employees, the societies in which we live, not only by our corporate philanthropy, but even more importantly perhaps the main thrust of our business and how we do our business?
Denver: Health is such a wholesome word, isn’t it?
Lauren: Yes, of course.
Denver: When you really apply it to those kinds of efforts.
Well, speaking of health, you are a pediatrician so it stands to reason that much of your work at FSG has been in that health arena. So, let’s touch on a couple of things there. There has been increased attention on adverse childhood experiences or ACEs. How are they defined? What’s the estimate of the number of children who have experienced them? And what is their impact on those children?
Lauren: That’s a very important question, and I’m happy to see that the field is recognizing the impact of adverse childhood experiences, or ACEs, as you mentioned. Those are defined as things that happen in childhood that leave or could leave lasting, toxic effect on the child. So things like the loss of a parent, things like living in homelessness, or experiencing or witnessing domestic violence of a parent or other loved one in the family. All of those kinds of things lead to a stress response in the child. I think what we’re now understanding is it’s really important work at the physiological level, the impact that stress has on creating a longer-term response to that stress over time.
One of the reasons, to be honest, I think people are getting more interested in it now is the data shows that kids who experience ACEs in childhood are much more likely to have chronic illness and things as hypertension, cardiovascular disease, diabetes, a whole host of other issues, as well as behavioral health issues, as well as not achieving as much in education or in their economic output. So, I think people are starting to understand that these experiences have legs and, importantly, there are ways to mitigate or address them and prevent them and help children heal… children and families heal.
Denver: Give us an example of one of the ways you can address one of these experiences.
Lauren: One of the things that people are really looking into now is how to support families who are experiencing poverty or economic difficulties. That means that there’s a community-level approach; there needs to be a two-generational approach. You probably heard many more people thinking and talking about: How do you support not just a child, but the child and the family?
I think we’ve matured quite a bit, where we used to think “We can try to do things for the child,” as if they don’t live in a context of a family with parents, as if what’s happening to the parents is unrelated to or unconnected to how the children are doing.
So, I think it was an increased recognition around, for example, two-generational or cross-generational approaches, whereas before people were focusing more on the child.
I think one of the things that the field now understands in a much deeper way is what people call the social determinants of health, or the structural determinants of health… so much of what drives health, people bring with them before they even get into the clinical setting. So that’s where they live, where they go to school. Do they have access to grocery stores? Are they living in a food desert?
Denver: A lot along the lines of trying to deal with an individual’s health, and being completely unconcerned about the community in which they live. And you begin to look at it and you say, “They’re actually pretty linked.”
Lauren: They’re incredibly linked. I think one of the things that the field now understands in a much deeper way is what people call the social determinants of health or the structural determinants of health.
Denver: Fifty percent.
Lauren: More than, even. So, as a clinician, of course, I am all about making sure that people get fabulous health care that’s evidence-based and high-quality and appropriate. And I also recognize that so much of what drives health, people bring with them before they even get into the clinical setting. So that’s where they live, where they go to school. Do they have access to grocery stores? Are they living in a food desert? All those kinds of things.
Denver: All connected. Well, as a clinician, what’s your assessment of what is happening to these migrant children at the border? What should be done, given the circumstances?
Lauren: It’s hard to even know where to begin. It’s a tragedy of epic proportions because we have created it as a country and as individuals. And to think that we are consciously and knowingly putting children in settings that we know is causing harm and can have lasting, detrimental effects to those children is … shocking, I think is a mild way of putting it.
So, the idea of what we should be doing? We need to have a way of caring for kids at the border. I think separating them from their parents, just as a non-starter — that’s absolutely not…you talked about ACEs…that is all caps right up there. I think we all have seen some of the pictures in the footage of just how traumatizing that is, especially for kids who don’t speak the language, obviously, and are then held in these conditions that are pretty inhumane. So, I think not separating the kids, having a much faster approach or mechanism for resolving the immigration status issues.
But the folks that are coming here, making the trek here, are not doing so lightly. So they’re making the estimation that this could be better than whatever horrors they’re fleeing. And so that’s the other thing I would just say, Denver, is that the compounding of…people are leaving because of trauma that they’re experiencing, or violence; then they’re experiencing it along the way, and then once we get them, we then compound it in excess, and intensify it – that’s just really a recipe for terrible outcomes for these kids.
Denver: Lauren, US healthcare, at times, really seems like a moving target. There are so many proposals.
Lauren: A messy, moving target.
Denver: That’s right. Everything’s being kicked around. You got your proposals; you got plans. In a climate with such uncertainty, how do you and FSG advise the foundations you work with and your clients and philanthropists how they can create real impact?
Lauren: One question, or one way we answer that is to be sure that people are thinking in a compelling and coherent way around what drives the health of communities. So, while the “health care system” – if you want to call it that in quotes– being, I think, very generous to call it a system – is in flux, and I think you’re quite right.
There’s right now, for example, people are wondering about: What kind of Universal Medicare for all is being talked about et cetera? Are there other structural changes to healthcare delivery? But even within that context, as people are experimenting…they’re experimenting with: How do you drive value with assessing impact?
So, the really creative work that’s happening on the healthcare side is: how can we organize how we reimburse and how we set up incentives so that it’s aligned with what we know is important for overall health? That’s a pretty important shift. And so, I think that one of the ways that we can support foundations and others who want to continue having impact in that area is to help them see where the opportunities to support that kind of shift and that kind of bridging between healthcare and, as you alluded to before, the rest of the community where health happens and where people live
Denver: Makes an awful lot of sense.
Speaking about systems, FSG was one of the first to appreciate that social change is really about systems change. What are some of the key principles and practices of Systems Thinking?
Lauren: I’m glad you made that question or asked that question. I think what’s hard about systems change is that it can seem messy or fuzzy, and so it seems maybe hard to grasp. But I think the key thing that I would say is that in order for policies– for laws, for regulations, for all those things– to change, which are key drivers of systems change when we think about legislation… and we think about all those structural pieces, if you go underneath of that, you find that people’s understanding of how the world works and their mindsets about what actually a system is or should be, or what it’s trying to achieve, that has to change, too.
I think what we find – and we find very much with our clients – is that if you only focus on the programmatic aspects or the top layer, what’s more visible, and you don’t get after the power dynamics or the relationships… and then the mindsets, the mind shifts that have to happen, then the changes that you do don’t stick because they’re not supported by a more meaningful shift in how people think the world works and how people think that problems can be solved.
So, in our work, we’re trying to help people drive down to that and be working at all those different levels. So they’re not only focused at the policy level, which I should say as a former public health official (I ran the Public Health Department for Massachusetts), policies are really important, so I don’t underestimate that. But you also want to have something underneath that holds it together so that if people leave or move, the policies don’t just drift away, but it’s the underpinning that holds it together.
Denver: It’s the old iceberg metaphor.
Lauren: Yes. Exactly right.
Denver: And it is interesting how sometimes you can make some real improvements in a certain area or program, but also have adverse consequences over here that you’re not even aware of, not even looking for, not even measuring. But that doesn’t happen when you’re looking at the entire system and how everything affects something else.
Lauren: The other piece is that if you’re looking at a programmatic approach, and I think that the philanthropy field is evolving rapidly in how it’s thinking about its own influence in improving things for the folks … people want to live better lives and be healthier and all of that. It’s about not only recognizing that there’s a program, but thinking about what got the problem to stay in place, and this piece around not only what created the problem, but what’s holding it in place. And so much of that, those structural kinds of impediments, are invisible to people. They don’t even think about it because it’s so part of the day-to-day. “Well, of course, this is how things are. This is how they’ve always been,” but they don’t really see–
Denver: A fish swimming in the water. What’s water?
Lauren: What’s water? Exactly right.
Denver: And often it could be the culture… that insidious culture that’s around you that you don’t even realize; you just accept as the norm.
Lauren: As an example, I’m sure you’ve heard that Optum, which is a very important health insurance provider… recently it was found out or elucidated that one of their predictive algorithms that was meant to identify which patients were more likely to need health care, to have more severe illness, was flawed and biased. And so, it was regularly or systematically under-identifying the African American patients in the cohort that would need services. So it was over-identifying the white patients and under-identifying the black patients. So, the algorithm had built into it this structural flaw. And so, now they’re aware of it and they’re working on it, but that’s just an example where that was just there.
And how did that data get chosen? How is it selected? Were they intentionally thinking about: Is this going to undermine our efforts to reduce disparities, or is it going to potentially exacerbate it? I think that’s really important.
Denver: A great example. And we tend to blame the algorithm or artificial intelligence without saying, “Somebody put in all that data, to begin with.”
Lauren: Right. And how did that data get chosen? How is it selected? Were they intentionally thinking about: Is this going to undermine our efforts to reduce disparities, or is it going to potentially exacerbate it? I think that’s really important.
Denver: Lauren, speak about what you do for a client. Now, you have a much broader palette than the organization had 20 years ago, but by that, I mean the process. What are the steps you take to identify a problem and then work with that organization or entity to solve it?
Lauren: I think one of the most important things that we do with the client is to partner with them over a period of time. Our approach is not get in and get out; we go off and do some kind of secret deliberations behind the curtain and then come back with a big reveal like “This is your strategy” or “This is your evaluation plan” because that doesn’t really get the client to where they need to be, which is to understand and to own it, and to have gone through the process of developing it themselves so that they can really see how to operationalize it.
I think that that’s an important stylistic approach for us is that we co-create with our clients. We help them think about not just the strategy that we’re developing with them, but: what are the learning questions that they want to have embedded in that so that they can learn and evolve as they grow? Because there’s no way of knowing exactly what’s going to happen a couple of years from now. So to have a static approach really wouldn’t serve the clients well. So to have a learning orientation, to have a sense of how evaluation is going to get in there…all of that is a key part of our approach.
So, for our corporate clients and for our foundation clients, and in our play space work, we provide analysis; we provide the strategic framing. I think part of what we do is just really ask questions and help people answer them in a structured, disciplined way that gets them to where they want to go.
The other part that we do is help people, remind folks of what it is that they’re looking to achieve and what might be barriers to them achieving that. Because sometimes…people are smart, they have ideas about what they want to do, but they may not always be aware of some of the ways that they’re functioning, or some of the ways they’re organized, or some of the ways they’re not seeing what those opportunities are.
Denver: You sound like a firm who’s very much of a coach because there’s a belief that the organization you’re dealing with knows the answers, and they have them inside them. In fact, they probably know the answers better than you, and your job is to get those obstacles out of the way so those answers can rise to the surface, and they can solve their problem.
Lauren: And bringing people examples of how other folks have approached or solved that problem, for sure. But that idea of a coach, or sometimes we talk about it being a guide on the side… where we will work with the staff of an organization; we’ll work with the board; we’ll create and help create an atmosphere where all of them can learn and grow together.
Sometimes we’ll be in a situation where the board is way ahead of the staff. The staff wants to keep doing things the way that they’ve been doing it, and the board has this vision of how they want to proceed. Sometimes it’s the opposite, where the staff is like, “No, this is really what we need to be doing,” but the board is kind of stuck several decades in the past with not a clear understanding… or not a nuanced or evolved understanding of how they can have impact.
So, depending on what situation we find ourselves, we’ll try to support whatever—
Denver: Get them working at the same speed because you don’t want one to be too far ahead of the others. It’s unhealthy.
Lauren: And we want to make sure that we can help folks understand what the rationale is and how it’s related to being effective. I think that that’s been the most compelling and, I think, rewarding thing is when we’ve come into situations where there’s friction or there might be tension, if we can peg it on what are the guiding principles and what is it that you’re really wanting to achieve and hold that up as the North Star… like, are you getting there? If you’re not getting there, if you’re authentic about wanting that to be true, then let’s get under there and figure out what’s going on.
Denver: That will solve a lot of disputes…if you get everybody looking at the North Star because that’s where the answer will very often be.
As you know, in the foundation world, they’re always talking about this power imbalance between those who have the money– the foundations that are giving it out, and the grantees who are trying to receive it… and always trying to even that up. But now that’s even a broader conversation in all of philanthropy, particularly philanthropy in a democratic society. What can philanthropists do to channel their power in a different way to have a more collaborative approach to make the world a better place?
Lauren: I think that’s an excellent question, and I think it hits on a theme that we’ve been seeing across our work, which is a deepening understanding of the need for a reckoning, an understanding of what has come before, why things haven’t worked, and that you’re not operating in a vacuum, or with a complete blank canvas.
So when we go into a community, or we go to help a foundation, what we’re trying to help them understand is: What was it that happened before? How did these problems get sort of established? What was the specific local context? What created that? And then adding on to that, a sense underneath all of the really deep, intractable social problems that our clients want to face, there are equity implications in terms of: Who has had the opportunity to be included and who hasn’t? How has that been a conscious choice versus an unconscious choice? And how we can sort of elevate that and make that explicit.
So, including communities in the work in an authentic way – and by authentic, I mean really being in partnership with folks, and allowing or affording the community to have the kind of voice and perspective built-in throughout the whole, say, strategy process or development process – that’s evolving. I’ll put it that way. The prior approach might be that maybe you’d have a focus group, or maybe you’d have an advisory committee.
Denver: You tell everybody you did that.
Lauren: So you did that and then you’re feeling, “Okay. Check! I’ve done that.” I think people are much more sophisticated now in terms of that didn’t really work because it wasn’t a meaningful integration of the community voice and perspective throughout the entire process. And so, people are doing much more of that and having to reckon with and being willing to oftentimes be uncomfortable in settings where the community may demand or call attention to ways that the organization hasn’t behaved as a real, authentic, respectful partner.
Denver: And in going into the history the way you talked about, too, there are so many assumptions that we make and assume that this is the way it was. And it’s only when you begin to track back and find out how those assumptions were developed, you begin to say, “Oh my gosh. Was that the reason?” But right now, they’re just unconscious in a normal way of business.
Well, speaking about equity and your role as Co-CEO, you have really led FSG staff development efforts in diversity, equity, and inclusion, not only among the staff but in the community and the clients you work with. Speak a little bit about that because so many people are having a hard time with it. I mean their intentions are good. Their outcomes are less good. What are some of the things you’ve been doing? And what are some of the things that have been working?
Lauren: Well, we have, we found, or we believe that for us to be credible at supporting our clients and doing the kind of reckoning work that we were just talking about, we have to be able and willing to do that ourselves, for ourselves.
And so that means, as an example, recognizing that originally, when the Collective Impact concept was delivered or synthesized, there are important elements of equity that weren’t built in, that weren’t called out explicitly. Now, since then, we acknowledged that, and I think the field was quite appropriate in calling attention to that.
So, I think we have internally been on our own journey in terms of how we think about our work and our place in our work, and so that’s a work in progress. We’re doing our own reckoning that we’re talking about; we’re doing that own analysis of where power is, and who has it and who doesn’t.
And then when we work with clients, we make it a point of trying to understand if there are unspoken issues that may have percolated in a community, and everyone has tacitly agreed not to talk about them because that’s too messy or too uncomfortable. So we’re empowering our staff, our senior leaders to be able to ask those questions… and exercising the muscles of doing that with each other so that we can be able to exercise those muscles with our clients.
Denver: Well, it’s good because it’s uncomfortable to ask those questions, too.
Lauren: It is uncomfortable, and I think being able to –
Denver: But once you started, it gets easier and easier.
Lauren: Yes. And acknowledge that no one’s perfect and that we all have those kinds of flaws, and everyone is on their own journey. So I think being able to be humble and have some humility. We’re not coming at this like, “We figured it out like. We’re here to swoop in and help enlighten you.” That’s not the positioning at all. It’s much more like, “We know how important this is now, and we’re really trying to work hard to incorporate it into everything that we’re doing.”
Denver: And as you say, you’re not only listening to what is said, you’re listening to what is not said, and that would be sometimes even more important.
As we mentioned earlier, you were a pediatrician. Not that many people – a couple I can think of – who begin that way and are now leading a mission-driven consulting firm. Speak about the transition. What was the impetus for it? What is going well and easy? What do you find a bit more challenging?
Lauren: I did have to explain this to a few people. What is this with this change? So, as you’ve mentioned, I’m a pediatrician. I worked in a public hospital setting in Boston, inner-city Boston, so the kids I took care of were kids from the city of Boston, but also kids from all over the world who land in Boston because they’re fleeing the kinds of things that we were talking about earlier, in terms of global disruption and whatnot.
So that was where I became grounded and understanding that kids and families, their health effects weren’t spontaneously generated. They really are the products of where they live and the structures around them and their environments. So, then I went to work for the Department of Public Health for the state of Massachusetts…and it was really there that I got to hone my skills at cross-sector, that multi-sector collaboration we were talking about, with Collective Impact. I got to practice that…I didn’t have that term for it, but that’s what we were doing across public-private collaborations, et cetera.
And so, I come to this work, the consulting work. I think I really bring that lens of working with families, thinking about systems at the structural level, and thinking big picture in terms of at the population level. So that’s the mindset or the world view that I bring to this work, and I think it’s helpful for our clients because that’s the level that they want to be having impact.
Denver: How do you think that perspective has influenced the firm in your tenure there?
Lauren: September is four years. I’ve been there for four years. And as you pointed out, I have a different background than many of the other folks. I think that it’s been refreshing to a lot of folks to have someone who has led an organization. So, I led the department. We have 3,000 employees and was responsible for having an enterprise, and having to lead that, I think, is different than only consulting about it. So, I think that it brings that kind of lived experience.
I think just having a diversity of perspectives and worldviews, I believe, always makes the product better or the results better because we all don’t know what we don’t know, or we can’t see what we can’t see. And so, having engaged colleagues that have different perspectives in the same way we were talking about, having the community deeply involved means that you’re not going to miss things.
Denver: Let me close with this, Lauren. In working with the clients that you do to bring about positive social change, is there one area you find to be particularly challenging at the moment, where it’s just so difficult to bring about the change that these organizations, these communities, these people are looking for?
Lauren: That is a tough question because we work in so many different areas: with education, juvenile justice reform…so many different topic areas. But I would say that underlying the social issues that are confronting our clients — the foundations and the corporations that want to get after these issues — really is around economic inequality and the perpetual… or the continued, deep divide in what people have and what they need to survive, and not just to survive, but to thrive.
So I think if you look across our entire portfolio of work, whether or not it’s the work we do here, or the work we do abroad, in Asia or on the African continent, that is, I think, the underpinning in terms of that economic and other insecurity that comes from that level of inequality.
Denver: That is a tough one. There’s no doubt about it. Well, Lauren Smith, the Co-CEO of FSG, I want to thank you so much for being here this evening. For people to learn more about these concepts and the areas in which you work, tell us about your website and some of the information you got up there.
Lauren: Well, you can go to fsg.org. You can find information about our practice with corporations, with foundations, as well as our initiatives, where we bridge the work of consulting with the work in the field. We have this kind of like a do-tank where we have an opportunity to apply the things that we’re learning outside in the field, and then bring that back to our consulting work, and then back out in the field again. So we have the Collective Impact Forum. We have the Shared Value Initiative, and we have Talent Rewire, which is really exciting, working with employers on how to do employment different.
Denver: Well, I look to pick up a new word or phrase every day and “do-tank” will be today’s. Well, thanks, Lauren. It was a great pleasure to have you on the show.
Lauren: Great. Thank you.
Denver: I’ll be back with more of The Business of Giving right after this.
The Business of Giving can be heard every Sunday evening between 6:00 p.m. and 7:00 p.m. Eastern on AM 970 The Answer in New York and on iHeartRadio. You can follow us @bizofgive on Twitter, @bizofgive on Instagram and at www.facebook.com/businessofgiving.