Why feedback loops threaten those in power

I’ve been helping get a collaboration off the ground with the goal of fixing the broken feedback loops in international aid and philanthropy. We call ourselves Feedback Labs. It’s a longstanding problem that people who receive services funded by foreigners have almost no power to shape those services. Those holding the purse strings have sole control. And while leaders in the halls of power where the money originates want these efforts to succeed, there are simply too many self-interested middle men that filter and reshape feedback from those affected, so that only the good news flows. These middle men need the money to keep flowing at all costs.

And even if all the middle men were perfect, there’s the manna from heaven problem. Taxpayers are choosy, but aid beneficiaries would rather get something than nothing. And decades of inconsistently-funded foreign aid programs have trained the world’s poor never to complain, or else even what little benefit was offered them will be taken away. Big aid iterates on whom they serve rather than iterating on how to serve the same population.

So why do we have the gall to believe we at Feedback Labs can fix this problem?

Here’s why.

Exhibit 1: The System (in theory).

basic feedback loop

National and local governments work with institutional funders to provide resources to implementing organizations and public utilities (bus companies, schools, hospitals, electric companies, sewers, etc). These implementers serve the citizens, who are expected to respond by voting to reelect their leaders when services are good and vote them out of office when services fail.

Exhibit 2: the system (in practice).

In practice, the voting-reelection feedback system is too slow and fragile to compel most leaders to improve services. Instead, the system is full of smaller  feedback loops, each of which are complex relationships with their own nuance and incentive structures.

detatiled feedback loop

The dotted lines are broken or failing parts of these feedback loops. NGOs don’t listen to citizens because their livelihood depends on what the funders think of their work, NOT the citizens. And funders can’t just poll all the citizens because only a few of them benefit from any specific intervention that each funder controls. International Funders have traditionally relied on the proposals and reports from their grantee organizations to inform them indirectly about community needs, but these proposals are usually tailored to align with the mission of each respective funding agency. Proposals are not a means to deliver feedback, unless there is a workaround…. which I’ll explain later. But I think America’s healthcare problem best illustrates how the problem could be fixed by delivering timely and actionable information to citizens directly.

Exhibit 3: Broken feedback loop in USA healthcare

broken-feedback-loop-USA-healthcare

Healthcare does not respond to free market forces like other services citizens pay for. You don’t comparison shop when you’re having a heart attack, and even if you did, the USA healthcare system is a masterpiece in obfuscating costs. My friend (a nurse) called up 5 Washington, DC clinics to ask about their sliding scale, and was denied any pricing information at 4 out of 5. I was not allowed to know what my “hit-by-the-bus” insurance would cost when I transferred my residence from Portland Oregon to Washington, DC until after I agreed to a contract to pay this unknown amount. If I were an employee with healthcare, my company would have to subsidize my paycheck an average $700 more per month. As a consultant I get the “freedom” to absorb this cost, or suffer without any real health cure options. And the very fact that health plans are tethered to employment benefits the employer (who can use the threat of losing healthcare to retain reluctant workers) and hospitals (who can charge whatever they want when billing is hidden from citizens) and insurance companies (ditto).

Last week the White House released a brilliant report comparing the same operation at every hospital in America (find the hospital charges dataset here: 3000 hospitals, 100 most common operations). Some operations ranged in cost from $5,300 to $223,000. In one case the same operation cost $3,000 or $97,000 in the same city.

What would happen if I went down to the steps of the hospital and informed citizens of the cost of their procedure before they entered?

This is a true feedback loop. Citizens would have some choice over their health costs – a choice that is carefully denied to them by the system that loves being 18% of total USA gross domestic product (GDP). Curbing healthcare costs is the same as shrinking the economy by 10% (and putting that “lost GDP” back in the pockets on citizens).

Exhibit 4: A dangerously effective feedback loop in healthcare:

working-feedback-loop-USA-healthcare

As soon as I started informing citizens about the hospital’s arbitrary Chargemaster policies (who decides whether a patient is billed $85 dollars or 85 cents for a pair of sterile neoprene gloves — see what scientists pay here), they would surely kick me off their private premises or arrest me. This is where the hospital tips its hand and demonstrates that it is truly a private enterprise in the business of making money first and curing the sick second. Even “non-profit” hospitals make profits; they just don’t have shareholders. And in most medium-sized cities the highest paid CEO is the hospital’s chief (See this ref and Forbes).

This is why feedback loops threaten those in power. It is more than giving voice to the silent; it is about shuffling power. Many acts that increase efficiency also shrink the economy when failing services are replaced with functioning services demanded by empowered citizens.

What citizen wants to give the economy more of his/her own hard-earned wealth?

Exhibit 5: Why the Feedback Labs folks are the best to experiment with fixing the system.

feedback loop members

We work in every part of the system. Our strength is our relationships with these players.

And earlier I said I had an idea on how we can fix the grant proposal system so that it is a better means of delivering community feedback to the “money” people. Here it is:

Exhibit 6: Storytelling data can feed community perspective into NGO grant proposals.

pre-evaluation-report-ngo-feedback-loop

GlobalGiving has relationships with over 1000 NGOs, most of whom depend on institutional funders for the majority of their funding. Although each funder has its unique guidelines and grant structure, many of them allow for supplementary documentation to justify the proposal. Many of these funders would welcome a true community perspective, provided this data was curated by an external party (GlobalGiving) that maintains data integrity. Likewise, this information will soon improve the quality of feedback NGOs provide GlobalGivers (individual soccer moms and globally engaged 20-somethings, etc.).

All NGOs are looking for an edge in the grantwriting process; and community can be that competitive edge. Over time, those NGOs that take advantage of our 58,000 stories and tools will have a higher funding rate, grow faster, and control a larger portion of the civil society’s wealth and influence — all because they are an active part of giving citizens voice. This is a system level change I can live with, even if it will take a while.

And there may be some tricks to accelerate the process. That’s what Feedback Labs is all about – accelerating learning that feeds system change. Giving “voice” will be a good start, but those people will not be satisfied with mere voice for long if things don’t change in the community.

Many of our future experiments are about discovering how to build a healthy appetite for feedback among those who currently hold power, so that it doesn’t threaten them. And some of our experiments are about understanding the reasons why citizens become disillusioned in the process. This latter question is what our new FeedbackLabs interns will be working on this summer, starting with existing data from recent PhD theses, field reports, and feedback experiments others have already done but not yet aggregated. To build a consumer culture around community feedback:

appetite for feedback

We need to start by asking citizens who have already been asked for participatory feedback two simple questions:

  1. Why did you participate with “X”?  (Where “X” is some past effort to give them “voice”)
  2. What did you hope would happen?

The answers may surprise us.

FBL

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