Book Notes #67: Lean Impact by Ann Mei Chang

Title: Lean Impact: How to Innovate for Radically Greater Social Good
Author: Ann Mei Chang
Year: 2018
Pages: 304

What if solving the world’s biggest problems isn’t about having better ideas, but about learning faster?

Lean Impact by Ann Mei Chang flips the script on how we think about social good. Instead of sticking to rigid plans and hoping for the best, she makes a bold case for treating impact like innovation—through constant testing, iteration, and adaptation.

Drawing from her experience in both Silicon Valley and the nonprofit world, Chang challenges us to rethink everything from how we design programs to how we fund them.

As a result, I gave this book a rating of 7.0/10.

For me, a book with a note 10 is one I consider reading again every year. Among the books I rank with 10, for example, are How to Win Friends and Influence People and Factfulness.

3 Reasons to Read Lean Impact

Book Overview

What if the way we’re trying to solve the world’s biggest problems is all wrong—not because we don’t care enough, but because we’re not learning fast enough?

That’s the bold question Ann Mei Chang poses in Lean Impact. Coming from a background that includes Silicon Valley and public service, Chang brings a fresh and urgent perspective: if we want to tackle poverty, inequality, health crises, or education gaps, we can’t keep relying on slow, traditional models of social change.

We need to innovate—not just once, but constantly. And we need to treat impact not as a lucky outcome, but as the goal of a rigorous, test-and-learn process.

At the heart of the book is a simple but powerful message: start small, learn fast, aim big.

That may sound like startup jargon, but Chang translates it beautifully into the world of social good.

The key idea is that solving complex, deeply rooted problems demands more than passion and good intentions. It requires experimentation, data, and above all, humility.

The book begins by challenging our love affair with solutions. Too often, we become emotionally attached to a clever idea or an impressive-looking program.

But Chang urges us to shift our loyalty—from the solution to the problem.

One of the most compelling examples is Proximity Designs in Myanmar. Instead of launching with a polished plan, they immersed themselves in the daily lives of rural farmers.

By truly understanding the problem from the inside out, they were able to design low-cost, human-centered irrigation solutions that actually worked. That kind of empathy-driven iteration is a theme throughout the book.

Chang builds her approach on three pillars: value, growth, and impact.

First, does your idea create real value for the people it’s meant to serve—not in theory, but in practice?

Will they use it?

Recommend it?

Come back to it?

Second, can it grow?

Can your model scale beyond one community, one region, or one nonprofit office?

And third, does it actually work? Is there measurable impact, not just activity?

It’s one thing to deliver services—it’s another to show real change in outcomes.

These questions might sound obvious, but Chang shows just how rare they are in the world of social programs.

We often focus on implementation plans, reports, and donor requirements, rather than continuously testing whether we’re making a real difference.

That’s where Lean Impact flips the script. Inspired by the Lean Startup movement, Chang proposes a cycle of build-measure-learn. Try something small. See what works. Adjust. Repeat.

It’s fast, it’s messy, and yes, it involves failure—but the kind of failure that teaches and moves you forward.

One of the book’s most striking insights is the idea that social change shouldn’t settle for incremental improvements. If your goal is to lift 1,000 people out of poverty, but millions are still struggling, is that enough?

Chang invites readers to be audacious. Dream in terms of solving the entire problem, not just a slice of it. Ben Mangan’s story with EARN is a great example. Instead of continuing to help a few thousand people save money, he set a new goal: help a million people save a billion dollars.

That stretch goal pushed the team to radically rethink their model, making it more scalable and impactful.

Of course, none of this is easy—and Chang doesn’t pretend otherwise. In fact, one of the most refreshing things about the book is how candidly it talks about the barriers.

Funding structures often reward predictability over risk. Donors want tidy reports and clear outcomes, which discourages experimentation.

Organizations may talk about innovation but lack the culture to support it. Chang devotes entire chapters to these tensions, especially around funding.

She makes a compelling plea to funders: if you truly want impact, you have to let go of control. Trust your grantees. Give them room to test, to pivot, even to fail.

Throughout the book, real-world examples bring the ideas to life. From Summit Public Schools using data to personalize learning, to Off Grid Electric scaling solar energy through mobile payments in Africa, each case study adds richness and credibility.

These aren’t abstract theories—they’re strategies that are already reshaping how social good can be done.

By the final chapters, the conversation turns to systems change.

Chang argues that solving big problems isn’t just about scaling programs—it’s about shifting entire systems.

That might mean influencing government policies, changing market behaviors, or building coalitions that can push for wider adoption.

It’s a reminder that innovation doesn’t happen in isolation. If we want to change the world, we need to work together, across sectors, and be ready to challenge how things have always been done.

Reading Lean Impact feels like getting a wake-up call and a roadmap at the same time.

It doesn’t romanticize the work—it respects it, pushes it, and insists that we can do better.

It’s a book for anyone who believes that good intentions aren’t enough, and that real impact demands relentless curiosity, courage, and learning.

If you’re building something for social good—whether you’re a nonprofit leader, a policy maker, or a purpose-driven entrepreneur—this book might just change the way you approach your work.

Not by offering all the answers, but by asking the right questions, and giving you a process to chase the ones that matter.

Chapter by Chapter

Chapter 1 – Innovation Is the Path, Impact Is the Destination

Innovation is a word we hear a lot, especially in the context of social good. But Ann Mei Chang starts this book by explaining that innovation, in the truest sense, isn’t just about creating new ideas or having a big “aha” moment. It’s about taking those ideas and turning them into something that makes a real, meaningful difference.

The chapter makes a crucial distinction between invention and innovation. Invention is the spark of a new idea, but innovation is what happens when that idea is turned into action. It’s about testing, refining, and improving to ensure the solution actually works. When it comes to social good, the process can be long and challenging. Instead of just jumping in with a big plan, innovation requires a lot of trial and error. You might not get it perfect on the first try, but by being flexible and learning as you go, you can make a much greater impact.

This is where the Lean Impact approach comes in. It draws inspiration from The Lean Startup, focusing on hypothesis-driven experiments that help you test your assumptions and learn quickly. The traditional model, where you spend a lot of time planning and executing without feedback, often doesn’t work in social innovation. Instead, the Lean Impact approach encourages starting small and adapting based on real feedback.

One of the key ideas in this chapter is that when it comes to social change, we need to have clear goals. It’s easy to talk about big concepts like “reducing poverty” or “improving education,” but without a clear and measurable goal, it’s hard to know if you’re actually making a difference. The author encourages thinking big—setting ambitious goals that match the scale of the problem—but also starting small and testing along the way.

A great example of this is Summit Public Schools. They didn’t wait for years to see if their educational model worked. Instead, they tested their approach in real-time, using feedback to continuously improve and adjust. Their model evolved quickly, and as a result, they saw significant improvements in student outcomes. This chapter shows that we don’t have to wait for the perfect solution to make an impact. The key is to learn quickly, adapt, and keep moving forward.

The chapter wraps up with a reminder that true social impact requires both passion and a structured approach. It’s about caring deeply for the problem, but also using a disciplined, iterative process to figure out what works. Ultimately, the path to social good is a combination of heart and mind—both are necessary for making a lasting difference.

Chapter 2 – What Is Your Audacious Goal?

In this chapter, Ann Mei Chang explores the importance of setting audacious goals that are big enough to make a significant difference in the world. While many organizations start with good intentions, they often fall short because their goals are too vague or conservative. The key idea here is that if we want to create real, lasting change, we need to set our sights high and aim for goals that challenge the status quo.

Chang reflects on the Millennium Development Goals (MDGs), which were established by world leaders to address global issues like poverty and education. While the MDGs helped bring attention to important causes, they weren’t always specific enough to lead to lasting, transformative change. The author points out that goals should be measurable, ambitious, and time-bound, so that we can clearly track progress and know if we’re on the right path.

A big part of this chapter is about thinking big. Chang shares the story of her time at Google, where the goal was to build a billion-dollar business. The challenge wasn’t just about making progress; it was about setting a stretch goal that motivated the team to think creatively and push the limits of what was possible. This mindset of aiming for massive growth was critical to the success of their mobile engineering team. The author suggests that the social sector needs the same kind of bold thinking: we need to aim for transformation, not just incremental improvements.

One of the key lessons here is that setting a clear, audacious goal helps focus your efforts. Without a big, challenging target, it’s easy to get distracted by short-term wins or feel like you’re making progress when, in fact, the problem is still far from solved. Chang emphasizes that you must base your goals on the size of the need, not what seems easily achievable. For example, instead of aiming to help a small group of people, ask yourself, “What does success look like at a scale that addresses the real size of the problem?”

To illustrate this point, Chang shares the story of Ben Mangan, who co-founded a nonprofit called EARN, which aimed to help low-income Americans save money. Initially, they were doing well, but Ben realized they were reaching only a small fraction of the people who needed help. So, he set a much bolder goal: to help a million people save a billion dollars. This new goal forced them to rethink their strategy and adopt a more scalable model, which led to much greater impact.

Chang challenges the reader to ask: Are we aiming for a big enough change? By setting audacious goals, we can drive innovation and take risks that ultimately lead to more profound and widespread social impact.

The chapter also touches on the common fear of failure when aiming high. Chang acknowledges that failure is often seen as something to avoid in the social sector, but argues that the real failure comes from not trying to achieve something truly transformative. It’s important to embrace the uncertainty and risk that comes with bold goals and see setbacks as learning opportunities rather than reasons to give up.

In short, this chapter lays out a powerful case for why we need to set audacious, clear, and measurable goals if we want to make a significant social impact. Without a big goal, we risk playing it too safe and missing out on the opportunity to make a real difference. It’s about thinking big, working down from the scale of the problem, and aligning your efforts towards a vision that challenges conventional thinking.

Chapter 3 – Love the Problem, Not Your Solution

In this chapter, Ann Mei Chang dives into the idea that, when working to create social change, we often become too attached to our solutions, even when they’re not the right fit for the problem at hand. The key lesson here is that it’s essential to fall in love with the problem, not the solution.

Chang starts by sharing the story of Proximity Designs, a social enterprise in Myanmar that tackled the challenge of irrigation for smallholder farmers. The co-founders, Jim Taylor and Debbie Aung Din, moved to Myanmar because they believed in being close to the problem—literally. They immersed themselves in the lives of the people they were trying to help, getting to know their needs and challenges intimately. This proximity allowed them to create a truly relevant solution: a low-cost, foot-powered irrigation pump that addressed a specific need for farmers.

The central idea here is that good solutions come from understanding the problem deeply, not from rushing to a pre-made answer. When Proximity Designs first started, they could have easily gotten caught up in the desire to create a perfect product, but instead, they focused on understanding the everyday struggles of the farmers. This allowed them to develop a solution that was both practical and effective.

The author also stresses the importance of engaging with your customers and stakeholders throughout the design process. In the case of Proximity Designs, the team didn’t just design the irrigation pumps in isolation. They actively involved their users in every stage of the process, getting daily feedback from farmers. This allowed the team to iterate quickly, making improvements and ensuring the pump met the farmers’ real needs.

One important takeaway is that solutions must be flexible and adaptable. In the social sector, it’s easy to fall into the trap of thinking that once you’ve found a solution, it’s set in stone. But the reality is that circumstances change, and problems evolve, so you must be ready to pivot or tweak your approach as new insights come in. This is where lean thinking comes into play, helping you test assumptions and iterate in real-time.

The chapter also discusses the idea of being proximate to the problem, which means engaging directly with the people you are trying to help. Chang highlights the importance of not just observing from a distance, but really listening to your customers and understanding their challenges from their perspective. This is especially true when the people you’re serving come from backgrounds vastly different from your own.

Chang uses the example of InWithForward, a social design firm in Canada, where the team immersed themselves in a community with adults living with cognitive disabilities. They didn’t just observe from afar; they lived with the community, built trust, and understood the problems firsthand. This deep engagement led them to create Kudoz, a platform for social services that connects people with new learning experiences, empowering individuals to explore new interests.

Another important part of this chapter is the idea that solutions should be driven by customer needs, not by the solution itself. Chang stresses that we often focus too much on the technology, product, or service we’re offering, instead of asking whether it’s truly addressing the problem. In fact, it’s easy to get attached to a solution because of how much effort went into creating it, but the real goal should always be to solve the problem, not to prove that your solution is right.

Finally, the chapter talks about problem discovery and the importance of deep listening to get to the root causes. One technique that Chang introduces is the “5 Whys” approach, a method used to dig deeper into the problem by asking “Why?” repeatedly until you reach the core issue. This process can reveal insights that are often missed in initial discussions and help ensure that you’re addressing the true problem, not just the symptoms.

In short, this chapter highlights that to create real impact, we need to stop getting fixated on solutions and instead focus on understanding and solving the real problems. It’s about being proximate, listening deeply, and continuously learning and adapting to make sure we are on the right track.

Chapter 4 – Build, Measure, Learn

In this chapter, Ann Mei Chang introduces the Build-Measure-Learn framework, which comes from the Lean Startup methodology. This framework is designed to help innovators test their ideas quickly and efficiently, so they can make the necessary adjustments before investing too much time or resources. The chapter explains that lean thinking is all about experimentation and learning—and failure is just part of the process.

The author begins by explaining that, in the past, many organizations would launch large, expensive initiatives without testing their ideas first. This approach often resulted in costly mistakes, with organizations investing heavily in solutions that didn’t work or meet the needs of their target audience. Instead of starting with a big, final product, the Lean Impact approach encourages starting with a minimum viable product (MVP)—a simple version of your idea that can be tested quickly and cheaply.

Chang emphasizes the importance of measuring your results after each experiment. This isn’t just about collecting data; it’s about using that data to understand whether your hypothesis holds true or needs to be adjusted. This process of measuring is critical because it allows you to learn from your tests and improve your solution incrementally. The key here is that you’re not just measuring for the sake of it; you’re measuring to learn, to make better decisions, and to move closer to your goal.

One of the most interesting parts of this chapter is how the author discusses how to learn from failure. In traditional settings, failure is often seen as something negative, but in Lean Impact, failure is reframed as an opportunity for learning. Each time a test doesn’t go as planned, it gives you valuable insights about what works and what doesn’t. By failing quickly and learning from those failures, you can adjust your approach without wasting time and resources on something that’s not working.

A practical example the author shares is from One Acre Fund, a social enterprise that provides smallholder farmers in Africa with the resources they need to increase their yields. One Acre Fund initially launched a program that wasn’t effective, but instead of sticking with the original idea, they quickly tested and iterated to improve their approach. They continuously measured their results and used that feedback to refine their services. This constant cycle of build, measure, and learn ultimately led to a more scalable and effective solution.

The chapter also emphasizes the importance of starting small. It can be tempting to scale a program or solution quickly, but this often leads to wasted resources and missteps. The Lean Impact model encourages innovators to start with small, low-cost experiments, then use what they learn to scale only once they’ve found something that works. This helps avoid the common pitfall of scaling too early and gives you the flexibility to pivot or adjust before committing large amounts of time or money.

Another key insight is the concept of the “pivot”—a shift in strategy based on feedback and learning. A pivot isn’t a failure; it’s a strategic course correction. In fact, Chang argues that pivoting is a sign of progress, as it indicates that you are learning from your experiments and adapting to make a greater impact.

To tie everything together, the chapter stresses that the Build-Measure-Learn cycle is a continuous process. It’s not just about testing once and moving on; it’s about constantly iterating and refining your approach to maximize your impact. The idea is to fail fast, learn faster, and keep improving your solution based on real-world feedback.

Chapter 5 – Accelerate Your Learning

In this chapter, Ann Mei Chang focuses on the importance of accelerating your learning process to create greater impact more quickly. She argues that in the fast-paced world of social innovation, we can’t afford to wait for years before we start seeing results. The key to faster, more effective social change is to learn as quickly as possible and make adjustments based on what we discover along the way.

Chang begins by explaining the concept of learning loops, a process where every experiment, failure, or success feeds into the next round of learning. She suggests that the faster we can move through these loops, the quicker we’ll be able to adapt our solutions and reach our goals. Essentially, it’s about increasing the speed of learning, so that we can test, iterate, and refine faster than ever before.

One of the most interesting ideas in this chapter is that the ability to learn quickly is often more important than the actual solution. Chang points out that, in the social impact space, we don’t always know the perfect solution from the start, and it’s unrealistic to expect that we’ll get it right the first time. Instead, we need to focus on testing hypotheses, gathering data, and adjusting based on that feedback. The goal isn’t perfection—it’s progress.

A great example she shares is from the Skoll Foundation, which focused on accelerating the work of social entrepreneurs. The foundation’s approach was all about getting data quickly and testing ideas to ensure they were on the right path. By doing so, they could better support their grantees and help them reach more people with their solutions. In short, they were accelerating learning for social entrepreneurs, which ultimately helped create more scalable, sustainable impact.

The chapter also touches on the importance of building a culture of learning within your organization. This means encouraging your team to embrace failure as a learning opportunity rather than something to avoid. By creating an environment where learning is valued over immediate success, you open the door to more innovation, risk-taking, and, ultimately, greater impact.

Chang stresses that to accelerate learning, it’s crucial to surround yourself with the right people. This involves working with partners, mentors, and team members who can bring fresh perspectives and challenge your assumptions. By collaborating with others who have different experiences and expertise, you can expand the learning process and get to better solutions faster. She also highlights the importance of sharing knowledge with others—when we share what we’ve learned, we help others move forward, too.

In addition, Chang encourages data-driven decision-making. It’s not enough to just have a good idea; you need to measure and analyze the outcomes of your experiments. Data helps you track progress, identify trends, and adjust strategies. The author emphasizes that even though social impact work often involves complex problems with no simple answers, data can help clarify what’s working and what’s not. By incorporating data into your decision-making, you avoid making decisions based on gut feelings or assumptions.

Finally, the chapter discusses the idea of incremental improvements. While it’s important to aim for big, audacious goals, it’s equally important to remember that small changes, when made continuously, can lead to big results. Chang refers to this process as the compound effect—small, consistent improvements that add up over time and create exponential impact. This approach is more sustainable than trying to make large, dramatic changes all at once.

Chapter 6 – Start Small, Iterate Fast

This chapter emphasizes that starting small and iterating fast is the key to effective social innovation. The author advocates for an approach where you test assumptions on a small scale first, learn from the results, and refine your ideas before making larger investments. By taking this approach, you reduce the risk of failure and avoid wasting resources on solutions that don’t work.

Chang explains that social sector programs often begin with detailed planning and large rollouts, which leads to big bets on getting everything right from the start. However, in reality, this approach rarely succeeds, and many projects end up failing. Lean Impact replaces this linear process with an iterative one based on the scientific method—designing experiments, testing them in stages, and adjusting the solution based on real data from customers and stakeholders.

A great example comes from the One Acre Fund, which started by providing agricultural services to smallholder farmers in Africa. They initially launched a new crop offering, passion fruit, based on research and assumptions, but it failed due to various real-world challenges. This taught them the importance of staging risks, by testing smaller, low-cost experiments before scaling up. This gradual testing allows them to gather insights without risking large investments.

The chapter also touches on the pressure to grow, especially in mission-driven organizations. The urgency to address immediate needs can lead to scaling up solutions before they’re properly validated. But Chang stresses the importance of taking the time to validate your idea first, ensuring that the solution will have lasting, meaningful impact.

At the core of the Lean Impact approach is the need to validate across three key pillars: value, growth, and impact. If you focus on these areas from the very beginning and test them iteratively, you can ensure that the solution not only meets immediate needs but is sustainable and scalable.

The chapter also presents the idea of staging risk—identifying and testing the riskiest assumptions first, using low-cost, small-scale tests to gather data before diving into larger, more expensive experiments. This method helps to avoid investing in unproven solutions and allows for quick course corrections if things don’t go as planned.

Chapter 7 – Value

In this chapter, Ann Mei Chang delves into the concept of value—the first of the three critical pillars for successful social innovation. If you don’t provide true value to your target audience, no matter how good your solution is, people won’t use it, and it won’t have an impact. This chapter focuses on understanding what value really means in the social sector and how to measure it effectively.

Chang explains that value isn’t just about offering something that’s technically effective. It’s about making sure that the people you’re trying to help genuinely want and need what you’re offering. She stresses that what people do is far more telling than what they say. For example, if people are constantly choosing your product, recommending it to others, and coming back for more, you know you’ve struck a chord with them. But if users aren’t engaging or sharing, it’s a sign that the value you think you’re offering might not be landing as you hoped.

An example Chang provides is from Harambee, a youth employment program in South Africa. Initially, the program had two value hypotheses: helping youth find job opportunities and employers identify work-ready candidates. Testing these assumptions early on helped the program adjust its focus to better meet the needs of both groups. The hypothesis about value was validated when the youth who used the platform had higher chances of finding employment, and employers were able to hire better-qualified candidates.

The chapter also touches on the concept of measuring value. You can’t just assume that your solution is valuable because you think it is. You need to have objective measures of success. This could include things like adoption rates, retention rates, and feedback loops. For example, if people aren’t returning to use your service, then it’s likely that the value isn’t as clear or impactful as you hoped.

Chang emphasizes that successful solutions must meet the needs of the people they’re designed to serve, and this means constantly listening to your users and adjusting based on their feedback. Whether it’s tweaking a product or changing how it’s delivered, being able to adapt and iterate quickly is essential for delivering real value.

Additionally, the chapter discusses value propositions and the importance of making sure that the solution you offer is better than the alternatives available. If your product is not significantly better than what’s already out there, then it will be hard to convince people to make the switch.

Finally, Chang points out that value is a key driver for growth. Once you’ve proven that there is a demand for your solution, and people find value in it, that will set the stage for the next phase—scaling the solution. But without solid value, growth will be difficult to sustain.

Chapter 8 – Growth

In this chapter, Ann Mei Chang explores the second pillar of social innovation: growth. While many social impact organizations are good at creating value, they often struggle to achieve significant scale. Growth, in this context, refers not just to expanding the size of an organization but to scaling social benefits—how many people can your solution reach, and how deeply can it impact them?

The chapter begins by comparing the growth trajectories of social innovations to that of mobile phones. Mobile phones have achieved what Chang calls hockey stick growth—slow growth at first, followed by rapid, exponential adoption. This kind of growth is possible even in the most challenging contexts, as seen with mobile phones reaching even the most remote areas of the world. But, unlike mobile phones, many social innovations fail to replicate this kind of growth trajectory.

Chang points out that many social innovations are funded by donations and grants, which have limits. Charity-based growth often follows an inverted hockey stick curve—quick growth followed by stagnation when funding dries up. The problem with relying solely on philanthropy is that the need far outweighs the available funds. The result is that many social enterprises never achieve the scale necessary to address large-scale problems.

What’s crucial to understand is that growth is not just about scaling your organization—it’s about scaling the social benefit. This might come from replication, government adoption, or even policy changes, not just expanding your own services. For example, instead of growing your own organization, you could partner with other organizations to replicate your model or push for policy changes that support the broader ecosystem.

The chapter also highlights the common trade-offs nonprofit leaders often face. Because there’s always a need for ongoing funding, there’s often pressure to prioritize short-term deliverables over long-term growth. However, Chang stresses the importance of testing your growth hypothesis early. Growth needs to be built into the model from the beginning, which means thinking ahead about whether your solution can be sustained over time and how it can reach a large audience.

Chang also addresses the importance of testing growth assumptions. For example, you must ask critical questions such as: Who will pay for your solution? Who will carry out the work? Will your solution integrate with existing systems? Testing these assumptions early can help you avoid falling into the trap of scaling a solution that may not be feasible in the long run.

A powerful example in the chapter is Off Grid Electric, a company providing solar power to off-grid households in Africa. Through a market-driven model, where families pay small amounts via mobile money, Off Grid Electric has managed to scale rapidly. The company’s early-stage grants helped test the model, and later co-investments catalyzed significant private debt, pushing the company to the next level.

The key takeaway is that growth is not just about bigger organizations; it’s about finding the right engines for growth. This could involve market-driven models, government adoption, replication, or other creative solutions. The goal is to build a sustainable engine that can accelerate growth over time, not rely on constant fundraising or charity.

Chapter 9 – Impact

In this chapter, Ann Mei Chang focuses on the third and final pillar of social innovation: impact. She makes the point that impact is the ultimate goal of social innovation efforts. If a solution doesn’t lead to a tangible and measurable change in the lives of those it aims to help, then it’s not truly effective, regardless of how much value it creates or how fast it grows.

Chang starts by emphasizing that while social impact is the driving force behind many efforts, it’s incredibly hard to measure. Unlike for-profit businesses, where success is often defined by clear metrics like revenue or customer satisfaction, social impact often requires years or even decades to be fully realized. This creates a unique challenge in determining whether social initiatives are truly making a difference.

One of the key takeaways from this chapter is that validating impact isn’t an all-or-nothing choice. Instead of waiting years for outcomes, organizations can take smaller steps and validate their impact hypotheses progressively. This can be done by breaking down the theory of change into smaller, testable steps that allow you to measure early indicators of success. For example, in the case of distributing bed nets to prevent malaria, Chang highlights how it’s much easier to test whether people are actually using the nets than to wait for years to see a reduction in malaria rates.

A significant portion of the chapter discusses the importance of theory of change, a tool often used by nonprofit organizations to map out the expected results of their interventions. A theory of change helps organizations articulate the steps they believe will lead to the desired impact, from inputs (resources) to activities, outputs, outcomes, and ultimately, the long-term impact. Chang advocates for breaking down the process and validating assumptions one by one, focusing on the riskiest parts of the theory first to reduce the uncertainty and make the process of validating impact more manageable.

The chapter also explores the idea of early indicators. While full social impact might take time to materialize, focusing on early signs of change—such as increased engagement or behavior changes—can provide useful feedback and help organizations optimize their strategies. Summit Public Schools is an example Chang gives to illustrate this. They continuously track data on student performance and engagement, adjusting their educational methods based on the feedback they receive. This feedback loop allows them to make real-time improvements that increase the likelihood of achieving long-term educational success.

Finally, the chapter delves into the complexity of social interventions and how the MVP (Minimum Viable Product) concept, commonly used in the startup world, can be adapted to test impact. Instead of waiting to finalize a large-scale program, organizations can create small, low-cost experiments to test the major assumptions behind their theory of change. This allows them to make adjustments based on real-world data, rather than relying on assumptions or hoping for the best.

Chapter 10 – Systems Change

In this chapter, Ann Mei Chang highlights the importance of systems change in solving society’s biggest challenges. She argues that no single organization can solve large-scale problems alone. Even the most innovative solutions can hit barriers due to existing market and policy failures. Systems change is needed to create lasting and widespread impact.

Chang introduces the idea that social enterprises and nonprofits can act as “systems entrepreneurs”—organizations that aim not just to implement individual solutions but to change the underlying systems that perpetuate the problems they seek to solve. For instance, VisionSpring, a company that provides affordable eyeglasses, initially succeeded by selling directly to consumers, but quickly realized it needed to change the entire distribution system to reach underserved populations. By partnering with BRAC’s community health workers, VisionSpring created a new distribution model that scaled the impact, showing that true systems change requires collaboration and innovation beyond the initial solution.

The chapter discusses the challenge of market and policy failures, where existing systems don’t meet the needs of disadvantaged populations. The key idea is that solutions like VisionSpring’s only become sustainable when they are able to influence and change policies or market behaviors. Chang argues that social enterprises are well-positioned to demonstrate the effectiveness of new approaches and to push for broader adoption by governments and businesses.

One fascinating story in the chapter is about the EYElliance, a coalition aimed at improving access to eyeglasses. By bringing together public, private, and nonprofit sectors, the EYElliance is working to create systemic changes in how eyeglasses are distributed, focusing on improving policies and business models to serve low-income populations.

Chang concludes by emphasizing that systemic change requires collaboration across sectors, creating coalitions that can tackle the root causes of problems. This approach challenges the traditional model of “quick fixes” and calls for long-term thinking and broader partnerships.

Chapter 11 – Financing Innovation

In this chapter, Ann Mei Chang addresses the major barrier to social innovation: funding. While many mission-driven organizations have impactful solutions, securing the necessary funding to support and scale them remains a significant challenge. The author argues that the way funds are currently structured—especially grants—does not align well with the needs of social innovation.

Chang explains that funding in the social sector often comes with strict requirements, leading to a lack of flexibility and micromanagement. In the private sector, investors offer capital with fewer strings attached, allowing businesses to pivot, experiment, and evolve. In contrast, grants often come with rigid guidelines and reporting standards that stifle creativity and risk-taking. This discrepancy between funding structures is one of the biggest obstacles to fostering innovation in social enterprises.

The chapter also discusses how organizations, especially nonprofits, have adapted to this challenge by finding creative ways to navigate the system. Some use unrestricted funding from philanthropists, allowing for more flexibility. However, the author emphasizes that funding practices must evolve to allow for more innovation and flexibility. A key part of this is understanding that risk must be embraced, and that not every project will succeed, but those that fail can still offer valuable learning opportunities.

Chang also highlights examples of organizations that have been able to leverage more flexible funding sources, such as tech philanthropists and crowdfunding. By shifting towards unrestricted funding, organizations can focus on impact rather than meeting specific donor requirements. Chang urges funders to adopt more flexible models that allow grantees to take risks, experiment, and learn.

Additionally, the chapter touches on tiered funding, which can encourage growth in stages, providing more funding as the initiative proves its value and scalability. This model has been successful in both the private and social sectors, encouraging a startup-like approach to social innovation.

Chapter 12 – A Message to Funders

In this chapter, Ann Mei Chang directly addresses the funders—philanthropists, foundations, impact investors, and government agencies—who play a crucial role in driving social innovation. The key message is that funding systems in the social sector need a revolution. The way social good is currently funded is hindering progress, and Chang argues that funders must shift their mindset if they want to support the kind of transformative change needed.

Chang highlights a major problem: perverse funding incentives. Many funders focus on well-known interventions or opt for risk-averse funding that leads to repetitive, subscale projects. Instead of adopting a venture capitalist (VC)-style mindset, where risks are taken to pursue growth and innovation, most philanthropic funding sticks to traditional, safe bets. This tendency limits the impact of social ventures, preventing them from addressing the root causes of social issues.

The chapter urges funders to empower entrepreneurs, encourage ambition, and approach funding with humility. Empowerment means trusting social entrepreneurs and organizations to make the right decisions, rather than micromanaging every aspect of their work. Ambition is crucial because it drives the restless pursuit of better solutions. Humility is necessary because no one has all the answers, and we need to experiment and learn as we go.

Chang emphasizes that funders often make decisions based on superficial metrics, like overhead rates, rather than focusing on the outcomes that actually drive long-term change. She encourages funders to move away from micromanaging and instead, focus on the trajectory for learning and improvement. Instead of funding activities or compelling stories, funders should measure success by the sustainable impact that organizations can achieve.

A new, more effective relationship between funders and social ventures is needed. Donors must shift the power dynamics—empowering organizations to take risks, make decisions, and pursue innovative solutions without constant scrutiny. This shift towards unrestricted funding is key, as it allows social ventures the flexibility they need to grow and scale.

The chapter also explores the concept of tiered funding—a system where organizations receive funding in stages based on their progress. This approach, similar to venture capital, allows donors to take calculated risks while providing the support needed at each stage of development. It helps organizations experiment, learn, and adapt their solutions.

Chang wraps up with a call to action: funders must stop being afraid of failure. As Bill and Melinda Gates have said, “If we don’t try some ideas that fail, we’re not doing our jobs.” Social good requires experimentation, and funders have a vital role to play by supporting these experiments, even when there’s a risk of failure.

Chapter 13 – Making It Stick

In this chapter, Ann Mei Chang dives into how to sustain innovation and the entrepreneurial mindset over the long term. It’s easy to get excited about a new approach, but how do you ensure that it becomes ingrained in your organization’s culture? How do you make innovation stick?

Chang begins by discussing the challenge of turning an entrepreneurial mindset into consistent practice. She uses the example of someone trying to adopt a healthier diet: knowing what to do is not enough, and without clear incentives, it’s easy to fall back into old habits. In the same way, organizations often struggle to maintain momentum for innovation if the incentives, goals, and culture aren’t aligned.

The chapter stresses that simply bringing in new tools or skills isn’t enough. If organizational goals remain unchanged, any new innovation efforts may become marginalized. The solution lies in creating a culture where stretch goals, experimentation, and data-driven decisions are at the core. Rearchitecting the organization starts with setting measurable, ambitious goals that challenge people to think beyond business as usual.

Chang explains that cultural transformation is essential for making innovation stick. Cultural barriers like entrenched habits and a focus on short-term, predictable outcomes must be overcome. In the social sector, the grant cycle model often stifles innovation because it’s based on predictability and detailed upfront plans—neither of which is conducive to experimentation and iterative progress.

She provides examples of organizations that successfully made innovation a part of their culture. MoveOn, a progressive advocacy group, created a “joyful funeral” to celebrate risk-taking and creativity—even when projects failed. This approach helped them build a culture where failure was seen as a step toward innovation, not something to be ashamed of.

Chang also talks about the importance of recognizing the difference between good and bad failures. A good failure happens when a calculated risk is taken and leads to valuable learning, while a bad failure wastes resources without providing new insights. The key to success is learning from both types and making adjustments.

One of the chapter’s most interesting points is the idea of using OKRs (Objectives and Key Results), a system popularized by Google, to track progress. OKRs encourage setting ambitious, measurable goals and reviewing progress regularly. This system helps create focus and alignment while pushing organizations to take more risks. The idea is that by aiming for big goals, even if they are not fully achieved, the organization will make significant progress.

Chapter 14 – A World of Impact

In this final chapter, Ann Mei Chang paints a picture of the future of impact. We are at a pivotal moment, where the lines between charity and business are beginning to blur. This shift is creating hybrid models that combine the best of both worlds—profit-driven companies and mission-driven social enterprises working together to create long-lasting social change.

Chang explains that while this transformation is exciting, it also presents challenges. As the boundaries between social impact and business grow less defined, new legal structures and financial models are needed to support these hybrid entities. She discusses the rise of impact investing, where investors seek both financial returns and social impact, as well as venture philanthropy, which blends traditional charitable giving with an entrepreneurial approach.

An essential concept here is the triple bottom line—focusing not only on profits but also on people and the planet. This shift in thinking is particularly important for millennials, who increasingly expect companies to serve a social purpose. According to research, a large percentage of millennials would even accept a lower salary to work for a socially responsible company. This new generation is pushing businesses to integrate social impact into their core operations, rather than just adding it as an afterthought.

However, despite the rise of hybrid organizations, most traditional funding models remain stuck in their old ways, either focusing solely on profit or purely on social good. This creates a financing gap for social enterprises trying to balance both objectives. Chang advocates for new hybrid financial mechanisms that allow organizations to operate across both worlds, enabling them to grow while maintaining their social mission.

The chapter also touches on the importance of smarter giving. Chang urges donors to ask more difficult questions about the social impact of the organizations they support. Instead of blindly giving money, donors should look for organizations that are committed to measurable results and are continually improving their impact. This mindset shift is essential for creating a culture of accountability and progress in the nonprofit sector.

Chang concludes with a call to action: “Think big. Start small. Relentlessly seek impact.” It’s a reminder that radical change happens when people combine bold visions with practical actions. To make the world a better place, we need to challenge traditional systems, create hybrid solutions, and encourage cross-sector collaboration to address the root causes of social issues. In short, this chapter underscores the importance of working together—across businesses, governments, and nonprofits—to achieve transformative social impact at scale.

4 Key Ideas from Lean Impact

6 Main Lessons from Lean Impact

My Book Highlights & Quotes

Impact is a critically important concept when it comes to social innovation, generally used in the context of measuring whether social interventions do or don’t work. But conceptually, it’s very similar to the problem of measuring success in a business before you have profits. That’s why lean methods are so perfectly suited to this kind of work. The only real difference is that instead of talking about maximizing shareholder value, Lean Impact talks about maximizing social impact. An advance party of pioneers, some of whom you’ll read about here, is already doing this, but we need more. This book is a way to help add to their numbers. Lean Impact is not only transformational for the social sector, though. My hope is that people in other kinds of businesses and organizations will also pick it up and, after reading about the dedicated people and clear strategies whose stories Ann Mei has gathered, think about how the products and institutions they build affect the world. All of us have more to learn about how we make impact so we can move together into this new era

To satisfy all the crisscrossing priorities of multiple donors, organizations can end up tying themselves into a pretzel

Let’s be real. Innovation for social good is harder than innovation for business. Period

One reason undesired interventions persist for longer in the social sector is that frequently it is funders rather than consumers who are paying for them

To maximize our chance of success amid such complex challenges, we need a methodology to manage risk and accelerate learning

Conclusion

Lean Impact is more than a book—it’s a call to action. It invites us to stop settling for small wins and start aiming for transformative change, backed by humility, experimentation, and bold ambition.

Whether you’re leading a nonprofit, funding social ventures, or just want to make a difference that actually sticks, this book offers a smarter, faster, and more honest path forward.

The problems are big, but with the right mindset, so is our potential to solve them.

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