How Jeff Raikes Approaches the Challenges of Foundation Strategy

Growing up on a Nebraska farm, Jeff Raikes learned something about the fun and not-so-fun aspects of work.

“Every farm kid wants to drive the tractor – that’s the cool thing,” said Raikes, chief executive officer of the Bill & Melinda Gates Foundation at the Center for Effective Philanthropy’s (CEP) 2011 conference. “But some days you drive the tractor, and some days you scoop hog manure. That’s a real job, and I have a real job [now].”

When Raikes took over the reins of the Gates Foundation, he had worked in the hyper-competitive world of computer technology at Microsoft for more than 20 years. In the business world, part of developing strategy came from learning from one’s competitors, he said.

“In the private sector, you see where competitors provide better value – how to do better,” he said. “I thought [here in the foundation world] there are no competitors, but there are opponents who have a legitimate different point of view about achieving the same goal or [believe] that it’s not the right goal. As in business where you have to pay attention to competitors, in philanthropy it’s important to listen closely to your opponents and their point of view.”

Moderator Nadya K. Shmavonian, president of Public/Private Ventures, pointed out that as the largest private foundation, many people are intimidated by the power, passion, and assets of the Gates Foundation. She wondered how Raikes welcomes and accesses honest feedback from others.

“It’s extremely important to be clear that you want a dialogue and then act consistently with that principle,” Raikes said. “I always find it important to say, ‘What is it that we could have done differently or better?’ because people are very highly tuned to say what they think I want to hear. If I say, ‘How’d I do?’ well, then they are going to tell me the nice stuff. If I say, ‘What it is that we have to do differently?’ it represents the spirit that we want to engage in a dialogue of how to make our work even better.”

“I know that’s going to seem overly trite and simple, but I just think of this as a general principle to drive down through the organization: that desire to always learn,” Raikes continued. “I think it’s extremely important that we pay attention to those people who criticize our strategy and really reflect on what they are saying.  If you are a business listening to what competitors say, it really helps you to improve your products and services. Take our education work.  I read Diane Ravitch’s book [The Death and Life of the Great American School System] cover to cover. I don’t agree with everything she says, but I think she’s got some insights that are worth reflecting on.”

Raikes also talked about other lessons related to strategy that he learned from his years in Microsoft.

“Growing up in the IT industry, you can easily fall in love with information and just want more and more information,” he said. “If you are going to be successful, it’s not the volume of information, but the quality of information – gathering the right information at the right time. Shortly after joining the foundation, I sat in a meeting with Bill and Melinda [and other senior leaders]. I could see in [Bill’s] comments a concern that we were going to go data crazy. In that meeting, the term ‘actionable measurement’ was coined. We need to measure those things that will cause us to make some decision or action.”

Raikes said that he also encourages his program officers to talk about not just the five best grants but the five grants that are not performing well.

“That’s where we are going to learn,” he said. “That is fundamental to countering the challenge that we don’t have the same feedback as the market.”

He also said that he doesn’t believe that an organization should wait to enter “the market” until it has a perfect plan. Raikes said he has learned that the way to develop successful solutions over time is to strike the balance of “where you have a good sense that something will work, and then you get out there and you test it and you learn and you iterate. I’m much more of a believer in iteration.”

He said that the Gates Foundation develops strategies that it intends to last three to five years. Then, on an annual basis, each strategy team reviews with him and the foundation’s co-chairs the execution of that strategy to see what’s working and what’s not in order to make adjustments.

“If our grants don’t fully succeed, we only fail if we don’t learn,” Raikes said. “That’s the essence of what we are trying to do in philanthropy. The key thing that I’m trying to emphasize is that success is learning.”

“If you’re not willing to continuously learn and make adjustments, you won’t get the greatest impact,” he continued. “…when we get into a new area like agriculture, which we did five years ago, we have this tendency to start out pretty broad. But then when we figure out where the points of leverage are, we focus. Those investments we make that are outside the points of leverage have to be transitioned, and that will be disappointing to some people…Maybe that’s the hog manure part of the job.”

The full video of Raikes’ talk is available here.

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