2 Lean Principles and Process

“Top of the heap … in homelessness!”

That’s what Monica Martinez said to herself after taking the job as CEO of Santa Cruz’s Homelessness Services Center (HSC). Santa Cruz County, her new home turf, held the distinction of having the highest homelessness rate in America. Twenty-five years into the center’s existence, Monica was determined to do something different. She was going to go lean.

For the past twenty-five years, HSC had followed the classic game plan: get an idea, write a plan, raise money (through charitable or governmental sources), and then carry out your plan. If you succeed at getting this far, then you take up what’s next: measure impacts, evaluate, raise more money (see Figure 2.1).

This Plan–Fund–Do approach had served HSC well over the previous two decades. The organization had grown from a scrappy, community-led effort to a well-established provider of up to 145 beds a night for homeless people, with an annual budget of almost $2 million. All that planning and funding and doing had brought immediate relief to some of those suffering on the streets (18 percent of them on any given night), but it had done nothing to solve the problem permanently.

Monica was struck by the similarities with efforts to innovate in the private sector, where over 75 percent of startups eventually failed. In the nonprofit sector, the metrics were more multidimensional than simply whether or not you turned a profit for owners and investors. But the bottom line was the same in many ways. Any startup, any new program eventually had to answer the question: “Does it work?”

By that measure, HSC’s efforts to end homelessness clearly had not. And there were twenty-five years of evidence to prove it.