Design thinking for economic mobility
Updated: Oct 30, 2018
By Mark Logan, idealect
This post first appeared at medium.com.
When I announced the launch of idealect this month, lots of people responded enthusiastically. A few people, though, offered up a candid, “I don’t understand what you do.”
That response is nothing new for me, truth be told. For most of my career, people haven’t understood what I do, but maybe now it’s a little harder to grasp. I’m taking a skill set that I’ve built over years of doing innovation in technology and marketing and applying it in the realm of social good. That move may not seem like an obvious transition or translate into a simple suite of services. Fortunately, an instructive example landed on my plate almost as soon as I launched.
This past week, I began work on a project that exemplifies the kind of work I formed idealect to pursue. Along with my collaborator, Jenn Hack, I facilitated a Design Thinking workshop on economic mobility and payday lending in Kansas City. As you may know, our city has earned some notoriety for payday lending in the recent past, so the topic is on the minds of many leaders here.
In preparation for the meeting, I did a secondary research review to understand the scope and impact of payday lending. It wasn’t hard to find shocking news stories and substantive research on the topic. Both are in abundance. Pew Research and the Consumer Financial Protection Bureauhave produced terrific research research pieces of all types.
I’ve been working hard to bolster my data science skills, and I’m committed to weaving data into my practice of human-centered design. As I dug into the data on this topic, the numbers leapt out at me: the average Annual Percentage Rate is 400%, the typical consumer pays $520 in fees on a $375 loan, the average loan consumes 36% of a borrower’s paycheck! These numbers are hugely problematic on their face, and they are compounded, literally, by the fact that most borrowers have to reborrow their loans an average of 10 times.
But one statistic really surprised me. Apparently, because Missouri is so lax when it comes to payday lending regulation, there are more payday loan stores in Missouri than there are Walmarts, McDonald’s and Starbucks combined!
Design Thinking Workshop
As a first step in building some momentum on this issue, we designed and facilitated a workshop with a motivated and knowledgeable team. We provided the Design Thinking framework and methods, and they supplied the subject matter expertise, energy and sincere motivation to make a difference.
We worked through a fast-paced agenda to build a common vision and generate ideas for future action. There may also have been some role-playing involving an inflatable waving man, but I’m not going to post the GIF in the interests of client confidentiality.
I’d love to claim that the quantity, quality and breadth of ideas that came out of the session were solely a testament to the design of the workshop and our expert facilitation, but the truth is that having the right people in the room is the essential ingredient to any innovation session. This group was practically ideal in terms of size, energy and diversity of expertise. The quality and breadth of ideas was as much a testament to their easy collaboration as anything else.
But the workshop is just a beginning. Ideas alone are insufficient. Bringing them into the world moves us into the next stages of the Design Thinking process, where prototyping, testing, learning, and some failure are involved. More on those stages to come.
Somewhat serendipitously, I had also scheduled a meeting later that week with Josh Rowland, CEO of Lead Bank. The topic of consumer lending and the unbanked happens to be one of Josh’s passions, and as our conversation wandered into this territory, he unleashed a torrent of knowledge on me. Josh gave me a master class in consumer loans, banking, regulatory frameworks, and alternatives to payday lending. My main takeaway from our conversation is that the rise in payday loans and similar forms of consumer lending stems primarily from two sources — banks’ failure to invest in their communities in terms of consumer loans and the steady, deliberate erosion of the incomes of middle- and lower-class Americans. Where banks no longer lend, payday lenders have moved in. My other takeaway was The Unbanking of America, which Josh kindly gave to me and I am now reading.
Fortunately, others are stepping into the void that bankers have left behind as well. In the current Kansas City TechStars class, SoloFunds is a peer-to-peer lending platform connecting individual lenders and borrowers directly. According to the Kansas City Star, SoloFunds founder Travis Holoway brought his company to KC because this is “the home of payday lending” and their intent is to “crush payday lenders”.
More Work Ahead
For me, work like this is immensely invigorating. It combines the possibility of technological innovation with meaningful social good. It allows me to bring my expertise in innovation methods and processes to bear on something that has the potential to make my community a better place to live. It gives me the chance to collaborate with civic leaders, business leaders, entrepreneurs, community members and other creative-minded people.
This is exactly the kind of work that I created idealect to pursue — innovation for social good — and I can’t wait to do more of it.