Jeff Raikes: Family Homelessness Strategy Convening Everything I Know About Ending Homelessness, I Learned at Microsoft October 29, 2012 Prepared Remarks I want to welcome you all to our new campus. One of the goals of our new campus is to provide a space for collaboration and learning with our partners. So convenings like this are the “proof in the pudding” that Bill and Melinda’s vision has come to fruition. Constructive partnerships are really the lifeblood of the foundation. By design, the issues we work on are complex, and we start with the knowledge that we can’t have an impact by ourselves; in fact, we can’t have impact without all of you who are in this room today. We also understand that most of the knowledge and talent in the areas we work exists outside the organization, and we believe that working together improves everybody’s work. Constructive partnerships can be challenging, but ultimately rigorous intellectual dialogue will raise everybody’s game. Gathered in this room today are more than 250 people, including representatives from our federal, state, county, and local governments, non-profit leaders, managers of housing and service agencies, leaders of faith-based groups, and other advocates. What brings us all together is our shared goal of ending family homelessness in our communities. I’m excited that you’ll be having discussions on the best steps forward to make that vision a reality. Many of you may have been surprised by the title of this speech, “Everything I know about ending homelessness I learned at Microsoft.” Our choice to be “edgy” was intentional. The reason I like that title is because it’s true. I worked at Microsoft for nearly 30 years. Although I’ve learned about family homelessness through my work here at the Gates Foundation, and about youth and young adult homelessness through our family foundation, the Raikes Foundation, I’ll be the first to admit I am not an expert on homelessness. Most of my career has been as a business person. And I bring a set of business skills and thinking to my work in philanthropy. So what is the relationship between business and solving some of the world’s toughest challenges like homelessness? Until a few years ago, I would have said there isn’t a relationship. Developing and selling software seemed worlds apart from improving the lives of the world’s poorest people or ending family homelessness. But since then I’ve learned that there are some things business and philanthropy share. I’d like to share three lessons from my career at Microsoft that I think are relevant to the issues you’re discussing today. LESSON #1: KNOW YOUR CUSTOMER In business, whether you are selling software, cars, or bubble gum, what’s important is to know your customer. You must understand what the end user needs and the best way to meet those needs. At Microsoft, we had the dream of a computer on every desk and in every home and that was a very motivating vision for us. We always believed in the power of technology and we bet on technology paradigm shifts, like the move to graphical user interface with the Mac and Windows. But less well known is that we simultaneously bet on business model transformations – e.g. the move from selling standalone applications like Word, Excel, and PowerPoint to an integrated suite of applications, Microsoft Office. We had a vision for how we could make the technology more accessible to customers. By putting the customers’ needs first, we were able to organize this technology in a way that was most affordable and usable for them. For example, one key to the success of Microsoft Office is that the software provides a common set of tools or services, with a consistent user experience – and allows each user to tailor their usage. Not everyone uses Office in the same way. Some just need it for email and word processing. Others take advantage of spreadsheet programs. And we all know – and love – PowerPoint! The trick for Microsoft was to have a consistent experience or entry point– much like a coordinated entry point – for the functionality, AND ensure that customers could tailor a solution to meet their individual needs. We should think of homeless families as customers. While all of them need access to secure housing, each family has its own unique set of circumstances that we must consider. They may need assistance not only with housing, but also counseling, job training, education, and other services. We need to provide a consistent experience through coordinated access to services, and then customize our assistance to the individual needs of each family. And yet, all of the best national studies—including data from Sound Families right here at home--suggest that we haven’t consistently done the best job possible in providing the right services to the right families at the right times. Our transitional housing efforts have certainly helped many families, but what often has been seen as a one-size-fits-all solution offers neither the efficiency nor effectiveness of a strong customer-driven business model. Think about the consequences of our current model: From the perspective of each family, they won’t be given the best services if they receive services that they don’t need or not enough services that they do need. And equally importantly, from the perspective of the entire system, we’ll never be able to meet the demands of the families who are seeking housing assistance—many of whom are receiving nothing today-- if we don’t do a better job of aligning these resources more precisely with need. Efficiency is as important as effectiveness if we are to reach our goal of ending homelessness for all families. LESSON #2: TO SOLVE ANY PROBLEM, YOU NEED DATA AND VISION The second lesson I want to share with you is about the importance of data and vision in solving problems. When I first announced that I was joining the Gates Foundation, I was told I would need to think very differently from business. Over and over again, I heard a similar refrain: that the biggest difference between business and philanthropy is that in business, the market tells you exactly how you’re doing. In philanthropy, most people said, there is no market, or a market system to give you feedback to spur continuous improvement. Gradually, I started to take some issue with this idea. Without a doubt, businesses do get significant and real-time market feedback in many cases. Costco generates a detailed sales report every single day. But when your work involves researching and developing new products and services, you seldom have real-time information about what’s working and what isn’t. When you’re trying something bold and new, there is often no playbook to follow. For example, I joined the team that created Microsoft Office in 1981. At Microsoft, our vision was to make computing power and information that only large organizations had available to everyone. Now Microsoft’s Office word processing, spreadsheet, presentation and e-mail programs are used by nearly 1 billion people every day. But it took us more than a decade to turn the corner with Microsoft Office. Back in 1981, we were starting from scratch. There was a lot we didn’t know about our potential customers and their software needs. We were investing in innovations that wouldn’t reach the market for many years. Perhaps this sounds familiar. All of us here today are committed to ending homelessness. This is a bold and ambitious goal, but there are no clear or easy solutions to this challenge. We are researching and experimenting new approaches and we may not know if we are successful for many years. So what’s the best way forward? How do we know whether we are on the right path? Well, to solve any problem, you need data. Data can determine how good a job you are doing and help you do it better. They highlight successes. They pinpoint problems. They improve your performance. And they can help you achieve ambitious goals. Data-driven decision making has enabled businesses to develop better products, helped hospitals to save more lives, assisted governments in improving the quality of their services. At Microsoft, as we were developing Microsoft Office, we gathered as much data as possible to measure our progress and determine if we were on the right path. We did our homework and researched what other software was on the market. We sought feedback from others with experience and good judgment about how our software could be designed better. We surveyed potential customers. And we used whatever data was available to underlie a vision of customer success – because we knew that we’d never have all the data that we’d need. Let me share an example to explain this combination. In 1985, we were approaching the launch of the first version of Microsoft Excel. A programmer, Steve Hazelrig, was writing the printing code. Apple laser printers were expensive, and the one we had was way down the hall. Steve wrote a little routine to display an image of the printed spreadsheet on the screen. The program manager, Jabe Blumenthal, saw this and thought, “Wow, that would be a great feature that would help our customers”. And that is how “print preview” made it into Microsoft Office applications. No customer had asked for it, but Jabe knew the target market – and used that data with a vision for usage to make life easier. Ultimately, available data combined with vision of usage – making life better for our customers – helped guide us and helped us reach our goal. This data- and vision-driven approach can also help bring us closer to ending family homelessness in our communities. By following the data and knowing our customers, we have an opportunity to make smart decisions about which strategies to pursue, make the most of our resources, and serve our clients better. To be sure, the lack of data in the homeless system has been a challenge for us. But there’s one piece of data that should motivate us to overcome this challenge: Here in Puget Sound region, there are more than 2,800 families with children who have lost their homes and those numbers continue to grow. That’s tragic. That’s unacceptable. We cannot rest until that number falls to zero. Getting there will require us to gather more data about the families we are trying to serve, to fuel a vision of how we can best address their needs. While our point-in-time counts provide valuable information, they don’t offer enough information. We not only need to understand how many families are homeless, but also what their specific needs are and how to best meet them. Our ultimate goal is to have real time feedback from homeless and at-risk families so we can anticipate their needs and prevent them from becoming homeless in the first place. We’re still a long way from that day, but we are making great strides in our community to act on the information we do have. One example of this progress is the new coordinated entry system being rolled out in King, Pierce, and Snohomish counties. Thanks to these new systems, we are learning more about our clients at the front end of our systems, allowing us to get them exactly the help they need while using our limited resources more efficiently and effectively. LESSON #3: YOU ONLY FAIL IF YOU DON’T LEARN FROM YOUR MISTAKES My third and final lesson is about failure. Failures and mistakes will happen, especially when you have big aspirations, and will need to take risks to deliver. This is a normal part of any ambitious effort whether it’s selling software or ending homelessness. Let me close today with a story about Microsoft that illustrates this point. Back in 1984, when I was a few years out of college and still pretty new at Microsoft, I was co-leading a team overseeing the release of a new spreadsheet program for a newly launched computer – the Apple Macintosh – called Multiplan. A few weeks after releasing Multiplan and selling thousands of units of the software, we discovered the program had a bug. Back then there was no Internet, of course, so there was no way to send a software update. We would have to recall the product. A recall would cost the company several hundred thousand dollars. That afternoon, I stepped into Bill Gates’ office to share the bad news and then, to be honest, I wasn’t sure I would still be employed at Microsoft. I sat down and explained what had happened. To my surprise, Bill didn’t stomp or yell. He didn’t even raise his voice. After staring at his shoes for a few minutes, he looked up and said, “Well, you came in to work today, and you lost $250,000. You come in tomorrow, and do better.” In essence, he recognized we were doing things that hadn’t been done before. He wanted to ensure that we weren’t afraid of taking risks or making mistakes. It was okay to take smart risks and endure mistakes, so long as we’re learning and improving. This story came to mind as I thought about our work in family homelessness. We are a community dedicated to ending homelessness, but that doesn’t mean we must be dedicated to just a handful of solutions. The fact is, the solutions we have today are not enough. We cannot accept the status quo anymore; we should not accept the fact that every night in our community a mother tucks her baby in bed in the back seat of her car. We must be brave enough to make the changes that are necessary for success. We are going to try solutions that haven’t been tried before. We will certainly make mistakes along the way. That’s not a bad thing – that means that we’re learning from what we do how to do it better. We will experience setbacks. That’s okay -- so long as get up, dust ourselves off, and try again. To be sure, governments’ ability to take risks is limited by political considerations. That’s why it’s more important than ever for the private sector, governments, and foundations, like ours, to work together. At the foundation, we have the freedom to explore new innovations and test whether a new approach offers a promising path forward. And that’s what we will continue to do in our partnership with you. What excites me most about our partnership is that we are not standing still. We are learning these lessons together and moving forward, step by step. By putting clients’ needs first, following the data and building the vision of success, and learning from our mistakes, we can speed up the progress we’ve already made and move closer to the day when no family will experience homelessness again. Thank you.