Nonprofit Organizations and Innovation

Nonprofit organizations have a high proportion of “disenfranchised” staff – according to research by Forrester Research, reported in the book, Empowered by Josh Bernoff and Ted Schadler. Conversely, nonprofits rank low on staff who feel “empowered” and “act resourceful.”As a result, they do not extend boundaries to create and promote new ways of doing things; they do not innovate. Their ability to transform operations to produce greater community impact is close to nil.

Their study looked at “information workers” – anyone who uses a computer – which, in most nonprofits, constitutes the majority of staff, and virtually all staff in key positions related to management and to customer (client) service.

These findings, along with the assertions by Bernoff and Schadler, should trouble us at a time when we, in the public and nonprofit sectors, feel pressured to create new solutions that will enable us to do more with less. Most of us would like to see an increase in fruitful innovation in nonprofits. Bernoff and Schadler would contend that, to increase innovation, we must create more organizational HEROes – highly empowered and resourceful operatives. These are staff who can move an organization forward, meeting the mission, increasing the effectiveness of services for the people served, and enlarging the impact of the organization in its community. To suggest how the thinking of these authors might increase the number of nonprofit HEROes, I would highlight a few principles:

1. Fail frequently. With more than 30 years of experience working in nonprofit organizations, I know that, on average, nonprofits have an overwhelming fear of failure. Nonprofit leaders typically suspect that to fail at something means they will lose grant funds or lose donors or lose clients or trigger a compliance audit – or, if nothing else, that failure will hurt someone’s feelings. Yet successful businesses – and successful nonprofits (as, for example, the Harlem Children’s Zone appears to be so far) – acknowledge, accept, and learn from failure. They will describe it, sometimes joke about it, and use it to inspire further searching for effective innovation. Failing nurtures growing; failure to fail stunts growth.

2. Transform IT departments and other corporate and central administrative departments from NO- sayers into valued coaches and supporters of innovation. Organizations where front-line staff are encouraged to “do it themselves” and where staff have the autonomy to create their own solutions – Best Buy’s Blue Shirt Nation stands as one of the best examples – develop an adaptive advantage for serving customers and growing.

3. Make certain that management culture truly supports innovation that increases community impact. Virtually all nonprofit managers state that they want innovation. Some nurture creativity that leads to better services and better outcomes. However, despite good intentions and statements supportive of change, managers’ behaviors frequently do not reinforce innovation. Managerial bureaucracies can create so many levels of review that staff become disillusioned about trying to suggest a new idea. Managers sometimes place risk above all other considerations when presented with a new idea – which inevitably leads to rejecting many great ideas, because all great new ideas have a large amount of risk.

4. Celebrate attempts at innovation, no matter what their level of success. People need to feel encouraged for bringing up new approaches. Some new ideas will make a huge difference in operations and results; others will make only a tiny difference. Some, as we noted, will fail. Regardless, people have put time and energy into creating them. Occasionally, they have placed their reputations on the line. If we want staff to return with more ideas, we must reinforce their enthusiasm for improvement.

The authors note the difficulty of installing principles such as these in organizations. Enabling employees to do things on their own can seem unnatural; it can feel “like a virus invading the body.” However, not to support such empowerment can greatly limit an organization’s capacity to achieve what it has the mission to achieve.

Increasingly, the solutions to the issues faced in our communities require collaboration among individuals and organizations. Increasingly, the solutions require engagement with community members, joint problem-solving, and the creation of new approaches for community improvement. Nonprofit staff who engage with others must be HEROes, “highly empowered and resourceful operatives.” They must understand the needs, aspirations, and cultures of those with whom they work. They must be able to imagine, create, think on their feet, and make decisions on the fly, with the knowledge that their organizations will support them.

Can we move nonprofit staff from “disenfranchised” to “empowered and resourceful”? I certainly want to support such an effort.