Innovation is no longer optional for social sector organizations. In the face of constant fiscal pressures, growing demand, and a quickening pace of change, we all need to build innovation-ready cultures. A report commissioned by our organization, Alliance for Strong Families and Communities, looked at the financial data of more than 200,000 nonprofits in the United States and found that community-based, human-service organizations are in financial peril. Nearly one in eight human service nonprofits are technically insolvent, and nearly half have a negative operating margin over a three-year period.

Yet there are a number of “north stars”—opportunities for the sector to move forward and better face these challenges. One important opportunity is the sector’s development of its innovation capacity.

Participants at an Alliance for Strong Families and Communities innovation summit.

But what does it take to build innovation capacity, and how can nonprofit leaders set the right conditions for innovation to flourish? During a series of two-day innovation summits last fall, the Alliance for Strong Families and Communities brought together more than 300 people to participate in a condensed human-centered design process we developed in partnership with Greater Good Studio, a design firm committed to working with social sector changemakers. The goal was to use human-centered design to examine longstanding challenges and new opportunities through a different lens. We aimed to build our “innovation muscles” so that we could begin to tackle old challenges in new ways.

In the process, we realized that the creative problem-solving methods we were applying were breaking some of the typical management mantras that have dominated our organizations’ cultures. We came to understand that if we’re serious about moving from lip service to action on innovation, we need to rethink six management mantras:

Management Mantra #1: Our CEO [and/or any other members of the C-suite] is the visionary and responsible for innovation.

Innovator’s Mantra: All of our staff are visionaries and responsible for innovation.

Charging only the CEO or executive team with innovation creates unrealistic pressure on one or a few individuals to continually drive the organization forward, as compared to a culture where every staff member feels a sense of responsibility and permission to solve problems and create better solutions at whatever level and in whatever role they operate. Because the culture assumes everyone has insights and expertise that can contribute to solutions, all employees become owners.

In addition, considerable evidence suggests that innovation is most likely to occur and originate with the people who are closest to the work, and closest to the consumer or end user. When organizations seek to invite people who have firsthand and direct knowledge of the systems they seek to improve, the problems they desire to fix, or the new solutions they want to offer communities, they will find the best solutions—and likely faster than if they limit this work to a select few leaders.

Organizations should create formal channels for employees at all levels to identify challenges and opportunities, and develop recommendations and ideas to observed problems, customer needs, and other challenges. They should also give staff opportunities to pick solutions, test them out, and report back results, and create incentives for employees to contribute solutions to business problems.

Management Mantra #2: We just need to get our brightest staff in the room to solve this problem.

Innovator’s Mantra: If you want the most successful solution, keep your end user (or key stakeholder) at the center of everything you do.

While most nonprofits intend to deliver the best services, programs, and results for communities, their approach is too often driven by staff beliefs, mental models, and ideas of what people need and how people behave. While it is natural to look at the world through one’s own perspective, it is problematic because organizations are likely to develop a solution that works for their staff and organization versus the end user.

One of the core principles of human-centered design is to develop empathy for the end user. In addition to typical surveys, nonprofits should get close to and observe the people for whom they are innovating to understand their hopes, their challenges, their motivations, and their actual behaviors. In short, they need to become anthropologists, and walk alongside children and families as they navigate their programs, services, and systems. Centering innovation around families and communities will make solutions more viable, valued, and sustainable.

In addition to quality and satisfaction surveys, organizations need to ask staff, community residents, and funders about their biggest challenges and, if possible, observe people as they engage with services to identify inefficiencies or potentially harmful steps.

Management Mantra #3: We need to define the problem we are trying to solve.

Innovator’s Mantra: We need to define the positive goal we seek to achieve.

Identifying problems is important, but it shouldn’t be the final step before identifying solutions. To conduct a productive idea generation process and motivate employees, it’s important to define an aspirational North Star for every innovation effort. In human-centered design, this is called a “positive goal statement,” and it articulates the person or group you seek to influence and the behavior you want to see occur.

This is important for a few reasons. First, an organization that defines the specific behavior change it wants to see doesn’t have to guess about what success will look like. And second, by defining the desired future state, it can look for examples where these behaviors are already occurring. When studying a problem, organizations can become fixated and overwhelmed by what’s not working, but when they define the desired solution, they can seek out and study the examples where things are working and seek to understand the contributing factors that make this positively deviant behavior occur.

For every “innovation” or problem-solving initiative, organizations should create a positive goal statement that clearly articulates who it seeks to impact and what behavior change it seeks to achieve.

Management Mantra #4: We need a really big idea! Go big or go home!

Innovator’s Mantra: We need a sound solution to a routine problem! Go small for big results!

People often think innovation has to be a big, new, wild, exciting idea. It can be, but it doesn’t have to be. A frequent comment made by participants at the summits was, “But these ideas aren’t really big ideas. They seem like things we should just be doing.” Well, if it’s something “we should just be doing, and we haven’t,” let’s start there.

Innovation is rarely a magical “eureka” moment; rather, it’s often an iterative process of solving problems—sometimes very small ones. Instead of trying to eat the whale in one swallow, organizations should tackle smaller, incremental challenges. Practicing problem solving on a small scale is valuable because it builds the skills and confidence for the times when organizations need to tackle the bigger, more complex challenges. It teaches us to break complex challenges into manageable pieces. The other benefit of taking on small problems is that it reduces the risks of failure.

Organizations should incentivize and encourage micro-innovation. They should invite staff to take on specific, manageable problems and reward all solutions (even if they are not successful). They should help staff break down large, systemic challenges into smaller components to tackle individually.

Management Mantra #5: Let’s start innovating, but we are looking for practical solutions. Because we’re a nonprofit, we can’t afford to entertain ideas that are too “out of the box.”

Innovator’s Mantra: Let’s start exploring the weird, wild, and wrong ways to do things. There’s plenty of time to get practical.

It’s very hard to generate unique solutions when the ideation process focuses on practicality. But when organizations invite people to explore weird, wrong, or unorthodox ideas, there’s a good chance they will generate unique solutions that can, over time, be made practical.

In human-centered design, ideation is catalyzed by “how might we” questions that invite people to consider possibilities for approaching challenges in novel ways. Conventional questions (How might we apply self-care principles in the workplace?) lead to more-conventional ideas; alternatively, improbable or abnormal questions (How might we make work feel more like going to a high-end spa?) lead to more-original ideas.

Inviting people to consider what work would be like if the organization did the exact opposite of what’s expected is the fastest path to uncovering desired “out-of-the-box” ideas.

Organizations should generate a set of common rules that govern the issue it is trying to tackle (for example, staff works nine to five at their desks, Monday through Friday, and hate Mondays) and then break those rules, inviting staff to brainstorm “how might we” questions to match the rule-breaking scenarios (How might we make Monday’s as fun as Fridays?).

Management Mantra #6: We don’t have time to waste; let’s figure out the best idea and start executing.

Innovator’s Mantra: We don’t have time to waste; let’s figure out the fastest way to test our ideas and fail fast, fail cheap.

Perhaps because resources are limited in the nonprofit sector or because the stakes are very high, organizations tend to rush to identify and implement a single “right” solution. This is problematic because rushing to find a singular, practical solution causes them to short circuit a very important process—first generating many solutions. In innovation processes, there is a rule that quantity breeds quality. Generating a big funnel of ideas before narrowing down to a singular idea has multiple advantages:

  • It fosters a culture that makes it OK for everyone to contribute ideas, and reduces fear and stigma associated with sharing “bad ideas.”
  • It normalizes the act of idea generation and displaces a common tendency for staff to automatically accept the ideas of the CEO, board member, or top donor as the best. (Maybe they are the best ideas, but it’d be better to determine that by picking from a lineup of multiple ideas.)
  • It reduces the tendency to fall in love with an idea out of fear that if the idea isn’t successful, there is no fallback option to explore.

Innovators don’t rush into large scale implementation without first subjecting their ideas to multiple iterations of testing to uncover potential pitfalls. If an idea doesn’t work during testing, it isn’t at the cost of a major commitment or outlay of resources. And if the idea has legs, testing and repeated cycles of feedback will only make the idea better, stronger, and more likely to succeed.

Instead of settling on one idea, organizations should select, say, the top three and invite staff teams to test each one. They should challenge them to figure out the cheapest and fastest ways to get user feedback, and uncover the concept’s benefits or death threats, and celebrate the process of testing and learning all new information.

Innovation doesn’t have be fancy or gimmicky, but it sometimes requires that we cast off deeply held notions of how to lead people and organizations, and adopt new norms and behaviors.

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