Driving Nonprofit Innovation – Part I – Managing the Process from Idea to Launch

I see patterns.  Fear not, this isn’t the introduction to a new M. Night Shyamalan movie but I do enjoy opportunities where I can connect the dots.  Maybe it is the linear, logical, left –brain, former programmer in me but I relish when I find patterns that emerge across different disciplines, groups, organizations, etc.  Five years ago I was part of a public policy group that mixed professionals from different worlds – for-profit, nonprofit, government, education, etc. The goal of the program was to advance public policy awareness and build public policy leadership.  What I quickly recognized was that many of the same issues that were challenging me in the “for-profit innovation arena” were also plaguing these other groups.  The challenges of funding, personal & organizational risk, managing expectations, and the fear or failure were consistent.  There were some nuances but there was far more similarity that difference.

InnovationThis article is my first in a three part series specifically focused on Driving Nonprofit Innovation.  I’ve broken it into three pieces to make it easier to digest: 1) Managing the Process from Idea to Launch, 2) The Challenges of Funding Nonprofit Innovation, and 3) Building the Culture & Skills for Sustained Innovation.

During discussions with nonprofit leaders the first concern with innovation programs is always how to manage the process: too many ideas, too few people, too little time, and too much risk.  This is what I have learned.

 

Starting the innovation journey

Most nonprofit leaders have new ideas flooding in all of the time.  How they might improve their organization, expand their services, and expand their reach.  These ideas come from every group of stakeholders: board members, funders, employees and clients.  The challenge for most nonprofit organizations is not a shortage of ideas but a shortage of resources.  This is the identical problem that for-profit startups have.  Where will the money come and who will lead and support each of these great ideas?

Sorting through of the opportunities is usually the first challenge.  Which will provide the best material benefit to the organization but not consume too many resources?  Being able to answering this question is necessary for defining an innovation strategy for your organization; a process that will take effort, patience, and focus.

A first step should review your organization’s mission, vision and values.  These elements will be important factors when weighting out which initiatives you will focus on and which priority of sequence.  One of the next tools that I encourage organizations to consider is building a frame work for an Innovation Pipeline.  The stages of a pipeline can be unique for the organization but should have a sequence of filters and gates that will help guide the team in making decisions and tracking ideas as they move toward execution.

An example that I use with retail organizations has five phases to a pipeline: 1) idea, 2) concept, 3) experiment, 4) pilot, and 5) launch.

An Innovation Pipeline as a tool

Innovation PipelineThe pipeline moves from left to right.  Ideas should enter the funnel and be captured from all of the stakeholder groups previously mentioned.  The next step requires support from a group that can continually help compare and contrast those ideas against the mission, vision, and values.  The ideas that rank well should be prioritized and move into concept phase.  During the concept phase there will need to be some effort put to quantifying the idea.  Ideas should be measured for their potential impact, possible drain on resources, likelihood of success, impact of not taking action, and risk to the organization.  The goal is not to be 100% accurate with your calculations but with a degree of uncertainty that you and the organization are comfortable with.

This is a good place to discuss the unique difference between Incremental vs Disruptive innovation initiatives.  Incremental initiatives usually involve less unknown elements.  They take an original product or service and build on it or change it slightly.  With less unknown elements there is a lower risk of failure when launching the initiative.  These ideas can more easily be tested and corrections can be made along the way.  Disruptive innovation usually involves a higher degree of unknown elements and thus a higher risk of failure.

One way to reduce the risk of failure in either type of innovation is by running the concepts through an experiment phase.  Is it possible to validate the hypothesis in a smaller test prior to committing the full amount of resources that would be required to launch such an initiative?  The experimentation phase should be iterative – testing and retesting different variations of the hypothesis.

Once you have found pieces that work through the experimentation phase you can bring them together in a pilot program where you are testing something that will more closely resemble the final product or service.  Similarly, the pilot phase is also an iterative process and sometimes will require running new experiments.  A pilot is meant to give you “real world” feedback on your initiative before you roll out the final version.

The process culminates with the Launch (or Scale) phase.  A couple of noteworthy points here based on experience and research – most ideas will not make it to the launch phase.  According to a Fahrenheit 212 (a NYC based innovation consultancy) survey of 100 Chief Innovation Officers fewer than 25% of their innovation initiatives ever see the light of day.  Most new ideas do not work out along the way.  This is the simple reality of innovation work – new ideas require a level of risk taking.  How much risk your organization can take or should take depends greatly on the organization.  An example I often give is that most grocery stores operate on 3% gross margins and 1% net margins.  Those thin margins leave grocers with very little room for error when trying out new ideas with their business.  The good news is that they can run experiments easily with real customers every day and unlike social service nonprofits a failed experiment is not going to negatively impact someone’s life.  If their failures can be quick and cheap they can minimize their impact.

 

Not perfection but a process

The intent of the Innovation Pipeline is not perfection but as a tool to help you manage the processes involved, develop criteria and measurement standards, funnel resources to priority projects, halt or end non-priority projects, and to reinforce an iterative process.  Getting a project from idea to experiment is a success.  Deciding not to go forward based on experiment results does not mean failure.  Instead it means successfully freeing up those resources to work on another higher priority project.  Maybe circumstances will change to your favor in the future and suggest that you retry that initiative but you cannot spread your resources too thin or you’ll be certain to find an abundance of failure.

Food for thought:

  • What tool(s) do you use for managing the innovation process?
  • Are you good at deciding to stop projects?
  • Do your leaders manipulate the pipeline process to ensure their projects make it through?

 

(image source: Huffington Post)

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The Importance of Finding Your Tribe

Have you ever looked around a room and thought to yourself, “This is my tribe!”  I just had the good fortune of having that feeling last month when I attended my second Business Innovation Factory Summit, BIF for short.  This is the 11th year that host Saul Kaplan (@skap5) and his cadre of BIF-zites have hosted the two-day summit in Providence, Rhode Island.  Unlike most other conferences that host speakers with their canned presentation, BIF instead chooses to focus on unique storytellers.  These storytellers share their ideas, their insights and their personal journey in an attempt to change the world in their own way.

I got my first taste of the amazing BIF storytellers a three years ago When-you-Find-Peoplewhen I participated by watching a live stream of the event.  I immediately loved it!  There were authentic people sharing their authentic stories.  When people ask me what the difference is between these storytellers and speakers at your average event or conference I suggest that it all has to do with the expectations set by Saul and the audience.  They have come to expect authenticity, vulnerability, and passion.  They expect BIF storytellers to leave a piece of themselves on stage.  Not all of them succeed but that is the expectation.

Saul kicked off this year’s event by sitting on a stool in the center of the stage and addressing the audience.  He suggested that we were all “innovation junkies.”  He was suggesting that collectively we see the world with a similar perspective – we want to improve it.  Not that we all have the same vision of how the world should be but that when we see something that isn’t working quite right our initial reaction is to think of how it can be improved.  Often these innovation junkies will feel compelled not to sit idle but to begin working of how they might participate in changing things.

Based on my discussions with other attendees it sounds like Saul was able to depict most of us with one broad stroke.  That is why I fell in love with this conference and the other attendees.  They are my tribe!  Like me, they see something that is off and they want to make it better.  They are activators, not patient enough to sit by and wait for someone else to get around to fixing things.  They may not always be moving mountains but they are changing the world in their own way.

I wanted to share with you one of my favorite story tellers from this year’s event – Jeff Sparr, the founder of Peace Love Studios.   Jeff suffers from a painful form of mental illness, Obsessive Compulsive Disorder (OCD).  This disease is in constant battle with Jeff seeking to destroy any moments of his happiness.  Jeff shared one of his most painful bouts in his battle with the audience.  It involved a moment with his son that should have been sheer joy – but it wasn’t.  Through Jeff’s struggles he took up painting as a way to relieve stress and clear his mind.  For him the distraction worked and it gave him a sense of control.  Rather than keeping this discovery to himself, Jeff wanted to share it with others who were similarly suffering with OCD and mental illness.  That was when he created Peace Love Studios as a vehicle to help others.  As of today the organization has had an impact on over 19,000 individuals.  Take just a few minutes to watch Jeff’s story and learn about how he and his tribe are making the world a better place.

Jeff Sparr

Jeff was amazing and his story was incredibly inspiring but his was just one of many powerful narratives.  Over the next few weeks I will share with you a few more of my favorite BIF storytellers.

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Nonprofit Communicators Workshop: Using Failure to Your Advantage

The Minnesota Council of Nonprofits is hosting their 2015 Nonprofit Communicators Workshop Series and it is focused on a great topic: Risk, Innovation, and the Role of Failure!  The event is being held on October 20th, 2015 from 9:00 am – 11:00 am at the Wilder Center in St. Paul.  Join us!

I am proud to be kicking off the series with a talk and workshop on how nonprofits, and all other organizations, can Use Failure to Your Advantage.  We will examine the realities of risk in driving new and innovative ideas and the fears that can hinder us. We will explore role of failure in driving innovation within your organizations and present some tools and techniques that can help you through the journey.

 

Series Overview: Embracing Risk, Inspiring Innovation: Fearless Communications
Nonprofits often shy away from risk, and that makes sense. It’s important to be reliable for the communities we serve. But, as the world and the way we communicate changes, we need to find a way to balance reliability, risk and even failure. When we take chances in how we communicate our work, we are able discover new and exciting ways to advance our mission, connect with others and ultimately serve our communities.

This series was created to help you push beyond the old borders of communication to see what’s on the other side. This series of four workshops, presented by MCN and the Minnesota chapter of the International Association of Business Communicators, will help you and your organization take the leap to the next level.

 

You can still register for the event via the MCN Website!

Wilder Center
451 Lexington Pkwy. N.
St. Paul, MN 55104

 

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Students’ Lesson From Launching Science Experiment Into Orbit… This Is Rocket Science

On Sunday morning three high school students were anxiously waiting for their science experiment to be lifted into orbit on board a SpaceX rocket that was scheduled to deliver supplies to the International Space Station (ISS).  The students had been waiting for this day for eight months.  Eight months ago the same students from North Charleston, South Carolina had watched as their experiment was launched on board an Antares rocket from Wallops Island, Virginia.  Just a few seconds after liftoff the rocket had exploded knocking one of the students off of his feet and giving off a tremendous blast of heat.  This time would be different.  Surely lightning wouldn’t strike twice?

In this photo provided by Kellye Voigt, from left, Gabe Voigt, Joe Garvey and Rachel Lindbergh pose for a photo outside the Kennedy Space Center Visitor Complex in Cape Canaveral, Fla., Sunday, June 28, 2015. (Kellye Voigt via AP) MANDATORY CREDIT

This time the rocket took off from Cape Canaveral, Florida and as it achieved liftoff the teens began to high five each other with excitement.  But as they headed to lunch their phones began to buzz with messages of condolence.  This rocket too had exploded before it could reach orbit.  With two attempts the teens had two failures.  What were the odds?

The reality is that while rocket failures are not as common as they once were when we ushered in the space race – they are hardly rare.  In fact this was the third failed rocket attempt to resupply the ISS.  The other cargo ship had to be abandoned in April after the Russians had lost control of it.  Now a fourth Russian cargo ship is scheduled to launch on July 3rd as each of the other organizations continue to determine what had gone wrong.

What I really appreciated about this story was the reaction from the students, there are some real lessons in their comments for all of us.

Joseph Garvey noted that “this one didn’t hit as hard or hurt as much, maybe because they really didn’t see it.”  Likely what also was a factor was that in feeling the failure of the first failure their anxiety was diminished with the second.  They had already been through a similar experience, they survived and moved on.

Rachel Lindbergh said, “That’s rocket science. Failure happens.“  She went on to comment, “Disappointing, sure, but you can’t let things stop you.“  How many times have we heard someone use the phrase “How hard can it be… it’s not rocket science?”  Well in this case it is rocket science.  It is hard and there are lots of variables involved in these equations.  Not even our most sophisticated computers can calculate every value and simulate the outcome.  But we persist anyway.  Sometimes we will fail and sometimes we will fail repeatedly.  But as Rachel suggests – you can’t let things stop you.

Each one of these students shared a real maturity about the episode but Gabe Voigt had already recognized the value in this lesson.  “There’s a lot of life lessons to take from this too.”  He went on to suggest that “If something happens, that doesn’t mean it’s the end of that.”  A failure can only be define as a failure when it is time boxed – otherwise it is just another attempt.

I have no doubt that these teenagers have the right attitude and hopefully their next attempt is successful.  Either way they have successfully learned the underlying lesson of scientific discovery, innovation, entrepreneurship.  Failures will happen along the way but as Albert Einstein noted “You never fail until you stop trying.

 

Image Credit: Kellye Voigt via AP

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Risk & Innovation Panelist – Bush Foundation Community Innovation Prize

The Bush Foundation will be hosting their first event focused solely on supporting their past and present Community Innovation Prize grantees.

I will be participating in a panel discussion focused on Risk and Innovation within the nonprofit community.  We will discuss strategies, methodologies, and tool sets that can support building a culture of innovation within a nonprofit organization.

May 5th, 2015
{Private Event}

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Community Agency Executives Retreat – Greater Twin Cities United Way

I will be presenting “Innovation, Risk & the Role of Failure – Innovating the in Non-profit Community” at the upcoming Community Agency Executives Retreat for non-profits funded by the Greater Twin Cities United Way.

Building a mindset and culture of innovation within any organization can be challenging enough but building that same mindset within a nonprofit board of directors and their funding organizations can almost impossible.

Together we will review the realities of innovation failure, examine frameworks and methodologies for building a culture of innovation, and discuss strategies for gaining the necessary support from your board of directors and funding organizations.

May 7th & 8th, 2015
{Private Event}

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When Should You Outsource Innovation?

We often hear about the importance of failure when driving new ideas or new businesses.  We’re given advice to Fail Early, Fail Often, and Fail Cheap.  While this well-meaning advice is accurate on the whole the reality is that failure in most organizations comes with pretty heavy consequences.  Within mature organizations a failed initiative can have a dramatic impact for both the individual and the long term success of organization itself.

  • For the individual, a failure can lead to a tarnished brand, missed promotions, lost bonuses, or even termination.
  • For an organization, how it responds to failure can impact the culture and determine the success or failure of future innovation initiatives.

This post is from an article that I originally published on April 1st, 2015 in Innovation Excellence.

Until the last few years not much has been published about innovation failure rates within organizations because everyone feared the stigma or repercussions that came with disclosing any failure.  For publicly traded companies the idea of giving stock analysts any ammunition for a critical stock rating would be tantamount to committing career suicide.  Instead most organizations would prefer to quickly sweep their failed initiatives under the proverbial rug and hope they are never discussed again.

A couple of data points can go a long way in helping us to understand the frequency of innovation failure.  It is first worth noting that there are significant differences in the success/failure rates of 1) incremental innovation and 2) disruptive innovation.

Incremental innovation is most commonly thought of as product line extensions (e.g. new cereal flavors, new soda brands, etc.) which tend to have lower failure rates.  Incremental innovation can more easily be tested with consumers because there is a benchmark to compare and contrast against.  Disruptive innovation is frequently a new to market product, service, or business model (e.g. Apple iPhone, Uber, HP Touchpad, etc.) that is much more difficult to evaluate prior to launch.  With that increase in uncertainty comes a higher rate of failure.

Data scientist Thomas Thurston (@thurstont) is CEO of the strategic consulting firm Growth Science.  For years Thurston has been working with innovative startups, large corporations, and educators trying to better understand innovation success by studying failure.  Over that time he has amassed a significant data set of over 1000 corporate innovation initiatives.  In the data Thurston has found that 78% of those initiatives cease to exist seven to ten years after their initial funding.  Stated differently, 3 out of 4 of those initiatives either failed to reach scale or to become self-sustaining.  Many others in the industry hint that the 78% sounds accurate with their experiences.

Even world-class innovation organizations see a significant percentage of failed initiatives.  Last year I had a discussion on this topic with Mark Payne (@MarkF212) the President and Co-Founder of innovation consulting firm Fahrenheit 212.  At the time Mark was proactively trying to address the issue of innovation failure by sharing the lessons he and his firm had learned in a book How to Kill a Unicorn.  Mark noted that even with all of the experience that his firm brings to an engagement they see a 20-40% failure rate for innovation initiatives.  Earlier in 2014 Fahrenheit 212 conducted an informal survey of 100 Chief Innovation Officers asking “what percentage of their innovation initiatives made it to made it to market?”  What they heard back was that two thirds of the respondents saw a 75% failure rate or three out of four of their innovation initiatives never made it to market.

When leaders don’t recognize these high failure rates and the corresponding risks involved to their individual employees they are setting their organizations up for difficult consequences when innovation projects do fail.

In a previous article for Innovation Excellence (Five Ways Organizations Lose When They Cover Up Innovation Failures) I highlighted some of these consequences:

  • Concealing failures sets the wrong standard for the entire organization. Values of deceit or dishonesty are not sustainable in the long run.
  • A failure cover-up pushes out some of your most talented employees. You need those curious intrapreneurs who are willing to take the personal risk to drive the organization forward.
  • Severely punishing failures will influence other employees to reconsider and reduce their risk taking. This can have a severe impact on who will participate in your future innovation initiatives.
  • Hidden innovation failures create false expectations for future success rates. If the only stories that you share are successes then you are reinforcing deceit and cover-up for future teams.
  • Obscuring failures prevents the entire organization from learning from them. You have already spent the money on your failed initiative but not learning from it will doom your organization from seeing any return on that investment.

Based on these high failure rates and the negative impact to employees many in the innovation community have suggested it is better to just outsource their breakthrough (e.g. disruptive) innovation work to external teams.

If something sparks from that work then the internal team can focus on building out the necessary capabilities to sustain the innovation initiative.  But if the project fails there is less impact to the organization.  Simply stated the resources can more easily be eliminated if the initiative fails.

I recently co-hosted a Twitter Chat (#InnoChat) focused on the innovation domain where I posed the question of “Should mature organizations hire external teams or leverage internal resources if they want to drive breakthrough innovation?”  The participants provided some great insights and direction to this thinking.

  • Start by asking “Why?” It was suggested that organizations start by getting clear on what their innovation objectives are before determining how to resource the work.  Why are they seeking breakthrough innovation opportunities?  The follow up questions should then be a realistic assessment of how they currently treat innovation and innovators?
  • Understand the capabilities and culture within the current organization. If your internal talent is strong enough and your culture is supportive enough then absolutely include internal resources as part of your breakthrough innovation team.
  • Identify skill and knowledge gaps. If your team lacks certain domain knowledge or innovation process expertise you can “wake up the innovators” by bringing in outside resources to fill in the gaps or lead the first few iterations.  External resources can also add value to the equation by bringing a fresh perspective and questioning internal dogma.
  • Examine competitive landscape: If an organization lacks agility and is changing slower than the competition it would suggest that a more radical approach is necessary by jump-starting the work with external teams.  It is critical to recognize that only internal teams can implement the initiatives in the long run so they need to remain as an important piece to the equation.

This is just a portion of the insights gleaned from the #InnoChat discussion but it is a great example of the “wisdom of crowds” in action.  Everyone brought their unique experiences, priorities and perspective to the conversation making it a robust exchange.  Here is a link to the complete transcript including insights into how organizations can help their employees de-risk their decision to join internal innovation initiatives.

While we still have an “it depends” answer I believe that the group has identified four great criteria that can help any organization through the process of determining their innovation resourcing strategy.

image credit: alleywatch.com

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