The not-for-profit sector is, by its very nature, innovative. Charities exist to respond to an unmet need or to drive change. But what does innovation actually mean? And what are charities really doing to develop innovation processes, cultures and, more importantly, results?
Innovation is a term that is overused and therefore it loses some of its meaning. It’s not just about whacky creative sessions with green bean bags. Innovation is a strategic development tool that helps organisations drive ideas forward to achieve their business objectives.
Depending on your organisational mission and strategy, you may choose to focus your innovation efforts on finding the next radical idea. Or you might try making smaller incremental changes. You could be developing new or improve existing products and services, or all of the above.
In the last 10 years, we have seen an increase in informed discussion, debate and learning about innovation in the charity sector as well as an increasing number of charity innovation roles appearing. But there still seems to be a lack of examples of how innovation has really driven positive change.
Making change happen is hard. One of the challenges that charities have in developing an innovation strategy is their attitude and approach to risk. Charities don't tend to take risks, mainly because they are scared of failing. Yet the world is changing rapidly, so unless charities change too they will fail. A bigger risk is not adapting to the changes that are happening all around us. It is more risky to stay the same.
What we are seeing is charities copying each other’s ideas because it is perceived as a safer bet. But the ‘If a coffee morning can work for one charity, it can work for us’ approach is flawed. You need adequate insight into the context of why someone else’s coffee morning was successful and an understanding of the needs of your particular audiences. Without those things, this approach just results in many similar products competing in an already crowded marketplace. Supporters then find it hard to differentiate between causes as charities compete for support and important messages become diluted amongst all the noise.
In his book ‘A technique for producing ideas’, advertising guru James Webb Young describes ideas as ‘nothing more or less than a new combination of old elements.’ This highlights the importance of gathering raw material for innovation by expanding experiences.
Not-for-profits must make time to look outside of the sector for trends and new ideas, rather than copying what they believe is working for others within the sector. They must also gain better insights and understanding regarding supporters and beneficiaries in order to develop products and services that truly engage with them and meet their needs.
Profit-making companies often take a different approach to investing in innovation. For example, when Amazon was founded in 1994 it focused on a long term strategy of building a market presence that spanned six years before paying a return to investors. Would your Trustees accept that sort of long-term return on investment for your new product or service?
Charities are scared that investment in innovation is perceived as wasting donors’ money on something new that is not guaranteed to work. There are no guarantees that your new innovation will work, just like we don’t know that doing the same as we are currently doing will continue to work.
But to do the best job for supporters and beneficiaries, charities must be braver and more open about truly investing in innovation and taking
measured risks that have the potential to offer far greater long-term returns.
Developing your organisational innovation skills and capacity is essential for survival in today’s rapidly changing world. You can read more about how to achieve this and the not-for-profit sector's approach to innovation in the report Innovation (still) Rules
. I have written it with nfpSynergy and it is free to download here
from Wednesday January 28th.
Lucy Gower is a fundraising and innovation consultant and has been a fundraiser for over 10 years. She runs her own company, Lucy Innovation, to help charities to think differently to find ways of improving their fundraising, services and communications. She also blogs for SOFII, 101fundraising and the Institute of Fundraising and speaks at conferences both in the UK and overseas.
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