Four key ingredients to building an innovation strategy for your NFP

“Innovation” is all the rage in Australia right now. Prime Minister Malcolm Turnbull has urged an “ideas boom”, investing billions of dollars to promote private sector innovation.

But what about NFP organisations?

With many organisations focused on doing pretty much the same work for decades – more that a century for some! – some not-for-profits simply don’t see the need to consider innovation – or see it as too hard.

But innovation isn’t just for business. NFPs need to innovate too – to:

  • Find new ways to do work more effectively or more cheaply,
  • Find new ways to raise funds and attract donors
  • Attract the best staff, especially from younger generations excited to be involved with the newest ideas
  • Expand into new service areas, or
  • Attract clients under new competitive models like the NDIS.

Innovation isn’t easy though – otherwise everyone would be doing it.

Recently, NFP consulting firm Social Ventures Australia (SVA) profiled four disability services organisations that are blazing a trail of innovation in the NFP sector.

SVA Consultant Alex Humphry interviewed leaders from House With No Steps, Cerebral Palsy Alliance, Northcott and Life Without Barriers to learn about their respective journeys to introduce and leverage innovation strategies.

Here are four ingredients she suggests are essential for organisations seeking to develop an innovation strategy:

1. Get your board on board

According to those who’ve done it successfully, getting commitment of your organisation’s board is a critical part of any innovation strategy.

The boards of all four organisations profiled were receptive to exploring innovation strategies, with board members originating from the corporate sector – the traditional home of innovation – particularly likely to be supportive.

But if your NFP’s board members don’t have a commercial background that values innovation, their ability to recognise the radically changing landscape of the NFP sector just might.

Spokespeople for all the organisations profiled said the huge sector shifts caused by the NDIS helped their boards recognise the need to put innovation on the agenda.

House With No Steps’ Head of Strategy, Excellence and Innovation Lyn Ainsworth even commented that the organistion’s board “sees innovation as a significant strategy for managing long-term strategic risk.”

2. Innovation doesn’t have to break the bank

Worried that innovation comes with unsustainable costs?

Don’t be – all four organisations provide evidence that an upfront investment doesn’t have to be large.

Life Without Barriers used internal volunteers – who had key knowledge about customers and organisational processes – to help carry out their innovation strategy.

And for most of the organisations interviewed, the initial cost of innovation was equivalent to the salaries of the one or two staff members working on the strategy.

Of course, a larger investment may be needed in the future to grow successful innovations – by which point it may be much easier to make a business case for them to the holders of purse-strings.

Improving staff innovation capability through training sessions was another popular and inexpensive path. For example, all managers at Northcott complete basic design thinking training, while all new staff members at the Cerebral Palsy Alliance have innovation included in their induction.

3. Don’t limit yourself to a single innovation structure

Innovation can take several forms. What works for some organisations won’t work for others.

The organisations interviewed by SVA adopted a variety of structures, including:

  • Developing an ‘accelerator program’ that provides external individuals or groups with seed capital, a working space, mentors and peer networking opportunities, as well as helping them define and build initial products. For example, Cerebral Palsy Alliance created its own accelerator, “Remarkable”, which runs 16-week programs to help early-stage technology start-ups that want to build sustainable enterprises focused on including people with disabilities.
  • Founding an “innovation hub” – a physical space devoted to innovation activities, staffed by a small team and with resources for internal staff from across an organisation to use.
  • Creating an independent and dedicated research team tasked with investigating and discovering new solutions to clients’ or organisational problems.
  • Designating person or team to lead and facilitate the innovation strategy, as well as cultivating a culture of innovation in the organisation.

4. There are multiple ways to generate ideas

So you’re convinced innovation is possible for your NFP. Now how do you start developing innovative ideas?

There’s no one way. The organisations profiled by SVA approached the generation of ideas in a number of different ways, including:

  • A bottom-up approach that empowers frontline staff to contribute ideas, which helps create a culture of innovation through the organisation. How do you tease out ideas from staff? Give them the frameworks and tools: hold workshops on innovation methods, develop platforms by which staff can provide ideas (like an online network or just a survey), and celebrate innovation at all levels.
  • Using a research program to develop new ideas by testing hypotheses. (It’s important that any innovation culture be evidence-based and data-led.)
  • Identifying future risks and using a structured approach to generate a variety of ideas that address them.
  • Sourcing ideas externally. For example, through partnerships, incubators, accelerators and research organisations.

An innovation strategy could transform the way your organisation works. But getting started doesn’t need to be intimidating. Hopefully the lessons these four organisations shared will help guide yours into action.

Does your organisation have an innovation strategy? We’d love to hear from you in the comments below.

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