A Framework for innovation in not-for-profits

The economist Theodore Levitt wrote, “Creativity is thinking up new things. Innovation is doing new things.” It's a crucial distinction, and in this guide we'll point to some ways to go from having a good idea to implementing a good idea.
When we talk about innovation there are two distinct areas:

• Continuous operations (optimising, extending, incremental improvements): These are innovations designed to improve and optimise your existing settings, such as increasing speed, lowering cost, improved productivity, stakeholder experience, yields, and outcomes
• Continuous innovation (disrupting, transforming, breaking new ground): Trends and ideas aimed at creating new business models, processes, services, capabilities, platform models and ecosystems into the future.

Both need to have a clear set of objectives and process supporting them; we do not want innovation to hit administrative or bureaucratic roadblocks. Instead, it is important to cultivate a culture of innovation and acting on those ideas.

Whatever your view of innovation, there are going to be activities around organising and executing the innovation process. It is therefore vitally important to establish your organisation’s innovation goals and principles. In a nutshell, the process can be summarised thus:

• Ideate: coming up with ideas 
• Evaluate: assessing worthwhile ideas for implementation
• Realise: implementing the ideas.

An innovation process is not one-size-fits-all. Rather, it should align with your organisation’s goals, capabilities, culture, and approach to technology adoption. You can customise an innovation process for your organisation based on the following principles:

1. Scope 
2. Ideas 
3. Ranking 
4. Evaluation
5. Evangelising
6. Transfer

1. Scope

The first step of the process is about setting the goals and context of innovation. This is where your organisation defines its overall goal for innovation and its innovation charter. Questions that you may begin with include:

• Are there any existing or emerging technologies that warrant a deeper investigation? 
• Are you spotting all the relevant tech and/or non-tech trends?

The adoption spectrum

You may have heard the term ‘technology hype,’ also referred to as a hype cycle. This is where innovative technologies arrive, mature and over time get adopted by the mainstream. Where does your organisation sit on this adoption cycle or spectrum?

Different perspectives or personas offer alternative approaches to adoption. Do you as an organisation ‘lean in’ to technology as early adopters, or is your organisation more cautious and conservative in its technology posture? 

For example, one organisation may thrive on emerging technologies (those technologies that are through the trough of disillusionment and have already proved out specific use cases). This kind of organisation will have a good understanding for what that technology can be used for. 

The adoption spectrum:

• Envisaging (Innovators 2.5%) – excited to get emerging tech 
• Exploratory (Early Adopters 13.5%) – engaging at the peak of inflated expectations 
• Emerging (Early Majority 34%) – in the trough of disillusionment, i.e., “let’s wait until there are some specific use cases”
• Evolving (Late Majority 34%) – “I want best practice”  
• Established (Laggards 16%) – beyond best practice, “everyone is doing it”.

It is important to align your organisation’s technology adoption persona with its business strategy. For example, if your innovation ideas are ‘envisaging’ or ‘exploratory’ (leading edge) yet your organisational persona is ‘evolving’ (mainstream conservative) then there is a misalignment. This will need to be addressed or your innovation agenda may not get the traction it needs to be effective. Your stakeholders are not going to be interested in what you are doing as you cannot prove value.  

Organisational requirements

Innovation cannot simply be bolted onto traditional systems and structures. Instead, it must be built into the very foundation of an organization. This foundation includes five elements:

• Leadership: Leaders do not have to be technologists to oversee an innovative team. In fact, the most important trait for an effective leader isn’t expertise but curiosity.
• People: Employees who take the initiative and champion innovative approaches within an organisation are called ‘intrapreneurs’. They’re typified by leadership, adaptability and intelligence skills.
• Culture: The broader staff need to be empowered by a culture that gives them permission to suggest and champion innovative ideas.
• Time: Innovation requires an investment of time to allow staff to seek out trends, attend webinars and conferences, make connections, build networks, and share learnings. Google for example has proven very successfully that you can systematise innovation. 
• Resources: Resources are always at a premium at non-profits, but you need to have a baseline of resources available to staff to make innovation possible.

Innovation should never be done behind the scenes. Innovation should be something we are actively evangelising and fostering in our organisations. 

Setting an innovation charter

As part of establishing your scope, set an innovation charter for your organisation. The charter should:

• break down how much time you are going to spend on certain areas
• allocate time and resources across three areas of target, time horizon and scale, aligned with the organisation’s strategy and technology persona
• align with executive expectations to achieve buy-in on the agreed targets and time horizons.

Once a charter has been established, share it widely across the organisation.

2. Ideas

Moving to the ideation phase, your innovation team sets about gathering ideas from as many sources as possible.   

Your first goal should be to create a list of actionable ideas and actionable innovations. Rather than try to implement everything, which is impossible, the focus should be about creating a balance between a culture of innovation and excitement for ideation, channelled through a process for implementing ideas. 

The emphasis at this stage can be summed up by the phrase: We have a great idea, and we are going to implement it as long as it’s worthwhile. The use of the word worthwhile suggests we are not going to implement everything. Innovation is not just having an innovative idea and implementing it. It is more like having a promising idea, evaluating it and implementing it if it’s worthwhile. 

Sparking creative thinking

Tracking and spotting trends – both tech and non-tech trends – is something all organisations should be actively committed to. These might include tracking cloud-native solutions, artificial intelligence, digital twins, or the Internet of Things. 

Many organisations fail to track or spot trends in other domains: political, economic, social, trust and ethics, regulatory or environmental. We want to be able to sense everything around us and have a sense of what is going on to exploit an idea or mitigate the impact of risks associated with a trend. 

Great ideas come from a variety of sources:

• employee campaigns
• installing a company suggestion box
• reaching out to new and existing vendors, suppliers, partners and volunteers
• workshops
• hackathons
• design thinking sessions
• solution- centric programs
• shark tanks
• researching the start-up ecosystem
• intrapreneur programs (internal entrepreneur programs for developing innovative ideas and business models).

Be sure to reach out and invite everyone to contribute ideas, making the process as diverse as possible. How will you inspire you people to give you their best and most innovative ideas?

Innovation strategies

There’s a variety of innovation strategies that will generate different types of ideas:

• IT Instigators: allows the IT team to gain familiarity with innovative technologies and seek out suitable problem spaces
• Rock the World: moon-shot goals aimed at transformative innovation, envisaging a new future with new business models and operating models
• What’s Your Problem: solving unique problems, one at a time 
• Culture Crush: developing a culture of innovation for organisations that thrive on and reward innovation 
• Baby Steps: for organisations that are just getting started on their innovation journey.

Combinational innovation

Sometimes innovations work best in combination with other ideas. Do not forget to apply and include combinational innovation – combinations of ideas, trends and technologies drawn from different sources. For example, you might discover that a use case can be solved by combining two different technologies and a trend. 

One recent trend of note that is relevant to the concept of innovation has been the rise of business technologists, whose role is breaking down the traditional delineation between IT and core business. 

Ideation techniques

Many techniques exist to arrive at a list of innovative ideas:

• goal setting
• what-if scenarios
• add/remove/invert constraints or assumptions about the organisation
• cannibalising your organisation. 

What-if scenarios, including scenario planning, sci fi prototyping or creating futuristic artifacts, are a fantastic way to look at ideas. Take a concept like, ‘what is the world is going to look like in future (e.g., 2040)?’ What is the world going to look like if everybody is an augmented human or with inbuilt AI?

The systematic collection and analysis of information from multiple sources is called competitive intelligence. Some large organisations have a coordinated CI program. For those with a focus on trend-spotting, you may also opt to do trend-centric innovation using technology radars and trend scans. These are the kinds of sources that will help you gather ideas into your tailored innovation program. Consider incorporating these sources as you improve your ideation process. 

The art, and tyranny, of the possible

If you are only living in the ‘tyranny of the possible’ – meaning you’re only focused on what you think your organisation can think, manage, or achieve – you are overlooking the art of the possible. Alternatively, if you are living in the ‘art of the possible’ you might be missing the ‘tyranny of the possible’ – the limits of what you can do. It is important to bring these two worlds together and incorporate people with deep-lived experience of the problem.

3. Ranking

The next stage of the process is all about synthesising and prioritising your list of ideas.

By starting to reduce the list and determining who is going to implement the idea, a framework or process emerges naturally. Having an innovation process helps ensure you don’t miss critical steps and decisions. 

4. Evaluation

Evaluation is important as we may have too many ideas and need to whittle the list down by considering risks and benefits. It’s also worth considering when to stop asking for ideas and suggestions.

Most ideas will fall into one of two categories: go or no-go. Of the former, you may decided to proceed immediately with some ideas or to put an idea on hold or on a roadmap for implementation down the track.

Some questions you may like to consider when evaluating ideas:

• Implementation: is it something we could/should do? 
• Ownership: who is going to own the idea going forward? 
• Scalability: it's a great idea - How are we going to scale it?

These questions provide some insights into making innovation more practical but at the same time a little more complex. 

Evaluation criteria

We want to rank ideas by:

• business value
• estimated resources
• risks
• scalability
• future ownership. 

One method of ranking ideas is to use a Risk v Reward 2x2 matrix across your portfolio:

• Is this incremental or radical innovation?
• Is this an existing or new idea?

Many organisations approach their innovation program with a gamification focus with a view making it fun and rewarding. They start with an ideation management system where people can go in and vote on ideas. This is a fantastic way to get people involved but is not necessarily a replacement for the idea selection phase. It is a good indicator for whether people are interested in an idea and provides insight into whether they are going to get behind it.

Whichever method you use, ask these questions:

1. Rate value and strategic alignment – could this idea be aligned today or sometime in the future?
2. Establish category and ownership – Where should the idea go, who should own it?
3. Estimate resource and risks – how much is this thing going to cost? How much time, what are the risks? What is the value/ROI? Is this something that makes sense?

Minimum viable experiments

One way to evaluate an idea is to hypothesize and evaluate it using minimum viable experiments. Before you are ready to perform some minimum viable experiments you need to establish some measures of success, such as rating the value, looking at resources required and arriving at an overall ranking for those ideas. You should already have some metrics for what you believe this innovation is going to do.

For example, formulate a hypothesis you can evaluate, such as, “Chatbots will allow us to automate common help desk questions without adversely impacting caller experience.”

Alternatively, you may take a business outcome approach, such as, “Chatbots will improve our Net Promoter score by 10% in the next 3 years”.

You are then ready to conduct some minimum viable experiments:

• Will callers like chatbots?
• Do we have the data to train a chatbot?
• Is the technology ready or good enough for our use cases?

There is no such thing as failure here. We may conclude that our hypothesis is incorrect, i.e. that while it may allow us to automate common help desk questions, it is going to negatively impact our caller experience, so it is something we shouldn’t move forward with.

That's the point of evaluation - it’s not just to prove an idea is correct (confirmation bias) and move forward. It is important to learn lessons along the way to ensure robust and proper evaluation of ideas and provide opportunities to evangelise along the way to secure stakeholder buy-in.

5. Evangelising

After we have been though some minimum viable experiments and after some initial scoping, we move onto the lessons learned, i.e., the results of our experiments. These are the types of ideas we have assessed and their potential return on investment/ROI (or demonstrated value). This stage may also include some of the risks and how to mitigate them.

To consolidate the culture of innovation we wish to foster in our organisation, we promote these results throughout the organisation by communicating our findings and looping back with contributors and/or employees. The aim at this point is to educate and inspire, creating a positive feedback loop that will foster or consolidate the organisation's culture of innovation.

6. Transferring ownership

Finally, we operationalise our ideas by moving ownership and ongoing commitment to a new responsible owner.

Once an idea has been evaluated and approved, responsibility for, ownership of and commitment to the idea are transferred to its new owner. At this point, the role of innovators recedes and the role of owners becomes pivotal.

The further we move through the ideation-to-implementation process the more the stakeholders become involved.
Many large organisations have multi-disciplined ‘fusion teams’ where groups are created for specific ideas. These teams might be called IT development and support (DevOps), Idea Development teams or an Innovation Review Board. All of these assist with the transfer of an idea to the operational stage.

Summary

1. Adopt a customised innovation process
2. An Innovation Charter is an effective way to share your goals and innovation objectives
3. Be sure to share your criteria widely (employees, volunteers, partners, supporters)
4. Share innovation ideas and wins, and celebrate success.

Read more

Unleashing Innovation in Non-Profits [Tech Impact, May 2021]