Cultivating a Culture of Innovation at Your Nonprofit

Photo by Flickr user elycefeliz (and h/t to Beth Kanter).
A persistent focus of conversation among nonprofit folks – and the highlight of one of the plenaries at the Nonprofit Technology Conference a couple of weeks ago – is the challenge of fostering a climate of innovation within the nonprofit community.

Why does it matter? For one thing, nonprofit folks know that some of the challenges they face aren’t solvable with conventional approaches. For another, funders often explicitly emphasize their interest in funding innovative approaches (a topic for another day). And innovative just sounds cool. Who wouldn’t prefer to be innovative and ground-breaking instead of dull and conventional?

The trick about innovation, though: it’s one thing to say we encourage it, but quite another to actually follow through. Cultivating a culture of innovation means encouraging your staff and colleagues to take risks. It means embedding an expectation about learning from those risks – the successes and the failures – and sharing that knowledge. It means rewarding people on the team for questioning assumptions and suggesting new ideas. And if fostering a culture of innovation is important enough to you, you may even need to penalize people for not taking risks.

Most importantly, you need to convey – not just pay lip service – to your staff and colleagues that you genuinely support them thinking creatively, testing their ideas, and sharing what they learn, even when it fails.

A Culture of Mentorship

Photo by Flickr user JonathanCohen.

Back in May, I wrote about the tech startup incubator program that Trey and I were participating in. The program (Founder Institute) was extremely intensive, really challenging, and very worthwhile, and we are now close to launching our first real mobile app.

One key element of the incubator program, and a pervasive part of the tech startup culture, is the idea of mentorship.

You’ll sometimes find mentorship in the nonprofit world, but it’s not pervasive and even when you find it the notion is typically much less rigorous and structured than we are finding in the tech startup world. Most of the serial entrepreneurs we’ve worked with have had mentors, most proudly talk about them and their ongoing relationships, and those relationships are often structured and even formalized through written agreements.

While I’m sure there are plenty of internet technology entrepreneurs that don’t have mentors, it’s a deep-seated part of the culture that, in my experience, exemplifies a strong ethic across the community of the experienced folks supporting the newer ones. The mentors themselves learn through the teaching, the new folks are more likely to succeed, and the entire community of entrepreneurs is strengthened.

The nonprofit community is dense with the entire spectrum of experience, from total newbies to grizzled veterans. Finding ways to strengthen the notion of mentorship as part of the nonprofit culture seems like a high-return opportunity.

A useful links:

Trust your staff

Trust your staff.

That is point number one in a recent post by Allyson Kapin on Frogloop titled Tips to Create a Culture of Collaboration and Innovation.

Leo Cullum cartoons on innovative thinking in the office.
Leo Cullum cartoons on innovative thinking in the office.

It’s interesting to us that a commentary on ways organizations can create collaborative and innovative cultures should begin by emphasizing trust in staff. Most nonprofits, after all, are intensely staff driven. For many, staff knowledge is their key asset. Salaries (and overhead) comprise the vast majority of expenses. This is perhaps even more true (or should be) in advocacy organizations whose activities revolve around research, policy analysis, lobbying and communications.

What does “trust your staff” have to do with innovation? As mentioned above, staff are all you have. The external pressures on organizations and pace of change around them require teams that are trusted to implement, innovate and learn quickly.

Numerous factors are coming together that make it more important than ever that staff be both strong actors and collaborative contributors to iterative growth and learning in organizations. Online communications is empowering citizens, activists and donors to take action, make donations, get involved and speak out in ways and at times that organizations can’t control. People have more ways than ever to do things organizations don’t expect. You send a direct mail piece and the donor goes to your website to make a contribution. You send an email asking an activist to send a message to his congresswoman and he views the message on his phone before going to bed but can’t see the links clearly enough to click and forgets it.

A fractured (and in some cases dissolved) news distribution system has completely altered citizen expectations of their role in news. People are not just recipients they are reporters (which is VERY different than journalists, we want to make clear and this isn’t necessarily a good change). And personal sharing of news and thoughts can happen quickly, with a large audience and impact networks beyond just immediate friends and family.

The 24 hour news cycle and social networks that are always on mean that organizations must be on their game at all times. They are also being asked to engage directly with activists, donors, media and community leaders in ways most never envisioned just five or ten years ago. Transparency is de rigeur. Financial statements and 990s are online for all to see. Staff, volunteers and just plain outsiders are blogging, Facebooking and tweeting about issues and organizations in ways that can’t be controlled.

In the face of these and other dramatic shifts in the environment in which nonprofits operate, the only way forward is to create and truly support cultures of trust within organizations. What this looks like will vary, of course, for every organization. All have different leaders, histories and missions. And “trust” is not the same as turning people loose to do what they will without guidance, leadership, plans and support.

What trust looks like and how to create and engage a trust-driven culture is itself a big topic. One for a future post. For now, we encourage you to reflect on that state of trust within your own organization and teams. Define it. Talk about it. If you are a manager, leader or staff member don’t stew on it. Bring it up. Hash it out. Take steps to make it happen. It may not be easy but the result will be more creative, innovative and successful teams that move past reacting and push organizations forward.

Rethinking Responsibility and Authority in the Online Organization

Seth Godin recently wrote about authority and responsibility in organizations. Achievers in traditional organizations, Godin says, lobby for more authority in order to get things done. In the top-down organization, one needs authority to act, build, implement. This structure doesn’t necessarily work in rapidly evolving and growing organizations, including nonprofits and others working to adjust to the impact of online networks. As Godin put it:

“Management by authority is top-down, risk-averse, measurable and perfect for the org chart. It’s essential in organizations that are stable, asset-based and adverse to risk.”

Those that demand responsibility should be granted authority, Godin concludes.

Having spent most of my career in and around nonprofit organizations that are “stable [more or less], asset-based [sorta] and adverse to risk [highly]” this got me thinking about the different natures of authority and responsibility in organizations, particularly those struggling to adapt to, integrate and manage digital programs and teams.

Perhaps the key word here is adapt. Online communications is a young and rapidly changing field. Few organizations had websites or email lists just 12 or 15 years ago. Those groups that created a website ten years ago have probably rebuilt it three or four times since (and are likely about the redo it again soon). Facebook, Twitter and much of what we call social media didn’t exist five years ago.

Today, more first gifts are coming in online than off. Organizations have Facebook pages, Twitter accounts, YouTube pages and more. Time and money are going into growing these networks, text messaging/SMS, iPhone apps and more. Meanwhile, it’s unclear who is doing what, how much it is worth, how to budget and staff for it all and whether this is a communications, development or policy department role.

In other words, rapid change is afoot and is pressuring organizations, boards, staff, budgets and plans. It is changing the expectations of members, activists and donors. People are scrambling to respond but evolving slowly, if at all.

Responding means adaptation, testing, rapid learning and, increasingly, the ability to empower staff (and even outsiders) to speak for the organization on social networks and online media.

Authority-driven hierarchies don’t work well when a premium is placed on rapid learning and adaptation. They assume that the people at the top (organizational leaders and middle managers that might run departments or teams) have complete understanding of the problem at hand, the tools needed to tackle it and what staff need to do.

Does the rapidly changing nature of online run afoul of most organizational structures? Quite possibly. Online teams and structures vary but are generally placed somewhere in an IT or communications department and responsible to the authority of someone with minimal experience in online networks. Online teams may be given responsibility (to put together emails, run Facebook pages, create web content) without clear authority over resources or strategy.

The networked nature of social media can add to the complexity for these organizations. Most everyone – not just online or communications staff – is present on social networks and talking about the issues that concern them, including those of the organization. Activists and donors are on the networks. All of them are tied to the organization and can be speaking on its behalf but how does an organization manage them? It’s hard enough (or impossible) to “manage” staff in other departments. Managing those outside the organization won’t happen. Many organizations fall back to not engaging those outside in a meaningful way. It limits potential but avoids messiness and time-consuming interaction.

Does this mean organizations should dissolve hierarchy, eliminate management/directors/supervisors and watch themselves slip into chaos? Probably not.

But isolating online in a single authority-based team limits the ability of the organization to adapt, grow and share responsibility across (and beyond) the organization. Indeed, responsibility for much of what we think of as “online” rests in many places. Most staff are potential online organizers, communicators and fundraisers. Encourage their responsibility to act appropriately and independently without relying on authority to act.

And online teams themselves are (or should be) stocked with people that are highly engaged online and understand trends. Encourage them to take responsibility for adaptation, innovation and success by granting authority to make decisions and lead. If this threatens authority placed in traditional management positions then deal with that. Online moves fast and the adaptive teams and organizations will come out ahead.

Looking Out for the Youngins

Photo by flickr user wisze.
A local fencing coach, I learned yesterday, keeps an eye out for kids with a lot of potential. He assists their parents in finding good tournaments, helps them imagine what it might be like to attend college on a fencing scholarship (starting with, I presume, pointing out that such a thing is possible in the first place), and makes sure to introduce them to people that might be useful down the line (like the people associated with the colleges that offer those scholarships).

It seems so obvious and so natural, yet in the nonprofit world it seems so rare. Executive directors that go out of their way to identify and then help cultivate the folks with the most potential are surprisingly difficult to find. It’s even tougher to find nonprofit folks that are looking out for high-potential newcomers across other organizations in their larger nonprofit community, and then making a point of giving them extra encouragement and support.

It’s not the skill set, not really, because the skills themselves aren’t complicated: bringing your high-potential junior folks to higher-level meetings (even if all they do is listen), introducing them to important contacts and potential mentors, deliberately escalating their responsibilities, finding new ways to challenge them, ensuring that they are exposed to a wide range of strategies and styles and projects. It’s a lack of imagination, perhaps, or more likely a nonprofit culture blind spot.

The bad news is that it leaves our bench thinner and weaker than it should be, and it puts people into positions of authority with a lot less experience and skill than they could or should have. I’ll bet we lose a lot of people, as well, who could grow into powerful advocates and champions but who bail early because they grow bored or frustrated with the lack of attention. The good news is that it’s not hard to fix.

Do You Need a Vertical Org Chart to Cultivate Your Staff?

Photo by flickr user MattHurst.
I wrote a little yesterday about Jason Fried’s column in Inc. magazine about their efforts at 37signals to keep the organizational structure flat. He relates the story of an employee that moved on to another organization because she had more ambition “than we could use,” by which he meant she wanted a promotion to a more managerial role while they have steadfastly resisted creating those roles in the first place. The thing that struck me most about Fried’s column was his notion of vertical vs. horizontal ambition. For one thing, I don’t think “horizontal” is quite the right word for what he’s describing, although I get his point . . . maybe vertical vs. deeper works better at the cost of a mixed metaphor. More importantly, though, I think there is another kind of vertical ambition that’s worth teasing out of his definition. It’s more of an introspective sort of vertical (vs. the org chart vertical that Fried seems especially focused on).

In our research at the Nooru Foundation a few years ago, we found that many nonprofits in Colorado do well at recruiting strong newcomers, but then aren’t very good at giving them a professional development trajectory. A common type of explanation: there isn’t a lot of turnover at the higher levels, so there isn’t any place to promote people to. That’s one type of vertical ambition (the type Fried seems to be mostly talking about), and it may well be true that a lack of high-level turnover makes it difficult to give newcomers organizational chart promotion opportunities. But it’s a weak excuse for not helping your staff grow and develop professionally over time. It’s very possible to deliberately and thoughtfully give your staff increasing responsibility and more demanding challenges, to push them to the sort of deeper understanding and increasing performance that Fried mentions, to expand the sophistication of their understanding and the expectations of their contributions, to include them in increasingly high-level discussions and introduce them to a wider and higher level range of contacts, and to give them access to training, conferences, coaching, and other professional development resources without ever touching the organizational chart or expanding managerial responsibilities.

Curiously enough, I first saw this in sharp relief in the public sector, as I watched my own city manager and his senior staff do this with their younger staff: give them responsibility for managing a small process, then a larger short-term group, then a standing board. Give them small parts in City Council presentations and then increasingly expand the scope of their presentation responsibility. Set them up to play support on projects, then run small projects, then grow into becoming the point person on bigger projects.

I’ve never worked in a software shop like 37signals, so maybe the model doesn’t work where the output is more about providing high-quality customer service and producing high-quality code, but some version of this approach does make a ton of sense in most of the nonprofits I’ve worked with and seen over the years, and provides a powerful way of thinking about growing your staff that doesn’t rely on charts and titles (though sometimes titles are pretty useful, also).

I think Fried is on to something important when exploring less vertical organizational hierarchies, in other words, but it’s not new territory for nonprofits (and the private sector could probably learn a lot by paying more attention to how many nonprofits do this). And I think he’s on to something when he pushes back against conventional org chart vertical ambition. If the goal is to give our employees the room and opportunity to grow professionally, and it probably should be in most cases, we have a lot to work with regardless of vertical promotion opportunities.

Be More Like a Business!

Nonprofit or for-profit, this organization's revenue trend has a problem.
Nonprofits hear the “be more like a business” refrain a lot, despite plenty of evidence that being like a business isn’t all it’s cracked up to be.

I’m persuaded by Jim Collins’ analysis, which more or less argues that within the business community you’ll find the entire spectrum, from extremely effective organizations to highly dysfunctional ones, and the issue is ferreting out the practices that make the good ones good. He extends this to the social sector, and essentially makes the same argument: the challenge isn’t for social sector organizations to be like businesses but to adopt the practices of the really well run businesses, as well as the really well organizations from whatever sector. I don’t think he’s ever evaluated the public sector, but I suspect his argument would be the same . . . learn what we can from the practices of the organizations that really kick ass (and I’ll bet there’s more of this than you might think, but that’s a post for another day).

In other words, conversations that focus on how the nonprofit sector can be more like the business sector are asking the wrong question. A better question: how can nonprofits learn from the best practices of highly impactful organizations within their own sector and across the business and public sectors?

Our frequent insistence on asking the wrong question leads to two kinds of problems. On the other hand, the nonprofit sector is often so allergic to the very idea of the business sector that it runs away from it, and eschews anything that smells like it might have come from the business world (the “we don’t do things that way” reaction). The problem is that there are a bunch of practices you find among the best-run private sector organizations that nonprofits would benefit from using. It’s not “be like a business,” but “adopt the applicable practices of the best businesses.” The most successful of the private sector organizations are often strong at things nonprofits are often weak at: capacity investments, staff cultivation, and staff management among them.

And then there are nonprofits that run in the other direction, thinking that salvation lies in being like a business, and they adopt private sector practices in seemingly wholesale and indiscriminate fashion, which often produces some of the weirdest and worst dysfunctions, since it involves the hybridization of worst practices from both the nonprofit and private sectors.

Nonprofits really are, at root, businesses. They are different in some important ways from traditional profit-oriented businesses, but they are similar in many more ways. Nonprofits live and die on cash flow, for example, and they have to offer a sufficient and appropriate value proposition to their supporters. But the implication isn’t “do whatever private sector businesses do,” since that would be dumb, but rather that the laws of business physics really do apply even if you are serving a social good of some kind. The sense of nonprofit exceptionalism that pervades much of the nonprofit world, the notion that we are special and different because we are a nonprofit, is harmfully misguided. If you apply a discriminating eye toward the private sector, however strong your allergy may be, you’ll find a ton of practices and accumulated wisdom that will help your nonprofit do good, better.

Leadership-as-Verb

This drum major has positional authority, but is she necessarily a 'leader'? Photo by Flickr user e_cathedra.
The leadership question is as vexing as it is interesting and important. Rosetta Thurman relates the story of an older gentleman asking his version of the classic leader-follower question: “What happens if you have too many leaders and not enough followers?’ (although his version was more interesting, asking about increasing competition within an organization as the number of people trying to lead grows).

Rosetta rightly challenges that positional notion of leadership and instead suggests leadership might be a behavior, but she doesn’t entirely let go of the idea that some people might qualify as ‘leaders’ while others might not.

I want to go a step further. The idea of leadership becomes even more interesting and robust, and more useful as well, if we think of it as a verb rather than a noun (with acknowledgments to Marty Linksy and Linda Kaboolian). One isn’t ‘a leader’ but instead you can – at any given time – exercise leadership. The shift to leadership-as-verb much more sharply distinguishes between people in positions of authority and people exercising leadership, it avoids the thorny question of just how frequently you have to exercise leadership in order to earn that exalted status (is five minutes a day enough? an hour? every waking moment?), and it morphs the notion from being a status you earn to being a behavior you can elect to exercise or not at any given time. It also – importantly – allows for leadership to happen anywhere in an organization, in any direction (an idea Rosetta describes as well).

The Three Great Virtues of Social Change Advocates

Photo by Flickr user nstop.
Larry Wall, a well-known computer programmer, famously said that the three great virtues of a programmer are laziness, impatience, and hubris. Perhaps these qualities apply to great nonprofit folks as well.

Laziness is the virtue, according to Wall, that leads folks to figure out how to be more effective and efficient, to “go to great effort to reduce overall energy expenditure.” Laziness, properly applied, means you do more with less effort, which is useful for those folks who aim to balance their nonprofit lives with, say, anything else at all.

Impatience is the virtue that leads people to anticipate future needs and opportunities instead of simply reacting to their current situation, and the quality that can lead folks to leap and ship instead of waiting for the perfect moment when everything is ready to go.

And hubris is the sort of pride that drives you to want to earn the respect of your colleagues by doing great work. Hubris is the virtue that enables the best advocates to believe they are capable of making great things happen, and that helps them be willing to take the risks that great things depend on.