Balancing Nonprofit Reliability and Innovation
For nonprofit leaders, the practice of thinking strategically is more important now than ever before. High on the list of strategic thinking is balancing nonprofit program reliability and program innovation. Finding the balance between reliability and innovation will help a nonprofit thrive. Conversely, missing the mark, at best, reduces the effectiveness of a nonprofit and, in some cases, can destabilize the organization.
Every established nonprofit organization wrestles with stability and growth as part of strategic planning. Too often, nonprofit leaders and board of directors have the mistaken belief that both stability and growth must be pursued for a nonprofit to thrive. However, when program reliability and program innovation are conflated many smaller nonprofits try to hold on to stability as they chase innovation as a stress to their organization’s capacity to the point of crisis (see here). Unfortunately, this cycle of chasing growth and innovation is fueled by the incentive system of philanthropy that rewards innovation and spectacular growth and diminishes the importance of operating programs well. For philanthropy, chasing moonshots may be way sexier than helping a nonprofit keep the lights on, but the net effect is that philanthropy forces nonprofits to lead their strategy with program innovation rather than reliability. In this post, I want to start a discussion about reliability and innovation.
I have written about the need for nonprofit innovation here and the need for nonprofits to invest in research and development (here). Let’s be clear that I am not downplaying the importance of program innovation for nonprofits. I am simply asking nonprofit leaders (and my friends in wealth-driven philanthropy) to back off a little the innovation side and invest a little more of your strategic thinking in the concept of program reliability. Then add innovation as a balance. Here are five principles that might help you:
Lead with Reliability – It might be obvious for many nonprofit leaders that reliability is more important than innovation but my experience with a number of the clients I have worked with over the years, this thinking is certainly not as ubiquitous as it should be. The primary focus of all nonprofit organizations is to provide reliable core programming before innovating. There are nonprofits that have strategically over-extended themselves trying to be innovative at the expense of being reliable in their delivery of core services. This sets up the prospect of instability even for large nonprofits (more here).
Question Your Consistency and Quality – Acting to ensure that your nonprofit’s existing programs are predictable matters. While this may be obvious it is often overlooked. Quality assurance and continuous improvement is ongoing and requires investing in the progressive evaluation of your programs (see here). You need to know you are making a difference. In other words, just because your organization runs a mentoring program does not mean you can assume you have the same outcomes of the Big Brothers Big Sisters research studies unless you are evaluating program practices and outcomes.
Check Your Budget Reliability Axis – Elsewhere applied the principles of nonprofit revenue autonomy and reliability to the concept of innovation (see here). In that previous article, I suggest that reliable revenues are a vertical access that nonprofits need to achieve reliably in order to pay the monthly bills. Failure to reach the reliability threshold will limit growth and innovation. From that perspective, a nonprofit should ensure that their revenues are reliable before taking on new innovations that would jeopardize its core programs.
Check your Leadership Axis – In addition to having the financial strength to manage programs reliably and to innovate new programming, your nonprofit needs to have the leadership and advisors capable of developing and sustaining core programs and an innovation strategy. Program innovation often requires the addition of new leadership and advisors to support new ideas over time. If you are approaching an innovation, it needs to be done in the context of your current and future people capacity. Without such thinking, one unplanned succession, for example, may be the difference between success and failure.
Think of Innovation as Startup – A final principle is that program innovation needs to be viewed from the perspective of a startup. Innovation is the equivalent of launching a new product line and requires time, resources, focus, care, and feeding. So before embarking on program innovation, a nonprofit must have the capacity to take on the new work and sustain core programming. Without thinking carefully about capacity, core program reliability can potentially suffer and dilute the effectiveness of an organization. The old axiom comes to mind, “when forced to choose, do a couple things well, rather than everything poorly.”
Too often program innovation comes up in the conversation that starts with “what can we do differently to appeal to foundation xyz or attract new donors.” The reality is that balancing program reliability with program autonomy is a series of tradeoffs that should be thought about in the context of organizational strategy. In having a thoughtful conversation that looks holistically at your organization’s core programs, budget, leadership, and capacity.
Your thoughts are welcome.
Photo Credit: Pixabay: Samuel Francis Johnson