Tagged: Innovation

Intellectual Capital -or- He who has the best brains wins.

Intellectual Capital

               “We have moved from an economy of hands to an economy of heads.”

How are you managing the ‘heads’ of your organization?

The growing power of ideas – as manifested in innovative programs, policies and processes – is the key differentiator for a successful nonprofit organization.

This means that the most important resource in your nonprofit is not your donor database, or your special event… it’s the heads that walk through your door every day. These heads make up the differentiator known as Intellectual Capital.

Building your organization’s Intellectual Capital has become a science that has been shown to propel programs, services and fundraising, to higher standards of success.

To raise Intellectual Capital in your nonprofit in today’s competitive environment, create a culture that encourages creativity, innovation – get that good stuff out of those heads- and one that keeps your best heads around.

What are some signs that you are not leveraging the Intellectual Capital of your organization? Thomas Stewart, early proponent of the concept of Intellectual Capital through knowledge management states “like Lyme disease, knowledge management problems have  symptoms that sometimes mimic other problems.” Each of these symptoms indicate that people in the organization are not finding knowledge, moving it around, keeping it refreshed  and up to date, sharing it, or using it. (Zurbuchen, 1998)

Here is what to look for to determine where your organization stands in nurturing Intellectual Capital:

  • Same Mistake – seventh time.
  • Duplicated effort
  • “Silos”
  • Someone is out, and work comes to a halt
  • Consistent loss of materials and information for routine projects and processes
  • Goals and Objectives consistently not met
  • Poor customer feedback on performance
  • High turnover of excellent performing staff
  • Declining values: Financial, Performance, Membership
  • Poor Employee Morale

This list is not exhaustive but you get the picture, it’s a great illustration of the environment experienced by nonprofits who have not yet placed knowledge management of Intellectual Capital as a core business function.

Growing and retaining Intellectual Capital requires strategy, plan and measurement.

Growing Intellectual Capital

Some steps to take in growing Intellectual Capital:

  1. Make sharing knowledge easy: Create an organizational Wiki, a place for staff to enter learned concepts and share information or ideas.
  2. Encourage online communication: Organizational bulletin boards where your brightest can test theories through communication
  3. Reward innovative thinking: Most organizations are risk averse. This translates into new processes and programs meeting significant pushback. Flip your model of operating around to encourage, embrace and reward new processes and programs.

Retaining Intellectual Capital

Findings from the 2012 national Nonprofit Employment Trends Survey conducted by Nonprofit HR Solutions indicate that three-quarters of nonprofits do not have any formal strategy for retaining staff. That’s money out the door.

What are the key factors in retaining your Intellectual Capital investment? Surprisingly, in repeated studies of the nonprofit sector, rate of pay is not as important to retention as you may think. Here is what is important:

  1. An environment that encourages and rewards autonomy. That means self-direction, flexible work hours and environment (work from home, café, beach) and a results only measurement model. Innovative people like innovative work styles.
  2. Frequent, positive and meaningful feedback on work results. Especially with our newer generation of rising stars, Millennials thrive on feedback. This is a generation that, for good or bad, had helicopter parents, teachers and coaches, giving direction, encouragement and correction at every step.
  3. A role that requires diversity of talents, skills and functions. Many of the most successful people I know, have an entrepreneurial attitude about their work, even if they don’t own the company. Unlike multi-tasking (doing many things at once), multi-talenting is using a variety of talents, learned experiences and ideas in the execution of your work.
  4. Collaborative work. As a society, we have gained an addiction to tribal-ness: the desire to be affiliated and interrelated in our communication, experiences and work efforts. Collaboration also has the benefit of growing your Intellectual Capital through knowledge management. It needs to be encouraged.
  5. Work that is meaningful. Your creatives, innovators and those who are bringing the most Intellectual Capital to your organization, want to know that the results they are accomplishing actually are feeding into higher levels of success. Show them the corollary in an authentic and factual way.

Intellectual Capital is a key driver for competitive advantage in today’s environment for the nonprofit sector. He who grows the brightest and holds them, wins. Therefore, Intellectual Capital is an important, if not THE important, resource that nonprofits need to develop in order to gain sustained strategic advantage increasing their effectiveness in serving their constituency  and funding their mission.

Innovation as a Culture…..

It all started with a statistic in 2006, repeated in 2011: Two thirds of all executive directors of US nonprofits intend to retire by 2016 (Cornelius, Moyers, & Bell, 2011).

That led to a thought: Filling those positions are Gen X and Y, who work so very differently and embrace a culture of Innovation

That led to a fear: Is our industry prepared?

That lead to a revelation: We need to focus hard on developing Innovative Cultures now, in order to weather the shift.

Innovate: Verb

1: to introduce as, or as if, new
2: to effect a change in 
Merriam-Webster Dictionary, 2012
 

Innovation is the creation of better or more effective products, processes, services, technologies, or ideas that are accepted by markets, governments, and society. Innovation builds on existing ideas. It is not to be confused with Invention. The Printing Press was Invented, the Kindle was Innovative.

If our Grandparents were Inventors, then Gen X/Y are Innovators. They may not own the market on Innovation, but lead the charge and drive the process. Their Innovative spirit causes them to see work differently, and for those working in the Nonprofit Sector, and stepping into the vacuum of leadership soon to be created, that could be a challenge.

The exiting generation of Boomers tend to believe work was for life and WAS life. After all, they created the ‘workaholic’ and ‘superwoman’ concepts. The Gen X/Y to come, view work and their work life much differently. They are traditionally seen as individualistic, self-reliant and skeptical of authority. They expect great workplace flexibility. They are tech savvy and seek diverse groups. The speed and ease of the Internet  and its subsequent vast knowledge base, has led the ‘Net Generation’ of Y and Xer’s to be flexible and changing in its consciousness and with how it is communicated. We can see how this is in great contrast to the current environment of the risk averse, staid and steady world of the nonprofit.

However, we have seen some break-outs in the industry, nonprofits that have jumped the fence to do things differently, and with great results. For these nonprofits, we see that Innovation provides bold, new approaches to the way they work; they have decidedly replicated and integrated what can be learned from other disciplines; and they have provided ideas and strategies to our industry on how organizations can better foster new ideas and solutions to challenges and mission need.

Which is just the type of culture required to manage through such a massive shift in leadership, that is pending in our industry in the coming years.

What is needed for your organization to jump the fence into a culture of Innovation and to stand apart and excel in the approaching change?

Here are some simple and manageable ideas to get started.

1) Create and/or Embrace Your Constraints:

An excellent line from Marnie Webb, CEO of TechSoup Global, reflects “Innovation happens when people work within constraints — in an environment of not enough — and they figure out how to do it anyway.”  (Webb, 2011).   Well, doesn’t that just describe the EVER PRESENT environment of most, if not all, nonprofit organizations? So lack of resources, lack of time, lack of experience is a benefit and not a detriment to your Innovation.

Inspire a spirit of can do in your team: Teach them to routinely say to the world, “I know you said we can’t do this, but we are  going to figure a way that we can.”  A fun way to do this is to challenge your staff each month with one new problem to solve. It can be simple or complex, but make sure there are no single ‘right’ answers expected, and that all respondents get an encouraging word about their creativity in designing a solution. Take a look at the monthly responses and find one or two things that can be implemented from each, to make this activity actionable and inspiring.

2) Data is fuel for Innovation:

Research has had its day recently in the public square of discussion among the nonprofit set. It wasn’t until this recent decade though, that many nonprofits began to wake up to the fact that data drives exceptional performance. Metrics on outcomes of service and mission performance, as required now by grantors; benchmarks on philanthropy, collected and aggregated to drive decisions on fundraising expenditures; demographics on constituency that support political advocacy and marketing investments – all data driven for enhanced results.

Data drives Innovation as well.  How many experiments do you have currently going in your organization? What are you currently testing? If the answer is nothing, the future may look bleak for you. Testing gives you all the raw data you need to begin to get creative and innovate existing projects and services. Without it, you’re shooting in the dark.

It doesn’t matter where you start, as long as you start. Test something every week, every month and have a few tests going at the same time. Overall, testing does not significantly impact resources devoted to your project: You’re already completing the project with all the resources you have and need. Testing requires a simple tracking methodology.

A simple trial test, to get yourself and your staff acquainted with a culture of testing, is to develop a survey used with every donor/donation received. The survey can ask some common demographic questions, but also some quirky ones:  What color would you paint your car if you could paint it any color? What did you want to be when you grew up? What’s your favorite treat food?

The resulting data can be a rich playground for your team to get creative. What if more than 75% of your donors said Popcorn was their favorite treat food? How could you use this information to better your appeals, raise more money, sign up more volunteers, get more people to your programs? You could also take that quirky data, create an info-graphic and share with your constituency, giving them all an intimate look at the tribe they are part of in supporting your mission!

3) Free Access, Embrace Risk:

Let your staff play. Open up their access to the internet, create an environment of walking around to work, withhold judgement, encourage impossible dreams, create shared spaces for interaction. Let go of your organizational fear, and strict fence posts, and let your staff bloom! Additionally, inspire and ask you constituents and donor base to get involved. Create spaces for shared ideas, allow your donors to see their own giving histories, to watch projects unfold and to openly track progress of service delivery and program development.  Yes, even the warts and the odd parts.

Try this for one month: Using a cloud based program, like Dropbox or Google+, create a shared folder or a group for idea generation. Invite staff, board, donors, clients, to get involved. Post a problem or question of the month. Then encourage everyone to drop a comment. People love to give their feedback, so encourage that sharing on your real issues. Why not start with this question: What one thing would you change about us? Interact with the group, asking further questions, exploring responses, challenging perceptions.

4) Allow process, iteration, pivoting. Don’t kill the messenger or the message – massage it.

If you don’t give Innovation the time and attention it deserves, it will not produce and it will not gel as a culture. There are no bad ideas, only ideas which have not matured yet. Like a fine wine, an idea becomes innovative after taking some time to develop. Too often we rush to judgement on a solution, concept or strategy. Keep all ideas generative and don’t lose any along the way. Pop them open every so often, encourage follow through and push back on development on those that look promising or have some immediate potential application. Use data to tweak them along the way and send them out for more testing. Turn them over, look at them differently.  One of my favorite examples of this is asking the question: How is your_____________  like a ________? For instance, “How is your Nonprofit, like a Toaster?”.

5) Be sincere

Finally, don’t offer lip service on Innovation. It knows when you are lying and it knows when you are passionate about serving it well. Innovation is not a tactic, or a business management style. It is truly a culture, one which can only come from authentic, inspired and patient nurturing. Making it part of the spirit of your organization will yield powerful results.