Stephen Brand: “Innovation” is not “Risk”

In this interview, I’m delighted to introduce you to Dr. Stephen Brand, President & Chief Imagination Officer of the New Enterprise Factory.  His firm designs, launches and scales revenue-generating, mission-driven ventures. In his words, he “finds the profit in non-profits.”

  • How do you define the word “innovation” for a non-profit organization? Is it synonymous with “risk?”

It’s entrepreneurship that is synonymous with risk, not innovation. When we speak of innovation, we are talking about the introduction of relevant new approaches, products/services or ways of doing business for an existing (or new) market/audience. A focus on innovation (I like to use the word “newness”) is critical to the health, viability and effectiveness of all sectors – non-profit, for profit and government.

Here’s how I see the structure of innovation:

  1. Creativity results in ideas.
  2. Innovation results in new ideas that are relevant and respond to a need or desire.
  3. Entrepreneurship is the implementation of ideas that push the envelope and drive new revenue.
  •  What is the relation between “innovation” and “mission” in a non-profit organization? Is an organization’s mission always sacred and if so, is it a constraint on an organization’s ability to innovate?

Frequently, non-profit boards and team members lose themselves in the nostalgia of their organization’s mission (i.e. what they recall their founder originally envisioned or what was codified in writing decades ago) that they lose sight of the need to continually be relevant and compelling to those they serve.

Innovation doesn’t conflict at all with mission. That innovation is necessarily grounded in a core (and simple) mission is critical to keep the non-profit vibrant and sustainable.

  • “Be more entrepreneurial” is frequent advice given to arts & cultural organization leaders. What should that directive mean to an organization beyond the obvious instruction to cultivate more revenue sources?

Well, I’m sad to say that the meaning behind “be more entrepreneurial” has become “get more things done” – even in the face of increasingly scarce resources.

What “be more entrepreneurial” SHOULD convey is an expectation that someone or an organization is authorized to take risks to excel and stand out from the crowd. I do believe that non-profits should be more entrepreneurial – but that task often requires a wholesale adjustment of organizational culture, delegation, skills and oversight.

To really “be more entrepreneurial” involves a far more complex responsibility than, say, “balance the budget” or “focus on accessibility”.

  • Non-profit organizations (and the people who run them) are generally expert at conserving resources while endeavoring to maximize mission. How does your approach to innovation change that paradigm?

First, accept that you can’t cut your way to long-term success.

Second, remember that managing expenses and eliminating “waste” is a baseline expectation of what it means to be a trustworthy steward of donor gifts and government grants.

Third, it is the investment in innovation – and a commitment to accepting some appropriate degree of risk – that determines whether your organization will still be alive and/or relevant in 5-10 years.

The good news is that there are increasing numbers of entrepreneurial donors willing to fund efforts that pursue bold new strategies, even while they understand the risks involved.

  • Speaking candidly, what do you see as the major obstacles to innovation in non-profit organizations? What are our chief causes of failure?

The list of obstacles is long – but it’s instructive, so I’m happy to share it:

  • Inept Control – You will fail at innovation because you ask everyone to be innovative, but then cut them down immediately when you don’t like or understand the ideas being generated.
  • Inadequate Culture – You will fail at innovation because you never purposefully designed a corporate process (or culture) that encouraged, welcomed, protected and respected new perspectives and ideas.
  • Devil’s Advocate – You will fail at innovation because you mistakenly thought that your role was to point out the flaws in the ideas. The devil has enough advocates, he doesn’t need you. Your team needs to be encouraged to think big and bold and given the opportunity to make things happen, even when it’s far outside of YOUR box.
  • Not Celebrating Failure – You will fail at innovation because you aren’t willing to learn from your mistakes like Thomas Edison, who invented 500 light-bulbs that failed before he found one that succeeded.
  • Square Peg/Round Hold – You will fail at innovation because you stopped listening to the people who didn’t give you the right reports at the right time in the right format. You failed to recognize that innovators work on a different plane than operators.
  • Blindness – You will fail at innovation because you see only title, age, resume and corporate hierarchy rather than the opportunity to give license to people with passion, drive, fire in their belly and the vision for seeing things through.
  • What resources (books, magazines, blogs, podcasts) do you recommend most highly for people working in non-profits who want/need to get into a more “innovative” mindset?
  • Fast Company magazine.
  • Anything that Seth Godin writes.
  • Try a different magazine every month from a field that is not yours with the task of learning something new that you can steal for your industry.
  • Go to a new conference every year that you never attended and push yourself to come up with enough ideas that generate twice what it cost you to attend.
  • Art of the Start by Guy Kawasaki – the first Apple evangelist.
  • Read about people, companies and organizations you admire that you perceive as innovative. There is always something to learn from people and companies like: Steven Jobs, Southwest Airlines, Disney, Zappos, Amazon, Google, etc.
  • Go on to TED.com and listen to a different 18 minute talk every week.
  • Be a curious observer of everything you come across, hear about, see, visit, etc. New ideas that drive innovation can certainly come from within your field – but the most exciting ideas will be sparked from fields far out of your range.
  • Finally, listen to your front line employees. They know much more about your “customer”, client, clientele,  members, etc. than management that lives in offices and on their computers too much.

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