The business world is abuzz with innovation. Why is it so important? In an increasingly crowded marketplace where new businesses pop up everyday, there is a need for companies to stay ahead of the competition and this is done through innovation. What is innovation, exactly? Ideaction, a Toronto-based innovation consulting firm defines innovation as “creating value for your organization with new, implemented ideas that improve what you do or how you do it.” Further, although creativity helps with innovation, the two terms are not the same. Ideaction simplifies the contrast, “Creativity is getting more ideas. Innovation is getting better results.”

Given the definition of innovation, how can your organization benefit from being innovative?

• Raises perception of quality and brand which helps your organization attract more resources in terms of staff, volunteers, donors, etc.
• Differentiation helps your organization stand out amongst the others while also helping to raise awareness, funds, and volunteer hours.

Replay our CharityVillage LIVE conversation on building a culture of innovation. John Paul de Silva and participants shared examples and ideas of innovation in action.

 

Now that we understand the benefits of innovation, how can your organization facilitate innovation?

1. Top down approach. an innovation culture is created from the top down. Executive directors needs to lead by example to facilitate innovation throughout the organization.
2. Facilitate ideas by holding monthly brainstorming sessions to address existing organizational issues. Encourage staff members to contribute equitably by tracking performance through the organization’s balanced scorecard.
3. Encourage small changes. Innovation doesn’t have to be groundbreaking. Breakthrough innovations are usually a result of a series of incremental changes.
4. Encourage failure! Although we’re inclined to want to succeed within our organizations, innovation often happens only after experimentation and failure. Further, it is best to fail fast. By failing fast, we limit the amount of resources (people, time, money) and risk devoted to the failure. Further, failure is a great learning experience that can help us avoid the same or similar failure in the future.
5. Create a culture of change. Change is sometimes frowned upon in the workplace because it carries with it risk and instability. In order to innovate, however, change must occur often. So, how do innovative cultures nurture change? First, is to use champions and advocates to back every change within the organization, according to Innovationcoach.com. This will give the change more credibility and accountability. Second, point to examples of success whether from the outside or within the organization to demonstrate that such a change will be beneficial.

What companies have facilitated innovation, what were the results, and how can this help your organization to innovate?

A. Unilever and resource innovation

Unilever is a global consumer packaged goods company managing many brands such as Lipton, Axe, and Hellman’s. Although it has more than 170,000 employees working in top research and development facilities, it has been looking outside of the organization for ideas to improve existing products or create new ones. This is also known as open innovation as anyone, including outside professionals, partners, suppliers, and even the unemployed can participate as long as they have a feasible solution.

Visit this online wish list to learn of Unilever’s challenges open for anyone to solve. One wish is for lighter and sustainable packaging. If solved, this will not only help the environment, but also help Unilever to reduce costs. Unilever does not pay immediately for solutions that are submitted, but select submissions can lead to a contract for licensing, joint venture, technology acquisition, or patent acquisition.

One success story is Pureit, a device that provides clean water without the use of cooking gas or electricity. More than 100 scientists contributed to the design and manufacturing of the solution. Quickly passing regulatory approval, Pureit has also received numerous awards including the United Nations Educational, Scientific, and Cultural Organization Water Digest Water award. More importantly, the solution has created a better quality of life for millions of people who previously had no access to clean, affordable drinking water.

How can Unilever’s open innovation be applied in nonprofits? Challenges can be posted on your website, e-newsletter, or through a third party such as KoodoNation. Examples of challenges can be as simple as “what should we brand our monthly giving program?” or “where should our next fundraiser be held?”

Drawing on resources external to your organization maximizes the likelihood that you find the most effective solution while also raising awareness for your cause and its needs. It’s also a great way to engage some of your more dedicated and committed volunteers, donors and supporters.

B. Salesforce.com and collaboration innovation

Salesforce.com is a global enterprise software company best know for its customer relationship management product which it delivers through the web (also known as cloud computing).

Traditionally, collaboration in the workplace is done through emails and meetings which can be difficult to organize, challenging to manage, highly inefficient, and tedious.

After being inspired by an engineer’s suggestion, co-founder and Chief Executive Officer Marc Benioff ordered the development of an internal social network called Chatter. The network allows co-workers to update groups on projects and deals while encouraging comments and conversations. The network’s potential was tested at an annual management meeting of 300 executives. Video cameras were setup so the company’s thousands of employees around the world could attend virtually while also being able to comment through Chatter. During the meeting, input started coming in from around the world including Singapore, San Francisco, and Australia. Marc had realized the company culture had forever changed for the better because conversations were happening globally and not just at individual offices. Chatter is still in use by Salesforce.com and is also a service the company provides to more than 100,000 companies.

By using innovative work collaboration tools such as Chatter, Salesforce.com has grown into a multi-billion dollar company and is recognized by Forbes as the most innovative company in the world.

How can your organization start collaborating online today? A basic version of Chatter is free for use. Other options include creating a Facebook group and a LinkedIn group. Your organization can then post executive decisions and garner feedback from staff members, volunteers, board members, and donors who log-in. The result is more engaged stakeholders that feel like they have real input into what goes on at the organization. More engagement often results in more donations and advocacy. In starting a new online social group, you’ll need to decide whether you want your group to be open or closed. Open groups will facilitate a larger membership and more chatter, especially if members are allowed to post anonymously. A closed group, which requires invitations or requests to join, allow you to control membership and content.

C. Southwest Airlines and operations innovation

After incorporating as an airline, Southwest Airlines needed to differentiate itself from the major carriers such as American Airlines and United Airlines, not only to compete, but to survive in the industry. Southwest did this by positioning itself as a low-fare airline that provides excellent service.

What did Southwest do to back up this positioning? First, to offer low fares, Southwest flew short routes that were usually intrastate and priced these offerings not to compete against other airlines, but against driving a car. Second, to make the low fares economically feasible, it had to cut its operational costs.The airline used older and less congested airports, which resulted in faster turnaround times and thus lower costs. Further, it provided no meals and limited check-in luggage. Only one type of plane with the same seating configuration was used. With less variability, mechanics only had to learn one type of plane, resulting in quicker repairs and less downtime. Similarly, cleaners were able to do their job much quicker because they knew where everything was and what needed to be done. Lastly, Southwest used a high-speed boarding process where passengers are given colorful plastic reusable boarding passes. The passes allowed those who arrived early to pick any available seat which offered an incentive for early boarding, resulting in quicker plane turnarounds.

As a result of these innovative operations procedures, Southwest was the only airline to have been first in on-time performance, lowest in lost baggage, and highest in customer satisfaction in the same year. The airline is also considered in the top ten of the world’s most admired companies by CNN.

How can your organization startinnovating its operations? Although it’s best to confer with a consultant, you can also try doing some of the work yourself. First, create a process map of a key area of your organization (e.g. processing volunteer applications). A process map is a flow chart showing all the steps from the start (e.g. volunteer submits application) to end (e.g. volunteer is approved to work with organization) and alternative pathways. An example of alternative pathways: after the volunteer application is read, the alternatives are “reject” or “interview.”

Next, determine if any steps can be done faster, combined, or removed entirely. In doing so, the overall process from step one to the final step will be quicker, saving your organization time (e.g. in processing volunteer applications) and allowing you to spend time on other organizational needs.

Innovation won’t necessarily happen overnight, therefore, take small steps that lead to progress and your organization will reap the benefits over the long term. Has your organization implemented successful innovations? Share them below in the comments field.

Also, just as there are distinctions between a nonprofit (organization without charitable status) and a charitable organization when it comes to social enterprise investing, so the two types of organizations have different legal regulations for operating a business.

 

John Paul de Silva holds an MBA from the Queen’s School of Business. He is also managing director of Social Focus Consulting which provides affordable solutions to Toronto-area nonprofits. He can be reached at JohnPaul@SocialFocusConsulting.ca or on Twitter @goSocialFocus.

Photos (from top) via iStock.com. All photos used with permission.