When talking innovation, CEOs and board members usually have in mind outside-the-box, over-the-moon, home-run kinds of initiatives. And woe to anyone who suggests that enhancements to “is” might reap a better return than chasing “could be.” It’s off with their heads.
But hold the guillotine. This just in from the Harvard Business Review: Most of the time, in most places, innovation comes via something less than turn-the-organization-on-its-ear change.
That’s what Bansi Nagji and Geoff Tuff, leaders in the Monitor Group’s innovation practice, discovered through a study of high performance companies. The research duo found that firms consistently outperforming their peers maintain “innovation portfolios” comprised of 70 percent in enhancements to core offerings, 20 percent in adjacent moves, and 10 percent to transformational initiatives.
Per the HBR piece, “Rather than hoping that their future will emerge from a collection of ad hoc, stand-alone efforts that compete with one another for time, money, attention, and prestige, they manage for total innovation.” The corporate superstars seek to “optimize existing products for existing customers” before expanding into new areas of business.
THE INNOVATING NONPROFIT
Transfer the Nagji/Tuff finding to the nonprofit sector and we see innovation leaders who think carefully before dipping the organization’s toe into untested service “waters.” They seek first to squeeze every drop of possibility out of existing programs. They take full advantage of what they hold in their hands before grabbing for more.
Despite the lure of expansion or siren song of trying something different, these leaders know better than to chase after the sexiest, flashiest, or latest wow-me change. For them, it’s about pacing, discipline, and building systematically on what’s already working.
WHERE EVERYTHING OLD IS NEW AGAIN
Even as I write this, I can hear nonprofit leaders — especially those who’ve been in place for several years — choking on the tough pill labeled “what is.” Familiarity breeds boredom with — or worse, contempt for — longstanding programs. Tired of the same old-same old, staff go searching for new possibilities and absent a vigilant board, mission drift sets in. The organization changes, but not through managed innovation.
Don’t get me wrong. I understand the importance of being open to emerging possibilities. Fortunately, for most organizations the 30 percent window suggested in the HBR article provides ample wiggle room for testing untried ideas. However, more often than not, sustainable change comes from breathing new life into existing programs.
As Jim Collins and Morten Hansen write in Great by Choice, “The Next Big Thing just might be the Big Thing you already have.” Now that’s an innovative thought.
Questions for boards: What is your organization’s “big thing?” How can you better maximize what you already hold in your hands?