The Three Essentials for Driving Innovation in Your Not for Profit

Innovation is critical for the not-for-profit sector in Australia, writes Doug Taylor, group executive, Uniting NSW and ACT, as he offers three practical tips to drive innovation.

There’s a lot of talk these days about innovation in Australia. Start-ups, incubators, labs, human-centered design, prototypes are just some of the topics.

At Uniting, which provides community services to Australians of all ages, we face the ongoing challenge of how to best respond to the many changes in the not-for-profit sector. It can be difficult to demystify innovation, and decide what to actually “do” about it. I wanted to share my perspective on this important topic.

The first point I’d make is that it is very important to get this right, because innovation is critical for the not-for-profit sector in this country.

Some of the models in the marketplace today are neither desirable nor sustainable for the long term. Suitability and desirability are driven by the changing nature of social and economic exclusion and the fact that not for profits must become more customer centric.

Sustainability rests on the conflict between the exponential increase in the numbers of people retiring compared with a smaller number of taxpayers which puts more pressure on government spending. These trends create an innovation mandate.

I’d like to offer three practical tips to drive innovation in your not-for-profit organisation.

1. Choose the right type of innovation for the solution you need

There are three types of innovation and each type is suitable for a different business problem.

Sustain and improve: Human Services is a heavily regulated sector in which compliance and risk mitigation become strong aspects of an organisation’s culture. This strong focus on quality and continuous improvement is itself a form of innovation that is incremental and an important organisational foundation. At Uniting, we invest heavily in a team dedicated to improving our practice and quality. The team provides proactive leadership and development in response to feedback, complaints and incidents.

Add and subtract: This happens a lot in Australia because we’re a small market without the investment pools you’ll find in the USA and Europe. This means we have become effective at identifying great models internationally and adopting and adapting them for our local market. This can be a very efficient mode of innovation because we’re an early adopter of innovation.

But, this does require deliberate and intentional work in adaptation. At Uniting, we have explored this through the development of our Inspired Care program which we are rolling out in the Household Model in our residential aged care facilities. Similarly, we could cite Newpin, a UK based model which we piloted and adapted to focuses on family restoration with the support of Australia’s first social impact bond.  

Disrupt and transform: Recent government reforms which encourage competition and consumer-directed funding may foster disruptive innovation in the not-for-profit sector in Australia. But, we have yet to see strong evidence of this type of innovation. There are, however, already some new models emerging through startups which will harness new technology platforms.  

“Disrupt and transform” is the most innovative, but least adopted model in Australia.

2. Ensure necessity is the mother of your innovation

Far too much work in innovation gets commissioned without a clear social or commercial mandate. This makes it unsustainable. Innovation can be costly. It takes time and will ultimately mean you have to make tough choices that will challenge the status quo in your organisation.

Without a clear “why” these challenges make it hard to sustain your innovation, so ensure you’re prepared and can make the link to your core business. The framework [below] provides a helpful way to think about your business activities and the way you can innovate and allocate resources.

Core: There are opportunities to innovate from your core business for existing customers and products. This should be the overall priority for your innovation agenda.

Adjacencies: By extending the services on offer, and expanding existing services into new markets, you will be able to explore more opportunities for innovation.

Transformational: This final quadrant for innovation is the most difficult for organisations to explore, but in an era of disruption it’s best to be on the front foot.

3. “Doing” innovation requires structure and discipline

Before we explore the process for innovation, let’s start with the biggest risk: you.

The biggest challenge for innovation is people with preconceived solutions. The best place to start is with a problem; and even better if it’s one that a customer has identified. The best innovations are anchored in a customer’s needs, with potential solutions developed with customers by digging deep into the assumptions that sit behind these ideas. What this tells us is that innovation is not a free creative process, but one that requires structure and discipline.

The other perennial question about innovation is how you structure it within your organisation. In other words, do you embed it within your frontline services, or do you create a centralised function? The reality is that either model can work if you acknowledge that innovation, excluding continuous improvement, will likely require a different type of skills from your business-as-usual activities. It will also require some dedicated focus.

This can be done by creating cross functional teams, dedicated units with operational leads, or external partnership with universities, or small startups. Other specialist organisations, such as The Australian Centre for Social Innovation, can also provide assistance.

About the author: Doug Taylor is group executive at Uniting where he is responsible for social impact, advocacy, disability, early learning and home care services. He has built a 25-year professional career domestically and internationally in the social sector out of his passion for social impact. These interests are manifest in his membership of the Board of the Australian Centre for Social Innovation and the advisory boards of the Centre for Social Impact Advisory Board and the Community Services Industry Alliance Reform Council.