Diversity in Innovation

The single focus on technology reinforces that innovation stems from a single brilliant idea and that one can’t separate innovation from ad-hoc technology creativity. The current craze in Generative Artificial Intelligence (GenAI) and Large Language Models (LLMs), like blockchain before it, reinforces this viewpoint. While this is certainly the case for many start-ups, this is not the only way innovation shows up in organizations.

Innovation can have many diverse meanings. Let’s use Walmart as an example. Walmart’s innovation was rooted in how it managed its supply chain to help keep prices low. This actually consisted of five different innovations linked together:

1. Closely Located Warehouse Distribution Centers – this reduces the transportation costs and makes inventory replenishment in stores faster. This also allowed rural Walmart storefronts to be cost-effective and actually allowed them to carve rural areas out as a market segment. This is a key activity innovation.
2. Bulk Purchasing Power – buying larger quantities of items to reduce costs; this strengthens their supplier network for those companies that want large sales volume. This is an innovation its partner network.
3. Realtime Inventory Automation – they were one of the first companies to track inventory in both within their stores and at the distribution centers. Walmart even invested in a private satellite network in the 80s to make it more real-time. This is a technology-focused resource innovation.
4. One Stop Shopping – Walmart attempts to give customers a one-stop location for all their needs. This reduces customers’ desire to go elsewhere for their needs. This showcases the impact of a customer experience innovation.
5. eCommerce Adoption – Walmart evolved to providing eCommerce as the need arose, placing inventory online. Having the distribution network made this more cost-effective. This is another technology-focused innovation.

For Walmart, it is these five linked innovations, and one could argue simply the first four, that created Walmart’s dominance for much of the 90s into early the 21st Century. Each one on its own is fairly strong, but having these working together made it extremely difficult for them to be disrupted.

So how do you apply this to mission-driven organizations?

Think of how you do business today, perhaps capture your model on our Mission-Driven Organization Canvas. What innovations could you change in your partner network, technologies, key activities (aka internal processes), outreach, or brand? What new services or perhaps even products could you provide? What would their value proposition be? How could you change or add to your funding methods so you have a more reliable cash flow to support your work? Co-creating and testing 2-3 linked innovations with your staff will allow you to face disruptions better, whether caused by regulatory changes, pandemics, new technologies, or competing organizations.

One worldwide mission-driven organization with which we have talked has reinvented their entire operating model by moving in-house services to partners within the countries they serve, and adding new services to support these partners. This was linked to a revamped brand to help align their donors.

Intentional Innovation

Let’s state the obvious: innovations you adopt should be in service to your mission, but how would you know whether they are or not? Could they simply be something ‘cool’ that came along that a few begin using without regard to how it supports the mission? This is ad-hoc adoption; and while there may be some benefit, often innovations adopted in this manner can become a distraction. For example, we all probably know of the one person using GenAI to write bland emails that ring hollow to the message they are trying to portray. In this case, its use may actually be at odds with what they need to get done.

Being intentional starts by recognizing an innovation may actually not produce the expected benefit for the audience it is intended. This audience could be internal or external. Thinking through the benefit it should produce is more than just a goal or outcome, though this is needed. What is needed by the people that help them? What will improve in their emotional state as a result? Does it ease stress or improve their happiness? Would it change anything in their social standing, such as claiming a new skill they have or improving their ability to get promoted? Perhaps it rids them of something that holds them back? Understanding the answers to these questions can help you determine what they MAY gain or the pains that MAY be reduced.

To answer these questions effectively, the organization needs to collectively understand the needs, co-create what it thinks will fulfill them, then iteratively test whether their needs are being met. This will reduce the risks preventing the innovation from being adopted or working within the organization. Each test will produce some understanding for the need trying to be solved + the specific beneficiary + the effectiveness of the proposed solution. If on target, move to the next test. But you may find that you need to tweak one of those in that combination or even find out that the idea isn’t going to work at all. The earlier you find this out, the less costly to make a change or kill off a project that won’t yield the desired results.

To intentionally discover what tests are needed, a cross-domain team needs to think through the assumptions that must be true in order for that combination of need, beneficiary, and solution to work. Any tests should be trying to invalidate the assumption; how will this combination NOT be true with this test. What breaks it? As we tweak any part of the combination, the team should revisit the assumptions, perhaps new ones appear, others disappear, or the risk levels change. Take the next riskiest one and make another test. A future post will go through some more detail in how to create and select appropriate tests as well as details in assessing your assumptions.

In Conclusion

For now, this will leave you a picture on the two major concepts that will improve your innovation fluency. You can apply these at a team or across the entire organization. These could be ideas in response to a disruption or something you are strategically putting in place. We welcome hearing from you on whether applying this thinking improves your ability as an organization to become more innovative.