May 20, 2012

Social entrepreneurship a tool for nonprofits

PAUL GRASSO, In Perspective

---- — Earlier this week, I was a member of a panel that conducted telephone interviews with candidates competing for a position with a small not-for-profit in Ireland that was recruiting a leader capable of creating a culture of innovation within their organization.

No mean feat.

I admire the organization for recognizing the need to be more innovative in serving its clients. They know they need to be in order to compete with other organizations vying for a constantly shrinking pool of Euro dollars. The organization recognizes that not only to survive, but also to thrive, means to be in a constant state of evolution. It's the only way to stay at the head of the pack.

In preparing for the interviews, I reviewed the interview questions and then began drafting responses based on how I would answer; in other words, the perfect responses. Not really, but I did begin thinking seriously about what "innovation" meant and how a person could go about creating a corporate culture based on innovation in a not-for-profit organization. More importantly, I thought about where a culture of innovation might lead an organization.

I have colleagues who argue that innovation in the not-for-profit sector is unnecessary. The more enlightened among us argue the opposite, that innovation in the not-for-profit is essential because not-for-profits lack the resources and cash flow of private sector firms. For starters, a not-for-profit needs to be innovative in expanding its reach, in its mission delivery and in utilizing its resources.

Most importantly, a not-for-profit needs to be innovative in finding ways to generate new revenue, but more about that later.

However, let's back the innovation bus up and talk about what we mean by "innovation." There is no one agreed-upon definition, but for me, innovation is about adaptation and change. It's about evolution. It's about what's new and what's next. It's about challenging long-held assumptions. It's about moving into uncharted territory.

Innovation is exciting and freakin' scary all at the same time.

I suspect that some not-for-profits recognize that innovation is no longer optional but a core requirement in order to survive in the current funding climate. Most simply don't know how to go about changing their culture.

I think other not-for-profits don't have a clue.

But, as Charles Darwin said, "It's not the strongest of the species that survives, nor the most intelligent, but the one that is most responsive to change."

So, why is it that a culture of innovation is uncommon in many not-for-profits?

Simply put, the attributes necessary to be innovative aren't necessarily the attributes that many not-for-profits value. For example, many not-for-profits value stability and predictability because of the certainty they provide. By their very nature, the attributes of innovation (adapting, changing and challenging) scream uncertainty.

An organization with a culture of innovation is one that creates an environment that inspires people to think creatively and simplifies implementing ideas that work.

Creating a culture of innovation is the first step on the path that I believe many not-for-profits need to walk, the path to social entrepreneurship, and the integration of social and economic value creation.

Social entrepreneurial organizations identify social problems and then attempt to solve them in innovative ways. They operate at the intersection of the for-profit and not-for profit sectors. A homeless shelter that starts a thrift shop to train and employ its residents is an example of social entrepreneurship by virtue of its blending of a social mission and an innovative, entrepreneurial activity that helps solve the problem.

Social entrepreneurship combines the passion of a social mission with businesslike discipline. However, for social entrepreneurs, the social mission and the mission-related impact of the entrepreneurial activity are central. Generating profits are simply a means to an end.

Social entrepreneurship provides an incredible opportunity at a time when the not-for-profit world needs it most. It's a powerful business model for not-for-profits in an era when traditional sources of funding are evaporating.

For organizations with passionate, creative and ambitious staff and leadership, the possibilities are limitless.

Paul Grasso is the executive director of the North Country Workforce Investment Board, the Clinton, Essex, Franklin and Hamilton counties' designated workforce-development agency and the North Country Workforce Partnership Inc.