Innovation Index. The Australian Not-for-Profit Sector. March 2015 · 2017-12-22 · FOREWORD...

INNOVATION INDEX OF THE AUSTRALIAN NOT-FOR-PROFIT SECTOR 6��>��5�:89=�� -��(0��$��,()'�" ��%()�

Innovation Index�

The Australian � Not-for-Profit Sector�

� March 2015�

Sponsored By�p

About this publication�

Innovation Index of the Australian Not-For-Profit Sector 2015 © GiveEasy Pty Ltd and Australia Post 2015. The view expresssed in this document are those of the authors. Methodology is the property of The Strategy Group Pty Ltd and is not to be used for any other purpose without their express permission. Persons who rely upon the material do so at their own risk.

Formulated and designed by GiveEasy Pty Ltd. Research conducted by GiveEasy Pty Ltd. Market Research Partner: Ian Davidson, FlyResearch.

About Australia Post�

As the nation’s oldest continually operating organisation, Australia Post has a long history of connecting Australians with each other – and the world. We operate to help our people, customers and communities to build a better future. � From the humble beginnings of 1809, Australia’s postal service has been growing alongside the Australian community for over 205 years. In a changing world, the needs of communities and the trust they hold in us, remains at the core of every decision and every action we take. � We do this by delivering mail, helping businesses and consumers with parcels, and providing a national retail network that supports local communities and organisations. As the needs of the community have evolved, so have we, with a range of services spanning our stores, online and the MyPost Digital MailBox. Wecomplement our national logistics and retail network with convenient digital products to help make everyday life a bit simpler. About GiveEasy�

GiveEasy connects charities, causes and not-for-profits to their supporters and communities through simple, smart and social digital giving solutions. GiveEasy’s four core digital giving solutions – Your SMS, Your App, Your Campaign, Your Page – sit on GiveEasy’s cloud based digital fundraising platform which take care of all the banking, processing, reconciling, legal, security, data and technology issues for its charity clients. These digital giving solutions allow charity supporters and donors to donate quickly and easily via their mobile or desktop and allow charities to connect with and activate their donor base - all from one simple fundraising platform. GiveEasy’s mission is to provide world-leading fundraising and social innovation solutions to help not-for-profits move into a digital and mobile future.

INNOVATION INDEX OF THE AUSTRALIAN NOT-FOR-PROFIT SECTOR 6��?��

FOREWORD�

Nicholas Gruen – Chairman The Australian Centre for Social Innovation �

Like many businesses, our not-for-profits (NFPs) often have trouble breaking out of old habits, seizing opportunities to innovate and improve how they work, particularly given the new technologies that burgeon around us. But competition among for-profit firms is often more direct. If a firm finds a way to lower its costs or improve its customers’ experience, it will steal market share and profits from its competitors. That gives its competitors an immediate interest in keeping up. Though they often compete for government and donor funds, other competition between NFPs is often more muted. And luck and history may play a larger role with NFPs. Established relationships may be more important and donors are often not in a good position to assess the relative merits of alternative recipients of their money. For these reasons, the pressure to innovate in the NFP sector may be muted. Yet it is at least as important as innovation in business, not least because the problems tackled by NFPs are often more intractable than those faced by business. I know from my experience as chair of the Australian Centre for Social Innovation that rethinking the way we do things, and rebuilding programs from the ground up to capture the knowledge and aspirations of the intended beneficiaries of the programs can be incredibly powerful. So I salute the NFPs that this Index identifies as innovation leaders. They’re on the beginning of a long journey that every NFP should be making and I salute the authors of this Index for the light it can throw on the NFPs that are meeting the innovation challenge. Such knowledge is hugely valuable, for policy makers, the NFPs themselves and for funders of NFPs, whether thecheques are for millions of dollars from governments or foundations or for more modest sums from those millions of us wanting to do their bit to build a better Australia.

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INNOVATION INDEX OF THE AUSTRALIAN NOT-FOR-PROFIT SECTOR |"PAGE"4""

CONTENTS

Introduc:on"

05"

Execu:ve""Summary"

07" Sector""Overview"

09"

Sector""Snapshots"

14"Sector""Insights""

22"

Other"Insights"

37"

INTRODUCTION TO THIS RESEARCH �

Greg Sutherland Executive General Manager, Marketing & Customer Experience, Australia Post

The Australian community has undergone a seismic shift in the way it has communicated over the past decade. The way we access services, shop and connect with others has fundamentally changed with the rise of digital technology andmobile devices. The implications for Australia Post are far reaching – and we are responding by changing the way we provide essential services to Australians in every corner of our country. In a world in which digital channels are opening up endless new possibilities, organisations need to continuously reassess their business model to ensure they are meeting their customers’ changing needs. Organisations now need to continually ask fundamental questions about their relationships with their customers and employees toremain successful. Technology is only one part of the equation. The other important ingredient is having talented people and a corporate culture that encourages them to ask big questions. An innovation culture. The rise of digital channels has created greater convenience and opportunities for many, but at Australia Post we are also mindful that this shifting landscape can potentially create a widening divide in our community. This is why we are investing heavily in building the “Our Neighbourhood” program – to help build healthier, more inclusive communities throughout Australia. We recognise that building capability in the community sector is essential to this mission. This is why we are supporting the first ever Innovation Index for the NFP sector in Australia. We believe that innovation is essential to our own ability to deliver on our business objectives, just as it is for community organisations to deliver improved services for people, and communities, throughout Australia. We hope that this study will deliver greater insight into the need for innovation and unlock ideas on how best to build a culture of innovation. Australia Post is proud to support the first ever Innovation Index for the not-for-profit sector.

INNOVATION INDEX OF THE AUSTRALIAN NOT-FOR-PROFIT SECTOR 6��B��

INTRODUCTION TO THIS RESEARCH �

Dr. Jeffrey Tobias Director, GiveEasy

Everyone loves looking at lists and rankings. Who comes first, which organisation is ahead of the other, how does one organisation trump the others on one characteristics, but fall behind on another. As great as these lists are, they come with one big caveat. For the most part, they do a lot more looking back than they do forward. Organisations are often ranked on their results with the idea that they will provide a good indication of future performance. Because performance is always easier to measure by assessing data that is readily available, rankings often focus on lagging indicators such as total income, growth, and spending. However, lagging indicators often do not provide enough information to guide future predictions on their own. Leading indicators signal future events and can provide a more accurate depiction of future success. They show you where you are going and what is coming next. And one of the leading indicators in innovation is the innovation capability of an organisation. How collaborative are you? How do you engage with your ecosystem? What culture do you have in your organisation to drive innovation and growth? � GiveEasy is an organisation founded on innovation and philanthropy solutions for the 21st century. We provide affordable peer-to-peer campaigns, mobile and SMS giving, custom apps for charities, and the use of technology to make giving simple, smart andsocial. The ability to review the innovation capability of the sector as a whole and how it is equipped to innovate in the future, coupled with individual reports that will go out with the release of this report to every respondent (showing them where they stand on each vector against the aggregate), will enable each organisation to further build their capacity to innovate in the future. This innovation is vital for the sector as a whole.

INNOVATION INDEX OF THE AUSTRALIAN NOT-FOR-PROFIT SECTOR 6��C��

 

 

 

 

 

 

 

EXECUTIVE SUMMARY� The Australian not-for-profit (NFP) sector is made up of hundreds of thousands of charitable organisations and makes an important contribution to the fabric of society. It fills gaps and reaches out to community groups and causes that need support, connecting them with others through giving. Like the business sector, NFP organisations need to work hard to be sustainable, thrive and continue to make a positive impact. Competition for the charity dollar is fierce and the operating environment of the sector is changing. Now more than ever the NFP sector is in need of innovation. The Innovation Index – Australian Not-for-Profit Sector 2015 is a study of the sector’s current innovation capability. The Index is the outcome of a survey of more than 744 professionals working across the sector from every Australian state and territory. Organisations were measured according to their capacity to develop and deliver innovation according to seven key vectors:

• External Collaboration • Internal Collaboration • Innovation Focus • Openness of Culture/Vision • Organisational Velocity • Rewards/Recognition • Stakeholder Centricity The NFP sector recorded an overall innovation score of 66 per cent from the Index survey, indicating that while some organisations prioritise innovation in their day to day operations, there is significant scope for improvement across the sector.

INNOVATION INDEX OF THE AUSTRALIAN NOT-FOR-PROFIT SECTOR 6��D��

It’s not about the activities of today.�

It’s about ensuring that we have the innovation capability in the sector to drive what we need to do tomorrow�

Overall Innovation

Score 66%�

EXECUTIVE SUMMARY (cont’d)� Measuring innovation�

In working to quantify NFP innovation, the study revealed that innovative performance is influenced by organisational size. Organisations with between 11-25 employees tend to be the most innovative, and innovative performance appears to decline in line with an increase in employee numbers beyond this size. Although 83 per cent of respondents said they felt it is worthwhile being innovative in their organisation, and 67 percent agree that innovation is central to their organisation’s success, only 18 percent said that funding was available for testing innovative initiatives and only one third of respondents believe they will be promoted faster for being innovative. While internal collaboration is identified as an important determinant of innovation, relationships and networks between NFP organisations and external stakeholders are highly valued as a way of stimulating and supporting innovation. NFP organisations concerned with the environment, youth and education areas are more likely to have a clearly defined innovation strategy and an explicit focus on innovation scored 62 percent in the Index by respondents of the survey. The Top Ten Most Innovative NFP Organisations�

According to participants in the Index survey, Australia’s top ten most innovative NFP organisations are:

The Innovation Index – Australian Not-for-Profit Sector 2015 points to opportunities for more innovation across the sector and identifies the changing environment in which it operates. The Index establishes a baseline for further investigation that will make it possible to track trends and changes in innovation capability in future years. �

INNOVATION INDEX OF THE AUSTRALIAN NOT-FOR-PROFIT SECTOR 6��E��

1."Movember" 2."Oxfam"" 3."CharityWater" 5."World"Vision"Australia"

10."Fred"Hollows"""""""""""Founda:on"6."Thankyou"Water" 7.Getup!" 8."Salva:on"Army" 9."McGrath"Founda:on"

4." Beyond"Blue"

PART ONE

OVERVIEW

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THE PRESSING NEED FOR INNOVATION IN THE NFP SECTOR�

Now, more than ever, the NFP sector is in need of innovation. While innovation may have been on the agendas of some NFP boards in the past, the imperative to innovate and change has never been greater. Why? • The global community is moving away from the act of simply donating. Instead,

people are wanting to engage, to be part of an experience, to feel genuine connection, to own a relationship. Merely sending an arbitrary sum in response to a fundraising campaign is seen as passive, non-committal, not of the 21st century.

• Much fundraising by the NFP sector relies on mail-outs. These paper-based, antiquated systems are becoming less and less relevant as the traditional postal service around the world is in steep decline. Younger people rarely send or open letters any more, relying on email and mobile communication.

• While giving has increased among GenX/GenY (NAB National Giving Index, 2014), the fastest rate of growth of giving is among those 60+. Over time, given thedesire of Gen X/Gen Y and the Millenials to engage in an experience, the volume of traditional giving will drop off significantly.

• Other models of ‘doing good’ are prevalent and growing. There is a very strong move away from traditional ‘charity’ (money to one entity) to newer models such as the social enterprise, for example 40K/Globe, and crowd funding such as Startsomegood. More and more, these innovative models are disrupting traditional charitable giving.

• Hundreds of thousands of charitable organisations in Australia are competing for the citizen’s wallet share. The inefficiency of this is apparent to the public who react by turning to disruptive models that are more efficient and offer to multiply the money.

INNOVATION INDEX OF THE AUSTRALIAN NOT-FOR-PROFIT SECTOR 6��>=��

6��>>��

MEASURING INNOVATION IN THE NFP SECTOR� How does one measure innovation in the NFP sector? An Innovation Index for the sector must reflect the actual human capacity for innovation, not simply the number of activities ortypes of activities that an organisation is carrying out. Innovation in any sector is driven by people – their motivation,their ability to communicate and collaborate, their agility ingenerating and executing on ideas, and the ability of leadersto reward those within the organisation who are, in fact, innovative and creative. The NFP sector in Australia employs well over one millionpeople. Stereotypically, the sector is traditional and not innovative, but if the stereotype is allowed to persist, then the innovation capability of Australia as a whole is far from optimal. Research on innovation often focuses on one or two factors at a time, but doesn’t consider how they overlap and interrelate. To help understand how aspects of innovative practice fit together, and the leverage they can provide, we’ve utilised an Innovation Readiness Assessment tool, developedby The Strategy Group as a result of many years of academic and corporate research and experience in international and Australian innovation. The tool has seven attributes that The Strategy Group has identified as crucial to innovation capability: Internal and external collaboration, an explicit focus on innovation, openness of organisational culture and vision, organisational velocity, rewards and recognition for innovation and stakeholder centricity.

INNOVATION INDEX OF THE AUSTRALIAN NOT-FOR-PROFIT SECTOR R 6��>>�

EXTERNAL COLLABORATION 65.0%

INTERNAL COLLABORATION 65.0%

INNOVATION FOCUS 61.8%

OPENNESS OF CULTURE / VISION 58.3%

ORGANISATIONAL VELOCITY 49.5%

REWARDS / RECOGNITION 47.3%

STAKEHOLDER CENTRICITY 41.5%

 

 

 

 

 

 

 

 

ABOUT THE INNOVATION INDEX�

GiveEasy and Australia Post have, for the first time, commissioned a survey of theinnovation capability of the Australian NFP sector. The key goals in conducting thisresearch are: • To draw attention to the diversity of the sector and its importance to the

economy. • To raise awareness of innovation in the Australian NFP sector. • To highlight drivers and barriers to innovation, identifying issues that not-for-

profits should address to optimise Australian innovation. • To share best practice among organisations across the Sector and spark an

ongoing dialogue on effective routes to innovation that organisations can follow. • For the first time ever, to focus on the innovation capability of the sector as

opposed to simply facts and figures of activity. • To highlight the need for the different innovation capabilities needed for effective

innovation. • To spark debate within the sector around innovation. • To provide a snapshot of the capability of the sector that can be used to

measure innovation growth in the future. If you are an innovation leader, or a top executive at an organisation seeking to be more innovative, understanding and implementing the seven capabilities we measured will provide you with your highest leverage for innovation acceleration.

INNOVATION INDEX OF THE AUSTRALIAN NOT-FOR-PROFIT SECTOR 6��>?��

The Capabilities That Were Measured�

Internal Collaboration

External Collaboration

Explicit Focus OnInnovation

Openness Of Culture & Vision

Organisational Velocity

Rewards & Recognition for Innovation

Stakeholder Centricity

 

 

 

 

 

 

 

 

 

METHODOLOGY�

• We measured the NFP sector’s innovation capability across seven discrete vectors, scoring each in the range 0-10. We had 744 responses. Innovative organisations score in the range 7-9 on each vector.

• There were 495 individual NFP’s represented. • We asked individuals to respond, rather than one representative from each not-for-

profit. • Analysing the results for each vector, we identified significant room for improvement

in each. • We collected a number of key data elements such as age, gender, location, tenure in

the organisation, position, type of organisation, with a view to later analysis of these demographics.

• We collected data on day-to-day activities associated with innovation, for example, the use of social media.

• By the above means, we have been able to provide an overall measure of the innovation capability of the Australia not-for profit-sector.

• The current analysis provides a baseline. Re-analysis on an annual basis will allow for an appreciation of the trend in innovation in the NFP sector.

• The Innovation Index score for each question/vector is derived from the number of respondents in the top half of the scale of the possible outcome for each question (6-11 in response).

INNOVATION INDEX OF THE AUSTRALIAN NOT-FOR-PROFIT SECTOR 6��>@��

PART TWO

SECTOR SNAPSHOTS

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PROFILE WHAT DOES AN INNOVATIVE NFP LOOK LIKE?�

• Mid to large sized organisations employing 11-100 staff • Ones that have national and/or overseas footprint (not one state) • Working in the environment, lobbying or youth sectors

• Treat beneficiaries and the private sector as important as front line staff and management as sources of innovation

• Developing over half of their innovations from outside the organisation • Working hard to bring in new funding • Financially rewarding innovation activity (not just paying it lip service)

• Has a publically stated innovation policy that all employees know about. • Building their own apps as well as just being on Facebook and Twitter • Hiring staff across all age groups including under 25s and over 50s

• Focused on retaining employees for 4 or more years • Running a budget of $500-$1m or $2m-$10m

• Enjoying a rising budget • Continually getting funds from new sources

INNOVATION INDEX OF THE AUSTRALIAN NOT-FOR-PROFIT SECTOR 6��>B��


4.6" 4.8" 5.0" 5.2" 5.4" 5.6" 5.8" 6.0"

Advancing"educa:on"

Advancing"social/"public"welfare"

Advancing"the"natural"environment"

Advancing"health"

Advocacy"

Advancing"the""natural"environment""

Preven:ng"the"suffering"of"animals"

Promo:ng"reconcilia:on,"respect"&""tolerance"in"Australia"

Advancing"culture"

Advancing"the"security/"safety"of""Australia"

Innovation Index Score

"

SNAPSHOTTHE MOST INNOVATIVE NFP SECTORS ARE…


0.0" 1.0" 2.0" 3.0" 4.0" 5.0" 6.0" 7.0"

* Small sample size

Northern"Territory*"

Na:onally"

Interna:onally"

Tasmania*"

Western"Australia"

Queensland"

New"South"Wales"

Australian"Capital"Territory"

South"Australia"

Victoria"


SNAPSHOTINNOVATIVE NFP’s HAVE OPERATIONS IN…


SNAPSHOTNFP INNOVATION IS STIMULATED BY…

5.2" 5.3" 5.3" 5.4" 5.4" 5.5" 5.5" 5.6"


Private"Sector"

Beneficiaries"

Small"Donors"

Front"Line"Staff"

Management"

Main"Donors"

Federal"Government"

State"Government"

Volunteers"

Other"notQforQprofits"

The most innovative NFPs see these as the most important sources of innovation

SNAPSHOT INNOVATION IS A KEY DRIVER OF REVENUE� FROM NEW SOURCES�

% o

f re

venu

e fr

om

new

so

urce

s�

100%

90%

80%

70%

60%

50%

40%

30%

20%

10%

0%

45% 46% 49% 49% 50% 55% 58% 60% 64% 70% 72%

Innovation Index �

INNOVATION INDEX OF THE AUSTRALIAN NOT-FOR-PROFIT SECTOR 6��>F��

The relationship between sources of revenue from new sources and innovation is almost linear

SNAPSHOT WHAT MAKES AN INNOVATIVE NFP EMPLOYEE?�

I stay in touch with a big network

My network is very diverse

Persuasive

I'm experimental

I like to take chances

I'm always positive

Challenging

Traits that drive innovation �

The things I work on are never finished

I'm rarely fully satisfied

Methodical

I tend to go with majority decisions

Impatient Traits that

I'm mostly an introvert hinder innovation �

Risk averse

INNOVATION INDEX OF THE AUSTRALIAN NOT-FOR-PROFIT SECTOR 6��?=��

SNAPSHOT INNOVATION DECLINES AS SIZE OF THE ORGANISATION INCREASES�

55%

53%

51%

49%

47%

45%

43%

41%

39%

37%

35% Just 1 2 to 3 4 to 5 6 to 10 11 to 25 26 to 50 51 to 101 to 500 to Over

Innovation kicks in with organisations

4+ employees

Midsize organisations most innovative

Innovation declines as

size increases

100 499 999 1000 Number of employees�

Inno

vati

on

Ind

ex �

INNOVATION INDEX OF THE AUSTRALIAN NOT-FOR-PROFIT SECTOR 6��?>��

PART THREE

SECTOR INSIGHTS

INNOVATION INDEX OF THE AUSTRALIAN NOT-FOR-PROFIT SECTOR 6��??��

 

 

 

1 INTERNAL COLLABORATION�

65%� External

Collaboration Focus On Innovation

Openness ofCulture/Vision


Rewards & Recognition


65% 62% 58% 50% 47% 42%

The ability for individuals and groups to connect and collaborate within an organisation is a key driver of innovation. Smart organisations today realise the power of internal collaboration, and are putting processes in place to foster regular, sustained and quality collaboration and communication amongst team members of all levels of seniority. The internal encouragement of collaboration, and the provision of senior executive support for it within an organisation, is essential if effective innovation is to take place. A culture of team members providing frank and constructive input to each other is a hallmark of a truly innovative organisation. Robust discussion is inhibited by hierarchy, and breaking down hierarchical barriers is important if innovation is to occur. Regular events for collaboration such as idea festivals, stand-up meetings and informal get-togethers foster an innovative culture. Time to share ideas is necessary for innovation, and if quality time is allocated on a regular basis for brainstorming and internal collaboration, true creativity can emerge.

INSIGHTS�

• Internal collaboration within organisations in the sector needs to be improved. It is surprising that organisations which have their focus on public service and outreach, communicate sub-optimally internally.�

• Organisations that are now large and hierarchical need to work hard to ensure that internal communication flows freely in order to accelerate Innovation.�

• More time for effective communication and collaboration needs to be made if effective innovation is to be achieved.�

INNOVATION INDEX OF THE AUSTRALIAN NOT-FOR-PROFIT SECTOR 6��?@��

Effective internal collaboration, where ideas can freely and frequently collide, is a key driver of innovation capability�

Score 65%�

 

 

 

 

 

 

 

 

 

 

 

1 INTERNAL COLLABORATION – RESULTS�

• People who work in NFPs with a stated strategy and/or have a more international outlook, 70%� receive more feedback from colleagues independent of organisational size.

Agree that they receive constructive • On average, men feel they receive more feedback than women and those in their 30’s get feedback from colleagues on plans,

less feedback than those in their 50’s or older. ideas and strategies

• Mid sized NFPs (6-25 employees) find senior support for innovation the easiest • People in marketing and fundraising found it hardest to get senior support in innovation, 69%�

however, the more senior the position, the easier it is to get support. Agree it's easy getting senior • There is more senior support in NFPs that have a stated strategy and/or those that have a support for innovation here

low % of innovations developed externally.

• NFPs with a stated innovation policy hold more networking events than those that don’t. 63%�

• Organisations that have larger budgets generally hold more events, although large organisations (100+ employees) hold less than mid sized ones (26-100 employees). Agree that regular events are

organised to ensure team members • NFPs in the environment, culture and education areas are more social than those in health, all know each other

homelessness and human rights.

• NFPs with mid sized budgets ($100k-$10m) brainstorm the most. • High performers and those that have worked in the industry for longer, brainstorm more. • NFPs that have some processes and innovation developed externally brainstorm the most.

Too many processes developed externally means you've got no value to add and too few means you're too inward looking (generally).

INNOVATION INDEX OF THE AUSTRALIAN NOT-FOR-PROFIT SECTOR 6��?A��

58%� Agree it's easy getting time with colleagues to brainstorm andinnovate

 

 

 

2 EXTERNAL COLLABORATION� Internal

Collaboration 65%� Focus On Innovation





65% 62% 58% 50% 47% 42%

Successful innovators are proficient at building and maintaining lively mutual relationships with outside suppliers, distributors, educational institutions, and service providers. They know how to draw ideas and capabilities from outside the organisation as needed, for use at various points along the innovation value chain. Various mechanisms exist for opening an organisation to ideas from the outside to effect external collaboration. These range from the very simple e.g. holding plenary forums for frank and open discussion with a diverse group of external stakeholders, to the implementation of ideation platforms whereby anyone within and outside the organisation can contribute ideas and effectively collaborate. Social media, of course, provides another mechanism, and the use of social media tools such as Facebook and Twitter provides for effective communication and collaboration with external stakeholders on an ongoing basis.

INSIGHTS�

• Effective collaboration with stakeholders is a key driver of innovation – the sector overall needs to work harder to solicit feedback from external stakeholders on a regular basis.�

• Although an organisation may believe it has a strong external network by virtue of its fundraising activities, it may not be drawing on the network for collaboration at all. External networks should be used to drive innovation.�

• Sharing incomplete work with external stakeholders is to be encouraged – especially to test ideas that will need significant funding.�

INNOVATION INDEX OF THE AUSTRALIAN NOT-FOR-PROFIT SECTOR 6��?B��

Successful innovators are proficient at building and maintaining productive relationships with outside suppliers and service providers�

Score 65%�

 

 

 

 

 

 

 

 

 

 

2 EXTERNAL COLLABORATION – RESULTS�

• Mid sized NFPs (6-100 employees) and those in the youth, social and public welfare 81%�areas work the hardest to build external networks Agree their company work hard to • NFPs that have rising budgets, higher sources of revenue and work throughout Australia build networks beyond thework harder to build external networks than those that don’t. organisation

• Mid sized organisations "collaborate with and rely on external partners to make core projects happen" the most. If you are small you do everything yourself, whereas if you are large you have the money to pay people to do the work for you.

• The desire to collaborate to make core projects happen with external partners is markedly highest in Advancing the natural environment sector - Partners in this sector are more proactive?

64%� Agree it’s very common to collaborate with and rely on external partners to make core projects happen

• Organisations with 26-100 employees share innovations, ideas and programmes with other 58%�charitable organisations the most - largest and smallest companies share the least . Agree that innovations, ideas and • Desire to share generally increase with age and slightly by gender. programmes are shared with other

• People who have worked a longer time in the NFP Sector are more likely to share ideas. charitable organisations

• Both small and the very large teams don't tend to get external input from partners, donors and beneficiaries to validate new ideas. 57%�

• Seeking external input from partners, donors and beneficiaries appears more common the Agree they get external input from higher up the organisation you get or the longer you have worked in the sector. partners, donors and beneficiaries to

• NFPs with larger budgets collaborate the most and get external input to validate new ideas. validate new ideas late new ideas.

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3 EXPLICIT FOCUS ON INNOVATION� Internal

Collaboration External

Collaboration 65% 65%

62%� Openness ofCulture/Vision




58% 50% 47% 42%

Many organisations list innovation as a key focus and pillar of their strategy. Despite the rhetoric, these same organisations may have no strategy for actually making their organisation innovative. A single slide on innovation in a stakeholder communication achieves nothing. Innovation needs a strategy in its own right – a vision, goals, and well defined metrics – if it is to be a key driver for an organisation. The strategy needs to be embraced by the organisation’s leaders, and disseminated enthusiastically through the entire NFP. Further, the strategy for innovation needs to be underpinned by the development of an innovation culture – setting time for creative thinking, sharing and responding, empowering people to act on innovative ideas, and providing rewards and recognition for innovation whenever it occurs.

INSIGHTS�

• As in the corporate sector, setting aside time to innovate is a challenge – but it is a necessity if the organisation is to innovate effectively. Those organisations that make time for team members to work on opportunities beyond the daily urgencies reap the rewards.�

• Ideas without execution are just dreams and, while team members may be confident that they know how to take ideas to execution, most organisations do this very badly. It is therefore important that organisations have clear and simple processes for taking ideas all the way through to execution.�

INNOVATION INDEX OF THE AUSTRALIAN NOT-FOR-PROFIT SECTOR 6��?D��

Innovation needs a strategy in its own right – a vision, goals, and well defined metrics – if it is to be a key driver for the organisation�

Score 62%�

 

 3�

 

 

 

 

 

 

 

 

3 FOCUS ON INNOVATION – RESULTS�

• As you get older and have more experience, you tend to be clearer on the process needed 69%�to go through to take an idea to execution.

Say they are clear on the process • Likewise the longer you have worked in the NFP industry, the more you are clear on what is they need to go through to take an

required. � idea to execution

• Ideas that can make a difference is higher in ‘advancing the culture’ and lower in ‘helping the homeless’ sector. Those in the homeless sector seem to be the least positive as a rule. 69%�

• Small to mid sized NFPs seem to have more ideas than very large organisations. Agree their organisation is full of • People in very senior roles (Directors) and those working in operations believe their great new ideas that can make a organisation have more great ideas compared to those working in marketing, fundraising and difference mid to senior management.

• Historically innovation is fundamental to NFPs. • Over a quarter of those with ‘high' revenue from new sources give the statement "Historically 57%�

innovation has been fundamental to my organisation" top score. Agree that historically, innovation

• Small to mid sized NFPs believe innovation is fundamental to their organisation compared to has been fundamental to their very large NFPs (101+ employees). organisation

• Setting aside time for innovation that can make a difference is highest in ‘advancing the natural environment’ and lowest again in ‘helping the homeless sector’. 52%�

• Those in very senior positions set aside more time for innovation. Males generally set aside Agree that time is set aside for more time for innovations than females. innovation in their organisation

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4 OPENNESS OF CULTURE & VISION� Internal


Collaboration Focus On Innovation 58%�




65% 65% 62% 50% 47% 42%

Innovation results when previously separate ideas collide. Often the colliding ideas will have arisen from the experience or expertise of different individuals. If people are closed in their thinking, fearful of losing power by sharing, if they feel that their position in the hierarchy is secure because of the knowledge they keep to themselves, how can ideas collide and creative syntheses happen? Innovative organisations are sharing organisations. They create an environment in which people can get together in informal ways, sharing ideas, intuitions and insights in person orelectronically, so that different perspectives collide on a frequent and regular basis, without any fear of loss of status or place in the hierarchy. A culture of openness, sharing, and generosity is the hallmark of innovative organisations. Technology tools such as social media allow for sharing – and those organisations that embrace the use of technology and sharing tools such as Facebook, Instant Chat and theCloud, are usually far more innovative than those that do not.

• It appears that the status quo of NFP organisations is challenged infrequently. In a world where disruption is rife, and most industry sectors need to justify their customer value proposition frequently, it would be expected that the NFP sector would be more self-questioning.�

• While the results show that the value of innovation is recognised in the sector, there is very little mentoring as to how people should drive innovation or become innovative. This should be addressed.�

• Only 63% of respondents see failure as an opportunity. In a truly innovative organisation, people are encouraged to fail fast, fail often and learn from failure.�

INSIGHTS�

INNOVATION INDEX OF THE AUSTRALIAN NOT-FOR-PROFIT SECTOR 6��?F��

Innovative organisations are sharing organisations. They create an environment in which people can get together in informal ways, sharing ideas, intuitions and insights in person or electronically�

Score 58%�

Industry Results At A Glance�

 

 

 

 

 

 

 

 

 

 

 

4 OPENNESS OF CULTURE & VISION – RESULTS�

• Innovation is rightly perceived as a key attribute for success. Over 85% of people scored six or more (from a scale of 1 -10).

• Innovation is highest in ‘advancing the culture’ and ‘advancing the environment’ sectors and 67%� lowest in ‘helping the homeless’ sector. Agree that innovation is

• Those in very senior positions (Directors) believe the most that innovation is critical to absolutely central to the successsuccess, followed by those in mid-senior management, marketing and fundraising. of their organisation

• Those in senior roles agree project failures are treated as positive opportunities to learn - with no recriminations whilst HR have more of a blame culture. 61%�

• As the number of employees increases, so does the tendency for blame and possible Agree that project failures arerecrimination to increase. treated as positive opportunities

• No gender differences, but the older you are the less likely you are to consider that project to learn - with no recriminations failures are positive opportunities to learn with no recriminations.

55%�• Mentoring increases with age and seniority. Males tend to mentor more than females. • Those working in small to mid sized NFPs tend to mentor others more compared to those Say they regularly mentor others

working in large organisations. on how they can be moreinnovative

• ‘Questioning the status quo at my organisation’ scores highest by seniority of role. Those in marketing and fundraising question the status quo less than other functions. 50%�

• In general males and those aged over 60 question the status quo more. Agree that people regularly• As budgets increase so does the tendency to question the status quo. question the status quo in their

organisation INNOVATION INDEX OF THE AUSTRALIAN NOT-FOR-PROFIT SECTOR 6��@=��

 

 

 

�

5 ORGANISATIONAL VELOCITY� Internal



Openness ofCulture/Vision 50%�



65% 65% 62% 58% 47% 42%

Some organisations achieve exceptional levels of performance, time to market, quality, reliability, responsiveness, dependability and adaptability. These organisations have a high degree of organisational velocity – the speed with which an organisation responds to change, adopts new behaviours, and embraces opportunities when they arise. Organisations with high organisational velocity can effect serial change and achievecontinuing excellence. Today, disruption is everywhere, and the disruptors themselves will have high levels of organisational velocity. The organisations that lack this are the ones at risk. The agile, nimble disruptors have a much greater chance of disrupting the incumbent if the incumbent has low organisational velocity – the usual metaphor is the ocean liner on a set course unable to change direction swiftly.

• The low score in this vector is particularly disconcerting. Organisations need to be receptive to change, and agile in their response.�

• There is a very strong perception that funding in the sector is limited and innovation requires surplus funds. However, the effective productivity of the sector will be severely constrained if this mindset is not challenged.�

• Innovation involves the need to take risks and experiment but the not-for-profit sector is risk averse. The sector will benefit from innovation when it finds the courage to try new things.�

�

INSIGHTS�

Innovative organisations have high organisational velocity – they are focussed on relentless improvement, and they achieve unparalleled levels of excellence�

Score 50%�

INNOVATION INDEX OF THE AUSTRALIAN NOT-FOR-PROFIT SECTOR 6��@>��

 

 

 

 

 

 

 

 

 

 

 

 

5 ORGANISATIONAL VELOCITY – RESULTS�

• Generally, most people really feel empowered to get on with their job - micromanagement is at a minimum. There are minimal differences between NFP sectors.

72%�• Those working in smaller NFPs (<25 employees) and/or NFPs with an innovation strategy feelthe most empowered in their jobs. Say they feel empowered to get

• Those working in marketing and fundraising and those in their 30’s feel the least empowered on with their job with minimalin their jobs compared to other functions. micro-management

• Those working in a very senior role consider that taking informed risks is encouraged and rewarded. However, the score is noticeably lower in other functions. 57%�

• Males consider taking informed risks is more beneficial as do the youngest and oldest age Agree that taking informed risksgroups. is encouraged and rewarded

• NFPs with an innovation strategy allow their employees to take more informed risks.

• Very large companies scored the lowest when asked to consider whether “my organisation is highly skilled at swiftly moving new ideas into action”. 51%�

• Those in very senior positions (Directors) think ideas move quickly to action compared to Agree their organisation is highlymanagement and those working in marketing, fundraising, HR and admin. skilled at swiftly moving new

ideas into action • NFPs that have an innovation strategy move ideas into action quicker than those that don’t.

• Funding is a key concern across the entire sector. Almost two-thirds score “funding is readily available for testing innovative initiatives” in the range 1 to 5 out from a maximum score of 11.

• As both the number of employees and budget in the organisation increases, so does the perception that funding is more available for initiatives.

• The ‘human rights’ sector is the most pessimistic about funding innovative initiatives whilst‘advancing the natural environment’ is the highest.

18%� Agree that funding is readilyavailable for testing innovativeinitiatives

INNOVATION INDEX OF THE AUSTRALIAN NOT-FOR-PROFIT SECTOR 6��@?��

 

 

6 REWARDS & RECOGNITION� Internal




Organisational Velocity 47%�


65% 65% 62% 58% 50% 42%

Asking employees to be innovative may seem easy enough. But it is not as simple to foster acreative environment and leverage valuable ideas that result in viable new products and processes. So what can help? To drive innovation, organizations must determine what works in an innovation context. How do behavior, motivation, appreciation, social cohesion and allegiance, engagement and commitment, and attitudes and feelings come into play? And how can structured rewards and recognition encourage employees to change their behaviour? Innovative organisations today have an active program of rewards and recognition centred around innovation. This does not have to monetary – the best programs use peer recognition, a “callout” from the CEO at a company meeting, a note from the boss, recognition at a group meeting, and yes sometimes, a monetary reward as well. An active program of rewards and recognition is one of the simplest mechanisms that can be deployed to drive innovation.

• While a very high number of people believe that it is important to be innovative in their organisation, there is little or no reward for innovation in the sector - either financially or through promotion. It could be argued that, in the not-for-profit sector, people do not require promotion or financial incentives, but the reality is that an organisation reliant on its employees’ altruism may not attract the full range of top performing, innovative employees.�

• Rewarding innovation is essential if an organisation is to build its innovation capability and hence its value to the community – this is an area that needs significant attention by the sector�

INSIGHTS�

INNOVATION INDEX OF THE AUSTRALIAN NOT-FOR-PROFIT SECTOR 6��@@��

Rewards and recognition, no matter in what form, are a key driver of an innovative culture. Without them it is unlikely that such a culture will emerge�

Score 47%�

 

 

 

 

 

 

 

 

 

 

 

6 REWARDS AND RECOGNITION – RESULTS�

• Generally people feel strongly that it's worth their while being innovative. Directors feel this more than admin/HR, but it's strong across the board.

• ‘Health and homelessness’ are strongly motivated to be innovative, but still notably less than other sectors.

83%�• The under 30s are the most motivated - though from the outcomes one feels this motivation is not always channelled successfully. As tenure increases in the sector, the perception that it's Say it is worth their while to beworth being innovative increases. innovative

• Motivation to be innovative decreases linearly as budgets rise.

• Generally people feel (fairly) well incentivised to share knowledge. This rises with age and tenure in the sector.

• Directors claim they are best incentivised to share knowledge. Fundraising and marketing feel 61%�least incentivised.

Say they feel incentivised to• Those working in ‘youth or social/public welfare’ felt most incentivised. Those on systematically capture and share‘homelessness and environment’ felt least motivated to share. knowledge with colleagues • People working in smaller and/ or higher performing NFPs (with rising budgets and high

% of revenue from new sources) feel more incentivised to share.

• Generally people cannot agree that good innovators are promoted faster. Where this 29%� sentiment is more likely to be felt is in mid sized not-for-profit (26-100 people). Agree that good innovators get

promoted faster

• Generally, people do not feel that innovation is rewarded financially. This was felt most acutely in smaller organisations with less budget and less people. 16%�

• The highest score for this statement was recorded amongst respondents from organisations Agree that successful innovationwith a stated innovation strategy. is rewarded financially INNOVATION INDEX OF THE AUSTRALIAN NOT-FOR-PROFIT SECTOR 6��@A��

7 STAKEHOLDER CENTRICITY� Internal





Rewards & Recognition 42%�

65% 65% 62% 58% 50% 47%

Innovative organisations have a deep understanding of the habits and ways of thinking of their customers and stakeholders. If we know our stakeholders well, we have a much better chance of engaging with them in ways that make sense to them. Many organisations talk of their stakeholder centricity, but there is often little research into, or understanding of, stakeholder behaviour and preferences. Innovative organisations are exceptionally stakeholder focused – they break down their stakeholders into narrow segments, and try to engage in relevant ways with each segment. Empathizing with stakeholders is exceptionally relevant in the NFP sector – the changing demographics of the stakeholders, the way in which Gen X/Y and Millenials communicateand connect, and the power shift that has taken place from the producer to the consumer all mean that now, more than ever, a deep understanding of the stakeholder is essential. Empathy with the stakeholder is a necessary condition for innovation.

A NFP might be expected to have a very high focus on its stakeholders. Only 63% believe they have a deep understanding of the needs of their stakeholders. �

Even worse is their rate of testing new programs with stakeholders, predicting trends, and soliciting feedback on a regular basis.�

The NFP sector should be scoring very highly on this vector and work needs to be done throughout the sector to move the stakeholder to the centre. �

�

INSIGHTS�

INNOVATION INDEX OF THE AUSTRALIAN NOT-FOR-PROFIT SECTOR 6��@B��

If we know our stakeholders well, we have a much better chance of engaging with them in ways that make sense to them�

Score 42%�

 

 

 

 

 

 

 

 

 

 

 

7 STAKEHOLDER CENTRICITY – RESULTS�

• Overall, the sector doesn’t have a deep understanding of customer needs. • Older, more experienced people have the best understanding of needs as do those with a 62%�

budget between $2 and $9.99m perhaps indicating more money is available to conduct customer research. Agree they have a deep

understanding of the needs of• Those on the board (Directors) and those in roles that are more customer facing understand partners, donors and beneficiaries

customer’s needs better than those in marketing and fundraising.

• Testing new programs with customers before rolling them out tends to be highest in mid size 39%� firms who are trying to grow. Small firms simply do not have the resources to test as thoroughly. Agree that new programs are

tested with partners, donors and• Those in higher management roles test more programs as do those with larger budgets3�� beneficiaries early, before being

rolled out • With increased age comes the conviction that you have a good track record of predicting

donor/beneficiary trends. • The larger the budget the more you think you can predict trends. • Those in very senior positions and in customer facing roles (operations) tend to predict

trends better than those in marketing and fundraising. Those in mid management roles have the least potential to predict trends.

39%� Agree their organisation have agood track record of predictingdonor / beneficiary trends

• There is generally a low level of asking feedback from beneficiaries in the sector, however, those in very senior management (Directors) do it more than others. 26%�

• As budget increases, so does the likelihood of NFPs soliciting feedback on donor trends and beneficiary needs every month. Say they solicit feedback on

donor trends and beneficiary• NFPs that work internationally tend to ask for more feedback on a monthly basis. needs every month

INNOVATION INDEX OF THE AUSTRALIAN NOT-FOR-PROFIT SECTOR 6��@C��

INNOVATION INDEX OF THE AUSTRALIAN NOT-FOR-PROFIT SECTOR 6��@D��

PART FOUR

OTHER SECTOR INSIGHTS�

MOST NFPs DO NOT HAVE A CLEARLY STATED INNOVATION STRATEGY�

� ( $��,��)� ��"" $��,��)�

��'� �$� �$#4(� #$.�

However, those that do have an innovation strategy usually have budgets that are rising rather than falling

C=I�

B=I�

A=I�

@=I�

?=I�

>=I�

=I�

Innovative organisations

have a well-defined

innovation strategy that

sits alongside their HR,

sales, marketing and

financial strategies�

INNOVATION INDEX OF THE AUSTRALIAN NOT-FOR-PROFIT SECTOR 6��@E�

NFPs IN THE ENVIRONMENT, YOUTH AND EDUCATION SECTORS ARE MORE LIKELY TO HAVE AN INNOVATION STRATEGY�

Environment

Youth

Education

Social Welfare

Health

Homeless

Human rights

Culture 34%

35%

36%

37%

38%

39%

39%

39%

Innovative

organisations have a

well-defined innovation

strategy that sits

alongside their HR,

sales, marketing and

financial strategies�

0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%

The % of people surveyed�

INNOVATION INDEX OF THE AUSTRALIAN NOT-FOR-PROFIT SECTOR 6��@F��


SOCIAL MEDIA, EMAIL AND DIRECT MAIL ARE THE MOST USED FORM OF COMMUNICATION TO DONORS AND SUPPORTERS

Direct mail still occupies a very significant component of communication, however digital communication will continue to grow significantly in the future

% of people surveyed

0%" 10%" 20%" 30%" 40%" 50%" 60%" 70%" 80%"

I"Don't"Know"

None"of"these"

QR"Codes"

Own"App"

Outbound"SMS"

Other"

Le`erbox"Drops"

3rd"Party"Solu:ons"

Twi`er"

Other"Social"Media"

Direct"Mail"

Email"

Facebook"

Digital communication will continue to grow

significantly in the future

The use of outbound SMS is growing as NFPs

are becoming more aware of its benefits

NFPs WITH HIGHER BUDGETS USE DIRECT MAIL, EMAIL AND TWITTER SIGNIFICANTLY MORE THAN THOSE WITH LOWER BUDGETS �

Budget over $10m+ Budget under $100k

Facebook

Targeted email campaigns

Direct mail

Other social media

Twitter

3rd party funding solutions

Letterbox advertising

Outbound SMS

Your own app

QR Codes

0% 10% 20% 30% 40% 50% 60% 70% 80%

% of people surveyed �

Direct mail still

occupies a very

significant component

of communication,

however digital

communication will

continue to grow

significantly in the

future�

INNOVATION INDEX OF THE AUSTRALIAN NOT-FOR-PROFIT SECTOR 6��A>��

INNOVATIVE ORGANISATIONS VALUE FUNDS AS THE KEY DRIVER FOR INNOVATION�

0%

Funding/Donors/Grants/Money

More Time

Social Media/Mobile Apps

More members/volunteers

Better resources

Better Computers/Comms/Software

Leadership/Management

Better Website

Better Communication

More Sponsorships/Partnerships

More/Better Staffing

Better Training

More/Better Collaborations

Mailouts/Direct Mail

Funding and money are seen to be the main driver of innovation,

however, funding in itself should not be the main reason for the lack

of innovation in an organisation


10% 20% 30% 40% 50% 60%

It is disconcerting that

the NFP sector sees

increased funding as

the most significant

driver of innovation –

contrary to the view of

the most innovative

companies in the world�

INNOVATION INDEX OF THE AUSTRALIAN NOT-FOR-PROFIT SECTOR 6��A?��

THE TOP 10 MOST INNOVATIVE NFPs AS RANKED BY INDEX RESPONDENTS�

PEER RANK� NOT-FOR-PROFIT�

1 Movember

2 Oxfam

3 Charity water

4 World Vision

5 Beyond Blue

6 Thankyou Water

7 GetUp!

8 Salvation Army

9 McGrath Foundation

10 Fred Hollows Foundation

The NFPs that are seen

to be the most

innovative by their

peers are chosen

because of their

marketing programs,

their services and

fundraising campaigns �

INNOVATION INDEX OF THE AUSTRALIAN NOT-FOR-PROFIT SECTOR 6��A@��

�

�

INNOVATION INDEX OF THE AUSTRALIAN NOT-FOR-PROFIT SECTOR 6��AA��

NFPs ARE SEEN AS BEING INNOVATIVE BY THEIR PEERS PRIMARILY THROUGH THEIR MARKETING & CAMPAIGNS �

25%

Promotion / marketing / campaigns�

Services / programs / projects�

Fundraising�

New thinking / Fresh ideas / imagination�

Innovations / innovative�

Social media /mobile /apps /Facebook

Community�

Digital / Technology / IT savvy�

Engagement /participation/ inclusive

Messaging /Comms�

5% 10% 15% 20%


The NFPs that are seen

to be the most

innovative by their

peers are chosen

because of their

marketing programs,

their services and

fundraising campaigns �

INNOVATION INDEX OF THE AUSTRALIAN NOT-FOR-PROFIT SECTOR 6��AB��INNOVATION INDEX OF THE AUSTRALIAN NOT-FOR-PROFIT SECTOR 6��AB�

For further information please contact GiveEasy� Dr Jeffrey Tobias Suite 606a, 3 Waverley Street Bondi Junction NSW 2022 Ph: 0401 890 071 E: [email protected] Australia Post� � Chris Newton Head of Community Partnerships, Products and Services Level 19/ 111 Bourke Street, Melbourne VIC 3000 Ph: +613 9107 0205 E: [email protected] �

mailto:[email protected]

mailto:[email protected]

INNOVATION INDEX OF THE AUSTRALIAN NOT-FOR-PROFIT SECTOR 6��AC��INNOVATION INDEX OF THE AUSTRALIAN NOT-FOR-PROFIT SECTOR 6��AC�:�?=>B��-��'0��#��,'(&�!��$'(�

Innovation Index. The Australian Not-for-Profit Sector. March 2015 · 2017-12-22 · FOREWORD...

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Transcript of Innovation Index. The Australian Not-for-Profit Sector. March 2015 · 2017-12-22 · FOREWORD...