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ASU Lodestar Center Blog

How Can Member-Based Nonprofits Use Lean Innovation to Remain Relevant?

Member based nonprofits and trade associations have been consistently losing ground in the volunteer sector and are challenged with remaining relevant and retaining members. In a field that is known for the lack of capacity building and infrastructure funding, nonprofits must be strategic in how they allocate time, treasure, and talent. According to The Chronicle of Philanthropy, “nonprofit leaders must focus more attention on innovation, measuring the impact of their efforts, and creating funding structures that encourage risk taking, according to a report  from Independent Sector." An approach that member-based organizations may consider from the private sector is Lean Startup, which provides a scientific approach to creating and managing startups in order to get a desired product into customers' hands faster. The Lean Startup method teaches you how to drive a startup: how to steer, when to turn, and when to persevere and grow a business with maximum acceleration. It is a principled approach to new product development. Applying this concept to nonprofits is another accepted means to include the nonprofit sector as a viable player in the business sector, with management capabilities that are equal or exceed the private sector in efficiency.

Taking risks in the business sector is considered research and development. It can drive up costs (pharmaceuticals) because of research and development. Often if a drug trial fails the public is unaware of the failure or the associated cost. 

Due to the nature of required transparency in the nonprofit sector, the opportunity to test the market is not supported financially. The implementation of innovation and adaptability is a business model that should not only be accepted but embraced by the third sector and its donors (members).

Many member-based organizations “are struggling to maintain membership, generate and increase participation, attract volunteers, and compete with alternative service offerings. They are falling behind in the race for relevance. In the article, “The Strange Disappearance of Civic America,” Robert D. Putnam reflects on his previous article “Bowling Alone: America Social Capitalism”. In an interesting opening paragraph, he approaches the subject as a detective out to solve a mystery. Putnam is looking to find the cause of the strange disappearance of social capital and civic engagement in America. When writing of social capital, he explains it is about the connectedness of individuals with shared interests in a social setting. Civic engagement, on the other hand, refers to the connections people have with their communities. 

Putnam digs into the changes in our culture in the 1970’s and 80’s and what may have occurred to create such a change in how we interact with each other in the social and civic arenas. The Race for Relevance, by Coever and Byers, looks at another angle, the internal structure of nonprofits as the place to evaluate the decline and influence change. This internal evaluation led them to five areas where member-based organizations should re-think their structure and focus their attention.

  • Overhaul the governance model and committee operations 
  • Empower the CEO and enhance staff expertise 
  • Rigorously define the member market 
  • Rationalize programs and services
  • Build a robust technology framework” 

Implementing these changes will “lead to streamlined and nimbler governance; challenged staff who work in true partnership with volunteer leaders; a realistic, well-defined member market that is easier to find and market to; product offerings that are desirable and beneficial for members; and increased financial and human resource capital." How an organization decides on which of these five areas to focus on first and decide on the outcomes they would like to see is where the process of lean innovation becomes critical. Lean innovation takes the concept of lean startup from the beginning of a process and allows an organization to pivot at a time when they are at an inflection point.

Moves the Needle, a Tucson Arizona consulting firm, writes “Impact Innovation programs are designed to help organizations learn before executing to optimize their results and sustainability in government, nonprofit, philanthropy, higher education, and social enterprise." 

The focus of the program is to first create member value by recognizing the unique attributes of your members and to focus on their desire to have individual impact. This is done by empathetic listening, one-on-one interviews with current, former, and prospective members to gain an understanding about how the organization can meet their needs. The next step is where lean innovation is implemented by conducting rapid experimentation. This is the critical step in the process that will lead you to your BHAG, Big Hairy Audacious Goal, according to Collins in 2005.

Rapid experimentation allows the board and staff to explore bold ideas, test them and then move on quickly when an experiment fails. Recently, Social Venture Partners Arizona (SVPAZ) enlisted the services of Moves the Needle to assist the organization in evaluating their membership and growth potential in the Phoenix market. By interviewing nearly fifty-percent of their membership via telephone, the consultants found the members most often were concerned about communication. Traditionally this would cause the staff to create a communications strategy that would include timelines, goals, and required outcomes. Using lean innovation, the staff conducted rapid tests on smaller percentages of the members to determine what type of communication they prefer. The tests included using video chats, which failed; and text messaging, which was successful. When the test group responded positively to the text messaging a larger group was tested, and again there was positive response. the staff and board will determine how to incorporate the results into their daily work. By using lean innovation, SVPAZ did not invest money or hours of staff time to determine how they might communicate more effectively with members. Instead, the tests allowed them to move quickly and make adjustments that have increased participation by members. 

Member-based organizations are one sector of the nonprofit community and those “that will thrive—not just survive—are those that are willing to make changes and take risks.” Lean innovation allows them to adopt new strategies to become sustainable and attract new members and retain current members.

Suzanne has built her career in community relations, event planning, and strategic outreach primarily focused in arts and education. In 2017, she joined Social Venture Partners Arizona as the Partner Engagement and Education Manager. With more than 10 years’ experience, Suzanne has also devoted her life to volunteer service, sitting on a number of boards. She currently serves as president-elect of the Tempe Leadership Board, serves on the board of Tempe Community Action Agency, Tempe Parks, Recreation and Golf Advisory board and the Tempe Chamber Board of Directors. Durkin-Bighorn  has a Bachelor’s from ASU in Public Administration and her Master’s in Nonprofit Leadership and Management from ASU. She and her husband Lyle have two grown daughters and reside in Tempe.


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