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The Glacial Pace of the Nonprofit Sector

Eric Ries, author of The Lean Startup Eric Ries, author of The Lean Startup

It takes too long to get things done in the nonprofit sector.

Since most nonprofits are small businesses, with few layers of bureaucracy, you would think we would be faster than the private sector. But it doesn’t often feel that way. Why is that? We’re pretty much in charge of the decision-making and we don’t have a lot of “they’s” to blame. Some of the reasons include the fact we’re undercapitalized and too much funding is restricted for project-only work. Nonprofit boards are often ill-equipped to deal with our issues and either lack business skills or awkwardly try to apply their big business experience to our issues. But I think some of the reason is we lack a sense of urgency to get a project completed.

Last year we launched the GuideStar Labs as one of our efforts to test and launch products quicker. Under the direction of Deyan Vitanov, we go through a rapid testing process and make a go/no-go decision within a matter of weeks. You can read more about it here on my blog.

The Labs were partly inspired by our commitment to Agile process for software development. I’ve come to realize that Agile is not just for developing software, but is a process that can be applied to many spheres of our organization. In his great book The Lean Startup, Eric Ries writes that the most important step in any project is to get something in the hands of customers/clients as soon as possible and start learning from them. He calls his three steps Build-Measure-Learn. Take small pieces of a product or project, he urges. Share it with potential customers and measure their feedback. What did they like? What did they feel is missing? Learn from what you’ve heard, make some adjustments and start all over again. Unlike a traditional strategic planning or market research process, this approach will be rooted in actual feedback on what is working rather than anticipated.

Ries urges us to recognize that the Build-Measure-Learn process is part of a very structured process. He doesn’t think being an innovative entrepreneur means having an undisciplined, just-do-it attitude. Justthe opposite. He says “entrepreneurship is a kind of management… that requires a managerial discipline to harness the entrepreneurial opportunity.” He thinks the key is all establishing a way for learning – and the sooner the better operating within a “culture and system” that allows teams to innovate at a high speed. The learning helps find a synthesis between our vision and what customers will accept.

Too much nonprofit sector management today is stuck in rigid techniques, standardized work tasks and an overemphasis on strategic planning. The Lean Startup identifies another principle that should resonate with all nonprofit leaders: the value of our people. Reis urges us to realize that all of our employees can be entrepreneurs. As he puts it: Innovation is a bottoms-up, decentralized and unpredictable thing, but that doesn’t mean it cannot be managed.”

How do you incorporate the entrepreneurial spirit into your nonprofit?

Topics: Nonprofit Leadership and Practice