Friday, November 5, 2010

Six Views on Innovation

To kick-off NetHope’s 19th Summit at Santa Clara University, I talked about six views of innovation. It’s an appropriate topic as we met in Silicon Valley and had the honor of co-sponsoring the laureates for this year’s Tech Museum Awards. I am continually renewed by the innovations I see from students and social entrepreneurs who are applying technology to solve problems in the most challenged areas of the world. Hearing and seeing what each team has done is itself a creative surge for thinking about new ways, new approaches.

As I talk about each view of innovation, I will be wearing two hats: one as NetHope’s chairman and co-founder; and one as the Global CIO at IFRC. And I will be challenging you to shift your minds.


If we have learned anything over the past two years of recession, it is that change is hard. And yet change is all around us, especially in the nonprofit IT world. I believe if you connect the dots on the challenges NGO CIOs face, it is evident that we cannot follow in the footsteps of corporate IT changes during the past decade. We lack the funding and time to do it; and we need to work in places where even electricity is an option. I've written about these challenges in other places[1]. As projects get larger and maintenance costs grow on the one hand, IT budgets and staff are contracting on the other. We are on a collision course that requires new ways of thinking.

One of the mind-shifts that needs to happen is the data center mentality. We often take pride in our racks of servers and air-conditioned rooms. If we ask ourselves what would we create if we started with a clean slate, none of us would repeat what was built in the past. What does the NGO Data Center of the future look like? Lights-out! The datacenter for NGOs in the future should not exist. We need to get out of that business.

CIO’s need to do some soul-searching here and ask themselves if they want to be a part of the change or its victim. Ask yourself: “who will pull your chain? The market? Donors? Your boss… Or you?” The conclusion is obvious: change is not an option; change is a must.


Thomas Alva Edison is one of the American heroes of innovation. A recent cover story in Time magazine featured the familiar story of how the light bulb was created. It took hundreds of attempts of trial and error. As the authors note “It would take years of experimenting with platinum, paper and bamboo before Edison found his way to a durable filament, carbonized cardboard.”[2]

Before this breakthrough, he was asked why he hadn’t gotten any results. Edison famously said, ““Results? Why, man, I have gotten lots of results! If I find 10,000 ways something won't work, I haven't failed. I am not discouraged, because every wrong attempt discarded is often a step forward...”

The point of Edison’s story is that failure is an important part of innovation. Fail fast, fail often is a hallmark of entrepreneurial companies. That means taking risks.

How can we take on the risks? I believe it was Bill Sharpe at Stanford who pointed out the relationship of risk and return when it comes to investments. Essentially the more risk you take on, the greater the return (when things are going up!)

One problem: at NGOs we are playing with donations not venture capital. How can we experiment and fail our way to success, when our stakeholders want and need our success. This requires a mind-shift about risks in IT.

To continue the investment metaphor, one of the ways to reduce the specific risk on any one bet is to diversify into a portfolio of many bets. This is why mutual funds work. What does a mutual fund have to do with NGOs or IT?

I believe we need a mutual fund of experiments. The NetHope I4D pilots can be seen as our innovation lab. We participate based on our membership; it’s not a variable cost and risk for us. What works, we can harvest. What doesn’t, we can ignore.


I've been a judge for the Microsoft Imagine Cup Competition for two of the past three years and have written about it in this Blog. The Imagine Cup can be seen as a funnel of taking a huge participation to a few winning ideas. In a recent year, the competition had 400,000 student applicants; 3,000 country competitors; 400 went to the finals 27 winners make the final cut in 9 categories.

The question this begs for us in and across our organizations is: How are you gathering the good ideas?

I've written about the “Discover and Harvest” approach and how we can apply it in our IT organizations (see my May 2010
Blog entry on the subject.) Discover and harvest is based on the work of Jerry Sternin, who I knew at Save the Children (for a longer discussion, see my Blog entry). What Jerry discovered was the value of discovering the positive exception, what he called “positive deviance.” He discovered and amplified what mothers did differently in a society where malnourished children were the norm.

Discover and harvest is the opposite of our traditional way of meeting IT needs. We usually take an “assess and build” approach: assess the situation, gather requirements, specify the project, build it, test it and deliver it. The problem with this approach is that it has a dismal history. A recent Standish Group report notes that only 32% of all IT projects succeed (delivered on time, on budget, with required features and functions). 44% were challenged (late, over budget, and/or with less than the required features and functions), and 24% failed outright (cancelled prior to completion or delivered and never used.)[3]

The discover and harvest approach is about finding those applications and uses of technology in the far reaches of your organization that are already working. This approach has a number of benefits:

  1. It’s already working somewhere; it leapfrogs over getting a new system to work. The pilot has already been run.
  2. Some group has already adopted it; it doesn't need to be sold.
  3. It's field-tested. Especially for international NGOs working in challenged rural settings, it works where technology is rare.

However, for discover and harvest to work, you need to believe in two things: (1) Headquarters Humility – that innovations will come from the far country; and (2) Good Enough Technology – that 80% solutions get the job done. This requires a change in our IT worldview.


I’ve talked about the IT Strategic Pyramid for nonprofits for a number of years. Our strategic imperative as CIOs is to move the IT agenda "up the pyramid" to applications that touch our beneficiaries (see below.) Our job is to get into the top (mission moving technology) and get out of the bottom (lights-on technology.)

An example of getting into the top is the IFRC SMS-Texting communications project in Haiti. The bottom line of this program: the beneficiary is at the center of communications

An example of getting out of the bottom of the pyramid is the IFRC BPOS/Office365 initiative, moving IFRC email to the Cloud. Why are we doing this? Consider this:

  1. We are not in the data center business
  2. We need to redeploy people, time and money up-the-pyramid
  3. We need to have impact on 60+ National Societies who have little to no IT
  4. We are a Microsoft-centric shop with many inter-application and platform dependencies
  5. We need a more fluid path from premises to off-premises computing
  6. Bottom line: We are about partnering with those whose business it is to do things that it is not our business to do

NetHope is moving in similar directions, branching out to I4D pilots to support development programs at the top of the pyramid, and sharing support services at the bottom of the pyramid. The common point is that we are both managing IT as a portfolio. We both have a related, diversified portfolio of projects and pilots that are focused on moving our mission forward.


Clay Christensen has done important research at Harvard on disruptive innovation[4]. I asked him at a roundtable discussion, "can you think of any cases where an organization was able to embrace disruptive innovation in headquarters?" His answer? No.

Tom Peter’s, another management guru, talked about the Law of Proximity: Innovation is directly proportional to the distance from headquarters. He pointed to the case of the IBM PC, whose design and success was due in no small part to fact that the development team was in Boca Raton, about 2,000 miles for IBM’s Armonk NY headquarters.

When thinking about innovation, a question we should ask ourselves is: what’s our far country? For NGO’s the answer is clear; it’s the Field. We should constantly be scanning the remote areas of our organizations for applications of technology that are working in ways that would surprise us.


Core to NetHope’s values is collaboration[5]. We believe we learn by collaborating and –to quote our paper on collaboration—"insights come by doing projects together. To accomplish this we partner with leaders from governments, donors, business and education.” “By dialoging and debating with the best minds from inside and outside our organizations, and challenging each other with ICT and other innovations, we can develop new ways of working that benefit those most in need[6].”

* * *

Six views of innovation: embracing change, taking risks, harvesting, being strategic, going to the far country and collaborating. Each requires a shift in our thinking from traditional to new ways of doing IT. If we are going to be relevant in our organizations and our sector, we need to challenge ourselves to change.[7]


[1] “The Good Enough Principle – What we can learn about technology from the pragmatic solutions of nonprofits,” an unpublished paper , Tuck/Dartmouth , June 15, 2008. Send me an email for a copy.

[2] Jill Jonnes, “
Let There Be Light,” Time Magazine, Wednesday, Jun. 23, 2010.

[3] See the Standish Group April 23, 2009
press release.

[4] Clayton M. Christensen , The Innovator's Dilemma: When New Technologies Cause Great Firms to Fail, Harvard, 1997

[5] The six NetHope Values and Guiding Principles are:

  1. Technology (ICT) Matters (NGO Missions depend on effective technology & capacity building);
  2. Benefiting all benefits one (Benefiting one also Benefits All);
  3. Learn through collaboration (Learn by doing);
  4. Build for the Field (IT solutions are deployed solutions);
  5. Bias for action (The need for speed, especially for emergencies);
  6. Trust above all else (Trust comes through open dialog and working together over time)

[6] NetHope Principles for Nonprofit Technology Collaboration (See my Relevant IT Manifesto).

[7] A copy of my slide deck for this year's NetHope summit is available on my web site.

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  1. Interesting blogpost - I'm curious about getting out of the bottom of the pyramid and into the top.
    It's something that I agree with, and have said many times myself, but in the current financial climate, I'm thinking that there is a danger that IT departments may get out of the bottom, but not get the funding to get into the top? When the money returns, internal expertise may have been lost, and the IT department will no longer be fit for entering into the top of the pyramid.

    Stuart McSkimming, Head of IT, Shelter

  2. I believe this requires a candid discussion with your CFO. The strategy for the lights-on bottom of the pyramid is to reduce unit costs. What costs you drive out of the bottom of the pyramid need to be reinvested at the top. That may not be enough to move the needle forward, but it's a good, budget-neutral place to start. Let the results of the cost savings and impact of mission-moving investments provide the proof statements for greater investment in the future.