Tuesday, February 01, 2011

Sustaining Innovation Part 4: Slack or Shoestring?

This is the last in a series of posts about Paul Light's book Sustaining Innovation: Creating Nonprofit and Government Organizations that Innovate Naturally. This post is another "open thread" encouraging conversation about a core question that arose for me as we've explored the topic this month.

Last week, this blog featured an interview with Sarah Schultz, a long-time staffer at the Walker Art Center, about her experiences working in an innovative arts organization. One of the things Sarah focused on is the idea of having "slack"--money, time, and headspace--to pursue experiments and let innovative ideas germinate. As we discussed slack, I was very sensitive to the fact that Sarah works in a big institution where there IS money to find in the corners of the budget and where there are enough people to be able to put together creative projects without completely abandoning their basic work requirements.

Most museums, frankly, aren't like that. The majority of museums are quite small in budget and staff. Sarah may be looking for slack on the order of $10,000 while your museum might be lucky to scrounge $100 for new ideas.

And this makes me wonder: is the "slack" model as appropriate to small, scrappy institutions as it is to larger organizations? The alternative is the model that startups use--the "shoestring" model--where passionate people bootstrap their vision into being, constantly facing threats from the outside. In Paul Light's book, he describes several nonprofits that are more shoestring than slack, fighting every day to make their innovative ideas happen. One of those--the Phoenix Group--overextends itself and has to close up shop, but the others survive and thrive.

Picking this apart requires differentiating organizational maturity from size or budget. In her great book on nonprofit lifecycles, Susan Kenny Stevens defines seven stages of nonprofits: idea, startup, growth, mature, decline, turnaround, and terminal (if the turnaround doesn't happen). The Walker is clearly both mature and large. As a mature institution, it needs to focus on using slack to drive innovation, since innovation often falls off the table when an organization reaches maturity. Without continuing to innovate and stay relevant, the organization goes into decline.

But for institutions that are not yet mature, baking in slack may not be necessary or even feasible. An institution that is (whether by design or accident) constantly in startup or growth mode is one that is constantly innovating by necessity. This mode of operation can be exhausting and risky, but it's also exciting and not as prone to slip into the self-congratulatory irrelevance that marks the shift from maturity to decline.

I'm not sure what's better: to be a mature institution with various systems to continue promoting innovation or to be a startup institution that is always hungry for innovation to drive growth. I know that Paul Light would say it's the first one, because nonprofits need to avoid risk to sustainably deliver on their missions. But I'm not sure I agree, or that that model is best for everyone. What's worse, the threat of irrelevance or the threat of insolvency? How would you rather innovate--on a shoestring, or with built-in slack?
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