Creating NPO Innovation Capacity in a Downturn

Google announced this week that they are closing down several sites and services. According to reports they are eliminating some redundant services (Google Video being a good example of that) while closing others that never performed.

Peter Drucker, in Innovation and Entrepreneurship, said that the single thing that highly innovative companies had in common was that they were ruthless in killing programs, products or services that no longer created value. There is almost always a finite limit to which you can expand your capacity to add new things. The most innovative organizations, according to Drucker, free up existing resources for more valuable efforts.

This is precisely what Google is doing now.

In my experience, stopping programs is a significant challenge for a lot of non-profit organizations. Services and programs tend to come with their own built-in constituencies (that’s how many of them get created in the first place!). The ones that fail to flourish become sacred zombie cows, staggering along without truly dying yet with no hope for growth.

This recession creates an environment where those sacred zombie cows can finally be driven from the organization. Before contemplating layoffs or uniform cuts across the organization, take advantage of the disruption around us to stop doing things that no longer create value. This will allow you redirect resources to more productive programs which will create a thriving organization while others continue to struggle.

5 thoughts on “Creating NPO Innovation Capacity in a Downturn

  1. David, I’m not exactly sure that Google is the right example to offer. Here in Austin, Google shuttered an office that was open for a mere 4 months and laid off its engineers (though they promised to relocate them to other parts of the country if they wished). Rather than refocus their people onto different projects, they did what most corporations do and just cut bait and run.

    With that said, I wholeheartedly agree with your point that non-value driving activities need to be culled. Don’t stop trying new things and innovate…just know when those activities don’t bear fruit that its okay to learn from them and move on.

  2. Chris, I think the example still holds so we’ll have to disagree on that one.

    The employees are being retained and redirected if they choose to relocate. Not ideal for them or Austin, I grant, but it’s quite different from companies that are slashing their staff left and right.

    Google is also letting go about 100 recruiters, which reflects the slow down in their hiring, but are holding on to core talent even while they shut down non-performing projects.

  3. It’s funny how most of the sites being shut down are/were acquisitions (like Dodgeball). Then again, other acquisitions are doing fine (YouTube, Urchin, Feedburner). I guess anything they have a hard time serving their ads on most be tough to justify in this economy.

  4. Let me start by saying that staff should not be spending their time on a bunch of niche programs.

    But associations are the long tail. Our umbrella is what makes micro-niche collaboration possible. Perhaps rather than letting programs become sacred zombie cows, we need to create a herd of self-supporting free-range cows.

  5. The current state of the Web certainly enables a lot of self-guided collaboration that doesn’t require significant investment of capital. I’m with you on that.

    When those grass-roots efforts grow and show significant potential for greater value, the association should invest in them to achieve that potential.

    That’s when those existing zombie cows become a problem if the organization isn’t good about ceasing investment in those that no longer deliver. Nothing left to invest!

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