Transcript: Creativity Unleashed: Strategies for Sparking Innovation in Your Nonprofit // Leah Kral, Mercatus Center

Flourishing Culture Leadership Podcast

“Creativity Unleashed: Strategies for Sparking Innovation in Your Nonprofit“

September 25, 2023

Leah Kral

Intro: Are you happy with the level of innovation in your organization? Well, whether you lead a school, a church, a Christian nonprofit, or a marketplace business, you're leading in a changing world. And today's solutions may not address tomorrow's needs. So today on episode number 356 of the Flourishing Culture Leadership Podcast, we'll learn from someone who works with organizations to help them develop a culture of innovation. So listen in to learn how you can unleash the creativity of your staff to be more effective in fulfilling your mission and vision.

Welcome: Welcome to the Flourishing Culture Leadership Podcast, your home for open, honest, and insightful conversations to help develop your leadership, your team, and build a flourishing workplace culture.

Al Lopus: And hello, I'm Al Lopus, the co-founder of the Best Christian Workplaces and author of the award-winning book Road to Flourishing: Eight Keys to Boost Employee Engagement and Well-Being. I'm passionate about helping Christian leaders like you create engaged, flourishing workplaces.

Well, I’m excited to welcome Leah Kral to the Flourishing Culture Leadership Podcast today. Leah’s a senior director of strategy and innovation at the Mercatus Center at George Mason University.

Today, through our conversation, you'll hear Leah talk about a couple of great examples of innovation in nonprofits and how they've changed the world. She'll also talk about three keys to make scalable changes in your organization. She'll give you some examples of workplace values that lead to innovation, and how to evaluate action that's already been taken.

I think you're going to love this interview with Leah. But before we dive in, this episode is brought to you by the Best Christian Workplaces Employee Engagement Survey, and you can sign up today to discover the health of your organization's culture. This fall would be a great time to listen to your employees with an easy-to-administer online Engagement Survey by going to workplaces.org. That’s workplaces.org. You’ll find that being a certified best Christian workplace improves your ability to attract more talented employees and keep them longer.

Well, hello to our new listeners. And thanks for joining us as we honor your investment of time by creating valuable episodes like this.

Well, let me tell you a little more about Leah Kral. She works with teams in the nonprofit sector to break out of their busy daily routine and draws out their best creative thinking. You know, we can get so tied up in just doing what we do every day that sometimes it's hard to break out and think about innovation. Well, she helps teams to design pilots, program strategies, and meaningful evaluation approaches, leading to better outcomes and more compelling stories for supporters. Leah is the author of Innovation for Social Change: How Wildly Successful Nonprofits Inspire and Deliver Results. I know that you're going to enjoy our conversation.

You know, early in her career, Leah became intrigued with how teams innovate in the for-profit world of industrialized Ohio. She found that bottom-up empowerment always resulted in better products, happier customers, and fulfilled team members. But then, she served a two-year stint in the U.S. Peace Corps in Jamaica and was deeply inspired by the dedication of Jamaicans working to make a difference in the face of immense social needs, and that compelled her to spend more time in the nonprofit area. So here's my conversation with Leah Kral.

Leah, it's great to have you on the podcast.

Leah Kral: It's so great to be here. Thanks for having me.

Al: Well, Leah, just to give us a little bit of context—and I'm really looking forward to our conversation—what inspired you to work with nonprofits?

Leah: Yeah. It's kind of an interesting story. Two decades ago, I had the good fortune to spend two years as a U.S. Peace Corps volunteer in Jamaica, and it was life changing. While we do certainly have poverty in the U.S., I had never seen extreme poverty like what I saw in Jamaica. There were families living in shacks with dirt floors and zinc roofs, which they had built by hand. Many people were considered illegal squatters, not by their choice, and they lived under the risk of their home being bulldozed. The roads were just kind of horrible. You know, just simply getting to work or getting to school was a big undertaking. You know, in one community, I saw a neighborhood swept away by a hurricane. In another community, I saw children scavenging in garbage heaps to collect soda cans just so their family could buy food. And, you know, so many people were just struggling to survive. So, of course, that's going to affect you if you're around that for two years.

And so in the midst of all this poverty and need, though, I also saw heroes rising to the occasion. I really like that Fred Rogers quote—I think he said this around September 11—that in times of crisis, you look for the helpers. And I definitely saw that in Jamaica. Even in crowded, noisy, open-air schools, I would see children and teachers who were so dedicated to learning no matter what the obstacles were. I saw Jamaican community leaders walking miles in the hot sun just to get to the Habitat for Humanity community meeting.

And then, as a Peace Corps volunteer, at that time, my work assignment was teaching computer literacy to Jamaica's future teachers. And so this teachers’ college, where I worked and lived, was founded and run by these wonderful, strong, kind of feisty Franciscan nuns. And they really created this beautiful school and created these meaningful learning experiences for their students. And each day I saw how they were changing lives, and their generosity really, truly moved me.

So when I finished my two-year tour of duty and came back to the U.S., I just, of course, I couldn't get all of those heroic people out of my mind, and I knew that I wanted a career where I could support people who were building civil societies, solving some of these very pressing social problems, and giving people hope.

And another thing that had shaped my motivation, sort of this twist in my career path, was that prior to the Peace Corps, I had worked in the for-profit world, doing quality systems or management systems. So of course, I admired really great management thinkers, I suspect, like you do—people like Drucker and Covey and Deming. And I realized I could help translate some of those really good management practices into the nonprofit world.

And so that's what I've been doing for about the last 20 years, helping nonprofit teams be more effective and innovative. And I find it really creative, fun, and fulfilling work. And as you mentioned, I also wrote a book about it.

Al: Yeah. And it's really a helpful book. And for our listeners, I'd encourage you to look at it because, well, and let's just start off by talking about the book and innovation overall. You know, sometimes it's easier for us to imagine innovation in the for-profit space because of products and technology.

You know, we all know the Apple stories and how they innovated to create i-everything products, you know, from iPads, iPhones, and such. And also, we've heard the classic story of the engineer who just invented the sticky notes for 3M and how innovation comes oftentimes by just making mistakes. And I think that’s how rubber was invented. Thomas Edison made a mistake, and all of a sudden, rubber was invented.

So what does innovation mean for those of us in the nonprofit sector? And again, as you came back from your Peace Corps experience, and I know many of our listeners, they're doing the work they're doing because of an experience like that, but what does innovation mean for those of us in the nonprofit sector?

Leah: Yeah. I think innovation is simply about finding new and better ways of doing things, you know, to add value in some way, to add value for someone, or to, perhaps, save time or gain some efficiency. And in the nonprofit sector, innovation can be really, really big. Like, you think of the civil-rights movement. That was big social change, right? But that's innovation. Or say, founding Habitat for Humanity, you know, big international organization that's making dramatic changes in housing for people. Those are big innovations. But both of those movements started quite small and quite humbly, with just a few very dedicated volunteers and very few resources.

But innovation can also be kind of small and something we just take for granted in the sense of everyday improvements. I think of, say, a receptionist who might be working at a legal-aid clinic who comes up with this idea that we should switch from a paper-based form to a handheld electronic tablet, and then the client can simply input their data, and now you've saved manual data entry. You've saved a little bit of time. And even this seemingly small innovation, maybe it saved you hours a week, maybe we reduced the budget by half of a percent, but that's still really important because our resources are so hard to come by in nonprofits, you know, and we can now shift those resources elsewhere, maybe to better use. So I would argue that small innovations and big innovations are both really important.

And to your question, well, what does innovation mean in the nonprofit sector? you know, imagine what it looks like when nonprofits fail or, say, its results are only lukewarm. What does that mean for an at-risk young person coming to us for help if we aren't serving them well? And if we aren't operating at our innovative and effective best, it's really going to affect people. So it matters.

And in my book, I share many stories of nonprofit successes, but I felt it was equally important to share stories that also include when nonprofits fail to be innovative. And we can learn from those and not make the same mistakes. And for a person of faith, we're really called to be good stewards of our limited resources, our time, and our talents. We're called to help others, and we want to be fulfilled and contribute. We want our work, hard work, to matter. And then, there's those of us who generously donate money. And that money is hard earned, right? Money is hard to come by, and we hope it's put to really good use. So we have this duty to be good stewards of our limited resources. And that's another reason why innovation really matters in nonprofits, that we should really always be searching for better ways of doing things.

Al: I think that's a great comment for our listeners. We always need to be looking for better ways to do things, and that's kind of the way you started off. And I, yeah, you know, you look at some big movements, Habitat is one I know that you mentioned, and we work with a number of Habitat functions or offices around the world, actually outside of the United States, and what a difference they've made over the years, you know, and just a great innovation in itself.

So, organizations that we serve, they meet human needs in a variety of ways, and they live out their calling as Christians to fulfill their unique mission and vision in the world. In your book, Leah, you talk about asking good questions so we can go deeper to understand unmet needs in our areas of influence. And as you were saying, you know, it makes a difference for those we serve, by investigating and looking at better ways to do things. So, you know, can you give a framework of how we can use good questions to help us get past the surface of, you know, to more meaningful ideas and solutions? I know that, again, in nonprofits, we're always looking for ways, how do we do this better? So talk about your why and your how questions.

Leah: Yes. I'm a big believer in asking questions. There's a fantastic book that really inspired me. It's called Questions Are the Answer by Hal Gregersen, and I love that book. And similarly, my book reflects this kind of thinking about asking good questions. You know, if you think about all the hidden assumptions that we sort of walk around and hold in our heads, which we may or may not even realize that we're holding, I think a great story or example of this is if you think of how in the 1970s the Detroit automakers were holding fast to this assumption that all consumers, all people buying cars really cared about was styling. So, you know, you had those big cars and with fins, and the styling and the look was important to people, so they thought. But this was a flawed assumption that they weren't questioning. And so you had the Japanese automakers with a more accurate model of what customers wanted at the time, which was, you know, smaller, more-affordable cars. And so the Japanese asked better questions, and they challenged these long-held assumptions and then ended up outselling us.

So we can also ask hard questions of ourselves and challenge our assumptions in the nonprofit world. So a story of that is Greyston Bakery in Yonkers, New York, they do workforce development, and the team at Greyston Bakery wanted to take on some of the hardest cases of the chronically unemployed, and so they worked really hard to understand the problem they were trying to solve. They designed these sort of radical immersion experiences, where their founder, who was actually a pretty sharp aeronautical engineer, he actually experimented with living on the street for a few weeks to better understand the clients they wanted to serve, walking in their shoes. And what they learned from these immersion experiences was really powerful, and they radically redesigned their workforce training programs, you know, doing all sorts of kind of innovative things that maybe you wouldn't automatically think of. And they're very successful. But the reason they were successful is they really asked themselves these hard questions, which helped them find clarity about their why and their how.

And I would say if we aren't asking ourselves the right questions, we might veer off course and miss an opportunity. You know, it's just so important to be clear about our hidden assumptions, and if we're not clear about our why, you know, everything else we do cascades from that, all of our work in the nonprofit space. At the nonprofit where I work, we have this saying, “Let's ask ourselves the hard questions so our board and donors don't have to.” And it's really part of our culture and makes us a better organization.

And I would say, very briefly, the first kind of third of my book gets into design thinking, a design-thinking framework. And there's three kind of major questions within that, which is, what's desirable? Kind of like Greyson Bakery, what is the problem we’re trying to solve? So there’s, what’s desirable? What’s scalable? meaning, can we think a little bit bigger? Does our seemingly small idea have bigger ramifications? And then, what's feasible? And so the first third of the book kind of goes through those thought exercises or shows the nonprofit leader how to take their team through those thought exercises to get really clear about our why and our how.

Al: Yeah. I like that. Wow, okay. So, what's desirable, what's scalable, what's feasible? Those are three questions we can ask our leadership teams. But even going back to your point of immersion experiences, getting out of our offices and actually experiencing what it is that we're oftentimes trying to solve for those we serve. Great, great stories.

Well, you know, as far as implementing new ideas, sometimes it's wise to test a change. You know, we have a lot of great ideas. My wife often tells me, “Oh, yes, Al. You have a lot of great ideas. But, you know, do they work?” So testing and change, you know. So we want to try out something, and we also want to limit risk. So give us an example of how a nonprofit might do some testing on innovations that they want to implement.

Leah: Yes. I love that question. I feel that experimentation really boosts our creativity. And I'm a big believer in this idea of “fail fast and fail small,” which then allows us to learn and adjust rather than failing big. So a great example of this is an organization called Worldreader. They're a nonprofit that has a mission to help children read books. And how it came about was its founder was on a trip in Ecuador, and he saw a library with a padlock on it, and he just could not get that out of his mind. So he founded Worldreader with the goal to bring digital books to disadvantaged children and their families all over the world. So when they launched in 2010, they began an experiment and introduced Amazon Kindle e-reader tablets to a small group of elementary students in Ghana. And they were really excited about these tablets. They thought they were going to work great. But once the experiment got underway, what they found was the devices kept breaking during recess and play with the children. So luckily, they were smart about this. So at the same time, their team was running a second experiment, this time with a mobile app, which acts—through use, right, they actually learned that the young users preferred, and children showed a much higher use of the phone app to read these digital books.

So the lesson here was if Worldreader would have just gone all in on those tablet devices, they would have missed an opportunity to deliver a better product. And their experiments paid off. And they've since reached more than 21 million readers with their e-books, which is great.

But failure can be really scary, as we know. So it's important for leaders and organizations to have the right attitude towards risk and failure. There's this other wonderful book I like a lot called Money Well Spent. It's by Paul Brest and Hal Harvey. And in this book they share how the Hewlett Foundation offers a prize to their grant officers and encourages them to share what they called “the worst grants from which you learned the most.” And I love that. I think it's really clever and smart. So at the Hewlett Foundation, they would, then, have these gatherings to discuss this together. I think it really takes the pressure off and allows us to be human and honest and even laugh at ourselves and be humble.

And where I work, I'm so thankful that we have a board of directors that encourages us to take risks and experiments, and they even tell us it's okay to fail as long as we're learning. And, you know, you think about some of the personal virtues that a scientist must have, things like humility and discipline and courage to seek truth, even if that truth is uncomfortable. We have to have personal humility and accept when our grand idea doesn't pan out. And it's just human nature to be really excited about some new idea. But we should resist the temptation to go all in and invest big. It's just far better to have the discipline and do some testing first. And then based on what we learn, then we can get clarity about what works.

Al: Well, I love the example. I have personal experience with—and probably you experienced this too when you're in the Peace Corps—but I work with the poor children in Guatemala, up in the highlands, and they experienced the 30-year civil war. And I read books in the school library. And so I raised some money, and we bought some books and shipped them down. And, you know, we went back a year later, and, yeah, those books were locked up because they were so precious, and they didn't want—the culture was, “We don't want to hurt these precious books.” And whether they're really intended to be read and to be used. And I was just so frustrated. So, you know, that was good, a good test. We failed on that test. But now, you know, we've got libraries all over that area. So, yeah.

Well, let's talk a little bit about change. Change is a topic that leaders love to talk about, but sometimes those we lead don't. So when we talk about innovation, we're talking about change, aren’t we? And change can happen in small incremental ways or maybe even exponential ways. And there's nothing wrong with incremental change. I think making sure that we're improving quality by incremental change year after year after year is important, but sometimes we're called to think a little bigger. So talk about changes that are scalable. I liked, again, that's the number two question, is it desirable? Is it scalable? Is it feasible? So let's talk about scalable. How can leaders decide what's possible and what's scalable so that we can impact more lives? What factors do we need to implement to achieve scalable changes?

Leah: So Dr. Martin Luther King, Jr., writes about the early days of the civil-rights movement in his autobiography, and he describes how they started very small, you know, just with a small group of leaders and volunteers and really no financial resources. And he describes their experiments with working to overturn unjust Jim Crow laws in places like Selma, Montgomery, and in Albany, Georgia. And sometimes their efforts failed. And what they would do is they would study what happened, and they would learn and adjust. They knew they needed to start with some small wins, and they were deeply committed to expanding and scaling their effort across the South and eventually overturning all Jim Crow laws through achieving federal legislation. So they were incredibly strategic and ultimately successful.

But change like that is easier said than done. So how do we accomplish things like that, you know, at whatever nonprofit we might be working at? So in my book, what I did is I tried to break this down into three smaller pieces. So a good first step, if you're aiming for kind of big, scalable social change, is first, we want to take an inventory of our assets. So if you think of if you invite guests over for a dinner party, you wouldn't just start cooking before you see what sort of ingredients that you have on hand. And so if you're a nonprofit, what we would call this asset mapping, it's just like taking an inventory. So you would ask, “What resources do we really have to work with?” And this might include a list of your team members and their particular expertise, their credentials. You might assess, “Well, how many volunteers do we have, and how engaged are they? What is our budget? Who are our partners and our allies?” And as you go about taking an objective look at your assets, you're also going to be thinking about how you need to intentionally grow those assets to match your nonprofit's ambitions. And so this might seem like common sense, but not everyone really takes the time to thoughtfully do that.

And then second, scalable change requires building a coalition or building an ecosystem of some kind. So the civil-rights movement absolutely did this, and it wasn't easy. You know, if you followed the story of the Southern Christian Leadership Conference, they had to navigate all of these tensions. So they were trying to build partnerships. So you had the black-power movement, which wasn't buying into a nonviolent approach. You had leaders of some black churches who felt the movement should really just focus on the spiritual life and just leave politics at the door. You had some people in the movement who thought that young people should not be involved in the movement at all, that it was too dangerous. So despite all those kind of tensions and people pulling in different directions, they were still able to hold a coalition together with a shared vision, which is truly remarkable. And any philanthropic effort that hopes to solve wicked problems or achieve major scalable social change will need to do something like that to bring many stakeholders together as a coalition with a shared vision.

And then third, scaling involves identifying a unique approach or strategy that will create momentum in some way, or in the words of Malcolm Gladwell, achieve a tipping point for change. So again, thinking about the civil-rights movement, you know, African Americans faced so many injustices in the Jim Crow South. There were segregation in schools, at restaurants, not being treated in doctor's offices or dentist offices, having no access to legal protection or police protection. The list was enormous. So, then, how would they choose what issue they were going to work on? And they had all these internal strategic debates about this, and eventually what they settled on was one approach that they thought could create a tipping point for change. They believed that voting rights would have a domino effect on all those other injustices. They were very smart about this. So this became their new strategy. And if you haven't seen this portrayed in the movie Selma, I highly recommend it.

So those are three steps that a nonprofit can take when they're thinking about that kind of scalable change.

Al: Great. Yeah. Take inventory of assets, number one, you know. And you introduced this idea of asset mapping. And one of the things that I think is really helpful, Leah, is that you're not talking about financial assets solely. You know, it's relationships. It's other organizations. Absolutely. And building a coalition through a shared vision and to, really, enlist many stakeholders. Oftentimes we go about trying to do things on our own and to really see scalable change, you know, having a coalition. And then, what is your unique approach that really is going to create the dominoes to fall the way you'd like to see them?

Leah: Yeah. And sometimes your assets can really surprise you. There are nonprofits that work with their ideological opponents. Like, there's a lot of people working on criminal-justice reform who might be on the conservative or liberal opposite sides of the spectrum, but together, right, they're doing fantastic things. So you can be surprised sometimes by your assets.

Al: Yeah. Don't have preconceived notions as to who your allies might be. Yeah. That's good for us all to think about. Yeah.

So, you've got a whole section in your book where you talk about workplace culture and building innovation through organizational DNA. And our listeners are used to us at Best Christian Workplaces talk about workplace culture and employee engagement and creating a flourishing workplace. In fact, we did a webinar that you could find on YouTube on innovation as a result of a flourishing workplace culture. It also seems like some of the attributes that you talk about that actually produce a healthy workplace culture to foster innovation. So what are some of the key practices that you see in workplace culture when it comes to innovation? What values and structures do leaders need to incorporate into their organization so that they can have a workplace culture that fosters ongoing innovation?

Leah: Yeah. I suspect really simpatico on this. I really love the discussion of workplace culture that I've heard on this podcast. You had a recent one with Dr. Michael Lindsay, who was talking about building a culture of trust. So yes, I'm a fan. And as I was doing research for my book, I ran across an example of—we've all heard of Pixar, right? the movie-animation company. And Pixar's movies have won 23 Academy Awards and produced some of the highest-grossing animated films of all time, like Toy Story. And so what's the secret to their success? Well, as I was learning more about what they do internally, it's pretty interesting. So at Pixar, teams are expected to give what they call brutal, brutal feedback to each other. And one Pixar executive said that they had this assumption early on that “all of our movies suck, and our job is to give them creative feedback to get the movie from suck to unsuck.” And that's a bit shocking language, right? Brutal feedback. But however, they also have this kind of spirit as they do this and a belief that everyone in the room knows that the questions raised need to be in the spirit of making the creative product as good as it can be. So you're not there to sort of dunk on your friend down the hall. So without your manager setting the tone that this should be a safe space, this kind of tough-love feedback process would never get off the ground.

How do we do that? So, I'm really glad that you already mentioned values. Most workplaces do have a list of sort of official organizational values and principles, but often they're nothing more than just empty platitudes, or they're mentioned once on someone's first day of work and then quickly forgotten. So I'm lucky that at the nonprofit where I work, the Mercatus Center, one of our workplace principles is openness and challenge. And this isn't just an empty platitude, but it's actually

So, for example, when we interview new hires, our questions are structured to ask about those principles and values. So a question might be something like, “Tell me about a time where you challenged the status quo.” And that would be followed up by, “And how did that situation work out?” And the interviewer is really listening to understand how the candidate handled the situation. Did they take responsibility? Did they handle it with emotional maturity and integrity? Or did they finger point and just throw someone else under the bus, right? So we're already, right from our screening process, kind of looking for those virtues and principles.

And then, another way that our principle of challenge and openness is built into our practices is in our 360-degree performance reviews. And that's where our work performance is evaluated, not just by our direct supervisor, but also by our peers and our clients.

For example, a peer might be asked to share a specific example of how we have challenged the status quo this year and what was the outcome. And whether or not I get a raise might be affected. So I'm actually being incentivized to care deeply about our organizational principles.

And then, there are other ways leaders can sort of take a pulse of how it's going. They might ask about this in workplace surveys, in focus groups. We've done listening tours and, of course, exit interviews are always, you can get data points.

And I think team leaders need to be mindful, too, of the courage that it takes for someone to come forward with a thought or an innovative idea. We should be mindful that our seniority can be intimidating. And so you can make a point to say certain things like, “Hey, team. Here's my perspective on such and such, but I'm looking for you all to challenge my assumptions. Am I missing some key information here?” Or we might say, “Team, I'd rather have this idea crash and burn here with you all than to have it crash and burn with our clients. What risks or problems should we anticipate here?” So I think if there's a culture of fear, no one's going to bring their good idea forward. And a workplace culture where people feel safe enough to challenge the status quo and engage in these uncomfortable conversations, it doesn’t happen by accident. It's got to be intentional.

Al: Amen, sister. Amen.

I trust you’re enjoying our podcast today. We’ll be right back after an important word for leaders.

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Al: Welcome back to Leah Kral, the author of Innovation for Social Change: How Wildly Successful Nonprofits Inspire and Deliver Results.

You know, as we talk about safe workplace cultures, we'll often say, you know, if people don't have the courage to raise their heads or raise their hands because of fear in the workplace, then there's not going to be any innovation. There won't be any engagement, or a limited engagement, because people aren't bringing their full selves to the work. And so I just love your thoughts.

You know, back to the brutal feedback, in many of our Christian workplaces, we have this impression that we shouldn't create any kind of conflict. Well, when you provide brutal feedback, you're starting to create conflict, in a sense. But your point is just absolutely important, and that is you're not providing feedback about the person; it's the idea that you're talking about. And as you say, at Pixar's “move this movie from suck to unsuck. “ But we like to think about moving workplace cultures from toxic to flourishing, and that includes creating a safe workplace where people can raise their hands and say, “Hey, you know, we could do this better.” But also, intense listening, as you are suggesting, is another way.

You know, I think for many of us, as we are working in leadership, in the very early days of COVID, we found ourselves in leadership-team meetings making pretty big, drastic, short-term decisions without impact and input from our front line. And I think what we realized is after we kind of started marching forward, it’s important to get that front line back involved in the feedback so that we could be even more innovative as we approached that difficult situation.

So, let's talk a little bit about frontline workers and their role in innovation. All smart things don't come from leaders. In fact, I think good leaders are the first ones to say they get all their good ideas from those that they're working with and that they're talking with. And so you mentioned the best ideas may not be obvious to those in executive roles. Frontline expertise is essential in the process. So how can a leader encourage innovation and idea sharing for people at all levels of the organization? And what kind of commitment does it take to really encourage that?

Leah: Yeah. I believe that when frontline workers are empowered to experiment, amazing things happen. Mayo Clinic is one of the best nonprofit hospitals in the world, and they're a nonprofit, and they're famous for finding innovative solutions for people who are very sick. And their reputation didn't happen by accident. And in interviews with people who work at Mayo Clinic, they'll say that good patient outcomes are because of their organizational values. And one of those values is, “The needs of the patient come first.”

And another value is what they call unsurpassed collaboration. And they seem to truly live this. And their team members are trained, empowered, and encouraged to put those values into practice, no matter what role they have, whether they're a doctor or nurse or the janitor.

And I'll read now from the book and quote from a Mayo staff member who said, “If the employee's choices are either getting back to work on time or taking 10 minutes to get a wheelchair for a patient who seems unsteady, the patient will most likely get a wheelchair.” And I just think that's wonderful.

And there's another example that struck me from Mayo Clinic, where the staff were concerned for how noise can affect a patient's peace of mind and how lack of sleep can really disrupt the healing process. And so the Mayo team members came up with the idea to conduct noise studies that led to designing quieter flooring and quieter wheels on food carts and lower decibels for overhead paging. Now, that's innovation stemming from frontline workers who are empowered.

But this actually, it gets a little complicated. There are some twists in thinking about bottom-up empowerment. So of course, when we hear stories like these, it's easy to applaud them, and it's easy to get excited. But we also have to ask, does bottom-up decision making work in every case?

So I'll take a counter example. Let’s say that we have a major donor who typically gives $100,000 a year to our nonprofit. That's a big deal. And then this donor suddenly gets involved in a public controversy, is on the front page of the Washington Post. Well, now we have a conundrum. Should our nonprofit continue accepting donations from this controversial person? This might be risky to our nonprofit's brand. And it's a high-stakes decision. If we turn the donation away, this could mean layoffs. So who should make that kind of a decision? Should the new intern down the hall make this decision for the organization? Why, or why not? Didn't we just say how great bottom-up decision making is? So it's probably not going to be the intern, of course. It's probably going to be the CEO in consultation with board members. But why is that? So the decision really is related to risk and the consequences of making a bad decision and who holds the most information and who understands the ramifications and nuances of the different options.

So as I was writing the book, I was struggling through these questions, and this is probably the chapter I work the hardest on. It's probably the least sexy chapter in the book, but it was the one that took the most thought. So on the one hand, yes, right? Whenever possible, we do want to encourage and incentivize bottom-up creativity and innovation. But on the other hand, when is that not the right approach, and why? And are there a set of rules or principles that we can refer to when designing how our organization is structured?

So I have this chapter in my book called “Optimizing Organizational Design for Innovators,” and it tries to do that. It provides guidance for anyone kind of struggling or thinking through these hard questions. And really, the right kind of decision-making authority depends on the particular situation. And we have to weigh considerations like risk, speed, efficiency, accountability, who has the best information. And the fact is we're always just balancing tradeoffs. So I do provide a list of questions that can help us think through whether something should be top down or bottom up, and how that can affect innovation, for better or for worse.

Al: Yeah. Yeah. Fantastic. Well, yeah, frontline workers, that's where we get many of our best ideas. I've been to the Mayo Clinic on a management tour. I was on the board of a hospital that was doing a lot of work with lean and using lean in health care, implementing it in health care across the world. And yeah, putting the patient's needs first. And so many doctors measure their effectiveness by how long the waiting-room list is, not how quickly they can get patients taken care of. And boy, that just completely turns some of these things upside down. So yeah, and it's all about value, you know, and are we putting our stakeholders’ needs first when it comes to those we’re serving, and how does that actually happen? Or are we putting our needs first?, which is the opposite of the servant-leader approach that Jesus Himself suggested.

But well, then, okay. So we get these ideas from our frontline workers, and maybe it's a combination of the front line, maybe it's also including middle managers and leaders, but then it's a matter of evaluating these ideas. And you mentioned some questions earlier to help evaluate. What are some tools for sorting through competing ideas to choose the best ones, you know, and what pitfalls might we avoid in the process of measuring and evaluating ideas? Any advice for us there, Leah?

Leah: Yeah. I think I hear you asking two different questions there. How do we evaluate possible ideas or possible actions that we haven't tried yet? And then a second question of, how do we evaluate action we've already taken? So I’ll start with that first one. It's a good one. So in nonprofits, of course, we care about our mission. We care deeply. And we care about the people we serve and the problems we're trying to solve. So just by the nature of nonprofit work, prioritizing is so difficult because there's so much need in the world. But of course, we have to choose. We have limited resources, and we can't say yes to everything. So in the book, there's a chapter on that, on how we can do some really hard thinking about that “What's feasible?” question. And I share three practical thought exercises designed to help teams cut through groundless optimism and focus, narrow, and prioritize.

So those three thought exercises are doing a landscape analysis. The second is what I call surfacing risks, unknowns, and obstacles. And the third is a two-step SWOT exercise. And SWOT is really common in the business world. It's taking a look at your strengths, weaknesses, opportunities, and threats.

So just to be mindful of our time, I'll just briefly discuss one of those: landscape analysis. So if you're doing a landscape analysis for a nonprofit, what is that? So imagine going back in time to, say, the 1950s, and your nonprofit aims to curb teen smoking. So how would you evaluate the landscape? You would start asking, “Well, who are our friends? Who are our foes? Who are our allies on this issue? Who might be on the fence or undecided about it?” And as you kind of start making your list, you would recognize that Hollywood was definitely not on your side. Neither was most of the medical profession. That's hard for us to believe now, but it was true back then. So mapping out your landscape will help you think about, “Well, is this actually a battle we can win? Are we being realistic? Should we invest our limited resources in this issue or approach?” So those exercises are meant to help you, as you face a myriad of possibilities that you want to work on, you have to prioritize, and those exercises can help.

So then, to your second question, how do nonprofits evaluate action we've already taken? And this is really hard. Nonprofits struggle with this because if you think about the for-profit businesses out there that are very quantitative, they have things like profit and prices and consumer demand and inventory levels and all this quantitative data that we in nonprofits usually don't have. You know, like at the nonprofit where I work, we work in the world of ideas. We're educating. That's different. That's very qualitative.

So often, what we have in nonprofits or in philanthropy is sort of this fog, right? Good intentions do not automatically mean we have clarity about what we need to do. I love this one quote from Stephen Covey. It goes something like, “We might be climbing up the ladder, but is our ladder leaning against the right wall in the first place?” How do we know, right? So how do we kind of navigate this fog? And I see nonprofit teams get pretty frustrated with metrics and evaluation because there are so many pitfalls and so many ways we can do it wrong, and I share a lot of those stories in the book. But in essence, what we're really trying to do is to answer a question of, how do we know if what we're doing is working?

And I'll just share a really brief story of a nonprofit that I think approaches this the right way. So LifeWorks is a nonprofit focusing on at-risk youth in Austin, Texas. And a few years ago, they just were starting to feel dissatisfied with what they felt were lukewarm results of their programing. And so through a series of strategy discussions, really honest, maybe even brutal, discussions, team members asked themselves, you know, “As we work with these at-risk young people, who are living with things like homelessness or trauma and abuse, what is the ultimate problem we're trying to solve here?” And through, I think, a lot of hard conversations, a lot of work, what they eventually determined was that all of their work should really be laser focused to help each of their clients become self-sufficient. So then, they asked the hard questions about each of their 17 programs, “Do they put us on a path to that goal?” And they reshaped their data and their metrics to ask, “How do we know if what we're doing is working?”

And so they began to analyze some of the data and ask specific questions. And by doing this, they realized that some of their programing, such as interview practice and on-the-job skills training, was actually designed for traditional adult clients rather than for young people wrestling with significant trauma. And so their workforce training program was failing because it was really kind of misaligned with their clients’ needs. So then, next, they looked to models of workforce-development training in the mental-health field, and they found a better fit, and they started to create new programming. And within a year, they saw that their results dramatically improved. For example, job retention was measurably increasing. And they just continued asking those questions for each of their 17 programs and making steady improvements.

And so this story really takes me back to that great question you asked earlier, which was, how do we ask good questions? And so to me, evaluation, when done right, is really about asking those good questions, simply finding better ways of doing things, and discovering better outcomes for the people we serve.

Al: Yeah. How do we know if what we are doing is working? What a great question and something that we should all reflect on regularly. And it's something that we take very seriously at the Best Christian Workplaces and always looking for ways to innovate to make sure we're doing even better. But we can measure our 400-plus, this year, 400-plus organizations that we worked with and the health of their culture. And we're happy to say that over the last ten years, workplace culture in Christian-led organizations has improved, and we have a measurable way of doing that. But yeah, such a good question that we should all be asking and thinking about how we can improve it.

So, you know, much of having an innovative mindset is challenging the status quo, which causes me to think about that line, “Well, if it ain't broke, don't fix it,” right? So we have listeners who have been leading, well, 100-year-old organizations, even some longer, and some organizations are relatively new, somewhere in the middle. So what are some practical skills or practices that we need as leaders to challenge the status quo in a productive way? You know, can you give us some examples of leaders or organizations who do this well?

Leah: So, I think of the status quo is just business as usual and being too comfortable with how things are and not asking ourselves those hard questions. And I definitely included stories in my book of nonprofits that got too comfortable with the status quo and ended up with weak results, losing donors and staff, and eventually closing their doors. So how can we as leaders avoid making those same mistakes?

So I thought it might be helpful just to describe how this works at my own nonprofit. So I work at an organization called the Mercatus Center at George Mason University, and it's been around for about 40 years, and I like to describe it as the home of brainy economists who work to discover what aspects of institutions and culture help societies prosper. And the heart and soul of Mercatus is really economics.

For example, we raise money for scholarships so young people can study economics at George Mason University. And then, the economists and scholars who are working at Mercatus will then research real-world public-policy issues. So it might be something like, how should city governments think about stadium subsidies, and what are the tradeoffs of that? And we have about 200 people working on 30 different teams, and all of that's related to economics.

And in our all-staff meetings, our executive director likes to remind us that we can never get complacent and that we don't ever want our organization to be irrelevant. And the world is changing around us dramatically all the time. And one of the questions he challenged us to think about is, in this time of polarization in our country, are we really focused on the right things? Are we getting too comfortable with what we've done in the past or our status quo? And we see all these people sort of in the country so caught up in outrage. Are they really going to hear anything that an economist has to say? I think that's a fair question. It's a good challenge question.

So in response to his challenge, one of our teams designed some experimental programing. It was a little bit radically different than anything we've done before. So what we're doing is we're bringing undergraduate students together, who hold strongly different viewpoints on an issue like, say, health-care policy, or technology and the right to privacy. And then, over the course of a weekend and through kind of tense-but-respectful conversations, we're seeing the students start to build trust with each other, and models and viewpoint diversity and pluralism, which is really great. But I think, Al, it would be perfectly fair of you to challenge me on this and to say right here, “Well, why is a nonprofit with a mission on economics working on civil discourse?” You might say, “Is that challenging your status quo or is that mission drift?” And that would be a very fair question. But our staff felt it was important to ask, “Can markets really work properly if there's a breakdown in social trust and civil discourse?” And perhaps, social trust is a critical aspect of economics, and we just weren't paying enough attention to that in the past.

So it's new programing. It's very different. It's a little bit risky. But I think this kind of radical thinking came about because our leadership prompted us to ask these hard questions and not be satisfied with business as usual. But of course, we're keeping a close eye on the results and thinking hard about how to evaluate it and whether we would want to scale it or not. But I think that's a really good example of a leader doing something very practical, right? Just being a leader and asking those hard questions.

Al: That's a great example. Yeah. Are we getting too comfortable? So something for us all to think about. And maybe too often we're working to get things to a point where we are comfortable and really, then, there should be something in our spirit that's saying it's time to get uncomfortable about things.

Well, Leah, this has just been a great conversation. You know, I just think back of what we've talked about, starting with just the definition of innovation and how with your own Peace Corps experience, you just couldn't let that experience leave you, and you got into this work of innovation to improve the world that you live in and to help us improve the world that we live in. And I love your, like, Habitat for Humanity example of innovation, finding better ways to do things. To ask questions, so the why and how questions that you've led us through. Yeah, America in the ’70s, with American engineering and with automobiles and focus on styling. Also, I remember where it was okay to have cars last three years versus, again, how the Japanese just completely turned that upside down. But then, we talk about the need for testing, you know, to fail fast and to fail small, and then build on that. And your story of the library in Ecuador and the approach to actually getting kids to read, not necessarily on tablets but on their own phones, which they're most comfortable with. Exactly. Yeah. And then scalable changes, you know, asking where there's three pieces of taking inventory of the assets or asset mapping, building a coalition, creating a unique approach that creates a tipping point. I think for all of us, we're trying to scale the mission and even the businesses that we have. Yeah, just great conversations. How to evaluate and prioritize, how to ask the question, how do we know if what we are doing is working? And really breaking out of the status quo by asking questions, you know, and if we're starting to feel comfortable, maybe that's time to really move things forward.

But Leah, this has been a great conversation. You know, considering everything we've talked about, I’ll bet you you've got a bottom line, a particular thought, that you'd like to leave with us.

Leah: Well, I did want to say that I wrote the book to be relevant and helpful for anyone working in the nonprofit space, no matter what their personal, maybe political, or ideological viewpoints, or if they're religious or non-religious. And the examples and stories in the book are really from a wide variety of nonprofits and meant to be practical and useful. But I just wanted to add that I think the listeners of the Flourishing Culture Leadership Podcast have a deep commitment to faith, and I suspect many of your listeners are probably deeply involved in charity work, maybe volunteering or donating, and some of the best, most-compelling stories in the book are faith-based organizations doing amazing things. Like the Southern Christian Leadership Conference, Fred Rogers in Mister Rogers’ Neighborhood, the Mayo Clinic, Alcoholics Anonymous, all had these great kind of origin stories involving people of deep faith who were answering a call. And I think these stories will really be meaningful and inspiring to your listeners in particular.

Al: Yeah. Well, thanks, Leah. Well, thanks for your contributions today. This has been a great conversation. And I want to remind our listeners of the name of your book, Innovation for Social Change. That's what we're all about. So thanks for your commitment to helping nonprofit leaders create innovative solutions to help fulfill their missions and vision and to create space for human flourishing. So thanks for taking your time out today and speaking into the lives of so many listeners.

Leah: Thank you so much.

Al: Thanks so much for listening to my conversation with Leah, and I hope you enjoyed it as much as I did.

And you can find ways to connect with her and links to everything we discussed in the show notes and transcript by going to workplaces.org/podcast.

And if you have any suggestions for our podcast or have any questions on flourishing workplace cultures, email me directly at al@workplaces.org. That's al@workplaces.org.

And leaders, if you want to improve your leadership and expand your organization's impact for good and see broader faithfulness in your broader culture, help us achieve our goal of seeing 1,000 flourishing Christian-led workplaces in the year 2030. To help, please share this podcast with another leader or launch a project in your organization to discover and improve the health of your workplace culture. If you're interested in learning more, go to workplaces.org and request a sample report.

Outro: The Flourishing Culture Leadership Podcast is sponsored by Best Christian Workplaces. If you need support building a flourishing workplace culture, please visit workplaces.org for more information.

We'll see you again next week for more valuable content to help you develop strong leaders and build a flourishing workplace culture.

Al: Next week, you'll enjoy my conversation with Darrell Hall, who's the pastor of Elizabeth Baptist Church, and the author of the book Speaking across Generations: Messages that Satisfy Boomers, Xers, Millennials, Gen Z, and Beyond. And you'll love his advice that he gave me, a boomer, from his perspective as a millennial on how to rephrase my ongoing conversation to make sure I'm more relevant for my cross-generational audience. You're going to love it. We'll see you then.