I enjoyed reading the special feature on ‘Talent for philanthropy’. How we staff philanthropic organizations is an important topic for discussion, and it’s incredibly valuable to have carefully grounded contributions calling for increased effectiveness and professionalism for the sector.
In particular, I enjoyed Felicitas von Peter’s useful ideas about partnering, and I think Judith Rodin’s comments on risk and diversity really hit the mark. But I want to focus my comments on three interconnected areas:
- the search for innovation
- the role of leadership
- the professionalization of ‘human resources’ as a function
Philanthropic foundations can and should innovate
Underlying all three areas is a question: what is the philanthropic sector for? There seems to me to be a clear answer but it’s very contestable. I believe the role of philanthropic foundations is to address the systematic failures of the other sectors in addressing social problems. It’s about doing good, but specifically using our unique position to find the solutions that other types of institutions can’t – perhaps because of the way in which they are funded, their size, or their need to deliver predictable outcomes. I think philanthropic organizations should use their unique position to do the experimentation and innovation that others cannot.
From this flows the imperative to understand innovation. Most foundations you speak to say they want to ‘fund what others don’t’ or ‘do more truly radical things’. With some notable exceptions, most foundations do just the opposite, a point well made by both Judith Rodin and Sylvia Bastante de Unverhau in the last issue.
The pressures driving risk aversion are obvious. Apart from anything else, understanding the impact of innovation in advance is by its very nature either incredibly difficult or impossible. Most of our impact prediction and measurement systems are not fit for innovation. In fact, many make open, participative and iterative innovation processes almost completely impossible.
So for me the question is: how do we build teams that can bring about the innovation we have a duty to deliver as philanthropic organizations?
Ericka Plater-Turner and Marcia Pregnolatto make part of the case by arguing powerfully for diversity. I agree that this is a critical prerequisite to building teams that can drive innovation. Within groups of people that share similar experiences and expertise, we are far less likely to hit on a new combination of ideas than when we bring people from many different backgrounds together. Laurence Lien points out that recruiting from outside the sector is one way to keep an organization diverse in background and skills, but rightly looks for evidence of values alignment to ensure people will be committed to the vision of his organization.
Realizing innovation in a team
But I think foundations could go further than bringing together people from diverse backgrounds and aiming to experiment. Too many organizations declare an interest in innovation or commitment to it but somehow seem not to put that innovation into practice.
Innovation is certainly a large and complex field that requires real study and practical understanding, and this might be the problem. It suffers from having practitioners that have little time or appetite for theorizing about it while also attracting a number of theorists who know little about the practical reality of doing it. This makes it all the more difficult to build a team capable of partnering in real innovation strategies – not least disruptive innovation, which challenges existing value structures, systems and institutions. That is the challenge we’re learning to navigate as we explore disruptive social innovation at the Young Foundation.
Here are a few tentative suggestions for how philanthropic organizations can realize their important role in innovating.
- We don’t need more heroes
There is the myth of leaders as heroes which fosters a particular image of the leader, then perpetrated by that same kind of leader. But it can be stifling for any innovative environment to have a ‘hero’ leading it.
Really, very little leadership is required for innovation to happen. On the contrary, leaders themselves need to encourage correction by other people in the course of the process. The strongest movements for change in the world are generally very democratic and powered from the bottom up. Of course, this doesn’t obviate the need for clear accountabilities, decision-making processes and project disciplines in the implementation of innovation.
- Giving credit
For any innovation to diffuse and change a system it requires that many people are given credit for their contributions at key points. An organization in which professional progress and payment depend on steady contribution and no failure will stop being innovative. A performance culture in which the expert credit-taker rises will never be innovative. We have to find ways to reward people who give credit rather than take it!
- Seeing humans, not resources
Most of our HR practices are stuck in industrial age paradigms. Even the fact that we call it HR is deeply problematic and casts light on the paradigm problem. If you start by calling a function ‘human resources’, you’re immediately off on the wrong foot. (I agreed with many of Simon Desjardins’ points, but not with his use of the term ‘human capital’!) People are not resources, even in very mechanistic and transactional operations. They cannot be managed like resources. Industrial processes that seek to standardize, minimize or outsource management are almost always counterproductive. Many of these processes are meant to ensure fairness but they generally have the opposite effect.
Fairness, like vision and passion, cannot be left to process. Fairness requires good management, shared objectives, mutual respect and support, open disagreement and disciplined execution. All innovative teams know this and all good leaders know it too. HR generally does little to foster this kind of environment. It often overvalues narrow pyramids of qualification, and undervalues personal development, collaboration, and the tacit skills needed to change complex systems. It also discourages scepticism, stubbornness and disruptiveness – the hallmarks of many good innovators.
- Avoiding counter-productive reward systems
Personnel evaluation and reward systems are even more problematic. They generally require managers to distribute scores according to predetermined standard distributions. This method is profoundly unsuited to making a group of people work together innovatively, because ultimately most of them get the feedback that they are relatively mediocre in their performance. You can never build a team of stars because the process won’t let you. Bonuses can be equally damaging, but prevail despite all the evidence that they are in many cases ineffective or counter-productive. It’s one part of the discredited ideology of free markets that we can probably safely forgo.
- Recruiting beyond the usual suspects
Recruitment processes are also mostly broken. They systematically reduce risk, which tends to favour the solid all-rounder rather than the change-maker who often spikes in one or two areas. Recruitment processes too often fail to address diversity issues in a proactive way and systematically drift towards recruitment of people who are similar to the recruiters themselves, rather than different from them. Too often we fish in narrow pools and radically overvalue the power of the one-hour interview to identify what is really needed.
Many of the challenges to the way we recruit and manage teams can’t simply be resolved in ‘HR’ departments or delegated to agencies. People in senior positions can become too attached to the idea that they are indispensable for things that they might have been better off recruiting other people to do. If we can overcome this way of thinking, we will have a better shot at building powerful teams who do truly innovative things – which is what the philanthropic sector should be doing.
To realize the potential of the sector we need teams built for innovation. That means less extraordinary leaders and more extraordinary teams. There are many foundations that do this already, but there’s much further to go.