Culture Leads to Innovation: Lessons from One of the Most Innovative Nonprofits in 2017

Culture Leads to Innovation: Lessons from One of the Most Innovative Nonprofits in 2017
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It's something you may see at a conference. Maybe you read a blog about it. Perhaps you listen to a podcast about it (and I hope you do...). But what does innovation look like in the real world? More than that, how can you and your organization be more innovative?

Well, I recently sat down with Brett Hagler, CEO and Co-Founder of New Story to discuss just that. You may not have heard of Brett and New Story before but you should've as they were recently recognized by Fast Company as one of the 10 Most Innovative Companies in the world within the not-for-profit sector for 2017. They were on the list for their ability to quickly create quality, cost-effective housing in slums around the world as well as their dedication to transparency, the 100% model, and giving video proof of their work.

New Story

My interview with Brett touches on many of these issues but one area that stood out as the foundation of New Story's success was this: culture.

Brett Hagler from New Story on Culture

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Culture Is the Secret Sauce

The commitment and interest in culture from Brett largely comes from his background in the for-profit sector and experience at Y-Combinator, one of the world's most powerful business incubators, where the product, or what we can see and touch, often is not the secret sauce. Culture is.Brett mentions

Brett mentions Airbnb as one of his favorite examples of culture and yeah they have a neat app, great scale, etc. but that's possible because of culture. Now I'm not smart enough to synthesize all of what Brett, New Story, and others have been able to do in creating their great cultures to foster innovation, but in chatting with him (and re-listening to the episode a billion times) three 'themes' stood out to me. So with that in mind, here are...

3 Tips on Creating an Innovative Nonprofit Culture

  1. Be distinct and true to your core beliefs
  2. Don't be afraid of failure
  3. Start small and where you are

1. Be distinct and true to your core beliefs

I was a bit surprised, at first, to hear Brett talk about their core beliefs as being so important to how they build culture. But when he read them out to me, I started getting excited just hearing them. I wanted to quit my job and go work for him! Check these out:

Check these out:

Their Vision

We're Building A Model That Powers A Bold New Era Of Social Impact.

But they don't say anything about housing! You're right, what they are aspiring to is bigger and possibly beyond 'just' housing. That's the type of vision that can rally people together - donors and staff.

Their Beliefs

  1. Technology Is A Force Multiplier For Impact.
  2. Every Experience Designed Must Be Human-Centered.
  3. Housing Stability And Resilient Communities Are Essential For Changing Society.
  4. Creating Change Should Be An Open Source Pursuit.
  5. Achieving Audacious Goals Requires A Diverse Ecosystem Of Partners.
  6. Hypotheses And Beliefs Must Be Data-Tested And Data-Influenced.

One of those, #3, is about what they do (and some of the why). The other five are focused on how they do it. Those beliefs are quite unique, for a nonprofit at least, but act as a guide for staff as they go about their work. Take #1, about technology, for example. New Story builds technology. Not something I suggest you try - generally speaking - but it's core to who they are not just because of what technology can save them - time, energy, money - but what they think it can create for them (and their supporters) - greater impact.

Having a vision that is big, bold, and inspiring as well as beliefs that help people go about their day to day work is huge for staff. And I think you can learn a lot more about New Story as an organization, as a donor, by reading their beliefs compared to most organizations even if they don't talk much about the what or why.

Now it's one thing to have cool, unique, and inspiring statements but it's the living them out that's the hard part. But setting the agenda with these types of statements and beliefs - for you and your supporters - at least sets the table and charts a course for you to follow.

2. Don't be afraid of failure

Much has been written about failure. Failing fast. Failing early. And there are many benefits to failing when done with a purpose - and not just because you clicked the wrong button (long story...). But it's often getting rid of the institutional fear of failure that needs to happen regardless of if things fail or not.

Nobody likes to fail but I think, as humans, we can tap into our evolutionary wiring to learn from failure and put ourselves on the path of success. But when organizationally - or culturally - failure is not tolerated, cracked down on, and not understood, we naturally become fearful. And fearful decision making leads to one thing: safety.

Do you think 'safety' thinking is going to end hunger? Eradicate poverty? Cure Alzheimer's? No.

And those are the things we're asking donors to do - or telling them we will do - when we fundraise. But when we get those funds, we turn around and do the same old thing the same old way. We don't invest in new ideas. We don't step out and take a chance on a new person, tool, or strategy. We play it safe. And in many ways, by playing safe we are breaking our promise to donors. And that's a huge risk!

How we go about solving some of the world's biggest problems is obviously a bigger discussion and how we get the funding for those solutions is yet another. And while I don't have anywhere near all the answers for those discussions, I can promise you creating cultures of fear and playing it safe are not a part of it.

Your donors don't want it. Your staff doesn't want it. And our world doesn't need it.

3. Start small and where you are

There are some big advantages of being a small, young, or startup organization like less baggage, quicker decision making, and it's easier to build culture. You don't have the history of what's been done before, you don't have departments and committees up the wazoo, and you can sit down and have lunch with the entire team. Those are massive strengths. Take advantage of them to build that team, be agile, and make bold decisions.

But what if you are that large, cumbersome organization drowning in red tape (which would be a terrible way to go...)? Brett gives some sage advice to start small. Maybe there is one project you can take on and do a bit differently. Maybe there is one tool you can implement. Or one campaign you can run a test with. If you try to overhaul the organization and throw off the shackles in one fell swoop it a) probably won't happen and b) you'll get frustrated.

If you're small, be small. If you're big, act small.

Once you have some success, on a small level, then it (hopefully) is easier to expand it. Grow it. Scale it.


Being an innovative nonprofit is possible - whether you are big or small - but it starts with culture. Standing for something and living it out, not being afraid to fail, and starting small before worrying about making it big are just three keys to building that culture that can lead to innovation. Good luck and happy innovating culture building.

Listen to The Good Journey Pod

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