Episode 198: Accepting Innovation - The Change That Will Help Both Nonprofits and its Professionals
Welcome to another edition of Around with Randall, your weekly podcast for making your nonprofit more effective for your community. And here is your host, the CEO and founder of Hallett Philanthropy, Randall Hallett.
I'm always so humbled when you join me, Randall, on any edition, but especially this edition, of Around with Randall. We live in a world that's moving. I don't think that's a surprise to anybody, but change and the ability to deal with the change and today's conversation about innovation seems to be a challenge.
I work really hard not to do many repeats of the podcast, in fact, try to do none. I look back, I've realized that I've done two podcasts on change, number 58, back in November of 21, really dealing with it, how people deal with change on a personal level. And then on episode 142, a little over a year ago, so in August of 23, about how to deal with it from a leadership perspective, what can you do to help others?
Today, I want to talk about innovation and I want to talk about how things are evolving in technology and other things pushing beyond the loop. And the fact that we really don't deal with this very well, which is part of change, and that fact today, we want to talk about how some things are changing that are actually solutions. How do you use change to your advantage in trying to accomplish something?
I want to start with a story that I heard at a conference recently and I think it's a well-known one, so I'm not plagiarizing, it's general, but I heard it for the first time from someone else. A physician, a German physician, Austrian physician, back in the middle 1800s, Ignatz Philipp Semmelweis, and if I said that incorrectly and you happen to be a relative, I do apologize. Was a specialist in birthing at the time and in particular in post-traumatic challenges that women were facing.
And what he realized is that bacteria, women were dying from bacterial issues after giving birth. And his solution was to wash his hands in a combination of a little bit of alcohol and some kind of lemon or lime juice that would cleanse the hands, which today we would think of as, well, at least that. Back then, that was not the norm and he wrote about it and statistically showed that when he and his staff, when delivering women, babies from women and also in dealing with their health issues thereafter, would use this solution every single time pre and post.
Again, common sense today, the mortality rate dropped from 18% to 2%. Which is beyond significant. He was laughed at. He was basically put off into the pasture and said he was crazy that the social medical norms of the time didn't back this up. And eventually he became depressed and ended up dying in a facility. And many thought it was because of the way he was treated after this discovery.
At the same time, and there's no direct evidence that there was a tie between the two people, but the placing and timing is awfully interesting. The Crimean War was going on and a nurse started doing something very similar and it was very well received and accepted by the medical teams in the Crimean War in the middle of obviously tremendous wounds and death and injury. We know her as Florence Nightingale.
Ever heard of Dr. Semmelweis? The answer I can say probably knows because I don't even know how to say his name properly. It wasn't until about the late 1900s that Louis Pasteur finally dove into the thought of germs and how they affect the human body. The reason I say this is sometimes the things that will move our society forward and today we're going to talk about philanthropy in a very narrow way of the whole society. Move us forward are challenging and not very well accepted.
And what are the issues that we deal with before delving into some of these things and really giving you I think five ways of looking at it. I want to talk for a second about why change is so hard because that's what we're talking about. Evolution.
The first thing is is it causes immense discomfort both personally and professionally and also organization that we don't like change. We like things to be the same in our life in general and specific. Innovation is about changing the way we do things. It threatens number two, the fear of the unknown. So you have discomfort with change and the fear that maybe something will take my place or something knows better than I am or I won't look like I know what I'm doing.
Number three is is do I have the ability from a complexity standpoint to deal with this? Do I understand it? Do I understand it enough to be able to explain it? It's like what I tell my son, if I teach you how to do it, you learn how to do it. If you teach someone else how to do it, you become an expert. That's really hard if we don't have a baseline understanding of the things that might have helped us to be better at what we do.
There are also cultural and organizational barriers. We have other people in our organizations from compliance to IT, to budgeting, finance, who put restrictions on what we do. Even though they may not be responsible for the things we do do, all of these barriers give us excuses not to move forward and push past the challenges.
Number five is very specific about resources. When you add these kinds of changes, there's usually a cost to them. Consultants like me. It's some type of mechanical computerization process that requires you purchasing software or having a company come in an input, this kind of process in place.
Number six is all too often and I'm finding myself talking about this more and more short-term focus. I.e., we concentrate on the goals that are really important to us today, but we don't necessarily look at the long term. But for every moment that we don't adjust to innovation, there's a cost long term. It may solve part of the problem in the short term. The long term doesn't get addressed unless we evolve.
The last one seems kind of crazy, but I think there's a lot of truth in it and it's emotional attachment. We get attached to the things that we do, the people that we work with, the daily routines that we're a part of. Not only at the beginning is there discomfort. There's actually a connection of things that we're trying to accomplish by the way in which we do them.
So whether it's discomfort or fear or complexity, barriers, resource constraints, short-term focus or emotional attachment, we have to innovate. We have to change what we're doing. We're seeing dollars drop off the table when it comes to philanthropy. There's a lot of arguments that it's because of inflation. It's because of the pandemic. It's because of a lot of other things.
If you go back, I come back to the same statistics and I apologize, but there's data out there in particular what Nathan Chappell talks about in the generosity crisis that in 2002, two thirds of the households made gifts to any nonprofit, one gift to one nonprofit. We're below 50% now. And the only reason we haven't seen greater diminishment in philanthropy in terms of total dollars is these mega gifts. But we're now beginning to see the last two years from which I am privileged to be a member of the Giving Institute, seeing drops in our overall philanthropy, which means we keep doing what we're doing. We're going to not see the results we want to see. And I believe it's innovation that should be part of what we try to adjust, to embrace, to get to where we want to go.
So as I always try to do, the tactical. What is it that you can do to embrace the concept of innovation about changing the way we do things? And I will get into some very specific things because you might be thinking, well, what's he talking about? Major gifts is he talking about databases? He said, yes, I'm going to talk about all of it.
So let's start with the top. The first thing is what I might think of as check inside your own house. And let me start with explaining what I mean. As the innovation that we're looking for actually doesn't come from outside. It's actually in front of us the whole time.
Let me give you an example. One of the great companies of the 20th century was Eastman Kodak out of Rochester, New York. They made film. Full of rights. If you're young enough now, you're like, I've never heard of Eastman Kodak or who's Eastman or I just thought it was Kodak. The point is, if you're old enough, you're like, that was a major company. They basically gone into nothingness because they didn't innovate. It was all right in front of them. Superglue came from Eastman Kodak, but they didn't deal with that. It was part of a process they were trying to figure out how to create a stickiness for pictures. Xerox and the idea of copying came out of there. The first digital camera in the 1970s got an iPhone or a Google phone. Photography, yeah, they said we don't want to deal with that. Sometimes the things that we need to embrace are right literally staring us in the face.
Let me give you some practical examples. The first one is talent. We tend to think that what someone else is doing or what someone else might be able to do, we should embrace more from the outside rather than the inside. What I'm specifically talking about are things like gift officers. We don't do a very good job of finding talent in our own organizations because we think historically that we need to find someone with 25 years of fundraising experience. I've gotten to the point, it's not that I don't care about it entirely, but I've got to a point that I'm telling clients more and more often. What? Looking for just the 25 year veteran for the fundraiser. Find the values and the skill sets. Number one, fire in the belly. They get up in the morning and show up without me telling them how to do it. Number two, is there a sense of resiliency? Can they make phone calls and go communicate with people, which is number three, communication? But do that from the confines of not taking it personally. They're going to make the next call if someone says no, or if they don't get the gift, they're like, gosh, I'd like to learn more about it, but I'm going to keep moving forward and build more relationships. Resiliency. Number three, can they communicate effectively?
Now, maybe number four is also, do they fit your mission? Do they believe in what you're doing? But the first three are skill sets. Those are more important than 25 years of experience. Do you have people in your organization that you could invest in and help because they have those qualities, they just don't have 15 or 10 years of experience to do that next-level job? Investing in them to help them grow? That is innovation.
I'll give you another one. Where do our donors come from? How do we better identify who’s going to give to us this year? The data says constantly that it’s all about lapsed and siphoned donors. They gave some year, but not this year. Unfortunately, not this or last year, but unfortunately, not this year. How do we identify those people? Are we willing to push in and have deeper, meaningful conversations, innovate, and build depth in relationships with the people who are already interested in what we're doing? Maybe eventually one of the greatest gifts one can give is a legacy gift. There are state gifts. Do people in your organization, in your department, in your foundation, whatever, have creative ideas that could help you be more than you are? Are you willing to listen?
Number one, check in your own house. Three examples: Talent, donors, and just general ideas. You don’t always have to look outside. Do you foster an environment where ideas and talent and people come from within and grow?
Number two, no may not mean no. No, in terms of innovation, may mean not yet. Let me give you a couple of examples. One is we deal with every day solicitations in our world. Not sure this is as much innovation as just realization. But sometimes a no isn’t a no. Something’s off. It’s not the right time. You didn’t ask for the right thing. Are we accepting that no, or are we pushing in and having a conversation about why the answer’s no?
Another example is that no may not be not yet. Introducing new technology from a budgetary perspective, from a compliance perspective, from an IT perspective. If you’re trying to do something that’s unique, like artificial intelligence, and I think about what Nathan Chappell is doing with the idea of taking data, well, if your organization is not ready for it, meaning all parts of it, and somebody says no, we’re not doing that, is that a no or is that a not right now? Can you respectfully have the conversation a second or a third time to allow that discussion to go forward when it’s more appropriate? No may mean not. And by the way, I’ll give you another one. If your innovation want to grow in the organization, you’re like, can I do more? No. Is that a no because they don’t think you have the talent or is that a not yet because we have some other things going that I’ve got to put my focus on and I want to give my focus to you when it’s appropriate? No doesn’t mean no most of the time. It means not yet.
Number three is the idea of accepting failure as an acceptable outcome. This one’s hard. I think the first thing I would distinguish is the difference from a small failure and a large failure. If it’s a colossal failure, yes, it can be incredibly detrimental to the organization. Yes, it should not be accepted. But most of the time, to steal from Peter Jennings and the idea of small bets, and I love him from a philosophical perspective for strategic planning, how many small bets can we make and be okay with the failure but not affect the organization? That’s what we need to be thinking about.
So the things we’re dealing with in our organizations in philanthropy in general that we need to be more aware of and be okay with failure because we need to change include some of the following. For some organizations, moving from special events to major gifts because you’re going to have more failures. You’re going to get more no’s if you’re asking for a thousand dollars from 10 people and you get eight yeses, but you’re going to take those same 10 people and ask them for $50,000 a piece. You’re probably going to get seven or eight no’s at least. But think about what I just said, 10 people, a thousand dollars, eight said yes, it’s $8,000. One says yes, it’s $50,000. Accept that.
Number two, the idea of grateful patient in healthcare. I have too many people who say, well, it didn’t work right away and they all said no. The first group said no. We know data from a data perspective, the statistics tell us that healthcare’s best pipeline opportunities actually come in terms of large numbers from grateful patients. How do you build out relationships with them and also with the clinicians who are treating them to get the HIPAA-compliant answers we’re looking for, regarding a simple question: Did they have a good experience?
The third one, I just had this conversation with a client two weeks ago. The idea of conscientious medicine. There are a lot of variations and I’ve done podcasts on the subject. But the basic premise is if you want a larger group of individuals who are at the top end of the socioeconomic strata to engage with you, they generally have expectations. Are you willing to meet them? That is very challenging from an organizational perspective because there could be some pushback. There could be some small failures. Artificial intelligence. I’m seeing more and more conversations about this but people are like, well, I just don’t know if we can handle it. Well, it’s not going to be perfect. Are you willing to try?
The changes we’re going to have to go through in annual giving, we talked about it earlier, but 10 minutes ago, the decreasing number of people just giving overall per household. What are you going to do differently? We’re digital, less digital, more in-person phone calls. I don’t know. There’s a lot of options. But are you willing to take innovation to do something different? Realize that any one of these things, the biggest thing is that it’s small steps of success. There are no magic bullets. There is no one answer to cover everything. And all too often we look for, I need the one solution. I’m going to solve all of our problems. I’d love it too, but I haven’t found it yet. It’s always the ability to push in and to think about it a little bit differently and attempt to be okay with that failure. And then adjust as you go through the process.
Number four, are you getting feedback from what you try to change? Innovation takes time, as mentioned, to do this. Putting things into a feedback loop and making adjustments is power in terms of innovation. You think about basic things like light bulbs. One day Edison just didn’t wake up and go, yep, I’ve got it. It’s not the flux capacitor from Back to the Future where Dr. Brown hits his head on the toilet and he’s got it. Edison’s light bulb finally came to be because he had 10,000 mistakes before it. Feedback loops. Keep trying. Don’t run from it. Embrace the opportunity. And then we have to be willing to accept the fear that each little adjustment may mean some more pain along the way, whether it’s discomfort or just uncertainty. The idea is that trust is critically important. Trust in ourselves, trust in the team, trust in the process, and even things like gift officers pushing more and more into having outside sources help them with portfolio development. Whether it’s artificial intelligence or a prospect management team, they’re professionals. They know what they’re doing. It’s not a perfect scenario. It doesn’t answer every question. Are you willing to accept that innovation and that change?
The last thing is just kind of a personal thought process. Not too often in life, and I think I’m part of the problem, we are too concentrated on the destination rather than the journey. The key to all of this is the experience that you go along with when you’re trying to solve the problems. The people you deal with when you’re trying to do this. It’s a windy path. Innovation, change is not easy and it’s not a straight line. I look back on the last 10 years of my life. I would have never dreamed that this would be podcast number 200 and something because I would have never thought I’d ever do a podcast. Have my own 20-minute or so classroom every week. Your goal in using innovation to change is to create as many new options to choose from going forward. If you do this in the right way, you create more options to best choose what is the next step that you’re trying to accomplish. There’s nothing worse than having only one option because then you feel constrained. You feel, “I don’t have a choice. Where do I go?” Except this way and I’m not sure I want to go that way. Innovation should be about creating more steps in the process and the realization that the failures and all the other things that go along create a learned experience, wisdom if you’re really good at it, and embrace it, that will get you to the next level of success. I’m hoping today I can push on listeners, whenever you listen to this, that you accept innovation, you accept change and embrace it in a way that allows you to grow. You, your organization, your department, the foundation, whomever, because we can’t get better if we keep doing what we’re doing. My guess is we’re going to need philanthropy much more in the future than we need it now, which means we’ve got to be better at what we do. Remember, having failure isn’t a negative in and of itself. Failing the same way every single time, doing the same thing over and over, ten times, and expecting a different result is called insanity. That isn’t acceptable. What are you doing today to accept innovation and look at things in a different way that allow you to see improvement?
Don’t forget to check out the blogs at helithelianthropy.com. Super quick, 500 words, 304 words, just things I see and read, interesting things that might get you to think like, “Wow, did I know that?” or hyperlinked to an article like, “You should pay attention to this.” You can get those, right? And RSS feed right from helithelianthropy.com. And if you’d like, you can reach out to me at podcast@helithelianthropy.com.
In our pursuit of betterment comes innovation and change and all these other things. They’re directly related to my all-time favorite saying. And people make things happen, some people watch things happen, then there are those who wondered what happened. People who make things happen are different than the other two categories because they embrace innovation, change, growth, and trying new things for the betterment of the world. And that’s the definition of philanthropy, isn’t it? Love of mankind, love of humankind. How do I make this better? I’m hoping that you understand how important you are. You are someone who makes things happen and you can increase that by embracing innovation to make your nonprofit, whether you’re a board member, a staff member, or a donor, better at helping those who are wondering what happened. I’ll look forward to seeing you the next time right back here on the next edition of Around with Randall.
And don’t forget, make it a great day.