The nonprofit sector is being rocked by all sorts of changes including, and to a large extent driven by, the financial pressures of a weak economy. Seeking ways to survive and thrive in this complex and dynamic environment, more organizations are embracing innovation and thinking about how to work differently. I recently read an interview on the Innovation Excellence blog where Susan Harman of Intuit talked about her company’s use of three innovation strategies: build, buy (or acquire), and partner. This got me thinking about how these important strategies can be translated to the social sector.

Build. Harman described how the build strategy plays out in the for-profit context as creating new products or services that strengthen the company’s competitive advantage. For nonprofits, developing new programs or services can serve a similar function. Good examples of build abound in the sector, and with the upsurge of social entrepreneurial activity, there are many new programs and services being successfully developed and brought to scale. This often requires that the organization build its capacity and make a substantial investment of human, financial, and perhaps technological resources to develop, test, and implement the new concept.

Acquire. A different approach to adding capacity is to acquire it from another organization. This occurs frequently in the for-profit world, and mergers are acquisitions are becoming more common in the nonprofit sector. Using this strategy, a nonprofit seeking to expand its services or reach would pursue a merger or similar alliance with another program or organization that has already proven its success in that particular area. This is usually only a feasible strategy when both organizations see mutual advantages or complementary capabilities. Successful mergers and acquisitions can also take significant time and effort.

Partner. Like acquisitions, partnerships offer a powerful value add, in that the collective efforts of the partner organizations lead to greater impact than what each could have achieved on their own. But partnerships are more fluid and flexible than acquisitions. Successful partnerships can also include organizations from multiple sectors – government, corporate, and academic – and may range from small collaborative projects (e.g., hosting a joint event) to much more integrated endeavors (e.g., submitting a joint proposal to a funder to develop a new project). Partnerships also vary in the level of effort and investment that they demand.

Nonprofit executives with their eye on economic and competitive pressures are looking for ways to make their organizations stronger and more sustainable. Some are building capacity from within, strengthening key programs or diversifying services to be more responsive to client needs. Others are looking at acquiring programs and assets through merger or building strategic partnerships.

This is an essential moment to think strategically and innovatively, considering all the options available to your nonprofit. The strategies of build, acquire, and partner offer three possible responses to the opportunities and challenges you face. It may be that more than one of these strategies can be useful in meeting different goals (after all, they are not mutually exclusive), or perhaps none of them is appropriate for your organization at this time.

How might each of these innovation strategies help make your organization stronger, more sustainable, and more impactful?

We are delighted to have some of our recent work highlighted in “The Urge to Merge: A Case Study,” on The Geraldine R. Dodge Foundation blog. Jo DeBolt, says of her work on this project: “Cindy, Bill, and their board members demonstrated outstanding leadership throughout this process.  They worked through the nitty gritty parts of the merger without taking their eyes off their vision of what a combined organization could be and do.  Their efforts have poised Raritan Headwaters to be the high impact organization they envisioned.”