Every organisation eventually reaches a point where familiar ways of working can’t keep up with the pace of change.
In not-for-profits and social enterprises, this can come from pressures such as shifts in funding expectations, evolving community and government expectations, and technological change. These stresses will then often hit at once - demanding faster and more imaginative responses.
On the one hand there is the urgent need to preserve: to maintain the core services, compliance, and stability that communities rely on. On the other is the imperative to explore: to adapt to the digital revolution, integrate AI responsibly, and rethink impact for a post-disaster, high-inflation world.
Yet many leaders feel torn between maintaining core services and rethinking how those services must rapidly evolve. The tension between these competing demands is real, especially when teams are stretched and the stakes are high. It’s no surprise that only 32% of nonprofit leaders believe their organisation has the capacity to innovate.
Innovation by Design
My research at the University of Sydney Business School has revealed that thriving organizations don’t choose one over the other. Instead, they master the art of “agile purpose-driven innovation by design”.
Time and again, I have observed senior leaders struggling with this tension without recognizing or dealing with the competing demands behind it. In these already fragile contexts, it doesn’t take long before this tension can rip the team or organization apart - when it can actually be channelled into being a positive tension that drives proactive innovation and positive change.
Fortunately, there is a simple way to identify and address these paradoxical tensions, ensuring both preservation and exploration needs are managed effectively.
Moving Beyond Reactive to Proactive Innovation
Many social enterprises and NFPs innovate by accident or in response to a crisis, such as a funding cut or a global pandemic. While effective in the short term, this emergency innovation often leads to burnout and fragmented strategy.
True resilience comes from proactive innovation. This involves shifting from a reactive mindset to a proactive architecture. By mapping the innovation landscape, leaders can identify where to pull in “tight” and focus on efficiency and reliability, and where to take a “looser” approach, such as through experimentation and creative risk-taking.
Leaders can then develop their own and their teams’ innovation- and change-ready capabilities, build their strengths, teach teams to complement one another, and enable individuals and teams to stretch and adapt. This can result in new mindsets, improved skillsets, and a well-equipped culture.
The “Ambidextrous” Leader
To build a future-ready organization, leadership must become ambidextrous. Ambidextrous individuals are typically known as those who use both their left hand and their right hand. In this way, they can access both ‘left brain’ logical functions and ‘right brain’ creative functions.
In the context of innovation, ambidexterity refers to the mental agility to hold the two opposing ideas of preservation and exploration at once. This capability can be demonstrated through the metaphor of looking through two different lenses:
- The Microscope: Focusing on the minute details of current delivery and operational excellence.
- The Telescope: Scanning the horizon for shifts in technology, policy, and social trends.
Both are important.
A study I recently completed (currently in publication) clearly shows that ambidexterity can be taught and that doing so yields more original and useful solutions to the wicked challenges that for-purpose organizations face.
Making Purpose-Driven Innovation Decisions Faster
The challenge in any contemporary organization is that there are rarely simple competing demands, and more often multiple complex tensions requiring our attention. Being ambidextrous in a purpose-driven organization therefore requires teasing out these tensions to identify which need to be prioritised and addressed.
In the NFP sector, for example, an additional tension typically arises between purpose and profit. While there is often a strong mission and vision in for-purpose organizations, there is also a clear need to remain financially and operationally sustainable to support that mission over the long term.
In a second study I am currently writing up, I observed senior leaders in a hybrid organization case study experiencing this as a clear additional tension, and I identified that also addressing this tension provides clearer guardrails for more responsible decision-making and action.
I have therefore developed a Purpose-Driven Innovation Radar (PDIR) to assist leaders with identifying and addressing multiple tensions such as these in for-purpose organizations. Relevant questions when approaching a challenge, according to this model, include:
- What are some ideal outcomes for the end user and for our organization according to our vision and mission?
- How can we ensure profitability and that we can remain open without losing sight of core values?
- Do we need to strip away some ideals that aren’t related to core values to ensure we can find a practical solution?
- Is there a way to integrate to ensure all competing demands are held in tension?
Building the Future, Together
Navigating the tension between today’s demands and tomorrow’s possibilities requires more than just “hope”. It requires a deliberate design. When we move from crisis-driven change to intentional innovation, ensuring our core values are considered and effectively applied, we don’t just survive the future - we shape it.
Andrew Grant and Dr. Gaia Grant (PhD) are globally recognized experts in innovation leadership, known for their groundbreaking research and bestselling books, including The Innovation Race and Who Killed Creativity?. Through Tirian (& Sydney University Business School), they have helped Fortune 500 companies and global leaders navigate the complexities of change, offering research-backed tools like the Innovation Climate Indicator (iCLi).
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