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It’s Time for Nonprofits to Get Lean

Want to change the world, but have limited time and money at your disposal? Join the club.

You can’t drive change if you pour your heart and soul into an inefficient engine. You need to get lean.

Nonprofits and social movements need to learn from the lean methodology, or risk wasting resources and throwing away the most precious commodity, attention. The principle of lean methodology is to produce maximum value with the minimum amount of wasted resources, and nonprofits are often guilty of failing this test.

You’re not always building something for your constituents. Whales don’t use web apps.

Nonprofits have a vision of a better world, and a theory of how to remake this world into the one they envision. For a nonprofit, the goal is change, and waste is any resource spent that doesn’t help achieve that change.

Is Occupy Wall Street a Lean Nonprofit?

Occupy Wall St. has garnered a lot of attention, but is it lean?
 Photo by Bob Jagendorf

Waste can cost you money or human resources, but when your goal is change, waste can also squander attention. If your organization is getting attention and failing to use that to drive change, you are wasting attention.

In an era of nonprofit proliferation, it is even more important that nonprofits learn to be lean. Attention is a finite resource. If your organization or movement is getting attention, some other organization is not. If two nonprofits are competing for attention around a specific issue, the problem becomes even more pronounced. If you capture attention but don’t turn it into change, you are not only wasting the attention, but you are preventing another organization from catalyzing that attention into change.

Don’t just demand attention. Create change.

The Origins of Lean

The lean methodology began in the manufacturing industry. The basic principle is to produce an increment of value with as little waste as possible. In manufacturing, an increment of value is a high-quality physical good. Waste takes many forms – including defects in production, excess inventory, unnecessary processing, and rework.

The lean startup movement, pioneered by Eric Ries, applies these principles to the startup community. In a lean startup, value takes a different form. To paraphrase Steve Blank, a startup is an organization searching for a business model. Since the purpose of the organization is to discover something, not to create a product, the increment of value is validated learning. Startups create value by testing assumptions and proving or disproving hypotheses. After the business model and growth model are validated, the business ceases to be a startup, and can focus on scaling.

[For a good introduction, checkout Ries’s book, The Lean Startup]

Lean for Nonprofits

Nonprofits and social movements are another animal. They still need to reduce waste – but value lies neither in validating hypotheses (unless the nonprofit also happens to be a startup, a topic for another post) nor in producing physical goods. You’re not always building something for your constituents. Whales don’t use web apps.

For a lean startups, it’s about learning. For a lean nonprofit, it’s about impact. Lean nonprofits create increments of value by enacting, provoking, or inspiring change with as little waste as possible.

It’s time for nonprofits to be more lean.

Less waste, more change.

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4 Responses to It’s Time for Nonprofits to Get Lean

  1. Ryan W. Cohen November 11, 2011 at 3:05 pm #

    What are some real world examples of not-for-profits employing lean methodology to good effect? Also, lean relies heavily on quantification to validate progress. What are some measures that non-profits, or for-benefit organizations, can use to see where there might be waste?

  2. Jay Cranman November 23, 2011 at 10:07 am #

    I work with Points of Light and we are in the planning phase to launch a lean-startup accelerator program in mid-2012. Our focus will be on helping civic startups which we define as early-stage ventures that put people at the center of change through the use of volunteers or civic engagement. We’ve found a number of incubators and accelerators, but haven’t found any that actually focus on nonprofits (several focus on for-profit social enterprise). I was interested by your comment about “what if your nonprofit is a startup”, and curious about your thoughts there since this is what we are focused on.

    • Teague November 30, 2011 at 2:50 pm #

      Hey Jay,
      I love the idea of an accelerator for civic startups. I think that many accelerators don’t focus on nonprofits, because the accelerators themselves need to be financially sustainable businesses, and the most popular model is to take a small equity stake in the companies they incubate. A nonprofit accelerator would probably be a nonprofit itself.

      I’m planning a future article about the additional challenges that nonprofit founders face, but I would be happy to chat with you about that before the article is done.

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