CBA Study uses 15 core drivers to gauge organisational innovation.

A recent Commonwealth Bank study shows that Not-for-Profits are often more innovative than the average business with around 95% of organisations either innovating or actively working on improving how they do things.

Faced with pressure of funding restrictions, competition and some profound changes in the sector (such as the NDIS), organisations are “rising to this challenge and finding innovative ways to boost efficiency and productivity and improve community outcomes”.



Measuring Innovation

The report sets out to create a standard means of measuring innovation so that comparisons can be made over time as well as between sectors of the economy. It uses a framework developed by the OECD and widely used internationally. From this framework the researchers have combined 15 metrics into one Innovation Index to provide a simple measure for comparative purposes.

Not-for-Profits scored an average of 38.6 on this index (where 100 is highly innovative and -100 is resistant to innovation), above the average business result of 32.0. Whilst 40% of NFPs met the innovation criteria and a further 55% were categorised as implementing improvements, this total of 95% is considerably higher than the national average of 82%.


Measuring Returns

Cash returns from innovation are generally lower than for businesses but the report recognises that profit is not the only motivation for the sector. Benefits cited by survey respondents also included better outcomes for customers and the community, improved staff engagement and well-being and a better competitive advantage.
The main focus of investment in innovation is in staff training, sales and marketing and operational efficiency. 25% are investing in new technology.


Overcoming Barriers

Lack of resources was recorded as the biggest barrier to innovation, though this is also sometimes a driver of innovation. Somewhat surprisingly, given the generally high levels of innovation, the next most common barrier mentioned by 60% or respondents, was the lack of an innovative culture or leadership.


How Innovative is your NFP?

The report is based on 15 core drivers of innovation which have then been combined to provide the single “innovation index”. While it doesn’t reveal the exact process for creating the index, the 15 drivers would still make a good discussion document for any board or senior management meeting. A self-assessment process and asking the right questions is a key ingredient to any change of culture and process and this is a useful list to start from.