Opportunities for innovation come in a myriad of shapes and sizes with different and equally effective results. For many nonprofits, innovation seems to be rooted in defining their opportunities and creating the conditions for innovation - developing and focusing appropriate innovation processes and winning from and sharing lessons of innovation.

Although some innovations may be small, they can have a big impact on organizational effectives and how some in an organization work. For example, the adoption of a server-based network systems for in-house computing was a relatively small step in many organizations, but these systems radically changed how and where people could work and the nature of their jobs, Other innovations can be large and can transform how many of us go about our daily routines. For example, completely new ways of teaching and learning, using multimedia technology, are leading to revamp education and training approaches throughout society.

But no matter how big or small the potential opportunities within organizations, including nonprofits, innovations appear to occur in one or more of the interlinked organizational elements illustrated in the following diagram. These five elements help explain how an organization works and where changes can be implemented. Innovations can happen in each of these elements and new initiatives usually involve integrated change in several of them.

The following are the five key elements in an organization where innovations might be focussed.

Innovation Strategy - fundamentally changing the overarching approach taken by an organization to their core businesses. In nonprofits, as in business, strategy is a combination of "where" to focus resources and "how" to focus to achieve goals and objectives. An innovation strategy in nonprofits may involve devising new services for their current situation constituencies or providing a service to a completely new set of clients.

Innovation Skills - developing new capabilities and enhanced competencies within an organization as a whole then sharing and leveraging them among an organization's various constituencies. Nonprofits innovate in how they build their own skill sets and competencies to get the job done and then share their learning, providing their clients with new capabilities to improve their quality of life.

Innovation Shared Values - building on a strong-shared beliefs and common goals in an organization to drive aspirations and strategies that guide activities and initiatives. Organizations in the nonprofit sector are generally founded on strongly shared values and beliefs - and on finding ever-changing ways to impart and build on these belief in society.

Innovation Systems - changing how the day-to-day business of an organization is done or how products and/or services are delivered to clients and customers. In nonprofits, finding effective and efficient ways of getting the job done is especially important as resources become scarcer and scarcer. Sometimes an innovative new technology will help internally; other times, getting products or services to clients through new delivery mechanisms is the answer.

Innovation Structure - changing the design of an organization or a network of organizations in innovative ways can create exciting new products, services, or even new organizations or businesses. Redefining who does what and how the pieces work together can help the organization work more effectively and efficiently.