Building Digital Readiness in Social Impact Organizations

Digital technologies can help generate greater impact, but are leaders ready to embrace them?

Technology has disrupted ways of working in every industry, particularly since the COVID-19 pandemic hit in 2020. For most of the nonprofit and wider social impact sector, this meant an even sharper shift to the use of tech tools than in other industries, both as a result of being at the frontline of the COVID response, and having previously lagged behind other sectors in adopting digital innovation.

Now, as funding from governments and other sources becomes scarce, there will be an increased focus on compelling data and analytics capabilities as a crucial differentiator. Many of the fast-tracked digital technologies implemented by the sector in the last two years are here to stay: trends such as mobile giving from donors, learning management systems for education purposes, and digital measurement and evaluation, are cost-efficient and provide a high level of accountability that benefits the sector.ⁱ

In RRA's annual 2022 Global Leadership Monitor, which surveys over 1,500 leaders globally on threats to organizational health and leadership, technology underpinned three of the top five external threats most likely to affect organizational health in the next 12-18 months.

What external factors will most affect business health over the next 12-18 months?

(% of executives selecting in top 5)

^{RRA 2022 Global Leadership Monitor, Base n = 1,590 global executives}

Looking at social impact respondents alone, technological change did not feature as a challenge even in the top ten organizational threats.

What external factors will most affect organizational health over the next 12 to 18 months?

% of social impact executives selecting item as top 5 issue from list of 20

^{RRA 2022 Global Leadership Monitor, Base n = 63 social impact executives}

These findings from the survey of social impact executives contrast interestingly with other surveys of the broader workforce in the sector.

A recent Salesforce.org survey of 1,250 global nonprofit employees found that 79% of respondents expect to leverage artificial intelligence in the next three years. At the same time, three out of the five major perceived challenges for the sector were tech-related, while there are clear technology components to the other two:ⁱⁱ

Can leaders overcome these tech challenges by embracing innovation to maximize their organizations’ impact? Our Monitor looked into various aspects of social impact digital readiness, including leadership perceptions, talent implications, and cultural mindset.

Barriers to bridging tech disruption and action

Technology will likely disrupt critical aspects of the social impact sector. There are opportunities to be harnessed, in terms of programmatic performance, donor engagement, and impact assessment. There are evident risks as well, not least for organizations that fall behind the standards set elsewhere in the sector.

Our Monitor found that just one in ten leaders at social impact organizations consider their organizations to be “tech-first” institutions. As described in a recent RRA article, a tech-first culture exist in organizations where technology is not the exclusive domain of the chief digital officer, chief technology officer or chief information officer - instead, every leader is a technology champion; and where failed innovations are not viewed as failures, but data points that help define the journey to success.ⁱⁱⁱ

A tech-first outlook cannot be achieved without the talent to foster it. Our research finds that just 22% of social impact chief executives believe they have the right talent to drive their digital journey. This is both a consideration of their technology function leaders, but also of how their organization’s wider leadership use technology as a strategic enabler of their mission. Just two in five chief executives responding to the Monitor believe that their executive teams have a strong understanding of digital technologies, and how their organization must transform.

^{Source: RRA 2022 Global Leadership Monitor, base n = 40 social impact executives}

Supporting effective tech-enabled, resilient organizations requires leadership to establish a culture that supports innovation. Around half of our respondents said their leaders were not afraid to disrupt the status quo, and were motivated to take tech risks. However, less than a quarter believed that their organization could engage constructively with failure of digital innovation. This suggests that while leaders might be willing to embrace digital transformation, organizations overall do not feel that failures can be absorbed.

^{Source: RRA 2022 Global Leadership Monitor, base n = 40 social impact executives}

Solutions for embracing the digital transformation

As in every other sector, technology presents immense opportunities to social impact institutions, whilst also creating new organizational challenges. Social impact executives will need to upskill their organizations at all levels, which might include hiring new leaders, developing existing ones, and fostering a pro-innovation culture.

So what can leaders do to gain advantage through technology?

Understand where you are in the digital maturity curve

Appraise the existing strengths of the technology portfolio, its functional leadership, and its connectivity to the organization’s mission. Evaluate where risks need to be mitigated. Are transformation programs aligned to the strategic direction of the organization overall? How well does the technology function understand the mission of the organization? Is IT functional, a strategic enabler, or a key driver of the organization’s success? Is the board aware of the implications of digital disruption?

Find and develop leaders who understand how technology drives growth

To unlock the real value of technology, you need board and C-suite leaders who can manage immense changes while inspiring others towards an ambitious tech vision. While the war for talent might be hard to win, particularly in a sector where salaries are less competitive, tech candidates might be attracted to other organizational features, such as organizational mission and purpose, owning a service line, C-suite titles and proximity to the CEO. Elevating tech roles will prove attractive in competitive markets. 

Embed technology acumen within leadership performance

When growth hinges on technology, you need impartial ways to assess every leader’s tech acumen, including your board directors, CEO, and CxOs. 

Build tech-savvy leadership teams

As technology cuts across organizational silos, leaders will only grasp its full potential and sustain high performance when they work as a team. Tech functions should be embedded across the organization, so they are not operating in silos, and there is greater trust across teams. In strategy sessions, ask what organizational challenges could be solved by a different approach to technology. These might be related to efficiency, organizational effectiveness, accountability, donor engagement, program delivery, or monitoring, evaluation & learning. 

Nurture a tech culture to foster innovation

Embracing tech advantage requires leaders who know how to drive cultural change. Encourage a culture that engages constructively with failure of digital technologies and pivots quickly to test new solutions. It will also be important to demonstrate that leaders who disrupt the status quo will be appropriately recognized and rewarded.

To understand how Russell Reynolds Associates can help you in your digital journey, please visit: Capturing the TechVantage

Authors

Emily Meneer leads Russell Reynolds Associates’ Social Impact & Education and Sustainability Knowledge teams. She is based in Portland.

George Head leads Russell Reynolds Associates’ Technology Officers Knowledge team. He is based in London.

Nick Ricketts is a member of Russell Reynolds Associates’ Social Impact & Education sector. He is based in London.

Simon Kingston co-leads Russell Reynolds Associates’ Social Impact & Education sector. He is based in London.

Tory Clark leads Russell Reynolds Associates’ Social Justice practice. She is based in Atlanta.

Vanessa Di Matteo is a member of Russell Reynolds Associates’ Social Impact & Education and Sustainability Knowledge teams. She is based in London.

^{i 13 Tech Trends Emerging In The Nonprofit Sector This Year, Forbes Nonprofit Council, March 2021. 13 Tech Trends Emerging In The Nonprofit Sector This Year (forbes.com)}

^{ii Nonprofit Trends Report, Salesforce.org, July 2021. ngo-report-trends-fourth-edition-111721-v1.pdf (salesforce.org)}

^{iii A Tech-First Culture Boosts Resilience. So How Can More Leaders Build One?  RRA Analysis, September 2022. A Tech-First Culture Boosts Resilience. So How Can More Leaders Build One?   | Russell Reynolds Associates}