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Setting Up Your Innovation Function in 6 Steps
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(C) Generous Mind LLC 2026 - CC-NC-ND license --- To use this worksheet please make your own copy as this is being distributed broadly. Visit www.innovationinmission.com for more innovation resources.
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Note: AI tools were used to help develop this resource
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Step 1: Defining Innovation
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Instructions: Take a look at this list of 30 definitions of innovation as a team and then discuss how you might build from these to develop a definition that will resonate with your staff. Then build your definition using the questions below:
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1. Who is benefiting from the innovation work?
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2. How will you talk about new, novel or unique work? Put another way, what noun will you use in your definition?
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3. How is your innovation work helping? How will you describe the outcomes of your creative efforts?
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4. What adjectives and adverbs will you use when describing the creation of new things?
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Insert your innovation defintion here:
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Step 2: Budgeting for Innovation
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Instructions: Modify C22 and C23 with org info and percentages in columns H, M and R based on your modified assumptions (remember to document your work by editing the percentage in the parethesis as well)
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Defining an Annual Budget
5 Year Spending Plan
5 Yr Funding Breakdown
5 Yr Experiment Breakdown
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Annual Gross Revenue$15,000,000Year 1 (40%)$216,000Staff (53%)**$715,500Big Bets (50%)$216,000
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Number of FTEs*200Year 2 (50%)$270,000Admin (10%)$135,000Small Bets (30%)$129,600
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3.6% of Revenue**$540,000Year 3 (75%)$405,000Experiments (32%)$432,000Exploration (20%)$86,400
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Per FTE Innovation Spend$2,700Year 4 (85*)$459,000M&E (5%)$67,500Exploration p/FTE$432
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*FTE = Full Time EquivalentYear 5 (100%)$540,000TOTAL$1,350,000TOTAL$432,000
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*Based on NSF 2023 ReportTOTAL$1,350,000
**Based on NSF 2023 Report
Note: Over 5 years
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Scenario Summary: We are evaluating a 15 million dollar organization with 200 full time staff that is seeking to reach full innovation spend by year 5.
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ORANGE = Target Annual Innovation Spend
Undesignated Money: The budget will likely need to be patient capital besides the Big and Small Bets (These are coded purple.)
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GREEN = Total Innovation Spend over 5 Years
Experimentation Money: Source is likely to be foundation/individual donor gifts with a percentage being revenue raised from successful experimentation.
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BLUE = Total 5 Yr Spend on Experimentation
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PURPLE = Undesignated Funds Required
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Step 3: Designing Your Innovation Function
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Instructions: Utilize the Innovation Definition Guide to help you make critical decisions about your approach to innovation, the type of team you need to build and the way you will do your work.
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When designing your innovation function, it is important to begin with the end in mind. Just like entrepreneurs use a Business Model Canvas to think through their new endeavor, an organizational Innovation Team can use this customized canvas to think through how to design the organization's approach to innovation.
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Download the Innovation Definition Guide here.
Staffing Your Innovation Function
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(Note: This guide is a secondary resource owned and distributed by LPK. Review copyright information about extended use.)
In step 8 of the Group Definition Canvas you will work on designing your team. This is a critical step in building out your innovation efforts. Below are KRA's to consider in your job descriptions.
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Innovation KRA's (Key Result Areas)
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1. Spirit-led Discernment
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KRA: Cultivate a culture of discernment, encouraging individuals to use their faith to evaluate ideas and opportunities.
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2. Tenacity
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KRA: Foster a spirit of perseverance and resilience in the face of challenges, grounded in a belief in God's grace and provision.
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3. Humility
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KRA: Promote a culture of humility, recognizing that innovation is a collaborative effort.
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4. Servant Leadership in the Midst of Change
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KRA: Lead by example, demonstrating a commitment to service that leads to transformation.
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5. Culture of Innovation
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KRA: Establish and foster a culture that encourages experimentation, risk-taking, and continuous learning throughout the organization, grounded in a belief in God's creative power.
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6. Growth Mindset
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KRA: Promote a growth mindset within the organization, emphasizing the belief that abilities and intelligence can be developed through dedication and hard work, guided by faith in God's potential for each individual.
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List out the roles you plan to hire based on your work above:
7. Strategic Innovation
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KRA: Align innovation efforts with the organization's overall mission, vision, and strategic goals, seeking God together as priorities are set.
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Role 1: Role 2:
8. Innovation Pipeline
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Short DescriptionShort DescriptionKRA: Develop and manage a robust innovation pipeline, including processes for idea generation, evaluation, prototyping, and implementation.
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9. Resource Allocation
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KRA: Secure and allocate resources effectively to support innovation initiatives, balancing short-term needs with long-term strategic goals, avoiding a limited-good mentality and recognizing that God provides the resources for us to accomplish His plans.
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Step 4: Innovation Management and ISO Standards
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Instructions: Review the 8 core principles of innovation management and give them a 1-5 rating based on how strong each area is presently within your organization with 1 representing very week and 5 representing very strong.
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Principles of Innovation Management (ISO 56001 Standard):
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[___] Realization of value: Value, financial or non-financial, is realized from the deployment, adoption and impact of new or changed solutions for interested parties.
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[___] Future-focused leaders: Leaders at all levels, driven by curiosity and courage, challenge the status quo by building an inspiring vision and purpose, and by continuously engaging people to achieve those aims.
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[___] Strategic direction: The direction for innovation activities is based on aligned and shared objectives and a relevant ambition level, supported by the necessary people and other resources.
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[___] Culture: Shared values, beliefs and behaviours, supporting openness to change, risk-taking and collaboration, enable the coexistence of creativity and effective execution.
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[___] Exploiting insights: A diverse range of internal and external sources are used to systematically build insightful knowledge, and to exploit stated and unstated needs.
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[___] Managing uncertainty: Uncertainties and risks are evaluated, leveraged and then managed, by learning from systematic experimentation and iterative processes, within a portfolio of opportunities.
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[___] Adaptability: Changes in the context of the organization are addressed by the timely adaptation of structures, processes, competences and value realization models to maximize innovation capabilities.
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[___] Systems approach: Innovation management is based on a systems approach with interrelated and interacting elements, and regular performance evaluation and improvements of the system.
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Step 5: Evaluating Your Innovation Function (Measurement and Evaluation - M&E)
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Instructions: Every organization will evaluate the impact of their innovation function differently, but these three elements are likely to be useful to consider.
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Outcome M&E: On a quarterly basis the Innovation Team should be looking at the core outcomes of the organization and assessing how the innovation function is helping the organization to reach those goals. Ideally they are utilizing the organization's established indicators and measuring innovation progress against them.Grassroots M&E: On an annual basis the Innovation Team should gather data from staff on the progress towards a culture of innovation. This evaluation includes: 1) Do people have a common understanding of innovation? 2) Can they share examples of innovation? 3) Is innvoation easier or harder? 4) Suggestions to improve?Innovation Maturity M&E: The Innovation Team should measure innovation maturity as a baseline as they are starting up the new function and then on a regular basis (ever 2 years). Using an external evalutation tool like AIM or the Seeds Innovation Lab Assessment provides an objective assessment to validate progress.
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Design your Innovation M&E Plan
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Insert your organization's core outcomes and indicators:
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