Open market firms are always competing with each other for the attention of consumers. The healthy competition serves as a catalyst for innovation within these businesses. New ideas drive transformative changes, improving the efficiency of products and services to empower businesses in a fast-paced, ever-evolving world.
One area that is recently receiving more attention for its innovation efforts is humanitarian organizations. In order to meet their social objectives, they must find novel ways to stay competitive in the market. However, humanitarian organizations find it challenging to develop and implement new ideas when many of them struggle with a lack of resources. In “Humanitarian supply chains and innovation: a focus on US food banks,” University of Arkansas Professor Iana Shaheen alongside Arash Azadegan (Rutgers) and Donna Davis (South Florida) provide insight into how innovation can be developed and implemented in certain humanitarian settings.
The researchers chose food banks as a potential area where benchmarking innovations in the human sector may be viable. Food banks collect, organize, and deliver food to soup kitchens, food pantries, and other agencies. The competitive nature of food banks and the public's expectation of them to alleviate daily hunger compel food banks to search for new ways to address their operating challenges.
The main obstacle food banks face is the scarcity of food and funds. The questions posed by the researchers address how resource scarcity affects innovation practices. Furthermore, they ask how the behaviors of food banks change when scarcity results from a major disruption, such as the COVID-19 pandemic.
The Scale of Innovation vs. Resources
The researchers established a scale, ranging from high to low, to depict food banks’ access to resources. Based on where they fall on the scale, the food banks are categorized into one of the following innovation strategies: process, product, marketing, and imitative. The results indicate that certain food banks will prioritize one type of innovation over another depending on their access to food and funds.
Food banks that are high in resource scarcity, meaning they are operating in food-scarce and fund-scarce settings, focus on process innovation. Food banks from this group reported the need to focus on initiatives that help improve the productivity of their limited resources. Process innovation helps organizations solve their problems in a radically different way because it allows them to glean the most benefit from their resources.
The President and CEO of a high-resource scarcity food bank explained how the lack of storage capacity created a constraint that could have resulted in its turning away any more donations. Since it had outgrown the facility and did not have the resources to have a new one, the food bank developed a more streamlined process that allowed better use of the space and avoided the cost of building a new one.
On the opposite end of the scale are food-abundant and fund-abundant food banks that do not face any constraints. They focus on product innovations, or augmenting their line of products and services to meet customers’ needs in a novel way. These food banks focus on developing innovations that extend and differentiate their line of offerings.
For instance, the President and CEO of a low-resource scarcity food bank reported their initiative of providing fresh fruits and vegetables as part of their offerings. This initiative required partnering with a nutritionist to offer more balanced and healthy meals. They also extended this program by offering educational programs to teach those in need how to better use food, prepare meals, and increase general life skills. The goal is to shorten the line of people that need food.
In the middle of the scale falls two other types of food banks that lack resources in one category but not the other. When food banks are food-abundant but fund-scarce, they look to innovation efforts that enhance possible revenue streams through promotions, market research, and brand recognition.
Marketing innovations involve significant changes in the design and distribution of products and services. One of the food banks in the study partnered with a marketing agency for campaigns and research. Through the agency, it was able to find out that its brand was not strong enough. New practices, then, would be geared towards bringing awareness to its organization.
The last type of food bank the researchers studied are those that are food-scarce but fund-abundant. The novel practices these food banks lean towards are imitative innovations which are based on the exploitation of successful methods generated elsewhere. These food banks scout for new ideas from other food banks and carefully select what to implement in their own.
For instance, the President and CEO of one of the food banks practicing imitative innovations explained how attending conferences allowed him to see what others were working on and evaluate whether their strategies might bolster his own food bank’s performance. One of the ideas he implemented was a school pantry program that is still in effect.
How COVID-19 Shifted the Scale
COVID-19 shut down nearly all aspects of everyday life. Prior to the crisis, food banks relied on the generous time of nearly 2 million volunteers per month, but that quickly depleted as face-to-face contact diminished.
However, food insecurity only increased with the pandemic, so food banks had to reorganize the way they operated. Organizations started facing high resource constraints during disruptions. Because the disruption increased scarcity in both food and fund settings, most food banks shifted their focus to process innovations to increase the efficiency of their limited resources.
Food-scarce and fund-abundant settings faced a separate challenge as regular funding became scarce when donors shifted their attention toward other organizations such as healthcare NGOs. They thus focused on developing marketing innovations during the pandemic to attract new donors.
The Future of Humanitarian Organizations
Humanitarian organizations have long been isolated from the pressures of innovation common in the commercial world. However, as more and more organizations enter the humanitarian center, gaining the attention of donors and volunteers has become increasingly challenging.
The researchers set out to investigate the development of innovation and its application by humanitarian groups, using food banks as a model. Their research concentrated on the consequences of resource scarcity on innovation. More specifically, they examine how two main resource sources (food and funds) lead to different innovation efforts by food banks.
One of the most revealing findings from this study is that innovation management is clearly contingent on the operating setting. A one-size-fits-all strategy is not optimal for humanitarian organizations. Food banks adjust their innovation management depending on the availability of resources in the area served.
The findings may help to understand why certain humanitarian groups are hesitant to embrace change and innovation. The problem simply could be because the resource availability in the area may not be correctly fitted with the type of innovation expected by them. The researchers urge humanitarian managers to be selective about the types of innovations they pursue.
Some of the previous literature exploring the effects on innovation implies that an excess of resources provides better opportunities, while others believe that scarcity of resources is an incentive for innovation. This study, on the other hand, provides more insight on how the necessary focus on the sort of innovation may differ depending on the level of scarcity.
The chronic food insecurity rates in the United States have risen to some of the highest levels in the past decade with almost 34 million people living in food-insecure households in 2021. Humanitarian food supply chains have the role of providing for the public. To run efficiently in the future, food banks should adopt the suggestions made by the researchers in this study. By assessing the resource scarcity in the area, food bank managers can accordingly change their way of operating to better fit the needs of the public.
