Innovation for Nonprofits: The Power of Observation Using AEIOU (Part 1: Clarify)

Introduction 

When I enrolled in Harvard Business School Online's Design Thinking and Innovation course  led by Srikant Datar, I discovered a new, more-systematic approach to transformative change. The course broke innovation down into four key phases: Clarify, Ideate, Develop, and Implement. While in the past, I prided myself on running an agile consulting firm, I realized I was personally missing something crucial: systematic observation and documentation – ironically, the very data-driven approach I constantly advocate for my nonprofit clients and friends!

One of my favorite tools in the first, Clarify stage is the AEIOU framework. This tool can help founders and leaders like you and me - identify both explicit pain points (problems users can easily articulate) and latent needs (challenges they might not even realize they're experiencing).

In this four-part blog series, I'll share one powerful tool from each phase of the design thinking process. We'll start today with the AEIOU framework because I find it both effective and memorable – a perfect starting point for any organization looking to innovate!

What is AEIOU?

Ever wish you had X-ray vision to see what's really happening in your organization? That's exactly what the AEIOU framework can give you! It's a great observation tool that breaks down complex experiences into five simple components:

Activities: What's happening?

• The main show (primary activities)

• The supporting acts (secondary activities)

• The behind-the-scenes stuff we often miss

Environments: Where's it all going down?

• Physical spaces

• Digital spaces

• The overall vibe

Interactions: How does everything connect?

• People-to-people connections

• People using systems

• Expected vs. surprise interactions

Objects: What tools are in play?

• Physical stuff

• Digital tools

• Things that help or get in the way

Users: Who's involved?

• The direct users

• The support crew

• Everyone affected by the process

Case Study: Clarify (Part 1)

Let's look at how fictional Mountain Home Solutions, a Denver-based affordable housing nonprofit, used AEIOU to transform its housing application process! What began as a standard observation exercise revealed fascinating insights into the complex ecosystem of affordable housing.

Through systematic observation, they discovered that residents weren't just struggling with paperwork - they were navigating a complicated web of challenges:

Activities:

• Primary: Completing housing applications

• Secondary: Gathering income verification, bank statements, and references

• Hidden: Taking time off work to visit multiple offices during business hours

Environments:

• Physical: Multiple government offices, banks, employers, and the MHS office

• Digital: Various online portals and systems

• Emotional: Stress and uncertainty throughout the process

• Cultural: Language barriers and unfamiliarity with bureaucratic processes

Interactions:

• Coordinating with case workers, property managers, and documentation offices

• Navigating automated phone systems

• Explaining their situation multiple times to different officials

• Managing follow-up communications across various channels

Objects:

• Essential documents (pay stubs, W-2s, birth certificates, Social Security cards)

• Application forms in multiple formats

• Transportation passes/gas money for traveling between locations

• Digital devices needed for online submissions

Users:

• Primary: Housing applicants (diverse backgrounds and needs)

• Secondary: Case workers and housing authority staff

• Support network: Family members helping with applications

• Other stakeholders: Employers and reference providers

This AEIOU analysis revealed that what appeared on the surface to be simple documentation challenges were actually complex systemic issues requiring a more holistic solution approach. By understanding these interconnected elements, MHS could begin developing more effective support systems for their clients.

Homework: Put AEIOU into Action!

Step 1: Choose Your Focus Area

Select ONE of these key nonprofit touchpoints:

• Donation experience

• Program registration

• Volunteer engagement

• Impact storytelling

• Digital communication

Step 2: Set Up Your Digital Observatory

• Block out 60 minutes of uninterrupted time

• Open your analytics platforms (Google Analytics, social media insights, form data)

• Create a simple tracking spreadsheet

• Invite 1-2 colleagues to observe independently

Step 3: Apply the AEIOU Framework

Activities: Track user behaviors

• What actions do people take?

• Where do they spend the most time?

• Where do they abandon the process?

• Which pathways are most/least used?

Environment: Analyze digital spaces

• How intuitive is your website navigation?

• Are forms mobile-friendly?

• Do pages load quickly?

• Is information easily accessible?

Interactions: Monitor engagement points

• How do users move between pages?

• Where do they seek help?

• Which content drives action?

• What prompts them to leave?

Objects: Evaluate digital tools

• Which features are used most?

• What technical barriers exist?

• Are there missing functionalities?

• How do different devices perform?

Users: Understand your audience

• Who completes the process?

• Who abandons it?

• What patterns emerge by user type?

• What feedback do they provide?

Step 4: Document Key Metrics

Based on your focus area, track:

For Donations:

• Conversion rates by amount

• Abandoned cart patterns

• Monthly giving completion rates

• Impact story effectiveness

For Programs:

• Application completion rates

• Popular registration times

• Language preferences

• Form abandonment points

For Volunteers:

• Most attractive opportunities

• Peak search times

• Registration completion rates

• Information review patterns

For Impact Stories:

• Content engagement rates

• Share patterns

• Active audience times

• Effective calls-to-action

For Communications:

• Open rates by content type

• Click-through patterns

• Optimal sending times

• Subject line performance

Step 5: Reflection & Action

Answer these questions:

1. What three patterns surprised you most?

2. What latent needs did you discover?

3. What immediate improvements could you make?

4. What longer-term changes should you consider?

5. How might these insights affect your strategy?

Share Your Insights!

• Document your findings

• Share with and discuss with your team.

• Email your discoveries to us at info@fundingstrategycollab.com to receive additional resources and tips for implementing design thinking in your organization!

Your observations today could unlock tomorrow's opportunities. From grants to strategic planning, we're ready to help you turn these insights into sustainable funding and growth strategies for your nonprofit!