Non-Profit Leadership - Three Lessons to Learn From Businesses

Ends up in non-profit organisations have invariably been vague. Historically, to be seen as legitimate and warrant our support, all that a non-profit had to demonstrate was its commitment to a cause. It would get rewarded (support, donations, funding from donors and governments) for what it represented, which support was based on what it promised, instead of performance or results.

Within the business sector, an organisation is rewarded based mostly only on its performance or results it delivers in terms of profits, market share, stock prices, employment created, and similar measurable indicators which underpin the core purpose of the business. The core purpose of non-profits is typically outlined in terms that do not make them amenable to be diminished into success criteria. How do you live the success of an organisation which defines its core purpose as removing poverty, or meeting the healthcare wants of the vulnerable population?

The core purpose of an organisation is to answer the query -- why does the organisation exist in the slightest degree? This is often completely different from defining goals or objectives at a specific purpose in time. In the non-profits, the core purpose is taken with a pinch of salt by successive generation of leaders. This is often partly because of the explanation that the core purpose is usually outlined therefore broadly that it becomes axiomatic that the core purpose makes absolute sense, no matter what changes could have happened within the external environment. Who can query the actual fact that poor exist, which they need facilitate, or that poor people's healthcare wants aren't being met, and hence there's a would like to address these?

So goes the thinking.

However, if you pause for a flash, and raise the question : what is the best way to assist the poor? As the noted Economist, Milton Friedman, argued over three decades ago, the most effective means to assist the poor is to assist them become richer. If the core purpose of a non-profit was outlined during this language, you'll live the performance in terms of wealth created, income raised, assets increased etc. This is able to conjointly enable the organisation to define a clear and compelling vision, whereas simultaneously enabling it to live and track its performance.

But, non-profits have historically shied faraway from such specifics, and donor and supporters (customers) are expected to take the organisations for who they are, what they represent, and what they promise, not what they deliver.

This paradigm is slowly shifting. There's increasing pressure now on non-profits to deliver and demonstrate results. Several donors have currently been supporting businesses to undertake activities that were normally delivered within the past by the non-profit sector. Company social responsibility is breaking new ground in terms of how companies engage with society. Caring for the society and therefore the vulnerable is now not the preserve of the governments and also the non-profits.

It's heartening to determine that some of the company giants have moved beyond their corporate social responsibility, and commenced redefining the core purpose of their businesses <http://m.hbr.org/12763/show/9d2b08e16444959c637f3b1e5d198f1d&t=54114d0202b0d5685a50248ba19888bb>. PepsiCo is reshaping relationships between business and society. PepsiCo is examining the health implications of its products, it's partnership with governments and NGOs, and initiating approaches to empower the younger generation to take responsibility early in their careers. It's launched a partnership with Waste Management Inc. to create innovative public recycling kiosks giving incentives for consumers to deposit empty bottles and cans. The corporate has been running a contest to find the simplest not-for-profit organisations whose social innovations can solve vital world problems.

Procter & Gamble is another company which currently defines its stated purpose as improving "the lives of the globe's shoppers, now and for generations to come." In 2009, the company launched a brand new business strategy <http://m.hbr.org/12763/show/9d2b08e16444959c637f3b1e5d198f1d&t=54114d0202b0d5685a50248ba19888bb>, known as "purpose-inspired growth" to "improve a lot of lives in more places additional completely." Entrepreneurs are creating businesses that mirror their social and environmental values shaping the core purpose. Anita Roddick's Body Search's involvement in activism and campaigning for environmental and social problems as well as involvement with Greenpeace and The Big Issue are well known. In 1990, Roddick founded Youngsters On the Edge, a charitable organisation that helps disadvantaged youngsters in Japanese Europe and Asia. These are a few examples. There are thousands others. As espoused by C. K. Prahalad in his widely acclaimed book 'The Fortune at The Bottom of The Pyramid', the business case for creating poverty eradication a core business of companies is immense.

Non-profit leaders want to demonstrate a stronger appreciation of these changes happening globally, and realise that they will not take their donors and public support for granted - mere smart intentions and guarantees that sustained them in the past don't seem to be enough any longer. One among the reasons why the non-profit sector globally has been steeped in a very static mode of thinking is the (perceived) success non-profits have had within the past. Despite not having clear measures and benchmarks to attain, there's no denying that some of the work done by non-profits have created immense impacts on the lives of innumerable people all over the world. However, future can't be seen as an extrapolated extension of the past.

There are 3 important issues non-profit leaders of these days and future generations ought to grapple with, drawing lessons from the business sector:

1. Redefine the Core Purpose: Although the wants of the poor and vulnerable stay as they were within the past, organisations still want to look at the rationale for their existence and the special and specific contributions it makes. Core purpose wants re-visiting frequently to make certain the organisation remains at the cutting edge of delivering what it intends to deliver.

2. Define Performance Measures and Tangible Success Indicators: It is important to realise that if your core purpose remains fudgy and vague ('serving to the poor'), the organisation can never understand if and when it achieves its purpose. Clearer the core purpose, clearer the goals and objectives the organisation delivers, and therefore the organisation knows when and the way it's delivering these.

3. Recognize Your New Competitors: Non-profits need to grasp that they're not competing with themselves. The new businesses and enterprises are setting new benchmarks that have potential to rework the entire non-profit sector landscape for the better. These provide new opportunities for collaboration.

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