Transitioning from corporate life to working in the social sector offers a chance to observe some differences in the fundamental organizational beliefs that prevent non-profits from reaching their peak.
This isn’t to say that all for-profit companies are high performing; many are not – and they share some of the same beliefs that prevent the social sector from doing more with their resources.
On the other hand, there are also examples of non-profits that are returning extremely high levels of social return per dollar spent. But as a group, social sector performance has significantly lagged that of the for-profit sector.
The key differences fall into four areas:
Targets: In the corporate world, target goals are clearly established and performance closely measured – quarterly, daily, or even hourly. Too often in the social sector there is no awareness of the target outside of key staff and board members, and often, even they hedge. Everyone should have clear targets – some will be more granular than others. The time horizon for these targets is annual, broken down into monthly or weekly.
Urgency: In business, the goal is to increase shareholder value – also known as making money. The goal is measurable and there is a sense of urgency that drives action. The drive is sometimes so strong and so prevalent that immediate action gets in the way of the bigger picture, but action creates propulsion.
Ironically, the problems many social enterprises are solving are pressing and require immediate action, yet that action comes slowly. The key is a laser focus on the problem you are solving.
Dealing with constraints: More money, time, staff or resources would be great in both corporate and non-profit worlds. Instead, they are replaced with efficiency and creativity to accomplish goals. Certainly there is waste in the corporate world. But because people are clear on their goals, and have a sense of urgency, they figure out ways to deliver – even when they do not have the resources they need.
Feedback loops: The companies that are succeeding today are very clever at making small changes in product or service design, implementing those changes and collecting feedback on their effectiveness. Sometimes these changes happen quickly and often. Feedback loops and adjustments are not common practice in the social sector, often leading to the delivery of less than ideal services or over-expenditure.
Every organization can learn and grow. What can you – staff, board members, volunteers, and investors – do differently to propel your organization forward? What questions should you ask differently? How would you prioritize differently? Are there simple changes you can make to incorporate these four key principles?
Increasingly, smart corporations are taking some cues from non-profits, especially in the practice of social responsibility and giving back programs. Non-profits should feel free to take a few tips from the corporate world as well.
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