As companies become more about brands than products, non-profit expertise is key
Even for those of us mid-career, back to school time is a period of reflection and nostalgia. Across a couple of decades in the working world, I have been in a position of mentoring and offering career advice to younger people. Everyone’s path is different. Everybody has a different range of motivators – money, mission, adventure, variety. But there is one piece of advice I offer to almost every young person who asks me: Mix it up.
My advice to people at the beginning – and, crucially, in the middle – of their careers is to mix it up between sectors. If you’ve been in business, take some of what you’ve known and spend a few years in the not-for-profit sector. And people from the not-for-profit sector should obtain some corporate experience where the mantra for investors, customers and bottom line efficiencies can hone your skills.
Non-profit sector boards realize they need highly qualified individuals in all aspects of business such as technology, marketing, design, finance and strategic planning to run and manage complex aspects of their charity operations.
Many non-profits run highly sophisticated social enterprises. A social enterprise is a business run by a non-profit which applies commercial strategies to promote social causes with the intent of maximizing community impact rather than profits for external shareholders. A perfect example of this is Habitat for Humanity’s ReStore operations – a very large retail enterprise, with some 910 outlets in Canada and the USA which generated $110 million in revenue in 2014. Habitat’s revenues are allocated to the social mission of the organization of “alleviating poverty through home ownership”. Social enterprises of this magnitude require experienced individuals from the business world to better professionalize their operations.
Charities may have, as I like to say, a mission that speaks to the heart. But their large funders usually demand business accountability that comes from the mind.
That means the non-profit world needs people who can meet the business and mission objectives of the organization. In today’s technological world, non-profits need to adopt best practices that are data-driven and factual, rather than mission-driven opinions. They require educated, trained, experienced business and tech-savvy entrepreneurs and managers who can assist them in growing their operations.
A less common transition is from the non-profit sector to the business world. I’ll be the first to admit that some non-profits operate in a weird vacuum with their own jargon, bureaucracy with possible impediments to progress and inefficiencies (although some charities are very well managed). They do not necessarily apply stringent business practices or utilize state of the art technology to run their operations and therefore can often fail to meet the full potential of their organization’s mandate. Too many non-profit leaders have chosen the sector as their lifelong career and, while they may move from organization to organization, they never escape the bubble that is their sector.
That’s a problem, because while corporations need to be driven by a bottom line that includes business efficiencies, they also require a social responsibility aspect equivalent to the non-profit sector in meeting requirements represented by their mission such as poverty, environmental, health, children, sustainability, disabilities or any number of other mission-driven factors.
Hearts and Minds
These are some of the reasons that the “non-profit to business” transition is less common: HR people in business may rightly have suspicions about a career non-profit worker moving successfully into a bottom line-driven organization. However, businesses should recognize that, while some non-profit sector employees may find it difficult to transition, others bring a wealth of talent that is rarely found in business. I call it the heart-plus-mind model.
The most successful companies will hire people with non-profit knowledge and who have a range of broad executive experiences that can help position them as leaders in solving economic, environmental and social challenges that are important to their customers. Forbes reports that the Reputation Institute identifies consumers’ willingness to buy, recommend, work for, and invest in a company as driven more by reputation than the products or services it sells.
“60% of your buying decision is based on your perception of a company’s reputation and 40% on the product or service it sells”
The bottom line will always be the bottom line for businesses. But there are more considerations now that consumers are increasingly demanding social commitments from the companies they patronize. Consumers are voting with their wallets every day and it’s not only about quality of product and superiority of service. Many customers are buying the social mission of a business, a corporate social responsibility bottom line that is only going to grow.
To succeed in the future, businesses, need to adopt some of the strategies of the non-profit sector that speak to the heart, as well as the mind.
This comes back to my advice for younger folks (or even peers) who talk to me about their aspirations. Mix it up.
Spend some time in business and move over to the non-profit sector. Go back and forth as often as seems appropriate and keep up on developments in both areas. This will help equip you with the diversity of skills, attitudes, capacities and, yes, jargons, that will serve you well as the line between for-profit and non-profit blurs. It will make you increasingly more valuable to the business world, more beneficial to the non-profit world and an ideal candidate for other career-advancing roles, such as a directorship on a board in either sector.
Strengthening organizations, whichever sector they may be in, demands that we understand and speak to our constituents’ hearts and minds in equal measure.
Eyal Lichtmann, CEO of Quilageo, is a senior executive with 25 years corporate and non-profit managerial experience.
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