Viewpoint: It’s Time That For-Profits Start Learning From Nonprofits: Here’s How
As cofounder of a firm that helps nonprofits hire leaders, I’m frequently asked for advice on how someone with a strong private-sector track record can make a move to more mission-driven work. These “sector switchers” are frequently armed with somewhat tone-deaf pitches about how they’re ready to “give back,” both by doing socially focused work and by teaching the nonprofit sector how to operate more like the private sector. To those of us who’ve been working with nonprofits for years, however, that pitch is alienating.
In fact, I believe the opposite is true, that the nonprofit sector has plenty to teach the private sector. I’m often taken aback by capitalism’s relentless emphasis on share prices, with reporting on other aspects of business health—especially longer-term metrics—de-emphasized and de-prioritized. Fiduciary responsibility to shareholders all too often trumps other interests and obligations, such as employee engagement or customer satisfaction.
Free from the pressure of delivering shareholder value to the owners of capital, nonprofits have honed a very different approach. Typically their success is defined by mission impact, measured in any number of ways, such as carbon emission reductions that benefit communities or the number of first-generation college students making it to graduation. These metrics share a commitment to the maxim that impact matters, a focus that carries over to include all constituents.
These are a few of the reasons why corporations can and should learn from the nonprofit sector—and not just the other way around. Companies can follow the lead of nonprofits and more broadly report on, highlight, and celebrate the full range of stakeholders affected by their actions: staff, customers, and community. Here’s why—and how: