Thursday, July 19, 2012

Corporate success is built on nonprofit wisdom

How many times have you heard a blustering layperson exclaim, “We need to run this organization more like a business!” If you work or are involved in the nonprofit sector, odds are you’ve heard that more times than you’d care to remember.

The truth is that nonprofits can benefit from adopting best business practice and many progressive organizations have added to their success by doing so.

But here’s another truth. The most successful and talked-about companies today have built that success on nonprofit wisdom. Moreover, today’s leading business advice echoes principles that are pillars of the nonprofit world.

Before you write off the notion of businesses learning from nonprofits as heresy or insanity, consider these two examples.

Mission
Mission is at the core of every nonprofit. It defines them. It is why they exist. It is why people donate to them and volunteer their time for them. While, as Elaine Fogel points out, they don't always do a great job of articulating them, missions are the driving force of every nonprofit.

Many businesses talk about mission, but it is most often a poorly disguised way of saying we’re in business to make money. However, it is those businesses that have identified a more sophisticated calling that are experiencing greater success. They in fact have identified a mission – a deeper reason for their company to exist. When that mission resonates with consumers, profits soar.

Simon Sinek, author and speaker, delivered a must-see TED talk called "How great leaders inspire action.” In it he asks questions like “Why is Apple more innovative than all their competition?” His ultimate answer is that those corporations that have mastered an understanding of why they do what they do, are most successful. He is quick to point out that making a profit is not an answer to why. Rather it is an outcome. For Sinek, "why" is your “purpose, cause or belief.” And furthermore he says, “people don’t buy what you do, they buy why you do it.” If that’s not the triumph of mission, what is?

Carol Cone, a CSR and cause marketing pioneer and now vice president with pr giant Edelman has declared this the decade of Purpose. In her terms, Purpose  is “an organization's reason for being beyond just making profits. Purpose expresses their values in action through a variety of strategies and programs engaging stakeholders to create positive social change and organizational growth.” And what does that Purpose do? “It creates differentiation; fuels product innovation, growth and sales; builds trust and protects reputation and engagement; and it inspires employees, customers and consumers.” If Purpose is mission, then mission is at the core of business success.

Community
Every nonprofit – even the really small ones – has a community that is an essential component in its decision-making and its success. In fact, the relationship between nonprofits and community is axiomatic.

Successful businesses have discovered the power of community. On the strength of the online world they are building and engaging communities that become powerful ambassadors for their products and services. Examples abound in the world of consumer products (think Dove, Nike, and 1000’s of others). Even in the B2B world, success is being built on community as is attested to by this list of the 71 best B2B online communities.

In a monumental piece for HBR, Henry Mintzberg, posits that an important way of rebuilding companies in the wake of the recent financial crisis is creating community. In this sense, he is referring to creating internal communities, where decision-making is decentralized and employees sees themselves as citizens or members of a collective. The key is the organic nature of community – the sense of belonging, caring and ownership. This aspect of community is clearly borrowed from the committee structure that is a plank in the nonprofit platform.

Some would say that community is not only essential to the success of the product; it is a feature of the product itself. This piece from Social Fresh astutely declares that “When you have a community, you get something more.  Now, by being a customer, you’re not just getting the features of that product, but you are now a part of something.  You have a group of people where you can ask questions, get help, give help and build real relationships.” Community is a reason to buy, to commit. This may be news to progressive companies but nonprofits have always understood that community is a criterion for involvement.

There are tons of other examples of how nonprofits have demonstrated organizational superiority over businesses. Perhaps one day, we’ll hear the story of the corporate director who said, it’s time we start running this company like a nonprofit.”

What do you think?


4 comments:

  1. What a brilliant spin! It's about time somebody gave the mission-driven crowd the credit. Nicely done.

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  2. Thanks Don. Feel free to pass on the message.

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