05.24.17

Nonprofit Leaders as “Adaptive” Business Builders

Karl R. LaPan President & CEO, The NIIC

Entrepreneurship isn’t just for start-up or growth-oriented for profit ventures. Business Builders (AKA entrepreneurs) – a more global and inclusive term coined by Gallup – can spawn from all walks of organizational life – associations, non-profit charities, educational institutions (think about how Purdue is disrupting education with the Kaplan acquisition), government agencies (hard to imagine!), and NGO’s.

What do I mean? Social entrepreneurship (combining an economic motive with a social cause) requires the same entrepreneurial talents and mindset for growth as for-profit enterprises. These organizations also face common challenges.

  • Nonprofit organizations must regularly reinvent and reimagine their programs and services. That means interative experimentation and pivoting is required in search of a new or different business model – testing out a concept, attracting capital, building a channel strategy, securing human capital, marketing programs and services, finding & building a client base and evaluating outcomes and impact.
  • The same 4 entrepreneurial pillars The NIIC focuses on with its clients are the same 4 pillars necessary to build an enduring social enterprise – capital, talent, work spaces and networks.
  • Mindset matters most. Most leaders of organizations spend an insufficient amount of time working on the business versus working in the business. We all need to protect our time to dream and think bigger without the distraction of the day to day operations.

However, non-profits don’t always have the luxury to innovate. Sometimes a board might stifle innovation because they don’t grow as the organization grows and responds to what the community, and its clients demand and expect. Sometimes boards or finance committees might not set aside adequate money in an innovation fund (what I might call the “speculative R&D”) to promote customer discovery, validation and early prototyping of novel solutions. Sometimes the leadership of the non-profit organization has stopped dreaming or become too comfortable with the status quo.

The non-profit sector is a significant employer in our community. We are fortunate to have many visionary and adaptive leaders in our non-profit sector who “read the tea leaves” and find smart ways to meet client expectations in new and more exciting ways. It is important to recognize that our communities are stronger when all parts are healthy and thriving. The non profit sector is integral to our community’s long-term success.

The non-profit sector needs talent especially as there will be many leadership transitions in the coming decade in our community. We need to share with Gen Z (skip the millennials!) the importance of broader leadership in the social sector. In his monograph, Good to Great and the Social Sector, Jim Collins reminds us that the same time tested principles for making a great company also apply to making a great non-profit organization. As opined by many wise individuals, “Non-profit is a tax status not a business model”. We ought not encumber non-profit leaders with a ‘fixed’ mindset that stifles innovation and creativity because we confuse our tax status with our performance drive for business results and successful client outcomes.

If you work for a non-profit, how do you embrace entrepreneurial thinking and doing in your organization? If you are a board member of an organization, how do you support the leadership of the organization you are governing in dreaming about the future, and most importantly to the adaptive leaders, what are doing to disrupt your business model? It may make the difference between mediocrity and greatness.

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