What’s the big deal about specific ‘not for profit’ leadership training?

Sandy Thompson, Hilary Star Foged & Garth Nowland-Foreman

We have learnt the hard way that context matters and there can be an enormous cultural differences between not for profit, business and public sector leadership. Consequently, we know full well how important leadership training and robust conversations specifically relating to the context of the not for profit sector are, for those who are leading and managing community organisations.

This doesn’t mean we can’t learn from other sectors – and frequently we do. It does, however, mean that we need to respect and value the culture and features that make our sector unique.

John Stansfield, the founder of Unitec’s Graduate Diploma in Not for Profit Management & Leadership (the programme that led to the establishment of LEAD), describes the uniqueness of not for profit organisations best in his archetype of a not for profit organisation. He identifies five key areas that not only make not for profits stand out, but are fundamental to the complexity of the leadership of these organisations:

1. Ambiguous ownership

Unlike businesses which are owned by shareholders or government departments who are accountable to taxpayers and voters, not for profits have ambiguous ownership and are accountable to multiple stakeholders, including the amorphous thing called “community”.

These multiple stakeholders all consider they “own” the organisation in different ways and their different objectives can pull the organisation in different directions.

The governance structure has to remain responsive (especially to those it serves), and yet lead within this complexity to achieve stewardship (kaitiakitanga) of the overall mission, vision and values.

Not an easy task given Boards in the not for profit sector typically have less autonomy to make decisions without stakeholder consultation, compared to private sector boards or the government.

2. Values & mission directed

Not for profit organisations are values and mission directed with the purpose of achieving a vision that is often concerned about outcomes such as social well-being. Success and performance criteria around how success is defined and measured, are far more complicated and difficult to articulate than a financial bottom line. It’s much easier to measure rate of return to owners and investors, than how much we changed the world today!

3. Voluntary & passion driven

Although many organisations have paid staff, the majority of not for profits (90% in NZ) are led by voluntary committees and support a fully voluntary workforce. Even for those 10% of organisations that employ paid staff, our sector is largely voluntary- and passion-driven. Workers (paid or voluntary) most often find their motivation and reward from their passion for the cause and for the organisation, and this provides the driving force for the work done. Due to the nature of the work often organisations are ‘swimming towards the horizon’ i.e. their vision is often challenging, a long way off and difficult to accomplish. So the passion has to be constantly kept alive.

4. Indirect funding

Although money for not for profits is a means to an end rather than an end in itself, there are even more complications when it comes to managing finances. The user or beneficiaries of the services or programmes is not the full funder. There is more usually a third party providing funding support. This is the case even for sectors like sport and the arts that derive much of their income from ticket sales; they are still highly reliant on sponsors. This indirect funding is different from the direct relationship that happens when a customer or client directly pays for the service or goods they receive, and is a key source behind the ambiguity of ownership of not for profit organisations - because the clients, funders and organisation itself may all be pulling in different directions.

It also means there can almost be a complete disconnect between an organisation’s income and its outcomes. You can be good at one, and terrible at the other - so you need to pay attention to successfully spinning both the income and the outcome plates at the same time.

If it sometimes feels like, as a not for profit leader you are doing twice the work, its probably because you are paying attention!

5. Interdependency

Finally, not for profit organisations have high levels of interdependency compared to businesses and government departments. They have multi-directional relationships with the community, other stakeholders and sectors in order to source and manage resources for their work. Very little of what we are interested in achieving, can we do alone. Added to this is the pervasive influence of the legal, political, economic, social and cultural environment on the operations and strategy. At the same time not for profits also play a role in influencing public policy, business behaviour and community outcomes.

We are not arguing to make impenetrable silos of not for profit capacity building programmes, but it is crucial that any learning curriculum or training product for not for profit leaders look in depth at these key areas and complexities if it to truly be of use to the individual, the organisation and in turn the sector.

Leading international management guru, Peter Drucker, for example, identified several of these same features in his article “What Business Can Learn from Nonprofits” (Harvard Business Review, July-Aug 1989).

There is great value in committed individuals from all sectors coming together to share experiences, explore diverse worldviews and create shared understandings – especially if done with humility, a genuine curiosity and respect for each others sectors. We have also had numerous folk come to workshops from overseas who have also felt the advantage of learning about the unique aspects of the Aotearoa/NZ experience in the community sector.

To be effective, not for profit specific leadership programmes should introduce theories, frameworks and diverse ways of seeing not for profit organisations that are relevant to the specific context of the sector. These create an understanding of the broader sector as well as key issues facing our country’s communities. Through the learning community we build and participate in, we are also able to collectively share and learn how others are finding pathways to community development.  Focused training and coaching supports participants to gain more confidence and build skills that are applicable and practical. Many of the participants who attend LEAD’s training events speak of their kete being filled by the discussions, ideas and shared experiences during the course. This supports them to feel more confident about what they do know, well-resourced and insightful about their work in their communities.

But most important of all…

Naku te rourou nau te rourou ka ora ai te iwi

With your basket and my basket the people will live

The networking during not for profit programmes, and the developing of new relationships with others in the sector, has been frequently described as being some of the best value people get from participating in courses with fellow not for profit leaders. The fancy name for this is ‘horizontal’ learning and it’s something we in the not for profit sector have known about for a long time.

It is the shared learning that creates the most compelling reason to participate in training programmes. The value of spending time with others who have common experience and “understand where I am coming from” is a common piece of feedback we receive. This shared experience enables a broad understanding of the differences, the common themes, and how collaboratively we can build the capacity and capability of leadership in our communities.