Corporate Leaders Can Learn from NFPs

Australia’s corporate leaders can learn several lessons from Not for Profit leaders according to a 12-month study called Engaging Leaders.

Global consultancy, Hay Group completed the 12 month study at the end of 2005 into what makes successful leaders in the Not for Profit sector.

Hay Groups managing director for the Asia Pacific region, Helen Scotts says the results show that the most effective leaders in the Third Sector can be role models for the corporate sector in how they behave and interact with their key stakeholders.

The study found several differentiating characteristics of outstanding leadership in the NFP sector which concentrated on those in the role of CEO:

These include:

– a personal sense of cause and alignment to the organisation

– an ability to bring this sense of purpose out in a clear story that is targeted and carefully managed to engage the broader environment

– the ability to understand the broader community and engage with all the stakeholders

– and a determination to lead the organisation, freed from the day-to-day management constraints by a supportive and strategically focused board and an effective and competent management team.

Helen Scotts says that the corporate sector can learn a number of lessons from NPF leaders.

In particular, Scotts says that NFP leaders are generally more successful at expressing a deep personal commitment to the organisation’s goals; a passion that is rarely matched in the private sector yet can be infectious among staff.

As well she says passion, humility and patience are also key differentiators.

The study reveals that in many ways the NFP sector is actually demonstrating a more sophisticated and savvy approach to business while often working with very limited resources.

It says the benchmark requirements of leadership within the corporate
environment all apply to the NFP sector – and critical to the success of an NFP is the CEO.

Scotts says that in addition, NFP leaders seem to better understand the complexities of managing a range of sometimes diverse stakeholders and of articulating their vision to employees.

But she says it isn’t all one-way traffic and the corporate sector also offers guidance to NFPs in many ways.

The Hay Group study found that NFP’s were openly adopting management practices from the private sector; such as putting in place strategies to review and manage the performance of their senior staff more effectively.

The study found that outstanding NFP CEO’s are usually backed by a capable management team.

The study involved face-to-face interviews with over 30 NFP leaders as well as written surveys. With each participant, the researchers explored a range of issues, such as:

– Role accountabilities;
– Career history;
– Leadership styles;
– Reporting relationships;
– Board and stakeholder management;
– Perceptions from within the sector; and
– Sector specific challenges.

If you would like an electronic copy of the study “Engaging Leaders” go to www.haygroup.com.au and follow the links.