It is fairly common to have smart, engaged volunteer Board members complain that our institutions should be “run more like a business!” You may have even heard colleagues and administrative leaders at your institution sharing similar sentiments.
Perhaps that sentiment has merit.
But, the reverse is also worth exploring. What if a business was “run more like a nonprofit”?
Here are 3 ways that for-profit businesses would become better if they operated more like well-run nonprofits.
- Customers would be treated better. “The customer is always right,” is the mantra that was birthed in the for-profit world. However, according to the National Customer Rage Survey (yes, that’s a real survey!), customer service ratings continue to fall. Importantly, how customers want to be responded to when complaining about a product or service has far more to do with kindness than money. For instance, 69% of customers stated they wanted more than monetary compensation when lodging a complaint. What mattered more were authentic interactions with customer service representatives, kindness, and empathy. Now, think about the values that drive the nonprofit sector and the ways in which nonprofit institutions serve and engage with their participants. Values such as “kindness,” “empathy,” “understanding,” “non-judgment,” and even, “love,” are hallmarks of most nonprofit value systems.
- Planning would be more strategic and inclusive. Compared to the nonprofit world generally, for-profit businesses make decisions more quickly, but not necessarily more effectively. As an example, some years ago, a friend of mine worked for a large, well-known company that made a decision to transfer her entire division from Washington, D.C. to Denver, CO. Within a year of moving the division, along with all employees, the company announced that Denver, CO, was not the best location and the entire division would now relocate to Orlando, FL. Although she held a substantive position within the company, my friend was not consulted about either of the moves. To say there was significant waste within that year of hasty decision-making would be an understatement. On the other hand, nonprofits tend to take the time to ask, listen, and engage broader constituencies in their planning. While it takes longer, adopting more inclusive planning processes helps to identify more strategic outcomes and helps people understand and feel positive about the aspirations of the institution.
- Board members would seek more than short-term results. The Board members of for-profit businesses serve financial shareholders who want financial results as quickly as possible. This means that decisions are made with one objective in mind: “What can we do to make the most money in the shortest period of time?” This is a fine objective but there may be instances where a longer-term or broader view would be more helpful. Serving only shareholders and their narrow interests means that other constituents and outcomes are not considered. The Boards of nonprofits, though, serve the cause, the employees, and the broader community. Nonprofit volunteer leaders wrestle with balancing multiple demands and create plans and goals that meet multiple needs. If for-profit Board members made decisions that considered and benefitted their employees more, for instance, they would take a significant step in helping to reverse the negative customer service trends identified in the National Customer Rage Survey.
Of course, nonprofits can learn from for-profit entities. But the business world does not have the market cornered (pun intended) on effective organizational philosophies.
Maybe, our friends in the business community could learn a bit from capable nonprofit leaders as well.
