I recently returned from a trip to the London School of Economics, where I attended a week-long session on organizational decision making and negotiation. Of the 34 attendees, I was the only individual representing the nonprofit sector. As I became the “nonprofit guy” in the room, many corporate and HR executives from global companies approached me and stated that they have envisioned a time when they would retire from the corporate world and transition into an executive position in the nonprofit sector. I praised them and said the nonprofit sector is always in need of great people. I talked to them about programs in the U.S. where universities are helping transition business executives into the nonprofit world, leaving out some of my challenges with these efforts. I also told them that many of the transitions that I have seen involving former business executives have had some road bumps. Often the new nonprofit leader does not have an adequate understanding of both the culture of a nonprofit organization and when and where their business experience may or may not apply to the nonprofit organization. I suggested that they begin thinking about this transition now by both volunteering with an organization and becoming an involved board member of an organization. All agreed. I then suggested that when they do make the plunge into the nonprofit world, they think about getting their feet wet in a middle-management position as a launching point. The response to this idea was less than favorable. Most believed they would immediately run an organization and looked at their management work in the corporate sector as more than enough to run a “lowly” nonprofit organization. I was somewhat offended at this and at the ongoing notion that the nonprofit sector would be so graced by the presence of more corporate executives.
During lunch, I tossed a table of my colleagues a question. I clarified and got agreement that all believed they could immediately begin running a nonprofit organization based on their experience working in the corporate arena. I then asked “could a nonprofit executive also make the same transition into senior leadership in the corporate arena?” All agreed that a nonprofit executive could not “make it” as a corporate executive and maybe could begin work in middle management. We then discussed the attributes of strong corporate executives; all, in my opinion, were the same attributes of a strong nonprofit executive. Essentially the defining difference was organizational size and the complexities of a corporation. I stated that lately I have been reading how many executives in the corporate arena have often misread these complexities, and much of the current economic crisis could be blamed on corporate executives being too far removed from organizational challenges. I conveyed my belief that sector experience did not matter. We agreed to disagree but the question still lingered in my mind, can a nonprofit executive transfer over into the same position in the corporate arena? Outside of understanding the culture and the sizes, what are the big differences?
There has been a great deal of writing on the attributes of successful corporate CEOs. If you do a Google search on this topic and a number of links emerge. The one of the best was a study by Steve Kaplan and Morten Sorensen of the University of Chicago’s Graduate School of Business entitled “Which CEO Characteristics and Abilities Matter?” The 2007 study essentially assessed CEO candidates for companies involved in private equity transactions, including both buyout and venture capital deals. They studied how CEOs’ characteristics and abilities relate to hiring decisions, investment decisions, and subsequent performance. The candidates were assessed on more than forty individual characteristics in seven general areas — leadership, personal, intellectual, motivational, interpersonal, technical and specific technical understanding including areas like human resources, product development and managing growth. In looking at the data, I found no real difference in the cited successful characteristics outlined in the study’s population in comparison to those of a successful nonprofit leader. The data that I did find most interesting is that the characteristics of outside CEO candidates were more highly rated than incumbent CEO candidates, potentially supporting my idea that outside nonprofit executives might have a great deal to offer as corporate senior leaders.
In fact, I think current nonprofit CEO’s might help bring a bright and potentially effective array of skills to a corporation. In the area of fund development, I suppose the equivalent skill in the for-profit sector would be “sales” but these two functions have many differences. Having worked in both sales and fundraising I know that evaluating best nonprofit executive that fundraises and the best corporate executive that sells and I would take the nonprofit executive every time. Reason? Have the corporate executive try to sell the idea of giving to an animal shelter and have the nonprofit executive try to sell a copier. I guarantee the nonprofit executive sells more copiers than the corporate executive gets donations. This is part of the reason why many corporate board members have a hard time raising funds; it is easier to sell a copier than a cause.
The crossover into sectors should work both ways, although of course there are variations and the applicability is not cookie-cutter. In fact, some may consider this idea asinine but I believe many of our corporate friends are hurting in more ways than just financial. As a long-time human service practitioner, I immediately wonder what program can be created to assist the corporate sector? One way might be for corporations to look for leaders outside of traditional routes. Either that or I am going to get Donald Trump to have a nonprofit executive on the “Apprentice”, which would inevitably lead to a nonprofit executive victory and a surge in the idea of looking to the nonprofit sector to cure corporate sector blues. Let the games begin!
Read more stories by John Brothers.