Moving to the NFP Sector why you may need to adjust your style

Senior executives who leave behind their corporate careers for a role in a not-for-profit often find that they need to rethink their management approach.

Senior executives who leave behind their corporate careers for a role in a not-for-profit often find that they need to rethink their management approach.

"When you’re in a bank, what you do is quite specific. When you ask, ‘Where can we make the most money?’ the question defines the criteria by which the decision is made. But when the question is ‘How do we create a better world?’ that’s going to require consensus," founder and chief executive of the Australian Indigenous Education Foundation Andrew Penfold told BRW.

When a group of US NFP ‘crossover’ CEOs were interviewed about the differences between sectors, they agreed that most business leaders underestimate how tough not-for-profit leadership can be, according to an article in the Stanford Social Innovation Review.

They identified a number of challenges. First, while NFP CEOs answer to a wider range of stakeholders, they often wield less authority and control than those in for-profits. Second, performance measures are not straightforward – there are no equivalents to profit in social change – and yet they are under greater scrutiny from politicians and the press. Finally, compared to the corporate world, many in the not-for-profit sector are underfunded, understaffed, under-resourced, and undertrained.

Graham Marshall had worked in senior positions at organisations including Westpac and Lynch Meyer Lawyers before he made the move to the not-for-profit sector.

He joined the Royal Flying Doctor Service’s West Australian operation as CEO three years ago.

With its 15 aircraft at five bases, the WA service flies about 9,500 patients around the state each year.

What was the biggest challenge in transferring your leadership capabilities from the corporate to the not-for-profit sector?

My own expectations. In the corporate sector, competition and shareholder returns are catalysts for making changes or improvements, and making them quickly. At NFPs it’s more about stakeholder management and outcomes.

Have you introduced changes to the way people are managed?

The changes I’ve made are accepted practice in the commercial sector. Firstly, much more investment in people’s professional development. Secondly, more accountability for results, because people in NFPs tend to be measured on the things they do rather than the outcomes they create. And thirdly, introducing what I call performance management: building skills in people, outcome measurement and career planning.

Has switching to the NFP sector given you a new perspective on life?

Definitely. I have a more balanced perspective.

It’s very different to go to work knowing that everything you do will make a difference to someone’s life out there, rather than it just being about dollars and cents. My work is more rewarding and meaningful.