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Time-and-time again I have heard people who work in business share their wisdom in the non-profit context. As someone who has spent most of my working life in non-profit organizations, I have found there are many lessons businesses can learn from non-profits as well.  

Given the turbulent times, rising costs, concerns around corporate social responsibility and looking for meaning in a post-COVID world, small and medium businesses need new and innovative ways to be successful. Some of their challenges include addressing financial pressures both on the cost and revenue side of the equation and supply chain issues. On the people front, concerns for employee wellbeing and mental health, learning and development and expectations that businesses reflect their culture and values in their actions and behaviour, make for an increasingly complex environment. Non-profit organizations have been grappling with these issues forever. Business leaders can look to non-profits to learn many important lessons. 

 To start let us look at how for-profit and non-profit organizations are similar. Both: 

  • Have a purpose: whether articulated in a mission statement or not, organizations have a raison d’etre which guides their work; 
  • Require funding: while the type of funding might be different, managing the bottom line is a necessity; 
  • Follow rules and regulations: businesses of all types need to fulfill a complex array of legal and governmental requirements; 
  • Must manage risks: every organization must manage risks, and this has become even more challenging in a volatile and complex environment; 
  • Communicate: all organizations must engage with stakeholders internal and external to the organization; and, 
  • Manage human resources: employees today are re-examining their work-life balance and have the flexibility to choose work environments that align with their needs and values. 

Non-profit organizations have always had to navigate complex environments with fewer resources and this capability has served them well during times of crisis such as COVID.  

What makes non-profits different from businesses? Most non-profits: 

  • Have leaders and staff deeply committed to the organizational purpose which is expressed through a clear mission statement; 
  • Carry out and understand the importance of strategic planning and aligning business decisions to the mission; 
  • Invest in developing strong relationships inside and outside of the organization. These relationships are built on reciprocity, trust, and alignment of common values; 
  • Understand the need for evaluation and ensure that they evaluate both their internal functioning and the achievement of organizational goals. These goals are complex and not simply about the bottom line; and, 
  • Carry out their strategic and operational work in an environment of scarcity which means they are creative, resourceful, and unrelenting problem-solvers. 

So, what does this all mean for small and medium size businesses? 

Stay tuned for the answer to these questions in part II of this blog series where Michelle will talk about the importance of mission for all organizations. In the meanwhile, if you are a facing business challenges, reach out for a free thirty-minute consult to talk about your business and non-profit issues. 

Dr. Michelle Coombs is a strategic leader, educator and change catalyst. Reach Michelle here.