What for-profits can learn from non-profits

For-profits commonly look down upon the management and staff of non-profits as woefully inefficient.  Non-profits are hounded relentlessly to operate more like for-profits.

An Economist article, Profiting from non-profits, writes about the reverse flow of innovation for-profits can gain from non-profits.  When I mentioned non-profits, charities might come to mind first, but non-profits covers:

  • hospitals,
  • charities,
  • educational institutions, and
  • government agencies

Some of the above non-profit industry organizations have budgets as big as, and larger than, for-profit budgets.

What are the better non-profits good at:

  • motivated workers with far smaller payroll budgets;
  • conveying a clear and distinctive purpose;
  • relationship marketing;
  • the opportunity for employees to interact with leadership;
  • increased responsibility and opportunities for new employee;
  • fostering a culture of fun; and
  • focus on building long-term customer relationships instead of one-off transactions

The article closes with:

For too long, for-profit firms have focused on learning only from each other as they try to do better.  It is time that business started to tap the valuable know-how of the best non-profits rather than dismissing the whole lot as hopelessly inefficient.

I’ve worked and consulted in both for- and non-profit organizations.  Both share a vital link:  finite resources.  I remind both that maximizing resources are vital operational goals.  Whether the resources is an investor/donor dollar or an hour of someone’s time both are finite.  The organizations that maximize efficiency of either are free to deliver great value to their stakeholders.

Looking for new thoughts or approaches deserves a bit of a peek at the better non-profits.  And that’s innovative thinking.

The article references the following book by Nancy Lublin:

telwin amajorc nancy lublin Zilch: The Power of Zero in Business

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