Nonprofits from Good to Great

Nonprofits from Good to Great

I have recently finished my Master of Business Administration (MBA) at Henley Business School. The following is an executive summary of my Master Challenge which takes inspiration from Jim Collins (2001) and looks at how nonprofits can grow from good to great.

Today civil society is playing an increasingly visible and effective role in tackling global challenges. Nonprofits are enabling solutions that the public and the private sectors have not had the resources or the will to solve. But although significant progress has been made within the UN’s Millennium Development Goals (MDG), the development is stalling or going the wrong way in other cardinal areas. The challenge seems to be, that as long as the nonprofits remain small-scale in terms of impact and revenue, it is unlikely that they will deliver in a significant way on the promise of a better tomorrow.

The question is therefore how international nonprofit organizations can grow in order to achieve the scale required to respond appropriately to societal and global problems?

Based on evidence gathered amongst top leaders in four successful nonprofits, the overall conclusion of the research project is that the nonprofits managed to scale by adhering (fully or partially) to four of Jim Collins interrelated six concepts unified in his Flywheel Framework (Figure 1.). In addition to these four another two emerging concepts were found to be influential in the buildup and breakthrough to greatness.

Forprofit_flywheel
Figure 1.: For-Profit Flywheel Framework

So what lead to success in the nonprofit sector? Well, starting with the CEO, the person heading the organization had a character that combined personal humility with professional will. Secondly the nonprofits became professionalized through an adaptation of business culture with a common language that allowed them to set ambitious organizational goals. People not in favor of the new culture were helped off the bus. Thirdly the nonprofits confronted the brutal facts and created shared meanings of them. Fourthly they focused on what they could become the best in the world at while at the same time following their passion and their economic drivers (Hedgehog Concept). Once they had defined their Hedgehog Concept they sat one single ambitious goal to guide them. Fifthly they created a culture of discipline with fanatical adherence to the Hedgehog Concept and slashed bureaucracy along the way. Last but not least it was found beneficial to remain self-implementing organizations that show intentions of scaling the impact, but wait until the timing is right (Figure 2.).

Nonprofit_flywheel

Figure 2.: Nonprofit Flywheel Framework

The research implies that if all six concepts of the Nonprofit Flywheel Framework are adhered to, the benefits will not only be the scaling of the organization to new heights, but also a scaling of its impact. With this powerful combination of scaling both organization and impact, the literature suggests that the nonprofit can start delivering results at the needed scale and thus respond appropriately to societal and global problems.

In Chapter 5 concrete recommendations on scaling nonprofits as well as how to stay successful can be found.

Please feel free to drop a note here or on twitter at #gtgnon or @simonprahm

Download the report (PDF, 1MB)

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