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Case Study November 2010

A New Breed of Not-for-profit Leaders YSC Insights

Original thought leadership from YSC


At YSC our mission is to release the power of people. We do this by combining industry leading psychological insight with a thorough understanding of our clients’ business needs. We work with clients across their entire talent lifecycles including: recruitment, induction, development, the identification of potential, internal selection, role change, measurement and departure. Our key client offerings include 1:1 and team assessment, executive coaching and organisational consulting.


YSC Insights: A New Breed of Not-for-profit Leaders

YSC Australia has been working with Westpac by coaching not-for-profit CEOs. This is being done through a partnership with Westpac’s cutting-edge, systemic Organisational Mentoring Programme.

Looking for meaning in your work? People are making the move earlier in their careers to combine a sense of purpose with an opportunity for their leadership capability to be stretched. A growing not-for-profit sector, combined with corporate leaders searching for greater meaning in their work, means we are seeing leaders entering the not-for-profit (NFP) sector much earlier in their careers. Historically, business leaders have sought out NFP roles toward the end of their careers, in a bid to do something meaningful after they have achieved their professional ambitions or climbed the corporate ladder. As ‘Meaning’ becomes more important, the attraction of NFP roles is spawning a new cadre of NFP managers and senior leaders.

Take an ambitious middle manager who has had a taste of success through project management or functional delivery, but also has an underlying restlessness to experience a greater sense of purpose or to increase their tangible leadership impact. He/she then arrives at a crossroads: the option to take another step up in the nebulous bottleneck of ‘middle-senior’ management positions and be tested by a further layer or two of complexity, or stepping across to a role with the control and scope of an executive position and the novelty of a new sector. The latter comes with the added bonus of leading an entity that has a positive impact on society in a way that can be seen and felt through a defined group of people. Not to mention, the opportunity to be a voice in the media. Now, which would you choose?

In Australia, there are more than 700,000 NFP organisations which account for 7% of employment for over half a million people. Since 2003, the NFP sector has grown from employing 6.8% of the Australian workforce to now employing 8%. This growth is also reflected in an increase in GDP, with the NFP contribution increasing from 3.3 to 4.1 per cent between 2000 to 2006-7 (Productivity Commission Report Draft October 2009). This provides an alluring leadership playground for striving managers who can spot the opportunities to have a unique impact without having to work through layers of hierarchy above them. Research into implicit motives that underpin leadership drivers have identified three primary needs: Power (Influence), Affiliation, Achievement. Most leaders will have a strong driver in one or two of these areas which propels their career paths. The NFP sector provides an environment in which leaders can get these needs met sooner or more tangibly than in the corporate for-profit world.

However, this is not just a case of changing career patterns; a different type of senior leader becoming more predominant in NFP sector shapes the focus of activity, affects dynamics between NFP and Corporate sponsorship and influences government funding. In contrast to the traditional NFP CEO who has historically held a personal, deep-seated mission for their chosen cause or social issue, there is an increase in CEOs and senior leaders who bring a personal leadership mission to their respective cause. A personal mission with commercial roots is likely to bring greater changes in strategy or positioning within the sector than a leader who has spent their career within the NFP context.

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YSC Insights: A New Breed of Not-for-profit Leaders

YSC are currently coaching not-for-profit CEOs through a partnership with Westpac’s cutting-edge, systemic Organisational Mentoring Programme.

find in a corporate organisation. Explaining allocation of funds or resources to someone who has been personally affected by the cause has different ramifications to communicating decisions to corporate employee groups. Add to this the complexity of leading and leveraging the value that volunteers have to offer, and you have a complex people management agenda. Externally, the stakeholders are diverse – organisations often work in partnership with other funding bodies, community groups, corporate sponsors and major donors. Personal motivations are not just an internal dynamic; Board members often have a personal association with the cause which underpins their interest and involvement with the organisation. There is the added challenge of lobbying government and gaining public support. The need to build public profile and support as an NFP agency can be just as, if not more, challenging than the competition faced by commercial brands or products. They also face complexities currently present in other sectors such as a tight fiscal environment, increasingly complex regulation and taxation practices and mounting calls for transparency and impact reporting. When we think back to the drivers of Power (influence), Affiliation and Achievement, and couple them with the challenges and very real opportunities of leading an organisation in a new direction, or leading change within a sector, the lure of a NFP is compelling.

What is the Organisational Mentoring Programme? The Organisational Mentoring programme is a skills transfer programme designed to help build and drive continuous improvement, innovation, collaboration and long term sustainability in the not-forprofit sector. Sustainable change is not brought about through short term pro bono work, but through long term commitment and support. It is the first of its kind and creating positive impact with our partners and with the social sector overall

We’ve discovered some high-potential leaders who are attracted to the new and different complexities of the NFP sector, and who see it as a pathway to realise their leadership potential. No doubt you are wondering what distinct challenges the NFP context provides? Intellectual challenges are found in the complex fiscal dynamics of a NFP as well as the task of stepping up to run an organisation. Influencing challenges present a steep learning curve, both internally and externally. Internally, leading and inspiring a group of people who have a deep personal passion and motivation for their work may appear easy on the surface. However, personal passion comes with personal opinions and at times deeper emotional attachments to the way things have been done in the past than you would

YSC’s model of ‘Potential’ looks at ‘judgement,’ ‘drive’ and ‘influence’ as core facets of an individual’s potential for success. Individuals who are high on at least one of these dimensions are likely to develop their capability in their chosen work or life paths at a faster rate than most. When we relate this to leadership, it often equates to progressing through roles of greater complexity and scope. YSC’s executive coaching with CEOs in the NFP sector has brought to light many elements of high-potential amongst these individuals. We found that leaders were strong on many dimensions of judgement, such as 3


YSC Insights: A New Breed of Not-for-profit Leaders

analysing complexity, managing ambiguity, thinking strategically as well as tactically, spotting opportunities for progress (either commercially or as an organisation), problem resolution and creating order or frameworks for others to follow.

achievement drive which fuels movement in this sector is often coupled with a preference to retain strong control over all areas of their position and a reluctance to let go. Senior leaders often go through a painful learning curve when they move from managing others to managing managers and then managing a function (Charan, 2000, The Leadership Pipeline). Learning the art of delegation, communicating through layers, letting go of operational detail and developing people are easier to progressively grasp through multiple moves rather than in one quick step into the Executive.

Drive is often equated with high energy, however YSC view ‘drive’ through the breadth of impact an individual seeks to have, the initiative to go after their ambitions or ideas and the self-assurance to deal with setbacks. Amongst the CEOs coached by YSC, we were struck by their ambitions to achieve something significant in their respective sectors, their resilience to pressure and setbacks and their high expectations of what could be achieved by their people. They bring with them huge personal resources of energy, determination and courage. Interestingly, influence, the third facet of Potential which looks at self-awareness, an environmental radar and a range of influence, was the greatest area of development for most CEOs. It has become increasingly clear that some of the relationship and stakeholder challenges discussed earlier amplify the need for these facets of potential.

Another consequence of their drive to have an impact means they can ask too much of their people or not know how to tap into different motivations of those in their organisation. It presents a learning area for these new NFP leaders: balancing their strategic impact in the sector with an ability to create an environment for their people in which to grow whilst they themselves are also on a learning trajectory. They need to make a shift from focusing on what they do to why they do it. Finally, for those who bring their corporate thinking or frameworks to their NFP, it can appear relatively easy to introduce change through structure, new initiatives or systems they have experienced in the past. These changes give them short to medium term wins and create a sense of momentum. However, they risk introducing organisational change intellectually whilst missing the behavioural change a leader needs to imbue in order to make their new strategy a success. Developing their influencing skills internally, with their Boards and their donor base is a key lever to getting this right.

Although there are a lot of positive implications for the NFP sector and the individuals that make the move to this new world, it is not as simple as a win-win situation for either the sector or the individual concerned. Firstly, there is a flipside to highly capable, ambitious, commercially-oriented individuals moving into senior NFP roles early to mid-career from their corporate leadership journey. They find themselves having to make the leap to executive roles without the management exposure their counterparts in the for-profit sector would have experienced by the time they reach the executive level. They can simultaneously be confronted with anxieties and demands of reporting to a Board whilst also trying to learn or embed the fundamentals of people management (commonly not having led large teams in previous roles). The strong

And what of the NPF sector? Born out of philanthropy, social conscience and personal losses, this recent injection of leaders from the corporate world creates a shift in the management of many NFPs. Combined with the pressures of being a successful NFP in a crowded market (for example there are well over 1,500 breast cancer charities), NFP 4


YSC Insights: A New Breed of Not-for-profit Leaders

organisations are evolving to increasingly resemble for-profit outfits. The drive to get results in shorter timeframes, to restructure, to create efficiencies, to introduce performance management and to set new strategies that go beyond their fundamental cause are just some of the shifts NFPs are experiencing. Whilst some may welcome these evolutions, those who have been with their organisation for a long time may find the changes confronting, challenging to their core values or may feel that the organisation’s original purpose is threatened. Another dimension to consider is that as the sector continues to grow there is an increasing focus on accountability and sustainability. Consequently, we see an emergence of social enterprise thinking and related action across NFP organisations. This opportunity to shape the broader sector attracts leaders with entrepreneurial traits or socio-political ambitions.

not surprising that moving back into middle to senior management corporate roles does not hold much appeal. We may see this group of leaders move across NFPs as they are not confined to a chosen cause unlike those who have grown up in a cause-s pecific NFP career path. And let us not forget the ‘traditional’ NFP leaders who are still bringing their own set of strengths to an evolving sector. Their deepseated drive and commitment to their cause as well as their knowledge and networks should not be lost. As the sector benefits from a new breed of leaders, it needs to ensure it holds on to the value of those existing leaders and their different perspectives and set of skills. If the sector can successfully tap both sets of strengths, we are likely to see the sector increase its influence in society and become an even more appealing source of employment. So, we watch to see whether more ‘high potential’ leaders move across to NFPs and how the dynamics of the different leaders evolve. In the meantime, have you looked into a NFP opportunity?

Having moved into the NFP sector earlier in their careers and getting Power (influence), Affiliation and Achievement needs met; it is

Shelley Winter is a Managing Consultant in YSC’s Sydney office. For further details please contact us on Tel: +61 (0)2 9252 3332 / Email: australia@ysc.com

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YSC Thought Leadership ­ A new breed of not-for-profit Leaders  

YSC Australia has been working with Westpac by coaching not-for-profit CEOs. This is being done through a partnership with Westpac’s cuttin...