Book Review: A Challenge to Prevailing Nonprofit Paradigms

‘Good to Great and the Social Sector’ sees nonprofit management through the eyes of business

Back Web Only Jan 15, 2016 By Michael Scott

The mantra “doing well by doing good” has long been a rallying call for nonprofit endeavors. It also reflects the dominant theme of the book Good to Great and the Social Sector: A Monograph to Accompany Good to Great.

Curated by noted author and management expert Jim Collins, Good to Great and the Social Sector is a philanthropy-focused follow-up to Good to Great: Why Some Companies Make the Leap…and Others Don’t. In this second book, Collins offers a look at how the principles covered in his best-selling business book relate to the nonprofit sector. It is based on the premise that the propensity of the social sector to mimic prevailing models from the business world often leads to outcomes that fall on a continuum between mediocre and good.

Informed with insights from hundreds of social sector leaders, the book highlights the distinction between how successful business enterprises and nonprofits evolve. This, says Collins, involves the pursuit of what he calls a nonprofit “culture of greatness” — an environment which endeavors to transcend the bureaucratic controls and profit imperative common in the business world.

According to Collins, exemplary nonprofits are most effective when they embrace what is inherently a dynamic process — one predicated on a mission-based journey rather than a static endpoint. The key here, he says, is the role of what he calls a Level 5 leader, one that fosters greatness through unrelenting passion and an ability to get things accomplished amid a diffuse power structure. These successful leaders must embody a unique blend of personal humility and professional will in order build legitimacy and influence around the cause they are championing. It’s a leadership style that is less about acquiring power and more about nurturing people.

All this sets a foundation for the infrastructural bones of the book. The starting point is a commitment to building a stellar staff. Achieving this milestone begins with “getting the right people on the bus,” Collins says — the right combination of staff and stakeholders who are passionately driven to excellence, not for what they will receive but because they are driven by a deeper commitment to the nonprofit’s cause.

A couple of HR stints with nonprofits in the Sacramento area underscored this point for me. These experiences required a focused approach to rigorous hiring practices, often within significant budget constraints, while encouraging underperforming staff to self-select out of the organization. While difficult goals to achieve, this endeavor is supported by an abundance of talented individuals seeking professional opportunities in alignment with their desire for meaningful work.

Arguably the most profound element of the book, “The Hedgehog Concept” features three intersecting circles that are designed to bring clarity around producing sustainable outcomes while saying “no” to any and all things not in alignment with this paradigm. These circles are:

  • What you are deeply passionate about
  • What you can be the best in the world at, and
  • What drives your economic engine

It’s this third circle that often proves most bedeviling to nonprofit leaders. It begs the question, “How much money should we make?” The book proposes a shift away from this question to one that challenges a nonprofit organization to look instead at how to create a sustainable resource engine that delivers tangible outcomes relative to its mission.

The final element of the book, “Turning the Flywheel,” could best be described as the engine that drives a social venture. Collins’ research concludes that successful organizations build a brand that is initially slow to catch on. Over time, velocity begins to build, propelling the flywheel faster until a breakthrough occurs with almost unstoppable momentum. This wheel becomes the catalyst for greatness.

Despite having been published in 2005, Good to Great In The Social Sector remains highly relevant for today’s mission-driven nonprofit leader. The book’s ultimate conclusion? Top nonprofits, rather than being defined by bottom-line factors like profitability, are predicated by the value they ultimately deliver to their clients. As social sector advocates, they embody a commitment to conscious choice and discipline towards a path that’s mission-oriented, value-infused and vision-directed.