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Assembled Nonprofit Leaders Discuss How
Organizations Can Go from "Good to Great"
Bridgestar Community Event Hosts Best-Selling
Author Jim Collins
Boston, MA ‚ Jan. 12, 2005 Jim Collins, best-selling
author of Built to Last and Good to Great, recently spoke to a packed
room of nonprofit leaders about how they can apply lessons from Good to
Great to improve the effectiveness of their organizations and the sector
as a whole. The event, entitled, "GOOD TO GREAT: Lessons for the Social
Sector," was hosted by Bridgestar, an initiative of the Bridgespan Group
whose goal is to attract, develop and connect senior leaders established
and aspiring for greater effectiveness and social impact.
Detailed highlights of Collins' presentation are available
in the January issue of "Leadership Matters" or online at http://capella.bridgestar.org/newsletters/January2005/default.htm.
Each month "Leadership Matters" picks a different theme
designed as a conversation about how to build and sustain effective nonprofit
organizations. "Leadership Matters" is available to all Bridgestar members
or, for a complimentary subscription, please email email@example.com.
Previous issues have reported on the Bridgestar Survey on Governance Practices,
offered the comprehensive "Guide to Navigating the Hiring Process," and
have focused on topics such as the role of the nonprofit COO, improving
nonprofit accountability, as well as best practices in compensation and
Nonprofits organizations can become great, Collins said, but the challenges
are more complex than for private sector companies. The reasons: first,
it can be more difficult to run a nonprofit organization than a corporation
because there is no single agreed-upon measure of success for a nonprofit,
whereas it is easy to measure the success of a private sector company
merely by the profit it generates.
Second, much of the funding available to nonprofits supports
specific programs, not organizations. Additionally, in contrast to the
private sector, where successful companies attract more capital, very
successful nonprofit organizations can actually drive funding to less
successful organizations because of the perception that the lesser performers
need more help.
How do organizations become great? According to Collins,
the country has become addicted to the concept of leadership. However,
his research shows that greatness is not necessarily the result of charismatic
leadership. Collins noted a negative correlation between charismatic leaders
and great organizations. He explained that organizations dependent on
charismatic leaders often can't be sustained, particularly if the leader
leaves, while executives "afflicted with charisma bypass" get things done
on the basis of fact and logical arguments, and have organizations that
prevail over time. This does not mean that charismatic leaders are doomed
to failure in building enduring greatness indeed, leaders like
Sam Walton and Thomas J. Watson Sr. did overcome their charisma to build
organizations that transcended their personal presence but, according
to Colllins' research, those afflicted with charisma need to understand
its limitations and deliberately compensate for its liabilities.
Moreover, he said, when charismatic leaders are wrong
and they can be wrong the results are disastrous. (The solution
for leaders blessed with charisma, Collins said, includes surrounding
themselves with people who are not afraid to question ideas, concepts
Rather than depending on charismatic leaders, Collins believes
that nonprofit organizations can become great by following a four-step
- Disciplined people: First who, then what. Many organizations
say that people are their most important asset. That's not exactly accurate,
says Collins. The right people are organizations' most important asset.
Nonprofits need to be rigorous, not ruthless, in finding and attracting
the right people including volunteers. When the right people
are "on the bus," Collins said, organizations can figure out the best
path to greatness.
And while they can't usually offer employee incentives and perks
to the extent that for-profit companies can, according to Collins,
the good news for nonprofits is that incentives don't work and are
not tied to organizational greatness.
- Disciplined thought: Live the Stockdale paradox and develop your
hedgehog concept. Citing a lesson learned by Admiral James Stockdale
while in captivity during the Vietnam War, Collins said that organizations
must never confuse absolute faith with the ability to confront brutal
truths. With this in mind, he said, organizations must develop a defining
concept, or hedgehog, by determining what its people are most passionate
about, by what it can do best in the world, and by the level of supporting
resources at its disposal. He also urged patience, noting that it can
take four to five years, in an iterative process, to define the hedgehog,
and even longer at organizations constrained by internal traditions
or policies such as tenure. Collins went on to describe two types of
hedgehogs, one involving content and the other process, citing Walgreens
as a "content hedgehog" because it "offers everything," and General
Electric as a "process hedgehog," because the company excels at an intangible,
developing executive talent, which is deployed through a wide range
- Disciplined action: The flywheel, not the doom loop. Great
organizations gather momentum over time through their persistent focus
and ability to coalesce resources the flywheel while their
reactive colleagues grasp at straws, falling into the doom loop. Great
organizations achieve a culture of discipline in which the entire team
focuses on the hedgehog. With this freedom in context, people do not
require traditional management. "The moment you feel you need to manage
someone, you've made a mistake," Collins said, explaining that discipline
doesn't mean to "do more," but to be able to say no.
- Building greatness to last: Preserve the core values and stimulate
progress. Organizations need to preserve their core ideology while
simultaneously stimulating progress and change in everything that is
not part of the core ideology, such as cultural and operating practices,
and specific goals and strategies. For nonprofits, the secret to creating
sustained greatness is knowing what shouldn't be changed and
changing everything else. Citing the Girl Scouts, Collins lauded a new
leader who recognized that while the organization's values were strong,
the practices being employed to develop girls into strong women
defined as housewives were outdated.
Bridgestar community events
Collins' talk was part of a key Bridgestar initiative to generate
and share knowledge with others in the sector. Previous community events
included a talk with Diana Aviv, president of Independent Sector, on improving
nonprofit accountability. "The nonprofit sector must nurture and retain
effective senior talent to reach full potential," Simms said. "The Bridgestar
community got a first look at new concepts that Collins and his team are
exploring to provide a roadmap for nonprofits organizations to become
great. Our philosophy is that social impact is dependent on having strong
people in key roles and that's the foundation of Jim's research.
We are pleased to be able to partner with him to bring these messages
an initiative of the Bridgespan Group, is a nonprofit organization building
a member-driven community of individuals and organizations working to
strengthen their careers, their institutions, and the nonprofit sector.
Established in 2003, Bridgestar's goal is to attract, connect and support
senior leaders established and aspiring for greater effectiveness
and social impact.
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