The Argument for Sector Switching: Nonprofit to For-Profit

By admin
In January 2, 2014

 

sector switching, nonprofitThere is much conversation in the nonprofit sector about the value (or challenge) of bringing for-profit leaders into the nonprofit sector. Many skeptics of this practice voice concerns about values-alignment, while supporters often cite that these sector-jumpers are looking for more meaningful work and bring valuable business skills with them. Whichever your perspective on this issue, I want you to think about what would happen if the transition went the other way. In other words, how do you think it would work for a successful nonprofit leader to move into the for-profit sector?

Learning from the Experts

Athletic apparel giant Lululemon is getting a lot of media attention recently for their announcement of new CEO, Laurent Potdevin, who is currently the president of Toms Shoes. Founded on principles of sustainability and corporate responsibility, Toms Shoes is not a nonprofit, but is well-known for their One for One movement and partnerships with nonprofits like charity:water and Movember. Given this background, many are looking to Potdevin to right the Lululemon ship after repeated public relations gaffs by Lululemon’s founder and former board chair, Chip Wilson. The praise of this move by business media outlets such as Business Insider and The Week focuses heavily on the hope that Potdevin will restore Lululemon’s feel-good ethical identity.

This question of a company’s ethical identity is at the root of my original inquiry of what it would be like for a nonprofit leader to be put at the helm of a for-profit corporation. Now, I know that people transition from nonprofits to for-profits all the time without any fanfare. Based exclusively on anecdotal data, it seems that these moves are often made by entry- to mid-level employees for reasons mostly boiling down to compensation and benefits. Often, again anecdotally, these people come back to the nonprofit sector later in their careers. I also know that when business leaders move into nonprofit leadership positions, the explanation often involves the notion that nonprofits should function more like businesses to bolster their sustainability over time. Logic says to me that if nonprofits can learn something from corporations about business practices, then corporations can learn something from nonprofits about mission-driven decision-making.

The Nonprofit/For-Profit Challenge

To help investigate this sector switching question, I went straight to the closest example I could find of someone who made the switch from nonprofit leadership to corporate leadership: Lisa Brown Morton, President and CEO of Nonprofit HR and my boss. Prior to founding Nonprofit HR, Lisa had spent her career going back and forth between nonprofit and for-profit work and her leadership is influenced strongly by this blended history. The biggest values that she identified from her nonprofit experience are her understanding of how nonprofits work and her management of our internal team. Her real-world, practiced experience with nonprofits is invaluable to clients of Nonprofit HR as we provide solutions that work for their unique challenges. In terms of management, her nonprofit background comes through strongly in the culture of the company. Her commitment to collaboration, empathy and improving the social condition of people shows throughout everything from our company values to our office space.

While there are challenges that a nonprofit leader would face in a corporate environment (Lisa noted that the candidate would need to adjust to the speed of business decision-making, for example), those are likely outweighed by the nonprofit skills that could give the leader an edge over corporate candidates. There were three main skills that Lisa identified that nonprofit professionals would bring to a corporate setting: resourcefulness, high-level multitasking ability, and socially conscious decision-making. In a business setting, these people can help every dollar be stretched to achieve more, are able to work across silos to strategize and problem solve, and have the ability to lead the charge as companies try to appeal to people’s charitable instincts. In 2014, businesses looking to make more of a social impact should consider reaching to the third sector for leaders who can do more with less.

4 Comments

  1. love your work

    1. Thanks James!

  2. Thank you for the breakdown in this article. I find myself going back and forth. [I] wanted to go into the corporate world however I really enjoy the mission of the organization I work for.

  3. After seven years in the nonprofit sector I am considering the switch. Very helpful.

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