Giving Thoughts

Nonprofit Skills for a Complex World

By Gina Anderson, Philanthropy Fellow, Centre for Social Impact, University of New South Wales, and Advisory Board Member, The Conference Board Initiative on Corporate Philanthropy

Look at your smart phone, your tablet. Hold it in your hand. This is the most powerful tool we have to provide affordable basic healthcare to the bottom 5 billion people in the world, to alleviate global poverty, to help people in crises or disasters. It is also causing profound changes to the way our societies operate, not least by bringing more stakeholders to the decision-making table. Business leaders could learn from nonprofit CEOs how to build consensus in this complex world.

In a recent radio interview, Kim Williams, the former CEO of News Corp in Australia, said that the internet and social media are imposing the greatest transfer of power in human history— from the producer to the consumer. Today, consumers and community members anywhere in the world—in developing and developed societies—have the social media tools to convene and congregate, to be activists, or to work together and independently at the same time. With these tools, they can effect change, and crucially, at scale.

Williams gave the obvious examples of disruption to the print media and retail business models. The experience of the large-scale and effective community activism faced by the coal mining and coal-seam gas industries in the state of New South Wales, Australia, is another example.

This transfer of power challenges the fundamental way our organizations, governments and societies operate, not to mention the way they are structured. Dealing with these shifts will require us to use all the talent, innovation and skills we can muster.

Back in the 1990s one of the 20th Century’s business gurus and futurists, Peter Drucker, said:

“The 21st Century will be the century of the social sector organization. The more economy, money and information become global, the more community will matter. And only the social sector nonprofit organization performs in the community, exploits its opportunities, mobilizes its local resources, and solves its problems. The leadership, competence, and management of the social sector nonprofit organization will thus largely determine the values, vision, cohesion and performance of 21st Century Society.”

Improving complex stakeholder management
One of the most under-valued skills that the nonprofit sector brings to meeting these challenges is that of complex stakeholder management.

Traditionally, business has been very successful with its single focus of producing goods or services, but the transfer of power from the producer to the consumer challenges this single focus. Nonprofit organization leaders are already dealing with a very different paradigm in which the consumer (or beneficiary) does not necessarily pay for the good or service—someone else does. The inherent complexity in managing this paradigm forces the nonprofit sector leader to actively engage with a wide group of stakeholders.

In fact the amount of stakeholder management conducted by nonprofit CEOs, and its complexity, stuns most businesspeople. These leaders are managing the expectations of board members and former board members, founders, donors, members, potential donors and members, former donors and members, governments at all levels, employees, former employees, volunteers, beneficiaries, beneficiaries’ families, former beneficiaries, media, and the local community. The list goes on.

All these stakeholders have an emotional investment in the organization in one form or another. This demands that the nonprofit CEO engages with a much broader focus and interaction, with parts of the community not necessarily touched by either business or large parts of government.

Community capacity builders
The best nonprofit CEOs are also community capacity builders, able to switch at any moment between a discussion with someone from one part of the community to someone from another part of the community. Often these stakeholders have very different perspectives, and sometimes have conflicting views. Throughout these interactions, however, nonprofit leaders must be able to engage, promote, and facilitate, to create bridges and understanding, a community of interest, an outcome for their beneficiaries and a public good for our wider society.

The result of this constant balancing of varied and conflicting interests is often consensus-style decision-making. This style of decision-making is generally slow, tedious and frustrating. It is often suboptimal from a productivity or economic standpoint, and even from a policy point of view.

But it is inclusive, and requires compromise by everyone. This is one of the areas that businesspeople struggle with most when encountering the nonprofit sector. But like it or not, we all need to be prepared for consensus-style decision-making, because it may well become more prevalent in our evolving world.

In the face of greater community and consumer activism, made so much easier by social media, I believe experience in complex stakeholder management, community engagement and consensus-style decision-making will become skills that are more valued in the C-suites and boards of all organizations, not just in the nonprofit sector.

About the author:

Gina Anderson is the Philanthropy Fellow at the Centre for Social Impact, University of New South Wales, Australia. She is Chair, Women’s Community Shelters; Director of The George Institute for Global Health and The George Institute Foundation; Advisory Board Member of the Australian Charities and Non-profits Commission (ACNC); and a Director of GDI Property Group and GDI Funds Management.