I recently participated in a “So You Think You Can Network” career development event at my alma mater, Albright College. I was astounded by the number of altruistic students with whom I “speed-networked,” indicating a preference for employment in the not-for-profit segment of the economy upon graduation. Prior to joining Andesa in 2006, I spent over half my career working as a Chief Financial Officer in faith-based, not-for-profit health care organizations.
Two fraternal organizations recently went live in production on the Andesa policy administration solution. By virtue of their benefit to society, fraternal organizations are deemed to be not-for-profit, tax-exempt entities. According to the American Fraternal Alliance (of which Andesa is an Associate Member), fraternal benefit societies are membership groups that:
- unite individuals with a common bond
- provide them the ability to secure their families’ financial security through a variety of life insurance and investment products, and
- form one of the nation’s most effective and efficient volunteer networks, delivering billions of dollars of direct financial aid and community service to those who need it most.
Without question, most not-for-profit organizations deliver significant value to their communities and intended beneficiaries. What might be some of the lessons we can absorb from their operations and business acumen that might benefit our ability to lead and manage regardless of the economic segment in which we operate? Permit me to share some perspectives on what business may learn from non-profits.
Mission first: I have always found a knowledge-based, service-work environment to closely resemble the not-for-profit operating model. Contrasted to a manufacturing setting where one can easily measure tangible output, service employees require a deeper understanding of the mission and their contribution to experience personal satisfaction and growth. In both service-based models and not-for-profit settings, direct benefits are sometimes not as tangible and can take years to be realized. Regardless of the segment, planning efforts tend to begin with the end in mind. Most businesses begin with financial metrics as the measure of success. Not-for-profits by contrast define success by measuring the impact they are making outside their organization. Growth is measured by making a larger impact. If it is good for the clients/constituents of the charity, the not-for-profit has to promote it, and the organization has to find a way to fund it and make it work. That is not to say that not-for-profits are not money-conscious; in fact, because of tight budgets, perhaps they are more frugal stewards than their for-profit counterparts. Money is not the motive, but is instead viewed as a means to an end; the end being the performance of the mission and the expansion of that mission to serve a broader constituency.
The significance of engaged employees: According to the Bureau of Labor Statistics, over 11.4 million individuals are employed by the not-for-profit sector (this excludes volunteer hours). Reflecting on the good being contributed to society through organizations providing educational, fraternal member services, healthcare, services for the aged, homeless, veterans, etc., I am reminded of the caliber of the individuals working in these organizations. They are committed to making an impact beyond themselves and are engaged by a mission. I sometimes wonder how the mission would be fulfilled without the commitment of the staff. They display an awareness that something must be done to make a difference and offer a level of passion, innovation and creativity to get the job done.
Contrast this experience to publicized measures of engagement. Gallup regularly tracks measures of employee engagement and finds that nearly half of the US workforce is “not engaged,” while an additional 17.2% are “actively disengaged.” Leading with a purpose, defining an organizational mission beyond financial metrics, can attract and retain talented and motivated individuals who will also sacrifice personally for a corporate cause.
The importance of succession planning: Ponder the number of not-for-profits who celebrate organizational histories in excess of 100 years. As long as there is missional work to be performed, the organization has a purpose for existence. The operation has been subject to generational, economic, political, technological, operational and cultural changes, yet continues to find leaders to execute on the vision and mission of the organization. Contrast that succession mentality against the modern business backdrop. One of the most frequent questions I am confronted with by outsiders is “What is your exit strategy?” as if exit is the only logical business option available. When one considers the overall economic and societal impacts that businesses can deliver, a well-thought-out succession and organizational perpetuation plan can help effectively navigate shareholder and leadership transitions. In fact, in order to fulfill most organization’s missions, a solid succession plan is a critical strategic element.
Andesa’s Board recently restated our Vision statement.
What is Andesa? It is the sum of the following two parts:
A majority employee-owned organization, grounded in an ethical culture, which encourages and facilitates its employees to develop and apply their business skills to the fullest, in order for clients and owners to achieve their full potential.
Individuals who thrive on excellence and achievement and who embody the values of honesty, respect, integrity, responsibility, courage and initiative in all they do.
In short, it is the combined strength of a supportive organizational structure and individual talents constantly reinforcing and empowering each other. Andesa is far stronger than the sum of its parts. It is a company sufficiently valuable that its life span should be forever.
To live into our Vision, Andesa must remain focused on our mission, engage our employees and understand succession and transitions; lessons we can learn well from our not-for-profit colleagues.