So, you are the executive director of a Not-For-Profit (NFP) organization. You look around, and think that you have a good organization. The first question that comes up is: “Is this good enough?” Many people would say no. We want to have a great organization. We all strive for this. The next question is: How do you make it a great organization? One way is to look at the book “Good to Great” by Jim Collins. “Good to Great” has become a bestseller in the business world, influencing management practices and leadership styles. It can be adapted to the NFP world as well. “Good to Great” emphasizes the importance of long-term vision, building a strong culture, and having the right people in place for sustainable success.
The book focuses on how ordinary companies can make the leap from being merely “good” to becoming truly great over a sustained period. The principles Collins puts forth work just as well for NFP organizations as well as for for-profit companies. Collins identifies “Level 5” Leadership as the crucial factor differentiating good organizations from great ones. A Level 5 leader blends humility and “professional will”, prioritizing the organization’s success over personal success. Great organizations understand the “Hedgehog Concept,” the intersection of three key circles: what they can be the best in the world at (passion), what drives their economic engine (cash flow), and what truly matters to their clients (passion). Many NFP leaders are not comfortable dealing with the fiscal side of the business, but as one religious leader told me, “it takes money to do God’s work.” Similarly, it takes cash flow to keep your doors open.
Collins believes organizations can build a culture of discipline This is achieved by having:
- Discipline of People: Great organizations foster a culture of discipline by employing and promoting talented individuals who embody the company’s core values and principles. This same principle applies to volunteers as well.
- Discipline of Thought: Great organizations maintain a culture of thinking and challenging assumptions, fostering a data-driven approach while remaining adaptable. Harold Geneen, the former president of ITT famously said, “the numbers will set you free.”
- Discipline of Action: Great organizations translate plans into action with a relentless focus on execution and achieving results.
By doing this culture of discipline, your organization will achieve The Flywheel Effect. Your NFP will build momentum through the flywheel effect, where sustained effort in core areas like people, strategy, and operations reinforces each other, leading to continuous improvement.
To be sure, there are some criticisms of this book. A common one is its treatment of an organization’s development is simplistic, and doesn’t deal with root causes. Nevertheless, “Good to Great” offers valuable insights for NFP organizations aiming to achieve long-term excellence. It highlights the importance of leadership, culture, and a consistent focus on core principles for achieving sustainable success. It can be a roadmap for taking your organization from being merely “good” to “great”!
Mark Koscinski CPA D.Litt. 