Why More Companies Should Operate like Nonprofits
I took a break from work today to flip through the June 7th edition of Forbes. The cover story caught my eye: “What Schools Can Learn From Money Managers,” but I’m not going to talk about that story here. Instead, I’m going to talk about one of the secrets in Rich Karlgaard’s article, “Recovery’s Seven Secrets.”
Purpose
Several years ago, Mr. Karlgaard had the privilege of interviewing Peter Drucker shortly before Mr. Drucker’s death. Peter Drucker spent the later part of his life studying nonprofit organizations. In fact, he “felt they are as critical to a society’s success as good government, entrepreneurs and thriving corporations,” because these organizations operate with a purpose. While most companies exist to make a profit, nonprofit organizations exist for many reasons, whether it is to raise awareness for a cause or to provide resources where private enterprise cannot (or will not). Regardless of the reason, these organizations know why they do what they do, because they operate with a purpose, “a reason for existence that transcends profits.”
While working towards a purpose might seem counter-productive at a for-profit company, working towards a common goal or a business objective will help motivate employees. There have been instances in my career where I felt like I was just completing task after task because my team needed to meet deadlines and things needed to get done. But all too often, I had no idea what I was working towards or what I was working for. I needed direction.
Luckily, I get to manage my own team now. Every month, I communicate clients’ business objectives with my team members. It can be something straight forward, like increasing sales leads from a website, or something more difficult like increasing revenue by 30% from organic search or cutting costs from paid search while maintaining the same level of revenue, and so on. Whatever the goal is, I let my team members know, so they know what they’re working towards and why they come to work everyday. I think they appreciate the open communication. We’re not working to cure malaria or anything, but at least we can help our clients’ build more successful businesses.
It’s really difficult to operate without a purpose. Let me rephrase that. It’s really difficult to operate efficiently without a purpose. It happens to large companies. It happens, especially, within the government. If you don’t know your organization’s purpose, I encourage you to walk into work tomorrow and ask your boss.
So, why should more companies operate like nonprofits? Because in the road to recovery, the companies that win are the companies that understand why they do what they do. Look at Apple. I don’t think anyone at Apple knows that we’re in a recession right now. They’re now more valuable than Microsoft. And they only own 10% of the market share for computers. Their purpose? – “Apple is committed to bringing the best personal computing experience…” A pretty lofty goal for a company that was on the brink of bankruptcy just a decade ago. But they don’t settle for anything less than “the best.” That’s why companies like Apple are going to win during the recovery, and they’re going to keep winning, as long as they don’t forget why they exist.
