Entrepreneurial Leadership in Non-Profits

I came across an old file in my desk when I was teaching on change and innovation recently. It was a chapter by Peter Drucker on Entrepreneurship in Service Institutions. The book?  Innovation and Entrepreneurship, 1985 edition. His insights and observations have relevance to non-profits, graduate schools, hospitals, and a plethora of organizations who are “called to serve” others.

We must remember, says Drucker, that we are called to maximize rather than optimize our impact. We cannot say things like, “We committed to healing every person who needs care anywhere on the planet!” Such missions are not just grandiose but are impossible to complete. You will always be a failure. But if instead the idea is maximizing resources to reach certain people, then that is more realistic.

So how do we accomplish our mission with innovation and entrepreneurship at the core? He gives a few guidelines.

1)     Make sure you have a clear definition of your mission. Focus on objects not programs and projects. “Feeding the hungry” is not clear enough. “Reaching people who do not know we exist” is too vague.

2)     Have clear goals that are attainable. “We are focused on serving 200 new patients in the free clinic this year” is more of what it should sound like.

3)     Failure to achieve an objective means the objective is wrong, especially after repeated tries. I see this with people who lay out a grand strategy for developing hundreds of leaders “in just three months” and they fail repeatedly. The objective needs to be right-sized.

4)     Constantly search for the innovative opportunity. Because funds are limited, creativity is even more of a need. Creative strategies and use of finite resources will allow you to thrive. The volunteer movements we are seeing are an example.

If you can convert your non-profit into a for-profit, Drucker says to do it. Entrepreneurship and Capital formation is a driver of innovation, and non-profits consume capital rather than form it. This is not true for churches and some groups, obviously. But some aspects of ministry or social work could be shifted so that resources are regenerated for the organization.

As I work with church leaders and business leaders, I see the same mistakes and issues. But they are more dramatic in the non-profit world. People must have a continued sense of the mission and clear guidelines for their contribution. You do not have an authority relationship with them, and they can walk at any time. No salary strings to pull and no emails saying, “Report to me today at 3:00 in my office.”

It is innovation, participation, a sense of urgency and a feeling of real contribution to the cause that keep people connected to your non-profit venture.

What are you doing to make sure people are part of the innovative vision you are pursuing? How can you use them without abusing their expertise? Are you seeing their potential to bring innovation not simply implement your ideas.

The non-profit service institutions need innovative leaders on the staff and in the volunteer ranks. Let’s rise to the occasion!

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Bill Donahue

Bill’s vision is: “Resourcing life-changing leaders for world-changing influence.” Leaders and their teams need a clear personal vision and a transformational team strategy. This requires work in 3 key areas: Maximize Leadership Capacity, Sharpen Mission Clarity & Build Transformational Community. Bill has leadership experience in both the for-profit and non-profit arena. After working for P&G in New York and PNC Corp. in Philadelphia, Bill was Director of Leader Development & Group Life for the Willow Creek Church & Association where he created leadership strategies and events for over 10,000 leaders on 6 continents in over 30 countries.

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Recent Comments
I like it Mac and do agree with your opinions on the matter. Thanks much
— winston
In this era, we have the opportunity of professional church staff today who utilize their gifting to shape the image and atmosphere of the church organization. But the 100% real impact on the church visitors is genuine evidence of changed lives by the gospel and the active growing discipleship (just as it was in the first century church). One demonstration is financially rich believers ministering equally together with poor believers (how odd, and incredibly miraculous; all humble and bow at the foot of the cross.). It is the awesome contrast of church members vocations, race, gender, age, maturity, gifting, humility that demonstrates to visitors "there is a Spirit in the place". That first-time guest list of 10 are "physical excuses", not spiritual excuses. Those don't tell the story. The condition of facilities and publicly greeting people have zero to do with it. The power of God in and through believers lives dedicated to impact other people with their relationship bridge-building of acceptance of the lost around them. Empowered believers are infectious, loving, helpful, giving, self-less, dynamic, compelling, bold, Christ-filled. As I have been in many church settings domestically and internationally, the facilities can be poor, and yet the fellowship can still be rich. We need to operate with first church humility. People come to Christ on His terms, not on our human abilities of hospitality. A huge catastrophe in a community, disaster relief brings lots of people into churches – many come to the church in those terrible conditions no matter the physical condition of the local church. Off the condition of facility, and onto the condition of God's people (living stones).... and everything else will grow.... and the other physical issues will be corrected by the staff.
— Russ Wright
"While I understand the intent behind this phrase" Expound please. What do you understand to be the intent behind that phrase?
— Ken

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