What businesses can learn from non-profits

Many business people assume that non-profits have it easy, in one important sense: They do not need to make a profit.

Therefore, the assumption goes, non-profits are relieved of one of the most important responsibilities a business has: to generate returns for its shareholders. This frees them up to focus on whatever good deeds they are dedicated to, because they don’t have to worry about results in as critical a way as for-profit businesses.

I have found this assumption to be untrue … by a long shot.

I have found, through advisory work with both for-profit and non-profit businesses, that those of us trying to make a buck can learn a ton from non-profits.

Defining results in a more unique and interesting way

If you were to ask executives in a for-profit business what kind of results they are trying to achieve, you will probably hear something like, “increase revenue 10% every year” or “gain market share.”

In a non-profit, by contrast, results are usually described in much more detailed, much more interesting ways. In this earlier newsletter, Who do we intend to be?, I described how non-profits are usually able to answer the question, “Who do we intend to be?” in a much richer way than for-profit businesses. Instead of saying “grow revenue,” or “gain market share,” or “generate a 10% profit increase,” they describe the impacts they have on people’s lives, or on the planet, in a way that paints a clear picture of what they are trying to accomplish.

As an example, Yastrow & Company is working with a non-profit summer camp, Camp Ramah in Wisconsin. When we asked the camp leadership, including the staff and lay leaders, to describe the camp’s desired results, we heard about the impacts they want to have on young people’s lives for decades to come. They talked about multi-generational camp families, where the parents had met at camp when they were kids and are now sending their children to camp. They talked about twenty-something alumni, now starting their families, who still spend time together and credit the camp for their enhanced sense of identity. Just imagine if a business were able to describe their results in such a rich way.

Responsibility to results…
“what’s at stake”

The president of a foundation I advise recently issued a concept paper describing a new initiative he wanted to develop. Instead of headlining the paper’s first section with “Summary of the opportunity,” he wrote, “What’s at stake.”

The implication: We have a chance to make a major impact on people’s lives, and if we don’t do it well, we will have squandered an opportunity to make a powerful impact on the world.

Next time you see a project floundering at your company, unable to get the momentum it needs to proceed, imagine what would happen if all those involved asked, “What’s at stake?”

To be in a complete win-win
with customers

I changed a reservation on United Airlines last night and had to pay a $150 change fee. My loss was United’s gain. There was no net benefit to the world, only a zero-sum process that included a transfer of resources from me to United.

In a non-profit, however, there is a constant alignment between what’s good for the customer and what’s good for the organization, because its entire mission is to do good for its customers.

Can you say that about your company and its customers?

To have intense empathy for
its customers

We all love our customers, and we all seek to understand what the world looks like from their perspective, but non-profits usually develop a deep empathy for their customers that is unrivaled by for-profit companies.

I once helped a charitable organization in the Chicago area that serves a population of very poor elderly people. We interviewed both the elderly recipients of aid and people who worked for the organization, and it was touching to hear how well the people inside the organization understood, at a deep and emotional level, what their customers’ lives were like. I couldn’t help but imagine the benefit if some of my for-profit clients had that kind of empathy for their customers.

To see channels of distribution
as partners

Many charitable organizations give support and funding to other organizations who, in turn, serve end-user populations. In the business world, we often look at channels of distribution as a cost center, stuck between us and our customers. I find that non-profits much more naturally see channels of distribution as true partners, each trying to reach a common goal.

To be constantly reminded of
what counts

When your work involves improving people’s lives or improving the world, everyday work conversations often revolve around very significant issues. When conversations about serious diseases, starving children or funding innovative social entrepreneurial ventures are common, you tend to keep your mind focused on issues of major importance.

How many employees in your company are regularly talking about the greater impacts your company creates? What would it be like if they were?

So, next time you meet someone who works for a non-profit, engage that person in a conversation, and see if you can learn a thing or two about creating business results. I’ll bet you can!

Steve Yastrow

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Posted in Customer Encounters, Invent Your Future, Newsletters, Observations
2 comments on “What businesses can learn from non-profits
  1. Steve – I think all your newsletters are great, and I get ideas and inspiration from each one; but this one was really exceptional. I especially loved your observations about “what’s at stake?” and “true empathy for your customers.” Bravo!

  2. Ayni Hailicka says:

    Hey Steve, what a great article. As a student who’s new to the world of PR, it’s wonderful to read content that gives me a better understanding of PR and its functions. I enjoyed the article so much that I wrote a response to it in my blog: http://bit.ly/AEyBwC.
    Keep the great content coming!

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