Why non-profits are good employers and MBAs give bad advice

A few days ago I came across a remarkable TED talk that gives some interesting insights into why non-profit organizations might be the best employers you can find.

It also got me thinking about whether we are asking the wrong people for advice, if we are  inviting the McKinsey’s and KMPG’s of this world to assist us with our problems.

I highly recommend you watch the video before you read on:

What I find most interesting about this presentation is that Dan Pink shows that intrinsic motivators are not only stronger than external motivators (like money) but make people more efficient:

“It’s an approach built much more around intrinsic motivation. Around the desire to do things because they matter, because we like it, because they are interesting, because they are part of something important. [That] new operating system (…) resolves around three elements (…):

  • Autonomy, the urge to direct our lives,
  • Mastery, the desire to get better and better at something that matters,
  • Purpose, the yearning to do what we do in the service of something larger than ourselves.

If you are working for a non-profit organization and recognize yourself or your co-workers, please raise your hand.

Let’s look at the three elements and how they are part in the day-to-day life of most non-profits:

Purpose: This is where most non-profits excel since almost all non-profits are driven by a mission to improve the world in some way. It is this purpose that keeps people working long days and night and even work for free. The hundreds of millions of volunteers who contribute their time without getting paid are testament to how motivating this sense of purpose can be.

Autonomy: Non-profits give their employees considerable more autonomy and responsibility than you’d normally have in the corporate world. In part, this comes from a lack of resources. But that is not an entirely bad thing because it allows people with drive and initiative to quickly punch over their weight. I mean, we have sent interns to represent the organization at meetings with the UN (and told them not to mention that they are interns) – how great is that if you are fresh out of university?

Mastery: This is probably the element where most NGOs fail and one of the reasons that so many people leave disillusioned after a few years. (For an excellent book that describes how and why someone got completely disillusioned with humanitarian aid, read “The Road to Hell” by Michael Maren.) The nature of most organization’s mission is such that it can never be fulfilled. And while your particular skills might improve, the mountain of work will stay the same.  The paradox is that many people choose to work for non-profit organizations because the mission is such a big challenge.

Now … if the above is true and if non-profits manage to instill a sense of purpose, autonomy and mastery into their employees, than this suggests, based on the experiments that Dan Pink describes, that non-profits are actually more efficient and productive than they are given credit for. Maybe the tasks are just so big that it doesn’t look like it.

Why business consultants might be bad advisors

Looking at Dan Pinks discussion about left-brain activities versus right-brain activities I would argue that the work of most non-profit professionals requires far more right-brain (creative/conceptual) thinking than in most other industries. After all, what could be more complex than to “fight poverty”, “stop global warming” or “alleviate human suffering”?

But whom are non-profits asking for advice when they are in real or perceived trouble? Most frequently they get some business consultant who more likely than not has mainly optimized companies that have fairly repetitive routine tasks: Build a car, build more cars, build more cars cheaper.

One notable exception seems to be Accenture who has its own non-profit branch.

But aside from this positive example, I think we have to ask ourselves the question: can these consultants really understand an industry like ours? Are they really the right advisors? Because in my experience their advice frequently limits creativity and autonomy, i.e. the very thing that motivates people to get out of bed in the morning.

Do you agree or disagree? Do I have a point or have I gone off the deep end? Please share your thoughts with me and leave a comment.

  • Well, Tim…even though I don't have a MBA, I don't think all MBAs or consultants are the wrong people to provide advice. There's a considerable focus on social enterprise or social entrepreneurship in business schools now: T ake a look at the Harvard Social Enterprise Initiative (http://www.hbs.edu/socialenterprise/) and the Stanford Center for Social Innovation (http://www.gsb.stanford.edu/csi/). How about the Social Enterprise Alliance? (http://www.se-alliance.org/) There's a growing world of MBA laden consultants out there. It's up to NPOs to start listening!

    • Thank you very much for those links – it's great to see that there are more and more initiatives like this. I still think, from my own personal experience, that unfortunately most MBAs don't have a background like that and that their advice can be very detrimental to the very things that make a non-profit organization work. But maybe that is changing – let's hope it does!

  • Jim

    Hi Tim – I work in IT for a non-profit Canadian hospital and I've also been working on my MBA for the past 2 1/2 years. (Athabasca U) I can tell you that we've learned pretty much what Dan Pink is saying – most MBA programs work hard to keep current. The problems you see may be with those who earned their MBA years ago and haven't kept current – you can find those in any proffesion! Your comment on non-profit's being "more efficient and productive than they are given credit for" just look at Canadian healthcare against American – longer life expectancy, lower mortality in infants – half the cost. Throwing money at the problem isn't always the answer. Yes, Canada has problems with healthcare – but as for the people who have gone to the states motivated only by money – you're welcome to them!