The Leadership Parallels Between Nonprofit & For-Profit Organizations

Leadership is not one size fits all.

In fact, many people have their unique style.

Whether you are leading a nonprofit or for-profit organization, under it all, the same parallels remain.

I had a chance to sit down with an old friend Ray Klinginsmith, and chat about the leadership parallels that are experienced whether you are in a nonprofit or for-profit organization.  

Universal Parallels

Despite the differences in structure, we discovered that at the core, the similarities are universal.

Ray, recently retired from Truman State University in Missouri and board member for a local bank, had a lot to say about his leadership experience in both education and business.

Many parallels exist and it’s clear to see what the front runner is.

Satisfaction.

For instance, measuring “satisfaction” is something that occurs on both side of the nonprofit versus profit world. The path to get there may differ, but what comes out of it, is the same.

Ray walked us through this a little more by saying, “In business, it comes down to growth of assets and profits versus, quality and quantity of services.”

At the bank it was obviously when a profit was made and that’s easy to measure. Deposits and new accounts go up; profits rise. Schools accept and have more students apply; enrollment rises. At the university, you aren’t measuring profits in the typical sense, but rather how many programs you can support within the budget.

But in both situations, it’s not as easy to measure satisfaction.

Ray went on to say that Truman State University was one of the first to measure student success. They accomplished this by giving students standardized tests both freshmen and senior years, thus comparing their growth from start to finish.

By doing so, they were able to truly measure the success students had directly related from their teaching. This concept has since become norm throughout most of the country.

At the end of the day, both students and customers have to receive value.

As Ray stressed, “You concentrate on the person receiving the goods or services and make sure they understand that they are receiving something that is high quality.”

It’s that concern to do a good job for the benefit of the students that motivates leaders.

With the bank it was the same mindset; to do good for their customers.

Are There Different Problems Between a Nonprofit and a For-Profit Business?

You might be asking yourself if there is a difference in issues that might arise perhaps challenging leaders in both spaces?

 “At the university, we were dependent on so many things for funding. So, in turn, it was surprisingly a very political climate.

Whereas at the bank, although not political, it’s highly regulated,” said Ray.

Despite the environmental differences, they both still have their unique pressures coming from “the top down.”

Final Thoughts

With his depth of experience, Ray wrapped up our conversation with a few lasting points regarding the value of leadership.

Reflecting he said, “I think more than anything I like for people to understand the value of building their local community. Everyone has talents that they can lend, if they just choose to do so. What can be more valuable than to live in a good community? Whether it’s big or small, the local citizens can make a big difference in the quality of life.

At the end of the day, it comes down to a few common characteristics:

• Intelligence
• A good personality
• Good ‘old fashioned hard work

So how are you leading in your organization?