Thank You, Mr. Collins!

by Dan Baum

Finally someone in the business community has come forth and stated what most of us in the nonprofit sector have been saying for years: “we must reject the idea…that the primary path to greatness in the social sectors is to become more like a business.” Jim Collins is not the first to make such a claim, but he is the first prominent business advisor (guru?) to state it so plainly and emphatically.  Thank you, Mr. Collins.

For those of you not familiar, Jim Collins is the author of an outstanding book called Built to Last in which he presented the results of an exhaustive research project comparing the number one company in a given industry against the number two.  The gap in financial returns between the number one and two companies was wide enough to call into question how the number two could be placed in the same league as the number one.  Having described the characteristics of these top, or “Great,” performers in his first book, he followed it up with a second book, Good to Great, in which he outlined how the rest of us can emulate the qualities of the great companies. Many readers, like me, tried to relate his recommendations to nonprofits and thus, challenged and questioned some of his notions. He received enough responses that he wrote a short monograph, Good to Great and the Social Sectors, in which he clarifies how the lessons he shared could be adapted to nonprofits.

The first topic of this monograph is extremely insightful (though all his points are instructive), which he has placed under the heading “Defining ‘Great’ – Calibrating Success without Business Metrics.”  Here Mr. Collins supports the premise on which Innovation Network was founded and on which our training and online tools are based: that ongoing measurement is a discipline practiced by great organizations, not simply businesses.  He acknowledges that tracking progress in the nonprofit arena poses some unique challenges, which is refreshing to see from a business person, but that it must be done all the same.

When tracking this progress, he makes the distinction between “inputs” and “outputs” (our distinction is between “process” and “outcomes”), and he emphasizes that nonprofits must focus attention on “outputs.” Our terminology is slightly different but our perspective is not.  It is possible – no, it is necessary – to measure success in the nonprofit arena.  Moreover, that success should be tied to the mission and the difference you want to see in the world, not simply the operational means to achieve it. On the subject of just one operational component nonprofits typically struggle with, he states, “money is only an input, and not a measure of greatness.”  Yes!

I can’t recommend this monograph enough in helping to clarify both the what and why of measuring your success.  Innovation Network's free online tools are here to help you put this shared philosophy into practice.  If our site and Collins' book aren’t enough to help you measure your success, you can contact us directly for help.  As we have long believed, and he states, “the critical distinction is not between business and social, but between great and good.”  Strive to be great! 

Learn more about Jim Collins and his work at http://www.jimcollins.com/.