Applying Knowledge from the World
of Business to Nonprofits
In 2001, after many years of research and teaching concentrated almost entirely on business, I shifted the central focus of my academic activity to the creation of social rather than economic value when I became codirector of the Center for Social Innovation at Stanford Business School. While the personal and institutional factors that led to this shift are probably relatively uninteresting to most readers of this book, the fact of the shift is not. This is because it bespeaks the fundamental approach or perspective (or bias, if you will) that informs my approach to the leadership and management of nonprofit organizations: specifically, one that emphasizes the fundamental similarity of the challenges facing managers of organizations, whether they be for-profit, public, or nonprofit, and the relevance of ideas about mission, strategy, and execution across all three sectors. There are important differences, to be sure, but we have yet to bridge the divides between the sectors and take full advantage of the skills, knowledge, and practices that have transcended historical, legal, and intellectual boundaries, although this condition has been changing rapidly in recent years.
Essentially, though the number of nonprofit organizations, as well as the number of people working in them, whether paid or volunteer, has grown dramatically over the last twenty years, the leadership, management, and organizational capability of the sector has been neglected, in terms of both attention and investment. This is not to suggest that nonprofit executives are any less intelligent, talented, or capable than their private-sector