June 5, 2017

Leadership development: Five things all nonprofits should know

Leadership development takes courage, but it is the best investment a nonprofit can make. James Shepard gives you five reasons why you should begin investing in it today.

2 min read

Many organizations think leadership development is too expensive, that it’s all about training or sabbaticals, that it’s a “nice to have but not necessary” employee benefit, or that executive leaders should focus on other things.

But those organizations are wrong—and wrong enough to seriously imperil their vision and mission. After years of working helping nonprofits and other organizations develop strong leadership, I believe these are the five most important things every executive needs to know:

1. Leadership development investments provide high returns on investment (ROI)
Dozens of studies encompassing a diverse set of organizations (including nonprofits, for-profit companies, and public sector organizations), spanning countries worldwide, and across dozens of diverse fields (such as health care, education, media, and manufacturing) all point to the same conclusion. Investing in an organization’s human capital management and leadership development capabilities pays for itself and continues to produce tangible benefits that far exceed the costs.

Related article: Building internal leadership is the founders job

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2. Strengthening leadership development results in more mission impact, higher revenues, lower costs, and greater stability.
Strengthening leadership development produces concrete improvements in the areas nonprofits care most about. Investing in leadership development isn’t a distraction from programs; it’s how you ensure that your organization achieves its potential impact.

3. Most nonprofits spend their leadership development dollars ineffectively.
The 70-20-10 Model for Learning and Development is one example. Professional development experts have demonstrated that about 70 percent of learning happens on the job through carefully chosen “stretch” assignments, 20 percent happens as managers and peers help employees succeed in those assignments, and only 10 percent happens through formal training. Yet we’ve observed that most nonprofits focus leadership development resources on the most expensive and smallest part: the 10 percent allocated for training, books, conferences, and sabbaticals—all essential but insufficient on their own.

4. Most nonprofits can achieve high-quality leadership development if they have courageous leadership
A great program will create a deep pool of talent and ready successors for important roles. As a nonprofit executive leader myself, it can be unnerving to work with one or more people on my staff or board who will soon be ready to take my place.

What’s more, great leadership development programs often move developing leaders into a variety of roles to provide a breadth of learning opportunities. Again, it takes courage to move an employee from a role in which he is highly successful to another where he is less proven, even if it is the right development opportunity.

Related article: Lessons in leadership building 

5. Nonprofits can make big improvements for free right now.
Even with limited or no additional funding, organizations can make immediate progress on leadership development. If your nonprofit has time to do just one thing, recruit an experienced executive with expertise in leadership development and succession management onto your board, and give them an explicit mandate as head of your new Human Capital board committee.

Every great journey begins with just one step: Take yours today.

This is an excerpt from the full article, which can be found here.

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Stanford Social Innovation Review

Stanford Social Innovation Review (SSIR) is published by the Stanford Center on Philanthropy and Civil Society at Stanford University. It seeks to advance, educate, and inspire the field of social innovation by seeking out, cultivating, and disseminating the best in research- and practice-based knowledge. SSIR informs and inspires millions of social change leaders from around the world and from all sectors of society—nonprofits, business, and government.