March 13, 2019

What corporates can learn from nonprofits

Nonprofits are often expected to be more business-like in their operations, but corporates also stand to learn a lot from them. 

5 min read

After six years of being CEO at Motorola Solutions, when I moved to the development sector, I did so because I thought I would be bringing in some business efficacies and efficiencies, and helping Magic Bus scale. And while that still remains true, there has been a lot that I have had to unlearn as someone who transitioned into this sector.

Having done that, a few lessons stand out—here are some things I think corporates can and should learn from their nonprofit partners.

1. The importance of contextualising projects

Corporates have a tendency to create a product first and then advertise it differently to populations in tier one, two, and three cities; the product doesn’t change, only the advertising does.

Nonprofits on the other hand are very aware that every community is different and has differing requirements from an intervention. Organisations therefore take the time to tailor their programmes for the communities they work with—they address specific challenges, involve people from the communities, and contextualise based on geography and cultural norms.

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Nonprofits are very aware that every community is different and has differing requirements from an intervention.

Let me give you an example—at Magic Bus we have a programme where we provide training for girls who want to be employed in non-traditional roles, such as Uber drivers, solar energy mechanics, technicians etc. But we know that if we move the same programme to a non-metro location—while we will still have girls who want to join the programme—we may not be able to find enough employers who are willing to hire them. This insight, gathered from years of working in rural areas, will inform our decision to add more layers to the intervention should we decide to move it.

We work in 22 states in India and each community we work with is different; the geographies they are based in, their cultural norms, expectations, and so on. Because of this, our approaches are different in different regions and very specific to the communities we work with.

In Chandrapur for instance, our programme draws upon and is led by youth volunteers from communities. But in Bhandara, while we continue to work with youth leaders, our programme is located in schools. This has meant that the programme has to accommodate itself around school timings, holidays and sometimes even teacher absenteeism.

Nonprofits understand the importance of being hyper-local in their programmatic approach as well as the solutions they design. Technology and processes can take you a certain distance, but ultimately, your understanding of the local situation and your ability to work alongside the community to solve identified problems, is what will make your work successful.

At a corporate on the other hand, everything is built around maximising profitability. Contextualising a product or a service for specific audiences requires customisation, which can take a lot of time and money. Since businesses are profit-driven, they look only at returns. They will not invest in—and it does not make business sense for them to—developing a new product or service if the customer base is small.

Related article: Listen to nonprofits

2. The ability to take risks, tweak ongoing projects, and work with limited data

There is often not a lot of up-to-date data available within the development sector. Despite this, nonprofits consistently devise solutions and approaches and work towards their project goals, while tweaking and adjusting their programmes as data becomes available. The absence of data or information doesn’t stop them from innovating and taking on big problems to tackle.

Corporates, on the other hand, are highly unlikely to risk moving on a project at all until they have sufficient data on it; this means that sometimes projects never take off.

Magic bus teacher sitting with students near a tree - corporates

Nonprofits understand the importance of being hyper-local in their programme approach as well as the solutions they design | Photo courtesy: Magic Bus

A great example of this corporate dependency on data is a healthcare technology company that I started several years ago. From the time we had the initial idea, to the time it was ready, we kept adding more and more data and functionality—until it reached a point where we over-designed it; and eventually it never took off!

Corporates need data and information and most often a full-fledged business plan, before they can act. The over-dependence on data for decision making reduces agility for companies, which in turn might impact how innovative they are.

3. Patience

Social change takes time. And nonprofits are good at working towards that change and not getting deterred by how long it takes. Corporates often expect immediate results for anything they invest in; there is a tendency to be driven by shareholder expectations and quarterly results versus building something that would be profitable—economically, socially and environmentally.

Addressing inter-generational problems and deeply entrenched practices and norms cannot be addressed in a few years, leave alone a few quarters.

Most corporates are very results-driven—there is always someone looking over your shoulder saying, ‘where are the results?’. Especially now, with the technological advancements we’ve had, the life-cycle for getting these results has become shorter. It took Ola five years to become a billion dollar company. This is in comparison to companies like GE or Godrej or other older companies, all of whom took much longer. Technology has shortened the life cycle of profitability, and of business models; and investors and business leaders alike have little appetite for patience.

This is in stark contrast to the social sector where one might have to wait three, four, five years to see even incremental change. When I first moved to this sector, my team used to show me impact numbers of 5 percent improvement here, 6 percent there—and I wondered ‘is this good enough’? I thought it was really bad. I have learned since, that it is actually good, because one is addressing inter-generational problems and deeply entrenched practices and norms. None of these can be addressed in a few years, leave alone a few quarters.

Related article: Why can’t nonprofits be more business-like?

4. Empathetic leadership

Nonprofits lean towards having empathetic leadership, and while some corporates are beginning to adopt this, more can be done.

Post the financial crisis of 2008 it’s becoming increasing popular for the corporate world to demonstrate responsible leadership. More corporates are learning the importance of engaging with the social sector. We find many of our funders wanting time off to understand the sector and encouraging their teams to provide domain expertise to organisations in the sector, in return for building traits of empathy and social responsiveness among their people.

I can definitely say that all this experience has made me a much better person personally, and hopefully a better CEO. My journey here of successfully carrying big teams through large scale transformations has yielded phenomenal learnings for me. I wouldn’t be lying if I said that I had never managed anything so complex on the other side, despite being in leadership roles for large national and multinational organisations in my earlier avatar.

This article has resulted from a media partnership with the AVPN India Summit 2018, in which Jayant Rastogi spoke about empowering India for job readiness and entrepreneurship.

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Jayant Rastogi

Jayant Rastogi joined Magic Bus as Chief Executive Officer, India in September 2016. Recently, he was elevated as the global CEO. Jayant comes with more than 25 years of corporate experience and was previously the CEO of Motorola Solutions South Asia and has been in leadership positions for the last 15 years. After Motorola, he had a stint as an investor and entrepreneur co-founding two technology-led ventures—a social venture providing affordable healthcare for the less privileged, and an aggregator platform for commercial transportation.