Nonprofit organizations are often full of highly motivated and enthusiastic professionals striving to make a difference by advancing their mission. In my experience, as I have spent about half of my career doing project management for nonprofits and the other half in the for-profit world, including project, program, and portfolio management for Fortune and Global 500 companies, nonprofits excel at developing new ideas and starting their implementation.
However, the outcomes often fall short of initial expectations, and many of those projects are either canceled or sleepily moving along like zombies. Zombie projects are the worst, as they drain resources, soak up energy and vitality, and rarely, if ever, see completion.
On the brighter side, when nonprofits execute their projects with precision, they can outperform anyone. I still recall my first major leadership experience with a nonprofit. At the time, I worked for a New York-based consulting company and as the Director of Execution Management, I led a major program (a collection of related projects that are logically grouped together to achieve greater synergy and benefits) for a leading nonprofit organization in the publishing industry.
At the onset, I knew we were in trouble. The nonprofit wanted to implement over thirty projects within a five month window. Some projects were significant, including completely redesigning their website, replacing the commerce engine of their website, developing a new product for kids, and more. But after multiple rounds of prioritization and filtering out projects, which took a month, we were left with ten projects and only four months to complete the program.
As the program leader, I had to project optimism. To add to the challenges, the nonprofit firm also hired a new general manager to lead this work, and he started just a week before the official launch of the program. To my surprise, we finished everything on time.
Employees from the nonprofit worked hard and smart. Every day, I witnessed how they collaborated, overcame challenges, and performed activities with the amount of energy that I rarely had seen elsewhere. We launched everything right on time; the webmaster also delivered her first child six hours later. The celebration party was so satisfying.
Since that experience, I have seen firsthand the power of good business management, solid program and project management, and strong empowerment that comes from a mission that people believe in. Sadly, while I had many other successes at nonprofits, only a few have achieved the same resounding high-performance execution as that first experience.
Hence, it has become my professional mission to find ways for organizations to achieve superior business execution sustainably through a synergy of good business acumen and project management, mission-oriented and purposeful work, and an execution-oriented culture and mindset.
Top Performing Nonprofits Outperform Every Other Sector
In 2015, I started a research study to examine the key factors underlying strong business execution, and I created an “execution index” which ranges from 1 to 100, to quantitatively analyze an organization’s ability to execute. To no one’s surprise, the ranking order of poor to strong execution by sector was government (worst), nonprofits and NGOs (somewhat better), for-profit private companies (much better), and for-profit public companies (superior).
But I also noticed high deviations among the nonprofit data. Upon closer examination, I observed that the top 10% of the nonprofits actually perform as well, and in some cases better, than for-profit public companies. In other words, the top performers among the nonprofits outperform every other sector.
Here are the top five reasons why these top performing nonprofits “out-execute” everyone else.
They believe in what they do. Nonprofit employees, in almost all cases, are more enthusiastic and energized about their work. Their energy and vitality set the right tone.
High performing nonprofits have sound business processes and governance, and they run their organizations as real businesses. This means they learned what to do and what NOT to do. These organizations are clear on their priorities and focus on the truly important goals.
Project, Program, and Portfolio Management
These organizations understand the value of good project management. They often create project management offices (PMOs) to oversee prioritization, governance, methodology, performance, communication, and knowledge management.
High performing nonprofits appear to have a highly inclusive and transparent culture where the predominant decision-making style is consensus-driven or participative.
While a consensus-driven culture can be slow to get things started, as in the case of my first nonprofit leadership experience, once agreements are reached, the effectiveness of implementing the decisions was remarkable.
These nonprofits are realistic about their capabilities and rely on good data. Their performance reports, for example, are more objective and believable, leading to superior decision making.
Much of my work and focus has been in helping nonprofit organizations to achieve that enlightened and sustained state of execution excellence where good project management is balanced with strong mission and culture. In my consulting work with nonprofits, one of the biggest challenges is to convince the executives that “less is often more.” As a part of project portfolio management, for example, it is far superior to focus on fewer projects and do them well than to work on many projects but starve them of resources and management attention. In addition to a higher risk of employee burnout, more projects also lead to more distractions and more mistakes.
Robust project management and PMOs (project management offices) can help organizations execute more effectively and efficiently, making the most of their precious resources. The amalgamation of strong mission, business acumen, project management, inclusive culture, and data-driven information creates a powerful blend in which nonprofits can out-compete everyone else.
About the Author
Dr. Te Wu is CEO and CPO of PMO Advisory, a project management training and consulting firm that establishes projects, programs, portfolios, and PMOs for companies, including Global 500 and nonprofit organizations.