Five Best Practices for Effectively Tapping a Commercial Leader for a Not-for-Profit Role

As more leaders look to make the shift from the commercial sector to a not-for-profit setting (as we explored in this article), organizations are grappling with how to optimize the value of this coveted talent. The leap from one world to the other is a major one, creating challenges for both the incoming leader and the enterprise.

How can not-for-profits leverage the value of a leader coming from a completely different environment and ensure a successful experience? These five best practices are proven to make a significant impact. 

1. Ensure Your Organizational Readiness

An essential first step happens before you post the position: Making sure you’re ready for a senior leader from outside the not-for-profit world. Organizational readiness is a critical success factor in any major change—and hiring an executive who differs from your norm falls into that category.

A willingness to look outside your sector for new leadership implies a desire for change. Yet, it’s possible the organization is more prepared for the end goal than everything that needs to happen to reach that future state.

Surveying your stakeholders will help you assess whether your not-for-profit is ready to bring in a senior leader from a commercial environment. Find out how the board, management team, and other staff members view the current state of the organization. What gaps do they see? Do they view anything as off-limits in terms of change? What risks do they fear in recruiting outside your sector? Go beyond an email survey and add one-on-one interviews or focus groups to gain deeper insights. Tapping an external consultant to lead the discovery keeps internal biases from seeping in and typically elicits more candid input.

2. Establish Your Ideal Leader Profile

While internal surveys can tell you a lot about the organization’s willingness to accept a leader from outside your sector, leaning solely on your internal team to guide the type of leader you need carries risk. Often, internal stakeholders are too close to the issue to objectively assess what the organization needs.

In one of our not-for-profit engagements, the board laid out in detail the type of executive director they sought. To supplement their input, we spoke with about 50 stakeholders, including external committee members, former board members, and current and lapsed donors. What we heard contrasted starkly with the board’s direction. After much discussion, the board changed its view, revised the desired director profile, and the newly hired leader thrived.

One word of caution: Some not-for-profits covet a heavy-hitter public figure to leverage their name and their big donor connections. This approach only works when you have the infrastructure to compensate for a leader who is likely to be much less hands-on than most not-for-profits need.  

3. Use Objective Assessment Tools

Evaluating candidates always demands a thorough, objective approach, but it’s even more vital when looking outside your sector. Many not-for-profits use assessment instruments to identify top contenders and help predict how well the candidate would perform on the job.

A reliable psychometric assessment tool will evaluate the candidate’s behaviors, interpersonal skills, and motivations, helping to supplement any assessments of their technical skills. The exercise can help your recruiting committee answer key questions like these:

• What’s driving this individual to switch gears and move to a different work environment?
•          What are their long-term aspirations?
•          Is the candidate aligned with your organization’s mission and passionate about doing the work it will take to fulfill it?
•          Do they have a learning mindset and a willingness to adapt to new situations?
•          Do they demonstrate leadership agility (which includes dexterity, interpersonal savvy, personal spirit, and growth proficiency)?
•          Do they have the skills and insights to understand which levers they can pull to effect change within a not-for-profit environment?
•          Are they under the misconception that leading a not-for-profit will be easier than leading a commercial organization?
• Do they tend toward a command-and-control approach (which won’t be effective if the not-for-profit has a more democratic culture)?

4. Engage in Candid Communication

Honest, open communication with candidates is always critical, and even more so when they’re accustomed to a much different environment than they’ll be joining. While you want to sell the right candidate on the role and the organization, you need to accurately convey what to expect; otherwise, you might be back to filling a vacant seat soon.

Some not-for-profits prefer to include a diverse group of employees in the hiring process, including those who would report to the new leader, but be wary about using them as interviewers. If an employee is openly vocal about a candidate who ends up being selected for the role, they might fear retribution. It’s typically safer and more effective to involve employees in activities like creating the job description or meeting with candidates informally over lunch.

5. Don’t Shortcut Onboarding

When you bring in a leader who is unfamiliar with the not-for-profit world, proper onboarding is vital. A thorough, thoughtful onboarding process should incorporate best practices like the following.

•           Set clear expectations about the incoming leader’s priorities. They’ll be eager to make their mark and likely to take big swings; just be sure they’re choosing the right areas of focus.  
•          Establish equally clear expectations about the board’s communication preferences, including the type, format, and cadence of communication they want from the new leader.
•          Schedule regular check-ins with the board, culminating in a structured annual performance review. These interim sessions can provide assurance that the leader is on track or identify the need to course-correct.  
•          If you already have a strategic plan, don’t just share it with the new leader; allow them room to add their perspectives. An objective viewpoint is likely one of the benefits you hope to gain from hiring outside your sector.
•          Ask the board to share insights with the new leader on how to build relationships with your donors. The board should also reach out to donors to convey the value this individual brings to the organization.
•          If the board needed to step into a management role during an unexpected leadership departure, make sure they shift back to their governance function right away. A leader from the commercial world might be sensitive to this dynamic, especially if they’re unaccustomed to it.

Not-for-profits are increasingly open to recruiting leaders with commercial backgrounds, especially when the organization sets aggressive growth goals, sees a need for a major strategy change, or wishes to gain greater operational efficiencies. If you decide to tap a leader from outside your sector, a best practices approach to hiring and onboarding will enable you to fully optimize their value and set a foundation for success.

The Leadership Advisory Practice at Odgers Berndtson helps organizations discover and develop leaders, strengthen value-creating teams, and prepare for what’s next. Learn how our highly experienced assessors and coaches can help you and your team make a positive impact on your organization and those around you.