Nonprofit Secrets Corporations Can Learn From
Where Nonprofits Are Outperforming For-Profits, and Why
My professional project management and management consulting career spans across both mission-driven nonprofits and prominent for-profit organizations. In general, for-profit companies are much better at project execution. A significant part of the reason is that for-profit companies often have much greater resources at their disposal. They have the funding to hire strong professionals to lead projects and the resources that most nonprofit organizations cannot easily compete with. However, in a study I conducted a few years ago about strategic business execution and project management, the result showed that the top 10% of nonprofits consistently out-compete everyone else on projects.
Why are nonprofits outcompeting for-profit companies on projects?
The answer is simple: nonprofits have powerful missions, and their employees believe in those missions. In project execution, these beliefs translate to enthusiasm and energy, collaboration, communication, and the willingness to tackle and overcome obstacles. This strong belief in their causes can overcome many resource gaps. Take Vladimir Putin’s war in Ukraine. On paper, it is a completely lopsided war. Russia’s resources are favorable in practically all military measures, from weapons and technology to the sheer size of its military. Yet, after a year and half, Ukraine is still fighting back and rather successfully. Naturally, much of the credit goes to Ukraine’s allies who are providing military, humanitarian, and political support. But the fact that Ukraine stands strong is a testament to the power of their mission. As President Volodymyr Zelensky famously responded in an April 2023 interview with CNN’s Jake Tapper when Tapper asked, “Is Ukraine going to win the war?” Without a thought and with the greatest sincerity, Zelensky responded “Yes, of course… and will!”
Nonprofit organizations are full of highly motivated professionals striving to make a difference by advancing their callings. When nonprofits execute their projects with the same degree of project management dexterity as for-profit organizations, and with the added ingredient of mission or purpose, they can achieve higher performance. 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, 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 a number of projects, which took a month to accomplish, we were left with ten projects and only four months to complete the entire program.
To add to the challenges, the nonprofit organization also hired a new general manager to lead this work, and he started just a week before the official launch of the program. As the program leader, I had to project optimism to others. But I still recall the sleepless nights trying to determine the best project plans and coordination. Yet, just two weeks into the start of the project, and to my surprise, we were surpassing our aggressive targets. We finished everything on time, including the most controversial aspects of the website redesign. Employees from the nonprofit worked hard and smart. Every day I witnessed how they collaborated, raising issues and risks, and the speedy resolution from the governance team. We overcame challenges and performed project activities with an effectiveness that I had rarely seen elsewhere. It was every project manager’s dream to work with a team of such dedication and performance. We launched everything right on time, even with the webmaster delivering 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, I have never encountered such a caliber of teaming and project execution in the for-profit world. While there were many successes and high-quality teams with my for-profit clients, none had the same energy level, dedication, and motivation. Hence, it has become my professional mission to find ways for companies to achieve superior and sustainable project execution through a synergy of good business acumen and project management, mission-oriented and purposeful work, and an execution-oriented culture and mindset.
What for-profit organizations can learn from non-profits about project management
Have a Vision – There are few things more powerful than a shared vision, and it can be the spark that transforms an average team to a high-performance team. People have to believe in what they do. While not every project is about changing the world, they can still be exciting if you find the “why” and mission in the project. Whether a project will provide solutions, make business processes more efficient, or improve your value proposition for your customers, it is essential for project executives to develop a vision for their projects.
Communicate Your Vision and Solicit Team Feedback – Developing an exciting vision is just the first step. Project sponsors and managers must share this vision with their team, obtain their feedback, and hopefully their collective buy-in. It is not enough to passively include it in the project charter or to discuss it in the project’s kick-off meeting. This is also a golden opportunity to seek input leading to improvements.
Create an Inclusive Project Culture – Businesses often favor quick starts, sometimes steamrolling over some details in the process. Nonprofits are more likely to be consensus driven and participative. A slower start may be the best cure to many downstream implementation problems. Benjamin Franklin famously advised fire-threatened Philadelphians in 1736 that, “An ounce of prevention is worth a pound of cure.” Hence, the next time you are rushed to start, create some space to think through the important project questions, such as why, what, who, where, when, and how; not just by yourself but with the core project team. There is a time for action and there is a time to be more inclusive in your approach.
Select the Best People – When project managers can build their own team and assemble them wisely, they have the opportunity to build highly capable and resilient teams. One of the best ways to increase success and mitigate threats is by building the best team you can afford. After all, strategic projects have many uncertainties. Capable people are a source of tremendous resiliency. Every project is different, and the “best people” depends on the circumstances. For example, if you are tackling a bleeding edge technology project, technical acumen is likely to be the most important quality you look for. If you are implementing an enterprise resource planning application such as SAP or Oracle, that transforms business operations, technical competency may be secondary to softer skills.
Understand Project, Program, and Portfolio Management – Naturally, to achieve high project performance requires your organizations to adopt good project management, not just for the implementation team but also the complimentary teams that support the project. These can include portfolio management for prioritization and governance, project management offices (PMOs) for methodology and performance support, organization change for adoption, and risk management capabilities to provide guardrails in the face of uncertainties.
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 500s and nonprofit organizations.
He is an Associate Professor at Montclair State University and Chair of Project Management Institute’s Portfolio Management Standard Committee. Te is certified in Portfolio, Program, Project, and Risk Management.