Why Leadership Development is Essential for Nonprofits
In all aspects of life, we hear about great leaders. Great business leaders, community leaders, political leaders, and all of the leaders throughout history. It is no secret that great leadership drives success stories no matter what space they operate in. Leadership development is essential for nonprofits who want to stand out in their community and execute their mission with incredible efficiency and success. Nonprofit leadership development has the potential to not only boost your organization with external success but also offers many overlooked opportunities to generate internal value.
The nonprofit sector is massive. If you need more proof of its size and impact, check out our blog on the economic importance of nonprofits. If you did not understand the size of the sector before, it’s mindblowing. With incredible size and resources, the nonprofit sector has the opportunity to take some advice from the for-profit sector when it comes to organization, strategy, and operations. In the past twenty years, nonprofits have grown rapidly in size and impact. Simultaneously, the baby boomer generation has retired or is actively leaving the c-suite of nonprofit organizations. A high turnover rate has continued through today and has been propelled by external hiring. High turnover is expensive for organizations and seriously hurts efficiency. Attacking the root of this problem is essential. The primary cause of turnover cited by executives is compensation (daunting for many nonprofits), but the second most common cause is lack of development and growth opportunities. Let’s take a look at how leadership development can generate value by engaging current leaders and staff.
How does nonprofit leadership development drive external success?
As prominent as the nonprofit sector is, it still has its differences compared to the for-profit sector. If a leader isn’t driving profits in the for-profit sector, something has to change. They are often coached or replaced. In the nonprofit sector, many leaders can safely deliver repeat results without growth. Oftentimes, this is celebrated. Maintaining the status quo is acceptable in many nonprofits. While this may allow for general stability, leaders must be pushed to pursue growth year in and year out in order to better serve the community and establish stronger long-term financial foundations for their organizations.
If the board accepts status quo fundraising, there is rarely anyone left to push leaders to pursue growth. This is what makes leadership development so impactful in many nonprofit organizations. Leaders can get competitive feedback, including criticism, coaching, and encouragement in order to grow. For many leaders, an outside source to guide them is just what they need to reach their full potential and deliver increased value to their organization.
How does nonprofit leadership development drive internal success?
The space outside your organization is “unknown” while inside your organization is “known” territory. There is far less guesswork when dealing with your own organization and staff. Despite this, so many nonprofits look externally for talent before examining and developing what is available internally. Developing internal talent, starting at the top, can create a culture of leadership that trickles down to the whole staff. Developing leadership throughout your staff can highlight successive leadership.
Need more convincing to invest internally? Organizations that feature a high level of leadership maturity are “11 times more likely to have a high number of leaders who can build talent for competitive advantage. And they’re 7 times more likely to have a high number of leaders who can inspire people to follow them” (Deloitte - High-Impact Leadership). Think about what this translates into. Developing talent inspires individuals to stay with the organization. That means that well-developed leaders are growing their current employees’ capacities and simultaneously retaining them. Your organization can have multiple levels of leadership prepared to step up as one generation of leaders steps aside. That’s huge. Losing valuable employees is costly. Hiring external talent is more costly than growing your own. A developed leader is more likely to help your organization avoid external hires and retain more employees. Additionally, this promotes a culture of leadership, advancement, and promotion, pushing all aspects of your organization to pursue growth.
Conclusion
Leadership development is beneficial on multiple levels. It benefits organizations externally by increasing leaders’ drive for growth and improvement year to year. It creates internal benefits by promoting development. Developed leaders develop staff members and retain a greater number of them. This allows for internal hiring and smooth change management in the long term. The result? Maximized efficiency and therefore maximized value. In conclusion, leadership development is an essential feature to increase value and growth for nonprofits.
Is your nonprofit lacking the urge to grow? At NMBL Strategies, we specialize in driving growth. Reach out to us today to learn how we use our 30+ years of nonprofit and small business executive experience to craft plans for leadership development.
