One of the things I love about my work is that I get to interact with leaders from all different spheres of influence: professional services firms, commercial companies, and non-profit organizations. I firmly believe that each has lots to learn from the other, which is why I like connecting smart, well-intentioned people from these different arenas.

David Maister poses an intriguing question on his excellent and widely-read blog about managing professional services firms. The essence of his question is as follows:

What are the differences in managing professionals in non-profit organizations vs. for-profit professional firms?

Quite reasonably, David starts off with a discussion about the difference (positive and negative) that access to cash has in the for-profit and non-profit arenas, especially in reference to how you manage key talent. Access to financial rewards certainly can make a difference – although I’d watch the assumption that non-profits have less money available to them than for-profit firms. Even when that’s true (and I know of some pretty well-funded non-profits), the perceptions of the managers and staff about availability of those funds are not always that different.

I generally agree with Jim Collins’ thinking about the differences and similarities between non-profit and for-profit organizations. Excellence and good management are excellence and good management wherever they’re found. Some tools at the disposal of a for-profit manager (career advancement, financial rewards) are sometimes less available to the non-profit manager. But in either setting, you have to get the people-motivation job done and compensation, to David’s point, is usually a blunt-instrument approach to that motivation.

The tool most obviously available to the non-profit leader that is often left on the shelf by for-profit leaders is the appeal to the Big Cause. Most non-profits have an obvious mission that can rally people and help them connect their personal efforts to the good they are trying to accomplish. Lose sight of this, and the non-profit quickly flounders. This is good news, in a weird way, because that loss of momentum is an early warning sign (long before donations dry up) for non-profit leaders. Get back on mission or risk the future of the organization.

I believe that most for-profits can have similarly noble causes to pursue. To their great disadvantage, they often substitute financial gains (which simply allow them to continue another day/month/year) for the Big Cause they could tap into. By doing so, they unwittingly turn their talent into free agents willing to shop themselves to other organizations who can offer better meaning and compensation.

Who else wants to comment?  What’s the Big Cause for your organization, whether its’ for-profit or not?