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Are Nonprofit Leaders More Effective Than Corporate Execs?

(Feb. 4, 2008) Nonprofit leaders scored significantly higher than their for-profit counterparts in a recent study about leadership practices conducted by The Nonprofit Quarterly.

More than 2,500 management leaders in both the nonprofit and for-profit sectors were studied through feedback surveys submitted by peers, direct reports and managers for a total of 22,859 respondents. Nonprofit leaders outscored corporate executives in 14 out of the 17 aspects of leadership examined in the study, including persuasiveness, risk-tasking, demonstration of effectiveness and vision.

Nonprofit executives scored significantly higher in categories related to sensitivity to people and situations and the use of personal vs. hierarchical power. These categories include encouraging participation, persuasiveness, and openness to feedback, sharing credit, demonstration of effectiveness (achieving the desired outcomes) and use of lasting power.

For-profit executives scored higher in the categories of push/pressure, energy and coping with stress.

Other key findings from the study include:

  • Nonprofit leaders tend to rate themselves lower than survey respondents did, while for-profit leaders rate themselves higher than did those who evaluated them.
  • Peer ratings of nonprofit leaders were higher than peer ratings of for-profit leaders in all 17 dimensions.
  • Differences in responses on leadership effectiveness were often affected by respondents’ relationship to leaders.

“We should not be surprised by the findings of this nonprofit leadership study,” said Jim Collins, author of the best-selling business studies Good to Great and Built to Last, in a press release. “In executive leadership, the individual leader has enough concentrated power to simply make the right decisions. Legislative leadership, on the other hand, relies more on persuasion, political currency and shared interests to create the conditions for the right decisions to happen. For this reason, we should expect to see very high leadership ratings in the social sectors, as true leadership only exists if people follow when they have the freedom to not follow.”

Respondents assessed leaders through the Clark-Wilson Survey of Leadership Practices (SLP), a feedback tool used to rate leaders within the corporate sector. SLP is a 360-degree, or multirater, feedback survey that provides insight on 17 leadership categories or dimensions, each representing leadership skills or practices.

A complete story about the report can be found on The Nonprofit Quarterly website.

The Nonprofit Quarterly is printed four times a year, with each issue focusing on a theme of importance to the nonprofit sector.

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