OKRs and NPOs: Insights from non-profits
Thorsten Eder and Julia Trinko are senior consultants at EDELWEISS CONSULTING – a leading consultancy company based in Austria. In this Voices of OKR piece, ‘OKRs and NPOs’, Thorsten and Julia explore what NPOs do well and what OKR users in the private sector can learn from them.
Peter Drucker on non-profits
When creating a meaningful work environment, companies can learn a lot from non-profit organizations (NPOs). Even Peter Drucker admitted this in the Harvard Business Review in 1989. He said: “The Girl Scouts, the Red Cross, the pastoral churches — our non-profit organizations — are becoming America’s management leaders. In two areas, strategy, and the effectiveness of the board, they are practicing what most American businesses only preach.”
Many NPOs organize their work primarily through volunteers who give up their spare time, which nowadays is considered the most precious resource in human life. For this reason, NPOs must organize the implementation of volunteer work to ensure it is meaningful and sustainable on a long-term basis. Therefore, it is essential to provide answers to the people: What is the mission of our organization? What is the deeper purpose driving it, and what contribution does it make to society? Organizations that cannot provide satisfying answers to these questions will face immense difficulties in convincing volunteers to contribute their valuable time over a more extended period.
Purpose as a source of engagement and productivity
Without giving employees meaning and purpose, they can lack pride in their daily work, resulting in decreased engagement. The daily routine takes its toll, especially when leaders look no further than short-term revenue growth and quick profits for their shareholders.
However, suppose the organization aligns all strategies, plans, and actions with a higher goal that is clearly and widely communicated. In that case, employees understand why they are putting in the effort. Employees who know the meaning of their contributions increase their engagement, as a study by Bain & Company shows. When individuals become genuinely inspired by the purpose of an organization, productivity levels reach 225%, compared to generally satisfied employees with productivity levels of 100%.
The search for meaning not only extends to vision and mission on a corporate level. The meaning and purpose of single tasks and activities are likewise discussed and explained in NPOs. It is this kind of transparent directional guidance for employees that ventures often lack.
Give voice and intangible participation
NPOs are often more open-minded when onboarding new employees. When they hire new team members, the NPO often gives them more autonomy. Employees are often responsible for deciding what type of work they will carry out, where they will work, and how they will perform tasks. This inevitably leads to higher motivation and job satisfaction.
This type of culture leads to a significant competitive advantage: in addition to the increased performance, it adds to the value of the employer’s brand. With so much competition for talent, employers cannot overestimate this benefit.
Recognize and celebrate organizational success
Similarly, whether the organization is an NPO, association, or corporate venture, visible success always helps to keep employee motivation high. It’s important to remember employees can’t always see the impact they are having on sales, turnover, or profits. The secret is to find day-to-day accomplishments and to celebrate, no matter how small. OKRs are suitable for this purpose, as their level of detail and refinement on a team or individual level has the power to reach many more people than the overarching corporate goal might attract.
Take pride in the success of individuals
Another principle of NPOs is to celebrate success, especially the individual achievements of their supporters. Team members are encouraged by the opportunity to have their share of public acknowledgment. Telling their stories plays a significant part in the success of NPOs. Stories allow NPOs to emphasize how many people are involved and what they have achieved. Stories also drive home the message that much is still to do and therefore, it is vital to stay involved. Unfortunately, corporate ventures often lack showing this pride in the organization’s members, demonstrating why it’s a great place to work and how individuals can and do contribute to the big picture of the company.
About Thorsten Eder and Julia Trinko
Thorsten is a consultant, a certified OKR-Coach, and leads a team of three consultants. He supports government, civil society, and special-interest groups in the implementation of multi-stakeholder engagement and facilitates participatory purpose-driven strategies. Julia is a consultant and certified trainer with over ten years of experience of working with teams and organizations. Julia combines her passion for team development with her deep knowledge of organizational development in NPOs.