Good to Great and the Social Sectors, by Jim Collins (New York: Harper, 2005).

Anyone who works within a Christian ministry thinks, at one time or another, that it could be far more effective if operated like a business venture. In a rational management climate, decisions could be made on the basis of their efficiency (read: “stewardship”) and effectiveness (read: “mission”), not hoary tradition or donor eccentricity.

But business management researcher Jim Collins challenges this notion. He believes too many businesses use modern management practices to maintain mediocrity, so “Why would we want to import the practices of mediocrity into the social sectors?” (4).

After the publication of his ground-breaking book, Good to Great, Collins’s critics cited nonprofits as an exception to his principles of organizational greatness. So he undertook a study of 100 nonprofit organizations. He compared matched pairs—i.e., nonprofits of similar size, with similar goals, but very different outcomes (one “great” and the other mediocre or, at best, only “good”). And he found that nonprofits face five critical management issues that seem different from those of secular businesses:

  1. How to calibrate success without business metrics.
  2. How to get things done within a diffuse power structure.
  3. How to get the right people “on the bus,” within social sector constraints.
  4. How to maintain the organization’s economic engine without a profit motive.
  5. How to build momentum for their cause by building the organization’s “brand.”

However, Collins believes these problems do not really set nonprofits apart from for-profits. Instead, he contends that great non-profit organizations excel because they apply to their own situation the same “good-to-great” principles that he identified in the secular world.

Collins does not share specific data or anecdotes from his study of nonprofits to show how he arrived at this conclusion. We must take his word for it (not a good methodology for reporting social research, especially when the researcher has a vested interest in confirming conclusions of a previous study).

He’s right on target when he identifies these five critical management issues of nonprofits. For that reason alone, his prescriptions deserve a hearing in the nonprofit world, and time will tell whether they help us advance the causes for which we were established.