Looking at the healthiest NFP organisations from the McKinsey & Company OHI survey, research found a pattern of three essential capabilities: talent growth, execution excellence and system shaping.
Our latest report in collaboration with McKinsey & Company examines what makes a not-for-profit organisation “healthy”.
Research finds in the not-for-profit sector, there is a high level of focus on what it takes to shape an environment and a system. Many organisations that participated in the research say their core strength is shaping how society thinks about an issue.
Understanding a system involves understanding all the people, issues and events that interact in that environment. Shaping the system builds on understanding the system; it requires being involved in defining the problem, and implementing good solutions that continually update and change as the system evolves.
ClimateWorks Centre shares how through a focus on cross-sector experience for staff and shared ownership of outcomes helps support their mission.
Case study – ClimateWorks Centre
The most critical enabler of innovation and therefore impact for ClimateWorks Centre, an organisation focussed on reaching net-zero emissions, has been having funders who ‘defined the mission, not the method’. The organisation has embedded this approach internally through a focus on cross-sector experience and shared ownership.
Our funders’ focus on outcomes has always been a driving force,’ explains ClimateWorks Centre CEO Anna Skarbek. “Over many different iterations of our approach, they have held us to account based on whether emissions reduction was actually happening at scale.
For Skarbek, this mindset has helped the organisation stay focussed, despite being in a field in which outcomes are difficult to attribute. ‘It has allowed us to say no to other funding or projects that may have taken us off track,’ she reflects. ‘I remember the choices we didn’t make, as much as the ones we made.’
Skarbek is frank about the imperative for ClimateWorks to see themselves as part of a bigger ecosystem. ‘We were set up to be mission-oriented; we don’t exist for our own sake,’ says Skarbek.
‘So we start at the end goal, and work backwards to what it will take to get there, and where the biggest gaps are. We ask, “is someone already doing this?”, and partner where we can, so we’re only filling the gaps that best fit our skills and where the greatest impact would be from a systems perspective.’
Skarbek recognises that ClimateWorks’ position as a ‘bridge organisation’, driving new thinking within the ecosystem, necessitates hiring for—and cultivating—cross-sector experience.
‘We are in the business of influence, so you have to be in a place of understanding someone’s position to do that.’
Employee exposure to new topics and experiences outside the organisation is vital. As Skarbek notes, ‘Monoculture is not good for biodiversity or intellectual diversity—it is critical for people to get experience elsewhere. We had a golden rule—say yes to experiences that put you in very different environments, particularly ones where the power lies.’
Employees are also empowered to be innovative through a sense of shared ownership and apprenticeship. ‘Ownership of the outcome means we can give leaders greater autonomy to play to their strengths.’
For Skarbek, developing this in younger staff is about coaching on the job. ‘An apprenticeship model is critical for us—we overinvest in pre-briefing and de-briefing with staff about the context, to build that collective sense of ownership,’ she explains. ‘This means even our most junior staff have a stake, and a strong understanding of our mission and how we seek to achieve it. That empowers them to be solving for it in all the decisions they make.
*About this research – The Australian Scholarships Foundation collaborated with McKinsey & Company for this research. The research was based on McKinsey’s ‘Organisational Health Index (OHI)’ diagnostic tool. McKinsey have used the OHI with 2000+ organisations (6 million+ responses) globally over two decades. The OHI measures how ‘healthy’ an organisation is. How it aligns around mission and strategy, executes with excellence, and renews itself to sustainably achieve its aspirations.
Findings are based on 4,000+ OHI survey responses across 37 prominent Australian social sector organisations. Also sector CEO roundtables and in-depth case studies on non-profits who are out-performing, even in the current environment.
Sharing stories to support organisational health
We’d like to share more insights like these to help improve not-for-profit staff capabilities and support organisational health and growth. If your organisation perform well at one or more of the three key capabilities this latest report has highlighted (talent growth, execution excellence and system shaping) we would love to hear from you. Please contact us if you are open/willing to share some of your insights and lessons with others in the sector.
Read more of our insights on not-for-profit capability building here.
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