Nonprofit Advice to Business Schools and MBAs

According to this article in the Times yesterday, Business Schools are struggling to figure out what they should be teaching their students to stop producing Gordon Gekkos who are primarily interested in short-term profits.

That’s easy, and I have the answer and am willing to give it to them for free!

They should be teaching their MBAers to act like the best nonprofits and the creative, ingenious peopel who run them. They should be sending out into the business world executives who understand the principles and power of the Connected Age; people like Premal Shah of Kiva.org, Amanda Rose the extraordinary force behind Twestival and charity:water, and Carie Lewis the creative and humble online marketing manager of the Humane Society.

Here’s what these nonprofit visionaries could teach the  MBA class of 2009:

• Open systems can’t be closed again, and that’s a good thing.  Proprietary thinking, closed systems are antithetical to the Connected Age. This is the crux of the struggle of the newspaper industry right now. (Read David Johnson’s outstanding reflection piece on the newspaper industry to learn more.) Being open to people, ideas, information leads to greater opportunities and greater profitability in the long run.
• Learn to manage networks not organizations. Every person, every company is part of an intricate and growing ecosystem of other people and companies. Executives need to learn to manage networks not companies or organizations to be successful.
• Relationships trump brands. We know how to see through advertising and marketing lingo and can decide if a company is really interested in us or not. Successful organizations create open and honest relationships with us. This happens through conversations online and on land, using tools like Meetup, and Twitter.
• Metrics can’t produce good products.  Wall Street became more interested in making money than investing in good products.  You can spin out all of the fancy metrics and powerpoint presentations that you like, at the end of the day companies make products and nonprofits help people and communities.  When we lose focus on those fundamental things; when we’re more interested in short-term profits and pleasing foundations our products and communities suffer.
• The Cluetrain Manifesto should be required reading for every MBA class.
• Governing boards don’t work, if they did we wouldn’t be in this mess. Every major financial institution had a board of directors that rubber stamped bad plans, bad motives, bad operations on the part of senior executives. The boards of AIG, Bear Sterns, Fannie Mae and Freddie Mac let short-term profits trump common sense and sustainability. As David Renz writes, “Governance is a function and a board is a structure.” Many grassroots nonprofit organizations hae a long history of involving their communities in the governance of their organizations — with the long-term well being of their communities in the forefront of their thinking.

Every MBA class should have a visit from one of these winners of the Skoll Awards for Social Entrepreneurship, so should ever company left on Wall Street.

The tide has shifted and nonprofit entrepreneurs and managers have a lot to teach the business world — if they’d listen.  There is an opportunity right now to do something we’ve never done before; reverse the polarity of excellent organizational practices from the for profit sector to the nonprofit sector; and take what we know has worked well to make nonprofit organizations, particularly those with the DNA of the Connected Age, and reinvent American business.

About these ads