08 Nov. 2017 | Comments (0)
Businesses that find new solutions to address social, economic, and environmental problems can mitigate risks, reduce costs, and grow profits and value. Unfortunately, many companies lack effective ways to stimulate leadership, creativity, and innovation among their workforces. Better World Leaders: The Nonprofit Board Leadership Study, released last week, reveals that by engaging employees in board service, companies develop their human capital for leadership in innovation. An earlier post showed that nonprofit board service is an effective pathway for companies to advance workplace diversity and inclusion. This post focuses on the benefits of nonprofit board service for employees to develop valuable skills that they bring back and effectively use at work.
It is evident that leadership development for new challenges in a dynamic world is essential for companies to grow shareholder value. Unfortunately, as shown by McKinsey, traditional leadership development programs fail to achieve the desired results: “According to a recent Fortune survey, only 7 percent of CEOs believe their companies are building effective global leaders, and just 10 percent said that their leadership-development initiatives have a clear business impact. Our latest research has a similar message: only 11 percent of more than 500 executives we polled around the globe strongly agreed with the statement that their leadership-development interventions achieve and sustain the desired results.”
Importantly, this new study demonstrates that board service is an effective means to develop leaders for business. Eighty-one percent of respondents who serve on boards rise to leadership positions, including board chair, vice chair/president, secretary, and treasurer. Nearly half serve as committee chairs. By gaining leadership experience on boards to solve community problems, employees can become effective leaders in finding innovative solutions at their companies.
People develop as leaders through experience, rather than by learning in passive settings. The McKinsey article explains that “every successful leader tells stories of how he or she developed leadership capabilities by dealing with a real problem in a specific context, and our survey provides supporting evidence for these anecdotes: companies with successful leadership-development programs were four to five times more likely to require participants to apply their learnings in new settings over an extended period and to practice them in their job… This is just one of several modern adult-learning principles grounded in neuroscience that companies can employ to speed the behavior and mind-set shifts leaders need to thrive in today’s fast-changing environment.”
Respondents indicated that they develop skills that drive success in business, including community relations (64 percent), board governance (63 percent), communications (60 percent), networking (58 percent), decision-making (53 percent), strategic planning (52 percent), and consensus-building (51 percent). Furthermore, nearly half of respondents who serve on boards also report that they develop proficiency in critical thinking and problem solving, creativity, and innovation.
The level of satisfaction among those who serve on nonprofit boards is compelling. Nearly every respondent reported that the work of the nonprofit is meaningful to them (97 percent), that they are able to add value (95 percent), and that they would recommend nonprofit board service to their friends and colleagues (99.5 percent).
Businesspeople who serve on boards confront challenges that dynamize their leadership, creativity, and innovation. This experience and expertise will help their companies grow value. Given the positive reception to board service by employees, it seems that increasing and enhancing board opportunities through company training and matching programs would be a win-win-win for companies, their employees, and communities.
The Better World Leadership study was conducted with the World Environment Center, and with the sponsorship and participation of American Express, Dow Chemical, HP, Johnson Controls, PIMCO, and Symantec. Datamaran provided big data analysis of corporate reporting trends which is in the Appendix of the study.
 Alice Korngold, A Better World, Inc.: How Companies Profit by Solving Global Problems…Where Governments Cannot, (New York: Palgrave Macmillan), 2014.
 Claudio Feser, Nicolai Nielsen, and Michael Rennie, “What’s Missing in Leadership Development?” McKinsey Quarterly, August, 2017, (https://www.mckinsey.com/global-themes/leadership/whats-missing-in-leadership-development).
 Fesser, Nielsen, and Rennie, “What’s Missing in Leadership Development?”