The third sector is often described as the 'not-for-profit' sector such as charities and services. One of the things we often find is that coaching within the third sector is fundamentally different to coaching in the corporate sector. The relationships with key stakeholders are different and the measure of success is often not related to costs, but to the benefit of people and the organisation. If you're working within the Third Sector then this episode is a must-listen.
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Welcome to this edition of The Coaching Conversation. This week I really wanted to talk about coaching in the third sector. The third sector is often described as the not-for-profit sector which includes charities, trade associations, clubs etc. It sometimes includes local authority organisations that have effectively adopted an independent status, but they're there to perform a service, not simply to make a profit.
Now, one of the things that we find about coaching in the third sector is that actually, the start points for the individuals concerned are fundamentally different to normal commercial organisations. I'll explain.
First of all, the description, of a not-for-profit is a misnomer. Clearly, organisations have to be financially secure. They have to have an income, which is above their expenses. Otherwise, ultimately, they will fail. The reality is it's not for distributable profit - any surpluses that are generated are retained to maintain the services for the benefit of the people that they are serving through their organisation. So that's a starting point.
It really means that the relationship with shareholders or stakeholders is fundamentally different. The measurement of success (whilst financial success is imperative) isn't about financial success; the measure of success is are we doing what we're here to do long? Are we doing it well enough? And are we doing it to the benefit of the people that we're supposed to be helping that stop? It's interesting because it's different.
The second starting point is that most third-sector organisations, particularly for the leadership have a complicated stakeholder profile. In an ordinary commercial organisation, it's pretty clear cut - there are shareholders who were looking for a return on their investment and there are legal compliances that need to be had whether its health safety, whether HR, company law and so on. But nonetheless, the actual ownership and purpose of the organisation are pretty clear cut.
When it comes to a third-sector organisation, that's not true. First of all, there are the beneficiaries and it depends on exactly what the organisation is there to do. If it's a charity, it's for the beneficiaries of the charitable works that the organisation performs. If it's a trade association, it's for the membership. If it's a local authority organisation, it could well be for the wider community of that particular local authority. So, to start with the first stakeholder community are the beneficiaries, the second stakeholder is people like the trustees or the board of directors or those responsible for the safe governance, the proper governance of the organisation in line with legislation and in line with best practice and in line with common sense. And they're often volunteers themselves, often people who are doing this because they have a real desire to be involved in that kind of organisation. And they may come with professional skills or experiences or insights. They may be a lay person, but nonetheless, they're there for good reason in the sense that they want the organisation to be successful in its endeavour.
The third stakeholder can often be regulation, can often be governance itself in order to prevent abusive charitable donations, in order to prevent misuse of resources that are there perhaps from a local authority. And so, there are tight rules around the kind of operations and the way in which an organisation can operate, which is managed and implemented by third-party bodies. And we know about the charities commission, but there are a bunch of others that are out there that are designed to protect and have authority over the assets of the organisation.
And then finally, and by no means of least importance, are the staff of the organisation. Often the staff of third sector organisations are a combination of salaried or paid members and others who are simply volunteers; people who give that time freely to support the activity of the charity.
So as a manager in that organisation, as a leader in that organisation, you've got these multiple stakeholders to start with; people who have different perspectives on the things that you are managing and leading, and a different set of standards by which you're going to be measuring success or failure.
In that environment, you come to a coaching program and an entirely different perspective than perhaps an executive from a commercial organisation. So as a coach, sometimes the work that I'm doing with someone from that particular field is more complex, it's more subtle, it's more nuanced. The challenges may be very similar in some ways, but the way in which the Executive, the leader, is going to go about developing themselves is a bit more sophisticated; it's a bit more challenging.
If I give a couple of examples, it will perhaps illustrate what I mean. As a business leader in a commercial organisation, taking steps to improve profitability would be seen as simply the right thing provided it didn't damage any environment or people, or in any way disadvantage the organisation, you would be encouraged to take that path. In the third sector organization, that's not necessarily true. Provided the organisation is producing a surplus, there may be no desire whatsoever on behalf of the trustees or other members of the governance of the organisation to make access services. It may be seen as being entirely inappropriate.
if, for example, you look at a housing association, if it were to continually seek excessive profits, by racking up rents to its tenants, beyond their ability to pay that would clearly be inappropriate. You can go on with these examples. If it's an organization that's providing care, but it charges for some of those services and if it overcharges, the very people it's there to serve could be being disadvantaged. So, the pure pursuit of profit might not be as simple as you might think.
Another example of why it's different... as a manager or leader in a commercial organisation, investing in developing your people is seen as a key driver to increasing performance. But it does require those people equally to want to develop what they want to grow and be better at what they do and enjoy more of a career. That may not be the case with volunteers, they may simply want to go and give that time. They're doing the best they can, but they have no real desire to go beyond that level of commitment. So how do you motivate them as the business leaders in a third sector organisation, to go that extra mile? It's a real challenge; perhaps you shouldn't press it? Perhaps it's not appropriate to ask more fromvpeople who are volunteers?
One of the aspects that we see particularly when talking about staff in a third sector organisation, particularly charities) is that there is confusion between whether what it's providing is a benevolent service to others, or whether it should be operating more benevolently towards its staff. And that sounded like a crazy, crazy conflict, but the truth is the beneficiaries of whatever the charitable organisation is, what their charitable endeavour is, other people that are supposed to be enjoying that benefit. The paid staff are really asked to do their best and to work with that end in mind, and that doesn't mean they should expect to be managed differently from a commercial organisation, but they may have that expectation. So, you can see that the starting point for any executive from a third sector organisation coming to a coaching program, is fundamentally different to their commercial counterpart.
Another facet is that often they're there for very, very dedicated reasons. They're there because they're passionate about the functionality of that charity or that trade association. They deeply, deeply want to make that situation better for those beneficiaries. And so, they are often really fixated, and by that, I mean motivated, around doing the very, very best job they can, which often means they're pricing themselves under undue stress.
And the final piece of this particular jigsaw is that the whole of the team could be like this; the whole of the senior leadership team could be people who are truly dedicated to wanting to help the people that their organisation is aimed at. However, they come at it from different angles, just as in any other organisation that different perspectives, and different personal contexts. And that can lead to a very difficult challenge for the leader to make sure that everybody is on message, on the same page and is truly working in the same direction, even though they are genuinely motivated to do that.
So as a coach and the third sector, you've got to be absolutely conscious that these people have a different, a not unique, but certainly different perspective on their work situation, their experiences at work, and why they go to work. Often, therefore, when you are a coach in the third sector, it's more demanding on you; it's more demanding on you to find ways of helping the coachee discover the way forward for them.
So, there you have it; coaching in the third sector - it's more difficult than it looks, but it's really important to be able to help those people, and it’s sometimes a real challenge for the coach too.
That was the latest edition of The Coaching Conversation. I hope you found it interesting. I hope you found it useful. You can find out more about our coaching programmes at theexecutivemindset.co.uk
If you want to reach out you can send us an email at email@example.com you can book a free 15-minute coaching session at theexecutivemindset.co.uk which will give you a really good feel for how coaching can help you.
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