Why Should We Learn with the Third Sector?

We try to attract managers to PMN events from a wide range of organisations and sectors. I am often asked by managers from ‘for profit’ organisations ‘Why should we ask our managers to learn alongside managers from the third sector?’ The implication is that it might ‘set them back’ or ‘slow them down’, or ‘develop skills and knowledge that are not relevant to ‘for profit’ managers’.

Some facts

  • The total turnover of social enterprises is estimated at £27 billion, or 1.3% of the total turnover of all businesses with employees. Their contribution to GDP is estimated to be £8.4 billion.
  • There are around 55,000 social enterprises, and numbers are rising.
  • Since 2004, the Government has invested more than £350 million in the capacity of the third sector.
  • Over £18 million has been allocated to support and develop the social enterprise sector over the next few years.
  • Total public funding (from local and central government) reported by the voluntary and community sector has doubled from less than £5 billion in 1996/97 to more than £10 billion in 2004/05.
  • It is a growing sector.
  • It has cash to spend and demands high quality professional services.
  • It will choose to work wherever possible with partners that share its values and vision. With people that it knows, likes and trusts.
  • It delivers work of great social value. The best staff  demand more than just a good pay packet. They find the sector challenging and rewarding to work with. They meet remarkable people and organisations.
  • Working effectively with the ‘third sector’ – as well as with the ‘for profit’ and ‘public sector’ should be a key part of your strategic thinking.

Jim Collins (of ‘Good to Great’ and ‘Built to Last’ fame) urged the third sector not to ape the practices of the ‘for profits’. Instead he urged the ‘for profits’ to learn lessons from the third sector – about managing people with passion for real social purpose. If you do that well, then profits follow. Both ‘first sector’ and ‘third’ then have to decide the level at which surpluses should be re-invested to pursue the aims of the business and what should be distributed to stakeholders.

Managers face similar challenges whether they are managing in the ‘for profit’, ‘not for profit’ or ‘public’ sectors. Learning alongside colleagues from other sectors enriches the experience and the increases the possibility of doing good business for all.

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