Business Leaders Can Learn from Their Peers

A LEADER IN BUSINESS TODAY needs to work across all types of boundaries to be effective. National, organizational and cultural borders are all part of the leader’s domain, and many of us have become comfortable traversing them. But there is still one set of boundaries that all too often trips up leaders as they rise to the top, and that’s those among economic sectors. I find that even experienced leaders perceive high walls among the public, private and nonprofit sectors, causing them to underestimate the applicability of tools and approaches used in areas other than their own.

Yet a new standard of leadership is emerging that will destroy this last boundary once and for all. The rule in 21st century economies is that there are no true boundaries, only problems to be solved and opportunities to be captured. Future leaders will be judged on how well they can tap all three sectors to achieve organizational goals.

First, Get the Message

Elite leaders have always recognized the advantages and disadvantages of each sector and charted careers that cross sector lines. But today, no leader at any level can afford to view sectors as stovepipes, thanks to a few key trends:

• A higher standard is being set. Leadership models are changing. New leaders in each sector are being assessed for their future potential based on a broad experience mix and their ability to solve problems, not for their career track in one particular sector. Aspiring leaders who want to distinguish themselves must test their skills on a broader playing field to be acknowledged as the best.
• Public and stakeholder expectations are higher. Global corporations, governmental entities, nonprofits and even startups are now expected to accept responsibility and accountability for public, global and local political issues.
• The emperor has no clothes. Well-worn sector myths have been exposed as fiction for all but the most stubborn observers. Private sector creativity is not the sole driving force of innovation. Public sector service ethics and economies of scale have never been as beneficial as many in that sector believe. And nonprofit independence has never been as inviolate as it pretends, whether for tax or fund-raising reasons.

Second, Use All Available Means

Each sector has unique advantages and disadvantages. Savvy leaders learn from the best leaders and organizations, no matter which sector they inhabit.

• Public: Some of the best management and leadership in the world can be found where the strictest bottom line of all exists?life. Just look at the Marine Corps or the Coast Guard, which are becoming management models for American business. Government at its best is good at scale, with not only massive resources for massive problems but also people experienced at handling large, complex problems, technologies and deals; such individuals can be invaluable in large corporations with similar scope.
• Private: Entrepreneurship, startups, incubators, corporate financing, market discipline and the bankruptcy courts show the benefits over time of a portfolio approach to problem solving and the capacity for quickly mobilizing capital and resources to emerging social needs. Public and nonprofit executives would do well to study and learn from leading venture funds such as Kleiner, Perkins, Caufield & Byers or internal venture operations at companies such as Nokia.
• Nonprofit: At its best, the greatest strength of the nonprofit sector is its independence and objectivity, with a focus on the problem to be solved, not just the politics or the profits. Organizations like The Nature Conservancy and The Salvation Army have demonstrated the ability to bring techniques and resources together from all sectors to accomplish a clearly defined mission in a way that any CEO or government executive could imitate with pride.

Third, Change the Way You Work

During a long career of work spanning all three of these sectors, I’ve distilled five steps to help me lead across boundaries:

• Alter your mind-set. Look at each sector not as a separate environment but as a resource. For me, the simplest example is strategic research and information gathering. Government and nonprofit information can be free from bias in a way that private sector research cannot. Private sector research can have a specificity that no public or nonprofit agency could generate. A combination forms the most powerful foundation for strategic decision making.
• Build your relationships. Construct your network of colleagues across sectors. Get to know people who are tackling the same types of problems but from a different sector and point of view. I never miss an opportunity to network with leaders who come from highly varied backgrounds. Your perspective on leadership issues will be enhanced simply by seeing things from another’s viewpoint.
• Develop integrated strategies. Once you’ve defined your goals, develop strategies for achieving them that use all the sectors. For example, in business, look for leverage points through lobbyists to influence public policy that may affect your company. Or partner with specialized nonprofits that are aligned with your interests. In an agency or nonprofit, learn how to involve private sector resources and strategies that will align profit motives with the achievement of your goals.
• Create cross-sector solutions. Whatever solutions you develop to solve each of your problems, think about requirements across all three sectors before you proceed past the design phase. For example, reporting and data acquisition interfaces with public systems, information sharing or knowledge pooling with nonprofits, and value-chain integration with industry systems can all increase the potency of your solutions.
• Focus on results. Make sure you’ve identified the risk factors that could affect your execution in each of the sectors. Risks could be competitive in the private sector, regulatory or political in government, or they could be public relations issues with nonprofits that might have an opposing interest.

Whether you’re already in a leadership position or seeking to develop your leadership potential, chances are you’ll confront a career hurdle or opportunity that can be overcome only by working across sector boundaries. The earlier you open your mind to the possibility, develop your network, get experience with cross-sector strategies and solutions, and learn the ropes of managing cross-sector risk, the more likely you are to meet the tests of 21st century leadership.