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Excellence In Non-profit Organizations: The Notion Of Organizational Capacity

The context of organizational development differs depending on whether the organization exists for profit or is aimed at fulfilling a broader social purpose, structured as a non-profit.

Whilst there is definitely an overlap in what constitutes good managerial practice across both types of organization, the tools one uses to gauge operational success differ in important respects.

Many conceptual frameworks exist which can help commercial organizations identify ways they can improve their performance. The Baldridge Awards and EFQM, among others, provide frameworks for assessing and rewarding excellence. See my earlier post elaborating on this here (Defining Quality And Excellence: The Holy Grail).

These same frameworks, however, have not been perfectly suited for evaluating non-profit organizations as the mission and objectives of a non-profit naturally differ from those of its commercial counterpart.

A useful concept when evaluating non-profit organizations is that of organizational capacity. USAID provides a succinct definition:

An organization’s ability to achieve its mission and objectives and sustain itself over the long term.

What has proven a bit more elusive is the operationalization of the term in a way that can form the basis for a comprehensive assessment which can then be used to effect process improvements.

I have recently used an online tool developed by McKinsey for use in non-profit contexts. The Organizational Capacity Assessment Tool (OCAT) breaks down the notion into 10 fundamental capacity categories, each consisting of specific dimensions of performance – giving roughly 60 evaluative dimensions one can test against.

Ultimately, this approach can help non-profits assess their operational capacity with a view to identifying strengths to leverage and areas for improvement. Of course doing the assessment is the beginning of the journey. Acting on the results to effect positive change is another story – and therein usually lies the biggest challenge.

Here is my take on what is typically required:

  • Get buy-in across the organization

  • Align on priorities

  • Link improvement efforts to strategic goals

  • Don’t try to do it all at once. Ongoing adaptation and adjustment requires patience and resolve.

  • Track progress and communicate.

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