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Learning from public and nonprofit leaders

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in Small Business Tax

Think the government would run better if agency chiefs behaved more like CEOs?

Not according to Good to Great author Jim Collins. Collins is challenging the conventional wisdom that government and nonprofit groups can improve by acting more like businesses.

Nonprofit leaders learn to negotiate a “complex and diffuse power map” in which they lack the direct authority of a corporate leader.

While most business leaders can make decisions and issue orders, public and nonprofit leaders must rely on persuasion, political currency and influence. While a business executive would describe herself as sitting atop a tower of power, a nonprofit leader is a hub within a network of interconnected links.

Collins speculates that, in an increasingly complex world, with a mobile work force and more scrutiny from consumer watchdogs, business leaders can learn a lot from their government and nonprofit counterparts. Instead of falling back on your direct authority, for instance, you can:

• Take direction from your customers and employees who keep closest to changing conditions in the marketplace.

• Persuade your allies, partners, vendors, other collaborators and even critics to join in the mission.

• Work with your constituents on keeping processes open and continually making them better.

Given the choice between a successful Fortune 500 CEO and an equally successful budget director for a large state, Collins says he’d probably choose the budget director to lead a project.

“Our best business leaders,” he says, “may have been trained in non-business environments.”

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