Summary Leadership Studies PBL #5 (Reporting Phase): The Third Sector

Leadership Studies
PBL #5 Notes
Chapter 19: The Challenge of Leadership for the Third Sector
Alex Murdock
The third sector has some distinctive characteristics which marks it out from the public sector:
1. Size of Organization
o Most third sector organizations are far smaller than typical public sector
organizations
2. Leader of Organization
o Few public sector organizations are led by their founder, while this is common in the
third sector
3. Role of Organization
o Third sector organizations do not necessarily have a service provision role (although
a significant proportion do)
o Campaigning or advocacy role  view accepting government contracts as restricting
their freedom of action to engage in this aspect of their role
4. Amount of Independence
o Often construed in terms of a mission which has an underpinning set of values
o Clash of values may appear…
 At a ‘mission level’, if an organization is to seek government funding
or contracts
 In operational practices (public servants are expected to adopt a
position of ‘neutrality’ and professional detachment in the conduct of
their activities)
o Third sector makes widespread use of networks; ‘cross memberships’ are part of the
organizational landscape
5. Leadership
o ‘Passionate leadership’: carries a sense of personal commitment which, for example
attracts people willing to sacrifice a substantial amount of salary
6. Strategy
o Non-profit organizations run on a high level of informal contact and trust as
opposed to the rules and accountability which are part of the public sector landscape
7. Structure
o Third sector organizations…
o Start with an idea which takes time to form and find its expression in formal
organizational structures
o Initially employ no-one, and the majority of such organizations continue in
this form
o Based on volunteering (i.e. enthusiasm and commitment of unpaid members)
o Differs from public sector organizations, which typically arise from existing
structures with paid staff


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,The founder element in leadership
 Many charities are founded by charismatic and driven individuals whose leadership style
was highly appropriate for their initial success and growth
o Founder folly/syndrome  tension which arises when the original founder fails to
adjust his/her leadership style as the organization becomes more structured/formal
 Present in private sector (e.g. family firms)
 Rare in public sector in which leaders move into pre-existing
organizations with formality, staff, and structures

 The founder needs to be an inspirational leader first, and a manager second (if at all)
 Founder role gives credibility to third sector leaders  they ‘earn’ the role
o Few public sector managers can say that they have founded the organization with
no budget, no salary, and no resources

 Founder mythology can be described as passionate leadership
o Definition:
 A strong emotional affinity with the raison d’etre of the organization; a
passion for its beliefs; a desire to succeed for the greater good of the
organization; a high degree of personal energy and enthusiasm for the
cause
o Passion is regarded with caution in public sector and takes place alongside a range
of other pressures and imperatives

Size and diversity matters?
 Leadership in the third sector is dominated by the majority of relatively small
organizations
 Third sector has great diversity in: (1) the degree of complexity, (2) the nature of
operations, and (3) the source of funding
o Cormack and Stanton  these 3 factors make it difficult to arrive at a common
basis for the requirements of a CEO in the third sector
o Two-dimensional model generating a series of clusters:
 Scale
 Main focus of activity (e.g. fundraising, campaigning, service delivery or
membership)
 Substantial part of typical CEO role in smaller organizations is
fundraising

Leader or leadership?
 Day (2001)  leadership emerges with the process of creating shared meanings, both in
terms of sense making and in terms of value added
 Third sector organizations can possess a very strong binding ideology or set of norms
 An organizational form particular to the third sector  federated organization
o Leadership is typically distributed; each local organization is constituted as an
independent organization which belongs to the national body


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, Does public sector contracting matter if the third sector and public sector share their
values?
 Both the public sector and the third sector have been described as possessing strong
value sets
 The Nolan report  describes the 7 principles of public life
 Selflessness, integrity, accountability, honesty, and objectivity are enshrined in the legal
expectation of how trustees of charities will conduct themselves; openness and leadership
are implicit




So third sector values – do they differ?
 Aiken (2001, 2002)  identifies what is distinctive about the values of voluntary and
cooperative organizations
o Their values are the core of their being
o There is no private sector ‘business bottom line’ to fall back on
o The values cannot be maintained by reference to an ‘official government line’;
they need to be sustained and renewed or the organizations concerned will
deteriorate
 Some values encompassed in the Nolan Principles, others not (and in contrast!)
o Paton  devotion, compassion, enthusiasm, solidarity, and defiance
 Contrasts with ‘objectivity’ and ‘accountability’
o Elsons  sociability, reciprocity, collaboration, loyalty, trust
 Charity: “an unlimited loving-kindness towards all others”




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