Good to Great and the Social Sectors

1. Social Sector Greatness Requires Redefining Success Metrics

It doesn't really matter whether you can quantify your results. What matters is that you rigorously assemble evidence—quantitative or qualitative—to track your progress.

Redefining success. In the social sector, greatness isn't measured by profit but by mission fulfillment. Organizations must develop rigorous, mission-aligned metrics to gauge their performance and impact. This often requires creativity and a shift from input-focused measures (like budget allocation) to output-focused ones (like lives changed or problems solved).

Evidence-based approach. Leaders should think like scientists or trial lawyers, gathering a body of evidence to demonstrate progress. This might include:

• Qualitative feedback from beneficiaries
• Quantitative data on program outcomes
• External recognition or awards
• Comparative performance against similar organizations

The key is consistency and rigor in tracking chosen metrics over time, allowing organizations to measure improvement and drive toward greatness.

2. Level 5 Leadership: Blending Humility and Will in Diffuse Power Structures

Level 5 leadership is not about being "soft" or "nice" or purely "inclusive" or "consensus-building." The whole point of Level 5 is to make sure the right decisions happen—no matter how difficult or painful—for the long-term greatness of the institution and the achievement of its mission, independent of consensus or popularity.

Humble yet determined. Level 5 leaders in the social sector combine personal humility with an unwavering commitment to the organization's mission. They navigate complex power structures by building coalitions, using persuasion, and leveraging shared interests.

Legislative leadership. Unlike business CEOs with concentrated power, social sector leaders often operate in a "legislative" environment. This requires:

• Building consensus without compromising on core principles
• Utilizing "soft power" to influence without direct authority
• Balancing multiple stakeholder interests while staying mission-focused
• Making tough decisions that may be unpopular but serve the long-term good

Level 5 leaders in these contexts must be skilled at both executive decision-making and legislative maneuvering to drive their organizations toward greatness.

3. First Who: Prioritizing the Right People Despite Constraints

Selectivity led to credibility with donors, which increased funding, which made it possible to attract and select even more young people into the program.

Talent over resources. In the social sector, having the right people is even more critical than in business due to limited financial incentives. Organizations must focus on attracting those intrinsically motivated by the mission.

Creative recruitment and retention:

• Leverage the mission's emotional appeal to attract passionate individuals
• Create a selective process to increase perceived value of positions
• Use early assessment mechanisms to identify top performers
• Build a culture that retains high performers through non-monetary rewards
• Invest in developing people, even with limited resources

By prioritizing talent acquisition and development, social sector organizations can overcome resource constraints and build high-performing teams dedicated to the mission.

4. The Hedgehog Concept: Aligning Passion, Potential, and Resource Engine

A great organization is one that delivers superior performance and makes a distinctive impact over a long period of time.

Three-circle alignment. The Hedgehog Concept for social sectors involves finding the intersection of:

1. What you're deeply passionate about
2. What you can be the best in the world at
3. What drives your resource engine (time, money, brand)

Resource engine focus. Unlike businesses that focus solely on profit, social sectors must consider a broader resource engine:

• Time: Attracting and retaining committed volunteers and staff
• Money: Developing sustainable funding sources
• Brand: Building emotional goodwill and mindshare with supporters

Organizations that align these elements create a clear, compelling direction that guides decision-making and resource allocation. This focus allows them to say "no" to opportunities outside their Hedgehog Concept, ensuring maximum impact in their chosen area.

5. Turning the Flywheel: Building Momentum Through Brand and Results

People want to feel the excitement of being involved in something that just flat out works.

Momentum through results. The flywheel effect in social sectors is driven by the connection between tangible results and brand reputation. As organizations deliver on their mission, they build credibility and emotional resonance with supporters.

Brand-driven flywheel:

1. Deliver exceptional results aligned with mission
2. Build brand reputation and emotional connection
3. Attract more resources (time, money, support)
4. Reinvest in organizational capacity
5. Deliver even better results

This self-reinforcing cycle creates momentum, allowing organizations to overcome the challenges of inconsistent funding or changing political landscapes. By focusing on consistent excellence and mission fulfillment, social sector organizations can build a powerful brand that attracts sustained support and resources.

6. Disciplined Thought: Confronting Brutal Facts While Maintaining Faith

You must retain faith that you can prevail to greatness in the end, while retaining the discipline to confront the brutal facts of your current reality.

Balancing optimism and realism. The Stockdale Paradox is crucial for social sector leaders facing daunting challenges. It requires:

• Unwavering belief in ultimate success
• Honest acknowledgment of current difficulties
• Willingness to adapt strategies based on reality

Data-driven decision making. Leaders must:

• Gather and analyze relevant data on organizational performance
• Seek honest feedback from stakeholders and beneficiaries
• Regularly reassess strategies and tactics
• Maintain transparency about challenges and setbacks

By combining faith in the mission with a clear-eyed view of reality, social sector organizations can make informed decisions, adapt to changing circumstances, and persistently work towards their goals despite obstacles.

7. Building Pockets of Greatness: Overcoming Systemic Constraints

Greatness is not a function of circumstance. Greatness, it turns out, is largely a matter of conscious choice, and discipline.

Focus on controllables. While systemic challenges exist, social sector leaders must concentrate on creating excellence within their sphere of influence. This involves:

• Identifying areas where immediate impact is possible
• Implementing best practices regardless of external constraints
• Cultivating a culture of discipline and continuous improvement
• Celebrating and replicating small wins to build momentum

Incremental progress. By focusing on building "pockets of greatness," organizations can:

• Demonstrate what's possible despite constraints
• Attract attention and resources to successful initiatives
• Gradually influence broader systemic change
• Maintain motivation and morale in challenging environments

Leaders who refuse to be paralyzed by systemic issues and instead focus on excellence in their immediate domain can create transformative change, even in the most difficult circumstances.

8. From Good to Great: A Universal Framework for Excellence

Great business corporations share more in common with great social sector organizations than they share with mediocre businesses. And the same holds in reverse.

Cross-sector principles. The fundamental concepts of moving from good to great apply across sectors:

• Disciplined People: Level 5 leadership and getting the right people
• Disciplined Thought: Confronting brutal facts and the Hedgehog Concept
• Disciplined Action: Culture of discipline and the flywheel effect
• Building Greatness to Last: Clock building and preserving the core while stimulating progress

Adapting the framework. While the core principles remain constant, their application differs:

• Redefining success metrics beyond profit
• Navigating complex power structures
• Overcoming resource constraints
• Building a sustainable resource engine
• Leveraging brand and emotional connection

By understanding and adapting these universal principles of greatness, social sector organizations can achieve exceptional results and lasting impact, regardless of their specific mission or domain.

Last updated: January 23, 2025