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Article_Recruiting Key Executives

Article_Recruiting Key Executives

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Published by sgrifennu
CEOs must navigate diverse conflicts and challenges to successfully lead an NGO through the financially challenged 2010s
CEOs must navigate diverse conflicts and challenges to successfully lead an NGO through the financially challenged 2010s

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Published by: sgrifennu on Jan 09, 2012
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01/09/2012

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Recruiting key executives:the expanding NGO sector
Malcolm DuncanIRC Global Executive Search Partners
 
Western democracies are increasingly outsourcing Human Services (HS) to Non-Government 
Organizations (NGOs), Not-For-Prots (NFPs), and Faith-Based Organizations (FBOs). Increasingly,however, the leaders of these organisations are not executives from the NGO sector, but rather executivesfrom the private sector, with a deep understanding of the commercial drivers, as well as the social and  political challenges of running an NGO.These key executives must be able to position their organizations to inuence government policy and decision making – and, equally important, put the right architecture around their business to attract thefunding from the end consumer. Australia provides a unique window on the challenges of leading the rapidly developing – and changing – NGO sector. Malcolm Duncan, co-founder and Director of The Insight Group – IRC Australia(an Australian-owned executivesearch and talent advisory rm with ofces in Sydney and Melbourne), is also amember of the Executive Board of IRC Global Executive Search Partners (IRC)
 ,
with deep experience in global recruiting for this challenging sector.In this article, he examines the sector’s development, current and future prospects, and describes the ideal (and rare) prole of those extraordinary chief executives who have the ability to lead NGOs into a successful future.
Why is the NGO sector expanding so rapidly?
Malcolm explains how economic challenges are creating the increased need for effective NGOs, andresults-driven key executives.
 “Providing for human services, for most Western democracies, has turned into a nancial black hole,” he says. “Now that all Western democracies are under budgetary pressure – trying to bring in balancedbudgets and/or draw down decit budgets – one way to lighten the pressure is to remove those largesocial/service obligations from government balance sheets.” 
Governments increasingly realise that these NGOs, NFPs and FBOs are much more effective in the deliveryof targeted, on the ground services. Malcolm adds: “Governments also realise there’s no votes in failing to
satisfy the insatiable needs of our communities for cradle to grave services. The Baby Boomers are leadingthat demand for better, more exclusive and comprehensive services in areas such as aged-care, with theirchildren wanting increasing quality built into childcare. Since the mid 1970s, incredible increases in wealthhave created a layered, non-egalitarian society – and that’s showing in the desire for stratied services,from basic to gold-plated.” 
Where’s the money coming from – and will it get less?
Government redistributes funds to the service providers or the end users.
 “Basically, the government then says we’re going to allow these organisations to deliver our policy on theground and, for the most part, it is up to those organisations to appeal to the end consumer to spend their
dollar with them,” explains Malcolm.
Recruiting key executives to lead the expanding NGO sector 
CEOs must navigate diverse conicts and challenges to successfully lead an NGO through the nancially challenged 2010s
 
Malcolm Duncan – IRC Australia, and Board member of IRC Global Executive Search Partners
Malcolm Duncan
 
As governments gradually reduce the amount of money, fund-raising becomes an integral part of theservice: “That’s why many services have been taken up by faith-based organisations, because they havetraditionally had balance sheets that can subsidise or support theprovision of these services,” he says.The UK and Canada have similar government models.As Sylvia MacArthur (Managing Partner at Madison MacArthur Executive Search Specialists – IRC Canadain Toronto, and president of the Board of IRC) says: “In Canada, almost all major NFP’s are now headedup by seasoned business executives. The aim was to bring more rigor and business discipline to theseorganizations. It has really changed the focus of these organizations, and they are now far moresophisticated in capturing wallet share.” According to Alam and Robb, in ‘Issues of Economic Efciency of Human Service Delivery in Australia’ 
1
:
 “Public investment is also inuenced by social factors. For instance, both public sector agencies andnon-government organisations, including charities, religious and not-for-prot entities, have a long and
sustained history of involvement in the funding and provision of human services such as disaster relief 
and support for people with a disability and other disadvantaged groups.” Malcolm adds that current models can cause conict: “Some FBOs are providing tiered services to the end
user. For example, in aged-care, if you can pay for it you can live in a resort-like facility, while other
aged-care facilities can be far more basic with shared wards and more modest services.” Alam and Robb state that, while a range of models in delivering human services is possible anddesirable both from society and government perspectives, “many human services are provided to peoplewho are poor, and therefore cannot afford to pay a market price (e.g. service for homeless people) andpose a challenge to the viability of a for-prot provision or ‘user-pays full price’ service model”.Increased government divestment means the services will necessarily become more money driven. “In Australia, it follows the line we’re moving to models of more self-funded retirees – so that’s a very bigpart of it,” says Malcolm. “This generation of people who are approaching retirement (55+) are expectedto pay for retirement from their own pension savings.” 
Is there an ideal CEO?
As Malcolm explains: “The successful CEO must understand the commercialimperatives that drive the sector. The prot-and-loss model, and the challengesthese businesses face having to manage across the social and political interface.And in that sense, CEOs need to be able to position their organizationsas a peak body, to inuence government policy and decision making and funnelthe end consumer to use their services.” He sees marketing as another key CEO skill: “Just as important, from a marketing point of view, is theability to put the right architecture around the business, to attract the funding from the end consumer.It may be to attract a person in their 60s looking to transition out of their home, and buy into age care,or it may be a parent who’s looking to buy into child care – the ability of an organisation to attract the enduser to a tiered service offering is vital and the CEO will always be chief salesman and marketer for theirorganisation and the brand”.
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International Review of Business Research Papers Vol.5 No.2 March 2009 Pp. 52-61
Issues of Economic Efciency of Human Service Delivery in Australia
Khorshed Alam and Walter Rob
b

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