“More Like a Business . . .”

Conflating functions of other entities with those of businesses can be a mistake

“More Like a Business . . .”

We’ve heard it for years — operate more like a business. As a result, we have hospitals with highly paid executives trimming costs and consolidating physician practices in order to gain sufficient scale to drive higher salaries and more system power, even as life expectancy slips and health care costs skyrocket. We have universities gobbling up real estate, operating as premium and exclusive brands, and functioning as police within the broader community, even as tuition costs rise and admissions fall, making a mockery of their educational mission.

In politics, one of the least objectionable reasons for voting for the previous US President was that he was a businessman, and the government needed to operate more like a business. The transactional nature aside, the damage is now glaringly apparent — in business, being elevated to the top executive was interpreted as becoming “the boss of the government,” which led to impulsive diplomacy, corrupt dealings, nepotism, meddling in pandemic responses, and, more recently, revelations that he used the Department of Justice to spy on journalists, political opponents, and his own lawyer. It was all kept secret because businesspeople know how to throw down an NDA — even if they are ultimately found to be unenforceable within the government setting, they operated as de facto gag orders for long enough.

The analogies we use to describe our organizations are vital, because they can be misleading. Is a non-profit a business? What does that mean? Businesses court risk, but most non-profits fail to allow for much risk in their operations, and lack to governance know-how or structure to manage risk in any meaningful long-term manner. Many non-profits in our space function as some combination of foundation, investment bank, and social club. There is very little risk allowed when you drop the false analogy that it’s a business — which is probably why their investment funds could be sitting ducks when the taxman comes.

If a non-profit were asked to operate “more like a business,” it might benefit by rethinking the premise. Is that even appropriate? Most are incorporated as public charities and given protected tax status as a result. Shouldn’t they think “more like a charity”? The same goes for governments — shouldn’t they think “more like a government”? Or universities — shouldn’t they think “more like a university”?

There are various types of legally and culturally defined entities in the world — churches, businesses, governments, charities, schools, shelters, and so forth. Expectations abound. Power is tempting, but temporary. If you can’t feel the rising impatience with the injustice, impropriety, and intolerance of systems that have become “more like a business” — and a bad business at that, with stock prices more important than people, with overpaid executives, and so forth — you might want to start paying closer attention.

Venerating “business” as the best way forward — even if just as shorthand for more operational discipline — can be misleading and unhelpful. A charity can have operational discipline that is special because it is honed to the charitable role. The two are not mutually exclusive, and crafting operational discipline that’s unique and well-suited to your actual organization is better than reading some HBR article and attempting to imprint “business” practices that may or may not apply.

Creativity can lead to solutions.

When you’re working to find a way forward, “more like a business” may not be what you’re after, appropriate to what you are, or relevant to what’s expected of you from the society you work within.

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