Unlocking the potential of purpose: Why leadership development matters for purpose-driven organisations, too

A thriving for-purpose sector is essential to individuals and communities. Across Australia, for-purpose organisations focus on critical pillars of society such as health, education, social justice, and environmental sustainability. At the heart of these organisations are committed individuals deeply connected to their mission and to the people and communities they serve. Many navigate complex, difficult-to-solve problems with courage and expertise.

Yet burnout and wellbeing challenges are common across the sector. The funding landscape often leaves organisations scrambling to cover the true cost of the services they deliver. And, as they scale, for-purpose organisations often find themselves dealing with significant time and financial constraints, leading to an alarming underinvestment in their people.

This can leave these organisations’ leaders in a tricky position with regards to their own development. While leadership development is par for the course in the for-profit sector, as well as in government, there is often a sense that for-purpose leaders don’t have permission – their own, their organisation's, or that of their stakeholders – to invest in themselves. Investing in mission is what’s important. But the fact is that achieving your mission depends on having highly capable, adaptive leaders at the helm.

Over the past four years, we have been engaged on a long-term evaluation of the Centre for Social Impact’s Social Impact Leadership Australia (SILA) program. A high-impact leadership development program, SILA was designed to disrupt common ideas of leadership across the for-purpose ecosystem, generating organisational and system-wide change by developing for-purpose leaders while supporting their organisations through the journey. The program features everything from leadership and wellbeing assessments to executive coaching, retreats, and, for CEOs, extended sabbaticals.

The lessons we have learned over the course of the program’s evaluation, which has included more than 150 interviews with CEO participants, step-up leaders, and board chairs, are broadly applicable across the sector. But there is one fact that jumps out above all others. Leadership development is not a nice thing to have. It is a necessity.

While it may at first sound counterintuitive, it is important to remember that leadership development isn’t exclusively about leaders. Any development program worth its salt will have benefits, not only for the individual leader, but also for the organisation. SILA adds a third dimension through its focus on system leadership, addressing complex, interconnected problems by breaking down organisational silos and collaborating across different sectors to create shared visions of, and to achieve, systemic change. Leadership has vertical impacts throughout an organisation – up to the board and down to managers and their teams – and outwards into the broader sector. The flow-on effects of good leadership development benefit everybody.

Good leaders are usually already aware of this, situating themselves in context using adaptive leadership techniques. Adaptive leadership theory was originally introduced by Harvard professors Ronald Heifetz and Marty Linsky, who concluded that businesses are constantly changing and must be navigated accordingly. Leaders need to transition from addressing solely technical problems, which often have clear solutions and can be managed within existing structures, to tackling adaptive challenges that require collaborative and innovative approaches.

Adaptive challenges are complex and involve changing mindsets, behaviours, and values within the organisation. To make progress, leaders must engage diverse stakeholders, fostering a culture of collective problem-solving and open dialogue. This shift demands a focus on building strong relationships, encouraging experimentation, and embracing uncertainty to drive sustainable change and organisational resilience.

It also requires a willingness to step up on to the balcony. This idea comes from Heifetz and Linsky, who, in 2009, coined the phrase “moving from the dance floor to the balcony,” which is another way of saying out of the day-to-day fracas of running an organisation and into a position where you might see the larger strategic picture. What is your mission? Why are you here? What is your role within the wider system? How do you bring your board and staff along with you on the journey?

Our evaluation has highlighted the value of the system-wide thinking and problem-solving capacity that the SILA program enables in leaders. The program also serves as a place for leaders to test ideas and discuss shared challenges with their peers, forging connections that lead to increased collaboration between organisations to the net benefit of the for-purpose ecosystem. 

Perhaps the most striking component of the SILA program is its inclusion of a three-month sabbatical for its participants, who are encouraged to completely disconnect from their organisations while another executive, the step-up leader, takes on their role. This is not so much moving from the dance floor to the balcony as leaving the party altogether, though what’s interesting is how positive the long-term impacts of such creative disruption tend to be.

In the not-for-profit or for-purpose sectors, there is often an unsustainable reliance on the CEO, especially when that person is also the organisation’s founder. They’ve been around the block a couple of times and have become the indispensable person. The impact of the SILA sabbatical is that organisations learn how to delegate better, start thinking a little more seriously about succession planning, and identify who is and isn’t ready to take over somewhere down the line.

We've seen the process generate new ways of working within executive leadership teams, many of which then filter down through other layers within the organisation. The CEO’s absence can result in increased capacity- and capability-building throughout the broader organisation, both during and after the sabbatical. This kind of creative disruption, then, is also a kind of renewal.

This has proven equally true for the individual who has taken the sabbatical. Three months away from the leadership grind gives leaders a lot of time to reflect. They often come back with new ideas about how things should operate, as well as a renewed focus on wellbeing that, like the new ways of working mentioned above, tends to fan out or cascade through the rest of the organisation. We have also found that the program leads to improved relationships, not only between acting leaders and their boards, but also between CEOs and boards. This can, and regularly does, result in improved outcomes for stakeholders outside the organisation.

It is important to note that, on occasion, such sabbaticals can have short-term negative impacts. We have witnessed CEOs return to work only to clash with their would-be successors. While program participants acknowledge the benefits of identifying such challenges sooner rather than later – as well as other issues, such as underperformance, that have sometimes emerged in their absence – acting CEOs have in some instances left to pursue other opportunities. But generally speaking, the net benefits have been positive, with leaders thinking differently about their role and what aspects of their work they can delegate, and returning with a renewed and infectious commitment to the original mission. 

Choosing between leadership development and mission is ultimately a false dichotomy. The development of your leaders and leadership teams is no less relevant when purpose is the point than when profit takes precedence. No matter how big or small a for-purpose organisation is, leadership development is crucial to achieving your organisation’s goals.

Some participating organisations have recognised this, implementing SILA-like measures independently, regardless of their size or budget. This means the lessons above are worth learning, have been proven to work, and can make a real difference.

But it is important to remember that the design of a leadership program is also ultimately context-specific. What works for one organisation may not necessarily work for another. The activities and courses, the retreats and sabbaticals, will look different in different operating environments. But the development itself, focused on the broader organisation and ecosystem, in addition to the individual, remains a necessity. You just need to be clear-eyed about that necessity, explicit about your desire to adapt, and ready to take the people around you along with you on the development ride. 

Get in touch to discuss how we can help you design, deliver, implement, and evaluate a leadership development program for your organisation.

Connect with Carlos Blanco and James Saber on LinkedIn.