Balancing the needs of both paid staff and volunteers, managing financial pressures, and adapting to a shifting funding landscape after the Covid-19 pandemic are just some of the challenges that charity leaders face daily.
Yet, despite these pressures, there are lessons in resilience, adaptability and purpose-driven leadership that every organisation can learn from. At Hult, we conducted in-depth interviews with 11 senior leaders from some of the UK’s largest charities to explore what leadership really looks like in this sector, now and in the future.
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Our findings reveal a sector under strain. Career pathways remain unclear, prompting talented leaders to move on in order to progress. Leadership teams lack diversity, with many senior roles still held by older, white men. But these challenges present opportunities, too. Charity leadership offers insights into how HR teams across all sectors can rethink how they develop, support and empower the leaders of tomorrow.
The importance of values and purpose-driven leadership
Our research highlights a significant shift among charity sector leaders; from traditional hierarchical leadership towards a more values- and purpose-driven approach. As one charity leader noted: “If you were to go back five years or more, you’d likely see a more hierarchical way of working… Now, you’re seeing a leadership model that’s more about listening, recognising where change is needed, and collaborating with others at different levels and spaces across the sector.”
Leaders are placing greater emphasis on empathy, active listening and empowering their teams. The above is in contrast to many public and private sector organisations that still rely heavily on a top-down command-and-control style of leadership. There’s much to be learned from how charity leaders are fostering engagement and collaboration, with clear lessons for leadership development in other sectors.
Listen to quieter and underrepresented voices
The charity sector exists to serve underrepresented and vulnerable voices, yet historically it has faced challenges engaging these groups. That’s changing. Many charities are now prioritising more inclusive approaches, ensuring people from underrepresented groups are involved in key strategic decisions, including how funds are allocated.
Practical steps include the use of interpreters, building connections through local/cultural social hubs, and engaging informally with individuals managing chronic conditions to gain deeper insights into their experiences. These insights are shaping more innovative and responsive services.
For HR and leadership professionals in the public and private sectors, there’s a clear takeaway: the need to listen more attentively to quieter voices, particularly among customers and employees from diverse backgrounds. Doing so can not only enhance inclusivity but also lead to more informed decision-making.
Diversity at the top
Despite widespread efforts to improve diversity, many companies have struggled to match the diversity of their customer base, especially at senior levels. The lack of diversity can lead to blind spots in decision-making, something shown through failures at organisations like Nokia, Nasa and Enron.
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The charity sector is grappling with similar issues. As one executive put it: “We need to see a diverse range of leaders from different backgrounds and with different experiences. It’s ironic that in a sector focused on social justice, the power structures often remain so exclusive.”
The sector is actively working to recruit, retain and promote leaders from diverse backgrounds, to reflect its customer base better. For HR teams across all sectors, the message is clear: ignore diversity at your peril. Inclusive leadership is not just about representation; it’s about ensuring decisions are informed by a broad range of perspectives.
Continuously adapt business models
One of our senior clients from the beverage sector recently described today’s business environment as one of “constant crisis”. He argued that leaders at all levels need to learn to continuously rethink their business models.
Contextual pressures – whether financial constraints or the operational challenges of the Covid-19 pandemic – have demanded rapid, often difficult, decisions. Leaders have had to rethink their organisational priorities and find new ways to reach and support their communities amid financial constraints and operational challenges. In many cases, this has involved making tough choices about which priorities to continue serving.
In our experience, leaders in the public and private sectors shy away from these difficult conversations, resulting in vague strategies and a loss of competitive edge. There is much to learn from the charity sector’s pragmatism, resilience, and willingness to embrace change.
Prioritise partnerships for continued success
The charity sector is moving away from rigid hierarchies towards more empowered networks with a partnership mindset. Leaders are increasingly open to cross-sector collaboration, recognising that working with organisations in the private sector, academia and beyond is essential to addressing complex challenges.
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As one leader emphasised: “Cross-sector learning is crucial. We can learn a lot from corporate efficiency models, especially in digital and tech areas where the charity sector still lags.”
For HR and leadership teams in the private and public sectors, the charity sector’s experience underlines the importance of breaking down silos and embracing collaborative, cross-disciplinary approaches to problem-solving.
The charity sector operates in some of the most complex and resource-constrained conditions imaginable. Yet, its leaders are embracing forward-thinking approaches that offer valuable lessons for organisations everywhere.
By learning from the charity sector’s experiences HR professionals across all sectors can strengthen leadership strategies, engage their people more effectively, and drive better business outcomes.
By Guy Lubitsh, professor of leadership and psychology at Hult International Business School
