In the present VUCA business world, the demand for strong and innovative leaders that are willing to provide and implement changes that drive business growth and productivity is surging.

Organisations seek leaders that will play significant roles in empowering their people and encourage well-managed risk-taking that brings transformational business results. 

The third sector – which includes Non-governmental, Non-profit, Donor agencies, Voluntary organisations, cooperatives, social enterprises and a vast number of charities, amongst others – is not left out.

This sector is the most vulnerable to radical social, political, economic or environmental changes, but at the same time, it is characterised as resilient, adaptive and enterprising. Therefore, as the business environment changes, they need dynamic, anti-fragile leaders that will be more strategic than transactional in leading and uncovering new growth opportunities.  

Third sector leadership differs from the private or public sector in a few ways. While private sector leaders have a bottom line as a ‘factor of life’, public sector leaders are accountable to politicians and, by extension, the electorates.

However, third-sector leaders are accountable to donor agencies and must continuously innovate and deploy pragmatic management models in response to social needs. 

In previous years, the sector struggled to meet increased service demands despite having reduced resources. As a result, there was a shift in operations to ensure that they survive, with a focus on collaborations and attempts to demonstrate their impact.

Now, it has become a fundamental part of the economy and social development of many countries and is keen to play a crucial role in the delivery of public services. 

There is a marked increase in expectations of organisations in this sector, accountability requirements and more transparency in reporting their operations, grant application or demonstrable impact. They are also under pressure to get a better grip on performance management and understanding the differences they make in people’s lives. 

Along with this increase is the emphasis on investment in leadership development. After factors like lack of funding, lack of volunteers, government policies, etc., lack of exemplary leadership is earmarked as one of the top five constraints the third sector faces.

The right leadership skills and strategic planning also feature among the top ten skill gaps in organisations. As a result, conversations continue to grow on the significance of building the right leaders. 

There is growing concern that the sector’s priorities are at risk if organisations fail to build leaders who can effectively fulfil emerging missions and adapt to fast-changing demands. Given the success of leadership investment in the private sector, it is normal to think that a more deliberate focus on and investment in third sector leadership will result in more effective delivery of social interventions.