Translating Nonprofit Board Experience to For-Profit with Raj Vinnakota

Intro: Welcome to The Daily Bolster. Each day we welcome transformational executives to share their real- world experiences and practical advice about scaling yourself, your team and your business.

Matt Blumberg: Welcome to The Daily Bolster. I'm Matt Blumberg, co- founder and CEO of Bolster, and I'm here today with my friend Raj Vinnakota. Raj is the CEO of the Institute for Citizens and Scholars, which is a nonprofit focused on strengthening democracy by driving civic preparedness and engagement in 14 to 24- year- olds. Raj has been a nonprofit founder and a scaling CEO for most of his career. He's served on a bunch of nonprofit boards as well as for- profit boards, including public company boards. He is a longtime friend of mine and I am actually now proud to be on his board at the Institute for Citizens and Scholars. Raj, it's great to see you.

Raj Vinnakota: See you too. Thanks for having me.

Matt Blumberg: Yeah. All right, so I've been wanting to ask you this question since I started the podcast. So at Bolster we do a lot of board searches, as you know, and we always say that being on a high- impact nonprofit board, not necessarily like a fundraising board, but a high- impact governance- oriented nonprofit board is great experience for someone who would like to be on for- profit boards. It's sort of good training and the experience translates. So my question to you having run and served on both types of boards is are we right or are we wrong? What are some reasons, either why or why not in terms of the experience translating?

Raj Vinnakota: Well, Matt, that is true in most complicated questions. You are both right and wrong, and so let me take you through just a couple of points here. The first is that it's not always the case that either for- profit boards or nonprofit boards talk this way, but really their single most important kind of ongoing responsibility besides choosing a chief executive is capital allocation. How are you actually allocating your capital? Now in the for- profit sense, it's a lot easier to talk about it. It's a lot easier to track it. How are you investing? Where's your working capital right now? What does your balance sheet look like? So on and so forth. Makes it easier both to be able to talk about it, to be able to measure it, to be able to understand the trade- offs in terms of strategies. Do you hold the cash, do you invest? Do you actually buy companies? Do you return it to investors? So on and so forth. You're actually doing that same thing in the nonprofit world. You just don't talk about it in the same way, because by and large, your capital falls into two major pots. The first one, of course, is obvious, which is cash, but cash is truly king in the nonprofit world and thinking about how you manage cash out, not just three or six months, but multiple years becomes a really, really critical role of the board. Then the second way of thinking about capital, and is especially true in the non- profit world, is talent, right? You'll only go so far as your talent is something I imagine that you talk about all the time, and that is totally agnostic on for- profit versus non- profit boards. In the non- profit space, really exceptional talent has an exponential impact on your success. It is both the leading and the lagging indicator in terms of success. So how boards think about that, talk about that, spend time on it in meetings really, to me, differentiates good from great in that world. Here's a second way I think about the boards that's actually somewhat different, which is scale. When you think about startup early stage for- profit boards and how they think about where they want to go to scale, I'm on two S& P 1000 boards that have thousands of employees. They have revenues in the billions of dollars and they are considered mid- cap, at best. Now if you had those kinds of institutions and you do a few in the non- profit world, really A, they're few and far between and by and large, they're probably hospital systems. In some ways I kind of set that aside and if I think of the kind of institutions that work in education space and so on and so forth, you just don't get to that size. So you think about scale and impact much more in the models that you're developing, the influence that you have on public policy and narratives and what you're doing with your talent and where it is that they're going both during and after their work with you. Whereas scale in the for- profit space, really it's what's my revenue, what's my FTEs, what's my volume? You're really thinking about taking over a market and on market share and so on and so forth. So that is a very different way about how to think about approaching scale and I would say that that's different. Then the third and final thing where I do see a lot of overlap is board development and management. You can learn a lot from sitting in a boardroom, whether it's a for- profit or non- profit room, in terms of thinking about what are the skills and how are those skills and experiences combined so that the sum is much greater than the individual people in that room? It can be the same for a 38 member board like Princeton University to a six- person board in a small startup non- profit. You're still thinking about those same issues. Thinking about the human interactions, thinking about who you need to touch base with before meetings and the conversations you need to have and how do you get a contentious policy approved. Okay, I'm going to do this. I know person A and B I've got to manage, I've got to talk to, and I need person C to advocate on my behalf in front of person B. All those kinds of things are true and really important for learning about how boards and frankly, humans work.

Matt Blumberg: Yeah. Look, those are all great points, and while you're overarching point, which is that I am both right and wrong, I'm sure is correct about most things in life. I would say your third point takes me to the place where I would say your first two points are things that for- profit and non-profit boards have in common, even though they have different expressions of them. So capital allocation, talent, strategy, thinking about focus, whether it's on a non- profit mission or a for- profit market share. It's a lot of the same things, but they do take different forms.

Raj Vinnakota: Yes. Yep. They absolutely do.

Matt Blumberg: All right, Raj Vinnakota comparing for- profit boards and non- profit boards. Thanks for being here.

Raj Vinnakota: Thanks for having me.