Unlocking Adaptability and Innovation in Australia’s For Purpose Sector

By Kate Wheeler, Partner, Future Leadership 

Across Australia, our leadership capability data is telling a clear and compelling story. The very capabilities required to navigate uncertainty and complexity in an increasingly tech-augmented world, are lagging.

Our Future Leadership Capability Compass to be released in March draws on multi-sector leadership assessments, revealing the most ‘in-demand’ capabilities of 2026 on one hand, and how leaders are showing up against those capabilities, on the other. The report reveals a growing pressure on a cluster of capabilities that are no longer “nice to have”, but essential: adaptability, creativity, systems thinking and digital literacy. These are the capabilities leaders need to navigate uncertainty, integrate technology, respond to shifting community expectations and redesign organisations under constraint.

And yet, across sectors, they are the least consistently developed.

When it comes to Australia’s For Purpose sector, this is not a future risk. It is a present reality. The report reveals not a capability deficit, so much as a capacity deficit. And with the right approach, capacity can be scaled.

A burning (out) capability platform for the For Purpose sector

The For Purpose sector sits at the intersection of rising community need, tightening funding, workforce fatigue and increasing complexity. It employs 1.47 million Australians, engages 3.2 million volunteers, and contributes economic value comparable to some of Australia’s largest industries. At the same time, it is being asked to lead on climate response, digital inclusion, social cohesion and care for our most vulnerable communities.

An early look at our Capability Compass data from the sector shows us what the experience already confirms on the ground: the system is demanding adaptability and creativity faster than it is enabling them.

This is not because For Purpose leaders lack capability or intent. It is because the conditions in which they operate make those capabilities difficult to sustain.

This is not a capability gap. It is an enablement gap.

The For Purpose Sector Development Blueprint released last year by the Australian Institute of Company Directors, is unequivocal. The sector operates under chronic structural constraint. Funding is often partial, short-term and program-specific. Full cost recovery is rare. Investment in leadership development, data capability and innovation infrastructure is frequently categorised as overhead rather than as core to impact and sustainability.

In this environment:

• professional development becomes episodic
• innovation is discussed, but not well resourced
• creativity remains conceptual rather than operational

It is difficult to adapt without time.
It is difficult to create without capital, financial or otherwise.
And it is difficult to learn without exposure to different ways of working.

The Compass doesn’t reveal a failure of leadership. It reveals a misalignment between what the system demands and what it enables.

Why the For Purpose context is fundamentally different

Unlike the private sector, where profit provides a clear organising principle, or government, where policy delivery anchors workforce planning, the For Purpose sector is organised around purpose, trust and legitimacy.

Leaders must navigate:

• multiple funders and regulators
• volunteers alongside paid staff
• boards with fiduciary and moral accountability
• communities whose lived experience must shape decisions

This creates a leadership context where influence matters more than authority, where outcomes are long-term and relational, and where failure carries reputational as well as human consequences.

Ironically, these conditions demand more adaptability and creativity, not less.

Yet despite constraint, the For Purpose sector demonstrates strengths many sectors are now trying to build.

The Blueprint recognises the sector’s leadership in co-design, shared decision-making, and systems collaboration; all capabilities critical to addressing complex social challenges. Purpose-led attraction and engagement remain powerful differentiators in a low-trust environment. Leaders develop breadth early, operating across governance, funding, service delivery and workforce wellbeing simultaneously.

These are not accidental strengths. They are forged by necessity.

What’s missing is systematic investment to deepen, scale and sustain them.

Where pressure points are widening

The Capability Compass and the Blueprint converge on the same fault lines:

• fragmented investment in leadership and professional development
• limited, inconsistent workforce and capability data
• fragile succession pipelines and bench strength
• uneven digital and data capability

As funding pressures intensify, many organisations are turning to mergers and alliances as a survival strategy. Yet too often, mergers prioritise financial and operational integration, while talent, culture and capability integration are under-designed.

This is a risk, but it is also an opportunity.

Mergers as capability accelerators, not just cost controls

Handled well, mergers are one of the most cost-effective moments to lift capability:

• roles are being redesigned
• ideas are being cross-pollinated
• governance is being reset
• leadership expectations are being clarified

Handled poorly, they erode trust, trigger attrition and stall performance.

First, capability must be treated as shared sector infrastructure, not organisational indulgence. Evidence-based, sector-wide capability frameworks reduce duplication, improve targeting and allow investment to scale, particularly when supported by initiatives such as ARC-funded research.

Second, development must shift beyond courses to real-time movement. Cross-sector project teams, secondments, board observer roles and partnerships across sectors are among the most powerful (and cost-effective) ways to build adaptability and creativity.

Third, focus matters. Under constraint, organisations should prioritise a small number of keystone capabilities. Adaptability, systems thinking, stakeholder influence, commercial acumen and practical data literacy are some that unlock performance across roles.

Finally, capability must be designed into mergers, not bolted on after. Clarifying critical roles, aligning capability expectations and deliberately creating cross-entity leadership teams costs far less during integration than repairing damage later.

The moment we are in…

Australia’s For Purpose sector does not lack talent.
What it lacks is enablement at scale.

The Capability Compass, when released in March, will demonstrate where the capability gaps exist. Future Leadership exists to help organisations build capacity where they need it most.

If you choose to partner with us, we will work collaboratively, deliberately and with evidence, to build identified priority capabilities into everyday practice to meet your needs. Through our strategic capability offerings, organisations can buy, borrow or build talent in ways matched to budget and scaled for impact.

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Kate Wheeler partners with For Purpose boards and executives on talent strategy, executive search, and leadership capability building. With 20+ years supporting the For Purpose sector through governance challenges, transitions, and strategic growth, she brings practical insight grounded in real-world impact.
Connect with her.