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Strategic Planning and Culture

Author: ; Published: Feb 4, 2013; Category: Collaboration, Strategic Planning; Tags: ; One Comment»

In a conversation with representatives of a for-profit professional services firm concerning an appropriate approach for developing a three-year strategic plan, the question of organizational culture came up. One  representative described the sharp cultural contrast he perceives between for-profit and non-profit organizations based on his daily work experience at the professional services firm vs. his prior experience serving on boards of non-profits which have developed strategic plans.

 

The conversation prompts me to muse on the culture question.  One operational definition of “culture” describes it as what employees think and do when the boss isn’t looking.  Are there cultural differences between for-profits and non-profits? Yes, but  these differences may not be as stark or consequential as might first appear.

 

The non-profits with which I work are led and managed on the basis of solid business principles.   These don’t fit the “Kumbaya” stereotype by any stretch. For instance, several clients do manufacturing and/or provide services which generate margin, i.e., revenue must exceed costs by a targeted amount which in turn is plowed back into the finance and delivery of benevolent services, rather than being distributed to shareholders and/or employees. So yes there are differences in how these earnings are applied, but not so much in how they are earned. For non-profits, generating usable income is of paramount importance today because of cut-backs in government spending, tightening of philanthropic purse strings, increased operating costs and other factors.  While it is true that “culturally,” some non-profit employees may not understand or embrace fully this unforgiving financial reality,  their leaders face it daily and make their decisions accordingly.  I concur that there is a cultural difference in for-profit vs. non-profit employee understanding but in the end, financial reality must be obliged; non-profit leaders I know work continuously to help their employees understand this reality and operate accordingly.

 

Non-profits with which I work no longer live in a “cushy” world, if they ever did.  Competition is fierce, often emanating from the for-profit sector and from other hungry non-profits.  I have worked with non-profits which are in competitive struggles which are equally intense as the struggles faced by for-profit organizations.

 

Bottom line?  To survive and thrive, an effective approach to strategic planning needs to be as thorough and competent  for today’s non-profit clients as it is for the for-profit client.

 

Personally, when I think about significant cultural differences to be factored into the strategic planning process, I reflect on cultural differences I have observed in Africa – not   only vis-à-vis US and European practices but also between East African and West African nations, between Anglophone and Francophone countries.  I think about cultural differences in Asian vs. Western approaches to negotiation and their strategic implications. I reflect on challenges experienced in optimizing collaboration among German engineers and French engineers who are employed by the same global company. 

 

In short, what one regards as a significant cultural difference is driven by the frame of reference being used. I am reminded of a valuable lesson: One person’s notion of “culture” is not necessarily the same as another person’s notion.  Maybe not even close.  So when the term “culture” is used, we all benefit from defining our terms!