Differences between For-Profit and Non-Profit Corporations

When we look beyond an organization’s Internal Revenue Service (IRS) non-profit status as reported on their IRS 990 Form, many of the distinctions between For-Profit and Non-Profit corporations become operationally meaningless when viewed from the structures-and-systems perspective. As Peter Drucker states, “The differences between managing a chain of retail stores and managing a Roman Catholic Diocese are amazingly fewer than retail executives or bishops realize. The differences are mainly in the application rather than the principles.” Many of the timeless principles that produce sustained financial and non-financial performance in high-performing For-Profit companies can also be applied to Non-Profit corporations, as described by Collins in his monograph, Good to Great and the Social Sectors. In fact, contrary to the view taught in many business schools, recent studies such as Collins and Porras’ Good to Great have shown that profit and wealth are not the driving force or primary objective of truly visionary For-Profit companies. Rather, For-Profit companies have a larger purpose in life, and this purpose becomes the focal point on the business horizon, guiding every decision they make. Generating revenue becomes a means to an end for truly visionary For-Profit companies, not an end in itself.

Eliminating Invisible Bureaucracy

One of the problems with identifying and eliminating the kind of Invisible Bureaucracy that frustrates and undermines organizational performance is that managers and staff members are actively involved in the patterns-of-interaction that create and sustain this bureaucracy and don’t recognize it because these day-to-day operations are on autopilot.

Organizational Culture Video

We just finished a new video on my book, Making Invisible Bureaucracy Visible: see http://www.breckenridgeinstitutevideo.com/index.html

New Book on Organizational Culture

Mark Bodnarczuk's new book entitled, Making Invisible Bureaucracy Visible: A Guide to Assessing and Changing Organizational Culture is now available on Amazon.com and at local bookstores.

Creating an Intended Culture

The process by which organizational culture is formed has many things in common with the formation of personality. In terms of personality formation, by the time we’re old enough to know that we have a personality we’ve had no hand in fashioning it. In much the same way, an organization’s culture is like its personality and many managers wake up one day and find themselves with structures, systems, and a culture that they have not consciously chosen; in business relationships that may not be in their best interest; with assumptions about generating revenue and patterns of spending that they have not consciously chosen; with employees who are not matched to the organization’s human capital needs; pursuing objectives and goals that don’t produce the desired financial and non-financial results.

One of the keys to understanding and changing this “unconscious” aspect of culture formation in organizations is to become aware of the degree to which an organization’s culture is intended or unintended. An Intended Culture is consciously configured to achieve an organization’s desired results; e.g., its goals and objectives. An Unintended Culture tends to be riddled with ineffective autopilot operations and Invisible Bureaucracy that derail, frustrate, and undermine organizational intentions as embodied in its goals and objectives. Even outstanding organizational performance may be episodic and short-lived because it is an artifact of the specific configuration of internal and external environments within which the organization exists, rather than the result of an Intended Culture. The ability of an organization to change and adapt with conscious intention is the true test of the degree to which its culture is consciously chosen for specific ends.

The approach to creating an Intended Culture described in Mark Bodnarczuk’s new book, Making Invisible Bureaucracy Visible will help you transform your organization’s culture into a powerful resource that effectively performs day-to-day operations on autopilot; e.g., effectively and seamlessly without thinking about them. When done effectively, autopilot operations can be your greatest ally because they increase your ability to compete and achieve your goals. But in most cases the autopilot operations that typify an Unintended Culture are self-defeating because they perpetuate problems with work performance, communication, interpersonal conflict, and decision-making and then derail attempts to create positive change. This unique approach to creating an Intended Culture helps managers take ineffective operations off autopilot, reconfigure them, and then migrate them back to autopilot operations that produce the desired results. Understanding how these invisible forces actually work begins to transform “culture” into a more reliable resource that can be used to achieve an organization’s goals and objectives.

Focusing Organizational Culture Change on Business Challenges

We are convinced that the process of assessing and changing organizational culture must be focused on real business problems – issues that managers care about deeply. It’s a mistake to lead with cultural analysis and cultural change. Assessing and changing organizational culture is of little value unless it is linked to (and motivated by) one or more of these six interdependent dimensions of organizational life:

• Generating and retaining revenue



• The effective use and cost of labor as human capital



• The effectiveness and non-labor-related cost of operating an organization



• Key performance indicators that measure an organization's performance with high precision



• The identification and reduction of squandered time and energy



• A focus on sustainability, creating value, and making long-term investments in human, material, and financial resources
  

If the activities associated with assessing and changing organizational culture cannot be meaningfully linked to one or more of these six dimensions, then they should probably not be done. Diagnosing and changing organizational culture for its own sake is an academic exercise that provides little or no value to organizations and the managers who lead them. But if an organization needs to develop a new strategy or strategic plan; improve its execution and day-to-day operations; implement new IT infrastructure; seamlessly integrate business systems; build bench-strength in leadership and management skills; or improve the decision-making and consensus process for the allocation of human, material, and financial resources, then understanding how its culture positively and negatively impacts these issues is not only value-added, it’s probably necessary. The key is to lead with a concrete, tangible business issue, not the study of organizational culture as an end in itself.

Speaking Up about Organizational Culture Requires Courage

One of the most difficult tasks of exploring the cultural norms upon which the day-to-day operations in companies are based is that they are tacit, unquestioned, and taken-for-granted assumptions that are undiscussible. In some organizational cultures, speaking openly and publicly about changing the cultural norms upon which ineffective processes and poor performance are based is viewed as "political suicide" even if these changes would lead to improved performance and deep, profound, sustainable change. So speaking up about organizational culture requires courage on the part of managers and staff members, especially in the face of real (or perceived) retribution for speaking the unvarnished truth.