CXO

Culture shock: What C-level execs can expect when joining a nonprofit

The move from the private sector to the public sector often comes with significant operational challenges for CXOs. Get a brief overview of what to expect.

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An increasing number of private sector CXOs are choosing to take executive positions in the public sector. Public organizations don't offer stock options or bonus incentives like their private sector counterparts, so on a level playing field they can't compete with for-profit CXO compensation packages. So why would a C-level executive join a public sector organization?

Most CXOs who move to public sector positions have excelled in business and ultimately reach a stage in their careers where their objectives shift to giving back. For many, there is no better way to do this than to obtain a CXO position at a nonprofit organization.

Public sector cultures, especially in charity organizations and institutions such as credit unions, are distinctly oriented toward reinvestment in communities and society, which many CXOs find rewarding and attractive after so many years of strictly focusing on bottom lines and profits.

Prepare for culture shock

A movement of private sector CXOs to public sector positions can be a win-win for everyone. Private sector CXOs have an opportunity to give back and to avail their expertise to public sector organizations that otherwise could not afford them, and public sector organizations are able to move forward with high-caliber managerial talent that can improve organizational performance for their stakeholders.

However, once private sector CXOs join nonprofits as C-level executives, they often find themselves in for a few culture shocks that go well beyond not getting stock options, incentives, and bonuses. The CXOs who are most successful in making the transition to public sector service are the ones who already understand how public organizations operate and what they value.

These are some of the operational differences that private executives considering public sector positions should be aware of before making a change.

Politics

Every organization has its politics, but in the corporate sector you ultimately live or die by the sword, and that sword is the ability to make money and expand the business. The comfort factor in private sector assessment systems is that they are absolute, and that the figures don't lie.

In contrast, the public sector places emphasis on relationships and relationship building, and there is less accountability for the numbers. Some private sector executives find these evaluative criteria unsettling, because they have less to do with performance and more to do with how well liked and regarded you are.

Rules

There are strict codes of behavior for nonprofits, such as rules that govern how board and committee meetings are conducted. Creative or entrepreneurial executives from the private sector often find these restrictive and limiting.

Work ethic

The work ethic in nonprofits is decidedly different than it is in the private sector, where some industries (e.g., software) encourage 80-hour workweeks. Work is more relaxed in public sector organizations, and private sector executives who come in with expectations that staff will regularly exceed 40-hour workweeks will find themselves disappointed.

Recruiting talent

Nonprofits need talent just like their private sector counterparts, but CXOs joining public sector organizations will quickly see that they are at a competitive disadvantage because private sector salary and incentive packages are stronger.

If you're an executive who has made the move from the private sector to the public sector, please share what you would add or remove from my list, as well as your thoughts about the experience.

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About Mary Shacklett

Mary E. Shacklett is president of Transworld Data, a technology research and market development firm. Prior to founding the company, Mary was Senior Vice President of Marketing and Technology at TCCU, Inc., a financial services firm; Vice President o...

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