Do you think competitive business strategy doesn’t apply to your non-profit? Think again.
Many – MANY times, when teaching Simplified Strategic Planning seminar, there will be attendees from non-profits. Many of them enjoy the seminar, take the tools from the workbook, and use them productively. Often they don’t think competitve business strategy applies to their non-profit and will comment that “this material is more suited to a business”.
These people are both right and wrong. It’s true, that many of the tools and examples in the seminar are designed to enhance profitability and competitive distinction in for-profit businesses. You could even say they are optimized for profitability. But – and this is a big but – it is a serious mistake to think that the principles of efficiency and differentiation aren’t useful for non-profits.
The truth is, both of these concepts are critically important for most non-profits
Yes, non-profits don’t exist to generate profit. But a non-profit that is run without attention to the creation of value and the efficient allocation of resources will not fulfill its mission as well as one that is. You may not see this issue change things in the short term. However, in the long term, money flocks to the more efficient organizations. This is true if you are talking about private donations, foundation money or government funding. So, you may not be profit-driven, but your sources of funding are almost always effectiveness-driven. If that is so, you ignore the lessons of strategic effectiveness at the peril of your organization’s long-term health.
You need to be aware that funding sources, volunteers, and other critical resources will flow towards organizations that clearly articulate a distinctive strategy. Many non-profits are learning the importance of branding to their mission. The core concepts of strategic competency and strategic focus are vital to your ability to build and maintain a solid brand. That is what attracts the people and resources you need to succeed in your mission.
Finally, it’s true that you may not have “market segments” in the same way a manufacturer might. Nevertheless, your stakeholders have a clear choice about where to spend their time and money. Non-profits often mistake the stakeholders directly served by their mission for their “market”, and this is not useful. The stakeholders who have the greatest range of choices, and whose resources are most critical to your mission are the true “market” for most non-profits. For example, competing for private donors may be the area of your non-profit’s activities that most closely resembles “market based” activities in the for profit world. Those donors are, in fact, purchasing something – whether it’s a good feeling, prestige, or a genuine sense that they are contributing to their community or cause – and we often do have to “sell” them this “service”.
You may consider this a crass way to consider the fulfillment of your mission, whether you are feeding hungry people, promoting peace, or educating young people. But the reality is that an effective strategy for efficiently doing these things will greatly expand your ability to support your mission. If you can truly distinguish your organization in this regard, my experience suggests you can grow your funding, staff and mission-driven activities by 10, 20 or even 100 fold. Wouldn’t THAT be good?
How important is competitve business strategy to your business? Attend the Simplified Strategic Planning Seminar for more instruction on how to improve your competitive business strategy as well as all other aspects of Simplified Strategic Planning.
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