Tag Archives: Competitive Advantage

by Floyd Rumohr

Before I get to the concept of advantage, I would like to start with competition; a topic that can be a bit unsavory for nonprofit professionals who might have a noncompetitive view of the world.

The Olympics is a great model for competition. Most sporting events are because competing is commonplace for athletes. In fencing, a sport that I have enjoyed for nearly three decades, worthy opponents square off. They salute each other. En garde! And off they go. May the best competitor win. How each person conducts him or her self is important, too, and in some sports like fencing improper conduct can result in disqualification or point penalties.

A fencer could be said to have a competitive advantage if he or she has a superior move or technique that enables a win over their opponent in a particular bout. My first bout against a left-handed fencer is an example of this. While my opponent had experience fencing with many right-handed fencers, I had never tried my right-hand against a left hander. I put up a good fight but lost the bout. We shook hands and looked forward to the next one (which I lost, too, by the way). Her experience and my lack of it gave her an advantage.

The truth is, I’m not a great fencer. I’m okay at it but I enjoy it immensely. I don’t care about winning. Perhaps with beginning bouters I might have a competitive advantage or two. But I won’t win a medal any time soon. Unfortunately, this attitude of enjoyment might not be the best one to adopt in the context of nonprofit work because losing could very well have dire consequences, such as not getting an important grant.

Competition in the wonderful world of nonprofit adventures can take a few lessons from sports. Perhaps it is more palatable if we qualify the process by inserting the word “noble” before “competitor” and then it takes on a whole new meaning. Just like with fencing, bouts with noble competitors happen all of the time: sometimes winning and other times losing. The important thing is to keep playing and to, at some point, find an advantage that enables a win over a worthy opponent.

Nonprofit organizations have noble competitors just like athletes. Contenders compete for every grant, board member, ticket holder, or staff member regardless of what you call it. In the case of a community based theater company, competition could be another nearby theater troupe. For a neighborhood health clinic, competition could come from a hospital that will be built a few years down the road. When the hospital in my hypothetical example is finished, will the clinic be ready to compete? Since the hospital’s completion is a few years away, the clinic has that amount of time to strategically plan — perhaps even working with the hospital as a partner!

Competitive advantage, then, plays an important role in distinguishing this theater troupe from that one. This clinic from that hospital. But being different is not enough. Adding value is, at least from the perspective of the community served by the organization. From that perspective (and this is the part that is sometimes difficult to swallow for noncompetitive types) advantage is any superior position the organization has over competitors. It can be characterized as a program that the organization does better than another group or an operational edge, such as proprietary ticketing software for performing arts groups that enables ease of use and audience satisfaction like no other in the area.

The concept of competitive advantage is beautifully illustrated by dance companies like the New York City Ballet. George Balanchine’s choreography and rigorous technique is a competitive advantage:

It’s no accident that I selected this photo from their Agon, which means “contest” in ancient Greek, to make my case that these dancers using Balanchine’s technique are masterfully suited for rapid fire attack to the movement like no other dancers I have ever seen. I love to be in the room when it is happening! That value — technical, artistic, athletic — captures my breath.

Clearly, I am their market and will continue to get tickets so long as City Ballet produces abstract work faithful to Mr. Balanchine’s vision. On the surface, the American Ballet Theatre (ABT) appears to be their competition. But that’s not entirely true. Not if we’re comparing competitive advantages. Of course they are both ballet companies but it is each one’s appeal to slightly different markets that enable them to be noble neighbors. ABT does superior productions of what is commonly referred to as story ballets and, in this way, doesn’t compete with City Ballet from my perspective as a ticket buyer. That doesn’t mean that people like me won’t buy tickets to ABT. But even then I am likely to favor choreography by Balanchine. That said, let the competition begin when ABT does Balanchine or City Ballet a story! Modern dance companies like Alvin Ailey, Paul Taylor, and others have competitive advantages, too, which arise in part from the creative innovations of the artistic visionaries driving them.

However you want to think about it and if  “superior” or “adding value” is off-putting, perhaps thinking about it as noble competition might help.

Is your organization ready? En garde!

Next up: logic.

by Floyd Rumohr

Executive directors are likely to hear the term “strategic planning” ringing in their ears from board members, funders, and other organizational stakeholders. But what exactly is it? Confusion over what it is and what it isn’t can leave a well-intended founder flummoxed and early career executive directors scratching their heads.

The nonprofit strategic planning process is borrowed from the for-profit world that uses it to, among other things, allocate time and money for a business that sells a service or product. Just like with for-profits, divvying up human and capital resources is essential at nonprofits. Perhaps more importantly, strategic planning helps organizations describe who they are while identifying potential new directions in program development and where they want to go.

Since neither time nor money tend to be in abundance in the nonprofit world, strategic planning processes that are adaptive to change will help executive directors, their boards, and other key members of the team remain fluid as new information becomes available. This is true unless your organization wants to waste what is precious to it — namely its time and money! Who really wants to do that? Nobody. But it happens a lot. Often because strategic planning isn’t thought of as a component of financial, time, or even human resource management.

Thinking of it from a resource perspective might help to illustrate why strategic planning is an important activity of boards since they are ultimately responsible for budgets. Who wouldn’t want to fend off resource hemorrhaging or other symptoms of struggling strategic leadership such as an organizational identity crisis or lack of an institutional direction in which the board, staff, and stakeholders are engaged?

Nine dimensions are described in the following blog entries as a crash course in the basics of strategic planning:

#2: Vision and Mission

#3: Core Values

#4: Goals and Objectives

#5: Environmental Factors Affecting Nonprofits

#6: Competitive Advantage: City Ballet and ABT

#7: Logic: Ins and Outs of Enterprising Nonprofits

#8: Evaluation: Bridging Inputs with Impact

#9: Alliances and partners

I like to think of them as “dimensions” because each can be thought of as a property of the physical space in which planning and implementation ultimately occurs. Many of them require vivid language and written goals and objectives to track performance.

Two additional blog topics are included for busy nonprofit professionals and those who care about them:

#10: Relationship to Development & Fundraising

#11: Tips for Creating Your Plan

Let’s get the strategic planning conversation started!

Next up: vision and mission.