Board Leadership: How to use a competitive advantage exercise to better understand your organization’s strengths

How to use a “competitive advantage” exercise to better understand your organization’s strengths

New Jersey is the most densely populated state in the nation – so it’s no surprise that it’s also densely populated with nonprofits.

The National Center for Charitable Statistics estimates that New Jersey has almost 39,000 incorporated nonprofits, and close to 26,000 of them are 501c3 public charities that raise funds from the public and philanthropic sources.

While this brings up some challenges, it also presents a strategic planning opportunity. Looking at your organization in light of other nonprofits can give you a new perspective on your own group’s strengths, and help you understand what it is about your nonprofit’s approach that makes it particularly valuable to the people you serve. Knowing these strengths can be a tremendous asset to your ongoing strategic planning.

While the ideas of competitive advantage or unique value proposition are not new in the for-profit world, we are only just starting to see them integrated into nonprofit strategic planning. In many cases, community needs are so pressing that it seems obvious that nonprofits are essential.

But understanding what sets your nonprofit apart can help your ongoing strategic thinking about how to strengthen your organization and better carry out your mission. This is less about figuring out how to best your competitors and more about making strategic decisions that amplify the best aspects of your organization.

So how do you figure out what sets you apart from other nonprofits? Start with this chart:

Consider other organizations that are similar to yours. Depending on what you do, there are numerous ways to frame this question. If you are a symphony, you can start by looking at other symphonies…but you also can also look at other choices available to people looking for an arts experience, like

Depending on what you do, there are numerous ways to frame this question. If you are a symphony, you can start by looking at other symphonies…but you also can also look at other choices available to people looking for an arts experience, like theaters, dance performances, or other types of concerts. You could even consider other choices that people might make with their leisure time, like going to a restaurant, shopping, or staying at home watching Netflix. You should select comparison organizations that will provide you with maximum insight into how your organization is viewed by the people you are trying to engage – be they clients, audience members, volunteers, or donors.

Once you have your list, look for similarities between your organization and each comparison group. Do you serve the same people? Seek similar outcomes? Share the same approach?

Then look for ways in which you are different. Do you serve different people? Maybe you offer a different service or experience or approach your work in a different way. Perhaps your service offers a different benefit to the people you serve. Maybe you carry out your work in a more efficient or effective way. What makes your approach unique and valuable for your constituents and your community?

Be disciplined when you are doing this exercise. It’s easy to say, “no one else offers an exact replica of our service” — but that’s not the point. While it might be true that you are the only group presenting Baroque music or conserving field mice habitats, you can dig deeper to better understand the roots of your uniqueness and success.

For example, I recently did this exercise with a company that presents an unusual type of dance — there really isn’t another company that produces the same kind of experience, so they had a hard time coming up with a list of comparison organizations. They settled on looking at other mid-sized dance companies even though the artistic product is not exactly similar.

During the comparison exercise, they realized that one thing that sets them apart is that they have never gotten into debt (a pretty common occurrence for smaller arts groups, unfortunately). This helped them to understand that their conservative financial approach has been a key to their success and longevity – and they should continue to prioritize it when making future decisions.

An advocacy group completed the exercise, and realized that it is their staff expertise that sets them apart from other groups with similar mission and intent, many of whom are more volunteer-driven. They have both lawyers and conservationists on staff, which informs their policy decisions and their advocacy work, makes them a leader in the field, and positions them as a valuable collaborator for many organizations with similar values. Understanding this, they place a high strategic priority on maintaining a strong staff and investing in their professional development.

Once you take the idea of “competition” out of this exercise, you can see it is really about understanding your own strengths and then using them to improve your chances of success. Your clients, audiences, donors, and volunteers are all comparing you to other similar organizations, so why shouldn’t your leadership do this as well? It can only help you to better understand what sets you apart and makes your work truly essential to our community.

Allison Trimarco is the founder and principal of Creative Capacity (www.creativecapacity.net), a consulting firm that collaborates with nonprofits to find creative solutions to management challenges. She is also an affiliated consultant and instructor at The Nonprofit Center at La Salle University’s School of Business (www.lasallenonprofitcenter.org).

Photo at top: Creative Commons/ Steven Depolo