Wednesday, November 2, 2011

Translating business strategy to non-business entities

As a policy student primarily interested in private companies only insofar as they engage in some way with the public or civic sectors, or involve a social mission, definitions of strategy that focus on competition are difficult to incorporate into my understanding of organizations. Michael E. Porter’s article “What is Strategy?” defines strategy as “the creation of a unique and valuable position, involving a different set of activities” that necessitates trade-offs in competitions and creating a fit amongst all of an organization’s activities. This supposedly creates a sustainable advantage over competitors.

After I got over the distraction of some of the outdated references in Porter’s work (Neutrogena definitely sells products in grocery stores these days, Southwest was not able to stave off re-positioners and straddlers, and things didn’t work out so great for Circuit City), I questioned how some of this vocabulary of competition and advantage aligns with the fundamental purpose of not-for-profit and socially focused companies. There are of course in the not-for-profit sector competitions over definitions of “common good.” For example, pro-life and pro-choice groups can be considered competitors, both attempting to “provide” the public with ideas on reproduction, freedom, and opportunity.

Even not-for-profit groups that serve similar purposes can be loosely defined competitors in some sense. In Pittsburgh, multiple groups working on community development, urban design, and restoration of Pittsburgh’s human-made and natural resources disagree on projects that properly serve those purposes. For example, many of these groups from Pittsburgh’s Urban Renewal Authority to Pittsburgh’s History and Landmarks Foundation and smaller groups like Preservation Pittsburgh disagree over the future of the civic arena, which used to house the Penguins and other groups and are attempting to garner the support of the small fraction of the population that cares about urban renewal and preservation in the first place. Yet most of the time these organizations work in ways that promote each other. Although they may compete for similar grants and other resources, its rare that one organization will have to promote themselves in terms of the other (aka throw them under the bus and claim their work is not as valid) rather than the intrinsic value of their organization. I guess in a sense not-for-profits main competition is inaction on whatever issues they promote.

On the other hand Collins and Porras article on the importance of building vision easily translated to the not-for-profit world. It’s vital for not-for-profits to understand their “true” why (after asking five whys) especially when having to explain their core values and purpose to potential funders and defend their reason for existence to doubters. Unlike companies that can have core values and purposes that define a vision in addition to making profit, without this clear vision a not-for-profit cannot function.

For those of you who are interested in not-for-profit strategy, or non-traditional-company strategy how do you adapt the lessons from this weeks readings to the sector?

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