During the first week of class my Strategy Development professor explained that a big part of strategy was knowing what your company was not going to do. It wasn’t until I read, “The Coherence Premium” by Paul Leinwand and Cesare Mainardi that the idea of saying no as a strategy became crystallized. For an organization to be highly successful it is important that they understand what they do well and how to market these abilities into products that generate value. To fully succeed in this endeavor, a company must reject (say “NO”) all products and/or services that don’t utilize the company’s capabilities and gifts.
In their article, Leinwand and Mainardi describe the “coherence premium” as a strategy whose “capabilities system in consciously chosen and implemented to support a focused strategic purpose and is aligned with the right product and service portfolio.” They further explain that this state of strategy “requires hard choices, including divesting businesses, streamlining nonessential functions, and paring product and service lines;” in other words it requires leadership to know when to say NO.
This line of thinking is extremely important in a world of profits, but what about the world of nonprofits? Do the same rules apply? I would argue, that this strategy is just as crucial to the nonprofit sector as it is in the private sector. I have seen many a nonprofit stumble and crumble because they did not have a strategy that was focused enough to know when to say no. In their search to help everyone, they end up helping no one.
One of the nonprofit organization I worked for had this very issue. As a Christian Ministry, the nonprofit worked tirelessly to assist hurting populations across a variety of spectrums: health care, housing, financial assistance, food insecurity, emergency services, job placement, spiritual guidance, reentry services, ect. In the organization’s quest to fulfill its broad mission, they had failed to evaluate their own strengths and determine what services were viable and effective. Due to their unfocused strategy, the ministry began to slowly lose money, even though several of their projects were providing revolutionary services and innovative training. The continued loss of revenue derives from the CEO and Board unable to clearly evaluate what the organization’s strengths are, align their services with these capabilities, and say no to those services and products that detract or don’t tightly align with those designated strengths.