Is Non-Profit Strategy an Oxymoron?
“Strategy is all about purpose, potential, possibilities and predictability”
Valid question, after all. Unlike their for-profit counterparts, non-profit organizations (usually) have a very clear, simple-to-understand and unchanging mission. Their target audience is also (usually) very-clearly defined. Further, non-profit organizations (NPOs) do not face the normal challenges of competition, price-wars, growth, and market dominance. There are no ‘5-forces’ of industry/market steadily eroding their ‘competitive advantage’ and driving their profits to zero – normally, there are no profits to begin with!
But then, take a step back and think deeper.
NPOs are organization, specifically incorporated under 501(c)(3) rules. While it may seem the driver for this action is to take advantage of tax exemption, the core reason for incorporation is the gain efficiency. That, after all, flows from ‘theory of a firm’ – firms organize economic activity to reduce friction, reduce waste of resources, and improve delivery of product/services.
Once you understand the reason why NPOs form (to improve efficiency), THEN consider that this is a $1T ‘industry’ in US, and finally consider the immense value they deliver to their (usually) endangered constituents – at risk children, vulnerable women, animals in need, fight against life threatening disease, etc. – you get the picture.
This is simply a too important an industry to not operate at peak efficiency.
So yes, NPOs need a strategy, and a plan, to operate at peak effectiveness. The needs are different from their for-profit counterparts, of course. Instead, they need to understand:
the segment they are serving,
the real reasons for the problems afflicting their target segment,
how to measure progress/success,
what resources they need to gather and deploy (including time/effort of their volunteer base), and finally,
how to raise awareness of their mission in the donor community to efficiently raise funding for their cause.
Strategy, at its core, is about purpose, potential, possibilities and predictability. NPO Board, their core leadership team, need to start by asking themselves the 5 basic set of questions outlined above. They then need to integrate the answers to these 5 basic/fundamental questions into a coherent single-thread plan, to address them in sync. Finally, they need to arrive at logical milestones, and metrics to track progress and make adjustments at a periodic basis to ensure they remain on track.
Future is inherently unpredictable. Every nonprofit organization goes through various phases and only those organizations that constantly and consciously re-invent itself to changing landscape, remain ahead in the game, succeed and survive.
Consider CLASS your mutating gene - the one that will help you adapt and master the new environment. We differ from the traditional management consulting firms that provide band-aid solutions or a menu card of silo services. That does not work, as it assumes that problems occur in isolation. We take pride in standing by our clients all the way to the top by re-inventing themselves.
About The CLASS Consulting Group:
The CLASS Consulting Group is a trusted advisor to the Board of Directors and Senior Leadership of Nonprofits. It is a boutique management consulting firm headquartered in San Francisco Bay Area that provides consulting services to senior management and Board of Directors of nonprofit organizations and offers offers community leadership opportunities to professionals.
Since 2002 CLASS’s volunteers have been assisting nonprofit organizations in the SF Bay area and supporting the communities in which, we all live and work.
Interested? Simply Request A Meeting and we’ll get in touch to tell you all about this opportunity and how our volunteer-run teams are helping nonprofits make the bay area a better place; one community at a time.
About the Author:
Deepali Sachdeva is the Founder and Board Chair for The Class Consulting Group. She is a management adviser, an influential leader and an effective manager with numerous business success stories spanning more than two decades…Read More