Competitive Advantage and Impact: The Difference is Critical to Nonprofit Strategy

Football Feet Crop 800x224pxI often feel like I'm walking on egg shells when using a term like competition.  Language like it is often viewed as foreign in the nonprofit community.  That's because collaboration, impact, and the common good are uppermost in all our minds.  But, competition can be good; it pushes innovation and inspires progress, and competition can be friendly. 

Understanding competitive advantage is about two things: 1) what it is you do best, and 2) how you fit within your community of service providers.  Considering these factors gives you the ability to better connect with your audience to improve funding and to better your position in the community by improving service options.

I've been following several topics in the LinkedIn group Strategic Planning for Nonprofits lately.  As someone with a natural curiosity and full well knowing this is a controversial topic, I posted the following question to the group: "What level of importance do you place on understanding an organization's competitive advantage in strategic planning?"  The comments flowed as though from a wellspring of enthusiasm and while I thought they would fall distinctly into two camps, by and large, I was pleasantly surprised.

In the contrary camp, comments included: "I don't usually use the term "competitive advantage" in this context, because I think it's more illuminating to say how one's organization fits into the landscape of others addressing an important community issue." Another comment stated: "I would add that in the nonprofit arts world organizations bridle at the word "competitive" so I often use the term "comparative advantage." Then, there was: "Swallowing to get past "competitive", there are several questions that funders silently ask that come close."

On the other side of the coin: "Other than Mission and Vision, I think that Competitive Advantage (Differentiation, Value Proposition, Uniqueness, etc. – they all mean essentially the same thing) is the most important consideration when doing strategic planning." Another said: "Being able to articulate how you are different and/or better than others is important to winning funding."

One of the more compelling comments stated: "Sadly, I find engaging non-profits in discussions regarding competitors to be challenging at best. I have encountered resistance to the use of business terms or concepts, as if doing so would somehow soil the purity of the group." This commenter went on to further illuminate his frustration with the following: "Adopting business concepts is viewed by some as cavorting with an enemy who somehow is responsible for the ills that the non-profit is trying to address."

I think we all agree that impact to the community is the priority, because without it, then what's the point?  However, it's important for every organization to distinguish between what it is they do best and how well they perform (outcomes).  Competitive advantage and impact are two different things. Outcomes demonstrate your value to the community and help you get better at what you do; while an understanding of your competitive advantage positions you among service providers and works to prevent overlapping services, which can dilute impact.

A final short, sweet, and poignant comment concluded: "Whatever you call it, it's vital."

And, that's the primary message I'd like to leave you with; whatever it is called, competition has always been present and it's here to stay.  Those organizations that do not understand what they do best, or that embrace that difference, place themselves at a serious disadvantage.
 

 

One thought on “Competitive Advantage and Impact: The Difference is Critical to Nonprofit Strategy”

  1. In todays world where there are so many non profits competing for limited if not meagre resources you certainly have to know what you are good at and what makes you stand out.Failure to do so makes you fall right to the bottom of the radar. Certainly agree that nonprofits managers feel uncomfortable refering to others as competitors or competition But in actual fact other nonprofits are indeed competitors & that’s why as a non profit you just gat to know your identity and what makes you stand out and fit into the community.Collaboration yes will collaborate but that doesn’t mean we cease to be competitors. They few stakeholder meetings I’ve attended have made me realise you are discussing a common cause yes but each one is propagating the agenda of there organisation.That’s just how it is.

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