Children's Voice May/June 2008

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Management Matters

From Strategic Planning to Strategic Positioning

By Shelli Bischoff-Turner

Strategic planning has been the mainstay of nonprofit organizational development for decades. Defining mission and vision, setting strategic goals, and creating work plans are the foundation of any professional enterprise. Nonprofits typically go through the strategic planning pro-cess upon start-up, after a few years of passionately providing services, at a transition point, or as a result of significant industry changes.

In today's complex and competitive environment, however, the traditional strategic plan isn't enough. While defining mission, vision, and goals are sufficient to maintain or grow an organization, it doesn't always capitalize on new opportunities or best leverage an organization's assets. We suggest that sophisticated and successful nonprofits consider strategic positioning to get to the next level.

Strategic positioning is outward-focused, more fully recognizing the competitive and market environment within which an organization operates. Positioning defines an organization's specific niche within its sphere of influence. With a strong strategic position, the organization is poised for ongoing success, sustainability, and distinct competitive advantage.

Strategic Planning Fundamentals

Since strategic positioning is an enhancement to strategic planning, reviewing its fundamentals is important. Good strategic planning is about focus and choices. Strategic means deliberate decisions based on internal, external, and market context and current and anticipated conditions. Defining an organization's direction and the strategies to achieve results should be an analytical and objective process. To be clear, strategic planning is not a visioning process; nor a brainstorming process; nor a long list of strengths, weaknesses, opportunities, and threats.

The strategic plan is a useful and viable nonprofit management tool provided it:
  • is based on external, internal, and market context and objective data and information,

  • involves a systematic and informed decision-making process and the plan reflects deliberate choices, and

  • is used as a touch point for programmatic, marketing, resource development, and operational decisions.

Strategic Positioning: The Next Level

Organizations that have mastered the fundamentals of strategic planning or are ready to go to the next level of development should consider strategic positioning. If they are clear about mission, methods, and distinctive competence, for example, they will want to do more than set strategic goals in a planning session. Positioning can be useful for organizations with substantial strengths and skills that seek to optimize those assets.

Strategic positioning enhances planning. Positioning defines, creates, or recreates an organization's niche within a sphere of influence. Positioning is relative to the competition, other players, or constituents. As pointed out by Jack Trout, who coined the "strategic positioning" term, it is not about the product, it is about where you are in the mind of your constituent.

Positioning more fully defines the organization's identity and helps create distinction in a competitive environment. Organizations that are well-positioned have a presence that allows them to achieve strategic goals in a seemingly effortless manner. These are the organizations that have a "bigger than life" organizational persona. They are able to command attention, appear ubiquitous, and are always at the right tables.

The Positioning Imperative

Good examples of how organizations can distinguish themselves comes from our work with human service organizations. In addressing the needs of parents, families, or children, human service organizations can find themselves providing an array of services. Pressure to create new projects or expand programs to meet ever-increasing needs can result in the proverbial "all things to all people."

Deliberately defining a position helps an organization be more focused and distinct. One human service organization decided to fully own the "family self-sufficiency" position in their community. They defined the desired results and the processes necessary to achieve those results. They realigned the organization and transitioned out of major programs and facilities to be more efficient in allocation of resources. The organization has become a model of reinvention and impact.

Positioning is also an imperative when an organization has outgrown the market or has the capacity to expand. One statewide organization outgrew its services to its constituents. Their positioning process helped to define their distinct expertise and highlighted the opportunity to apply those skills in a broader geographic market. In another situation, a large, successful, century-old human services organization redefined its position to best leverage its assets and brand. Its distinct assets were under-utilized as a local, direct service provider. It had opportunities to reposition as a national model.

The Process

Like planning, strategic positioning is a systematic, objective process based on context, analysis, deliberate decisions, and organizational alignment. As shown in Figure 1, positioning enhances and informs the strategic planning process.

Situation analysis. The situation analysis for the positioning process expands upon the analysis used as context in planning. It is a more externally focused, constituent-centered approach to understanding the industry and macro-environment in which the organization operates.

Competitive analysis. Most nonprofits are not comfortable with the idea that they compete for market share. Non-profits are trained to distinguish themselves from one another. Oftentimes funders require collaborative approaches in a competitive funding environment, making for a very interesting market scenario. Asking the question, "Who is the competition?" typically yields less than useful results. Most will not admit that organizations, companies, or government agencies exist that provide the same services. In many instances, the competitors are also partners and collaborators.

It is more useful to ask, "If your organization went away tomorrow, what organization would likely fill your niche?" This question typically yields a handful of competitors. Websites with resource links also provide lists of other organizations that occupy your niche.

A good competitive analysis provides a detailed comparison of the mission, programs, members, budget size, and funders of similar organizations, at a minimum. An enhanced analysis would assess distinctive competencies and personnel, markets and market penetration, partnerships, board networks, and operating models.

Constituent interests. Typically, nonprofit member, donor, and volunteer research are done with customer satisfaction surveys. Strategic positioning encourages us to go deeper and be more constituent-centered. Being constituent-centered focuses on what the organization knows about the constituent, rather than trying to discern what the constituent knows about the organization. In addition to what is known about current constituents, what is known about the interests, attitudes, behaviors, and unmet needs of potential constituents?

Social marketing research reminds us to understand constituent behavior-what do they perceive as benefits and obstacles to changing behavior. Objective, attentive research provides insights to constituent unmet needs or interests, or to the products or services that would bring about desired behavior, whether it is quitting smoking or donating to your cause.

Distinctive competencies. Organizations with clear, focused missions and identities generally have developed methods, skills, or assets that have allowed them to excel in a particular area. Over time, those skills become distinctive, competitive advantages. Positioning can leverage those assets. What does the organization excel at or where does it have a competitive advantage?

Distinctive competence is one or two things-not a long list of generic characteristics or styles, such as "collaborates well." Does the organization have a unique business method? Has it excelled at a distinct process, or does it simply have expertise and skills that the competitors do not? An environmental group, for example, has a unique partnership with a renowned law school. It has access to legal expertise that few other organizations can boast. In other situations, well-established and well-endowed organizations had unmatched research capacity. In the case of a human service agency, it housed a research staff that had become experts on outcome evaluation. In the case of a natural area preserve, their research station had unique longitudinal climate data spanning 70 years. In both cases, the distinctive competence provided unparalleled opportunities to position within a broader sphere.

Gaps and unmet needs. Unmet needs and gaps should emerge from the situation analysis, competitive environment, constituent needs, and distinctive competencies. If the needs are not obvious, presenting the data and information to a board, staff, or advisors can elicit response and conclusions. The true value of a board with diverse backgrounds and expertise is that each person sees the situation differently.

In some cases, the overlap between unmet need and organizational competence is obvious. In others, gaps may not yet have been defined as a need. The enterprising organization, however, will see the opportunity to better achieve mission.

Alternatives and selection. Several potential positioning opportunities usually exist. Options may be to go broader, or narrower, as in the case of the human service agency that decided to focus on family self-sufficiency. A local or statewide organization may have an option to go regional or national.

Selection of the appropriate position is a strategic decision. Decision considerations include the organization's tolerance for risk or change. Some positions are likely to be more challenging or more radical than others. Funding options and feasibility are strong considerations in position selection. While some alternatives may be most attractive, they may be more difficult to fund. In some cases, to more fully occupy a position, the organization may have to vacate another. Each alternative position has its own set of implications. In all cases, the appropriate position should be strategically advantageous and align with mission.

It is critical to emphasize that positioning is not necessarily about taking an organization into a whole new area, nor does it suggest the organization become too diverse or unfocused. Positioning is based on distinctive competence and clarity about mission, method, and skills. Being deliberate about the position goes beyond organizational identity to strategic advantage. It goes beyond organizational description to clear distinction in the marketplace and in the minds of constituents.

Strategic planning and organizational alignment. With clarity of position, the organization can move into the strategic planning process. The position will influence goals and objectives moving forward. Upon completion of the planning process, it is necessary to align and develop the organization to achieve goals and support position. In its simplest form, for example, an organization cannot be the "voice of the sector" if it has no research and advocacy capacity. An organization cannot promise to be the leading source of accurate and current information without the systems and technologies to handle that information. At a more complex level, organizations may have to undergo comprehensive redesign and resource reallocation. This was the case of the human services organization that sold off assets that were not within its more focused position and transferred entire programs to other organizations.

The Benefits of Strategic Positioning

Embracing strategic positioning can mean different things to different organizations. A mature organization seeks rejuvenation, a growing organization endeavors to broaden their reach, and a young organization wants to strengthen its identity.

Rejuvenation. Positioning was key to the revitalization of a statewide association. A positioning analysis validated a gap in leadership sector-wide. The organization's donors, clients, and stakeholders, as well as the external and market conditions, highlighted a need for the organization to better fulfill its potential and live up to its brand.

The positioning analysis, and subsequent decisions made by the board, rejuvenated the organization as it redesigned programs, created a stronger public image, hired staff to fill needed services, and positioned itself in a new arena. Positioning literally defines the table at which one sits, as well as who one talks to and what names are on the speed dial. To fulfill the sector-wide leadership position, the organization needed leaders who interacted with other leaders.

Broader reach/greater impact. Positioning can help an organization meet unmet needs and occupy a larger niche. One organization had successfully met its goals. The savvy director understood that simply doing more, or incremental growth, was not a sustainable business model. A positioning exercise defined significant opportunities in a broader geographic marketplace that built on distinct organizational assets and filled an unmet need. A subsequent business plan and financial projections proved this was a viable next level for the organization.

Stronger identity. Positioning sometimes means an organization's identity needs to catch up with its image. It is not unusual for small organizations to reach a point where they need to more fully occupy their position. We have seen several situations in which the organization's image demanded that it step up to the plate and have much greater capacity to do the job. In one case, constituents perceived a regional organization as the leader in their field. The organization's self-image was much more humble. The organization needed to more fully occupy their position or risk losing it.

Many examples exist of nonprofits that operate with a resource-poor perspective and are unwilling or unable to invest in the infrastructure to support the organization they have built. Operating with a log cabin foundation for a skyscraper building does not provide the capacity and infrastructure necessary to successfully own a position.

Positioning hones an organization's identity. It is not possible to "sort of" position. A viable position implies being strident and true. Being weak, not filling the position fully, or not living up to identity undermines the ability to position and leaves the niche open to others.

Strategic positioning reminds us that it is not just about what the board and staff desire to do to fulfill mission, but more importantly, what the constituent expects and what the environment demands.

Shelli Bischoff-Turner is president and founder of Conservation Impact and Nonprofit Impact. She can be reached at 303/223-4886 or shelli@nonprofitimpact.com.


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