How does your organisation stay competitive

nfpSynergy Summer Insights Wednesday 16 th June 2010 20 Cavendish Square

How does your organisation stay competitive? Joe Saxton

How is competition different between for-profits and non-profits?

Structure of for-profit and non-profit organisations Provision of goods and services Income greater than costs Profit For-profit Non-profit Income greater than costs Profit Provision of services

Influence of external world and rapid change
Focused strategy
Responsive and adaptable to change
Excellent people
Excellent funding
The inside world The outside world The specific competitive arena
Your culture, strategy and competences
What factors influence competition and your organisation ability to succeed

How do charities say they stay competitive?

Strategies for maintaining a competitive advantage Organisations earning less than £500k “ Which of the three following strategies do you believe are the most important in maintaining a competitive advantage for your organisation?” Base: 38 people Source: How does your organisation try to get a competitive advantage? nfpSynergy Feb 2010

Base: 56 people Source: How does your organisation try to get a competitive advantage? nfpSynergy Feb 2010 Strategies for maintaining a competitive advantage Organisations earning between £500k and £5 million “ Which of the three following strategies do you believe are the most important in maintaining a competitive advantage for your organisation?”

Base: 58 people Source: How does your organisation try to get a competitive advantage? nfpSynergy Feb 2010 “ Which of the three following strategies do you believe are the most important in maintaining a competitive advantage for your organisation?” Strategies for maintaining a competitive advantage Organisations £5 million +

How does your organisation try to get a competitive advantage? Strategies for maintaining a competitive advantage under all categories “ Which of the three following strategies do you believe are the most important in maintaining a competitive advantage for your organisation?” Base: 170 people Source: How does your organisation try to get a competitive advantage? nfpSynergy Feb 2010

The research from 1994

How can organisations measure their competitive position?
Media mentions
Awareness
Search engine results
Voluntary income growth

Number of media mentions per month Nov 2009 – March 2010

Google and Bing search Number of hits

Spontaneous awareness of certain charities

Growth patterns of development charities since 1980 Vol Income £ ,000s Year

Measuring your competitive position
Media mentions, awareness, search engine results and growth patterns are only suggestions
Our forthcoming fundraising benchmark – released July 6 will provide another way to compare yourself with other charities
All our monitors help organisations understand how their compare with their peers
But each organisation needs to decide for itself what measures make sense
Number of applicants per job
Staff turnover rate
Success rate in tenders
Direct marketing response rates
And many more

But the outside world is changing too

Budget deficit Public Sector Net Borrowing as a percentage of GDP Base: UK Source: HM Treasury/nVision

Declining Voter Turnout As percentage of the UK electorate Base: UK electorate Source: British Electoral Facts: 1832-2006, Parliamentary Research Services, House of Commons Library data

Type of household in England Trend and forecast, 2006-based projection Base: UK 2005 Source: Social Trends, National Statistics/nVision

Age structure of the UK population Number of people and proportion of total UK population of each age, 2009 projection Base: UK Source: National Statistics/nVision

International migration Number of people moving into and out from the UK, in thousands Base: UK Source: International Migration, National Statistics/nVision

Household disposable income growth Total increase from 1980 in real terms – January 2010 nVision forecast Base: UK Source: National Statistics/nVision

Proportion who have internet access By age, gender and social grade “ Personally, do you have internet access…At home; At work; At school/college, none of these?” Base: 1,200 respondents aged 15+, GB Source: nVision

Participation in social networking websites As percentage of total population, by gender, age and social grade “ Which of the following, if any, have you done on the internet in the last 6 months…? Created / updated a personal profile on a social networking site (e.g. facebook / myspace / bebo)” Base: 1,200 respondents aged 15+, GB Source: nVision Research

Volume of SMS messages on UK cellular networks among the four main operators In millions Base: UK Source: OFCOM/nVision

But what does the changing external world have to do with competition?
Other organisations may become more adept at dealing with the new world
Existing stakeholders may become more distant or more engaged as a result of the changing world
New stakeholder groups may become important
Older/younger/rich/poorer may change their outlook in a changing world – so the old ways of communications will no longer work as well

Awareness and communication strategies

What does a generic strategy need to do?
Provide a framework for all of the marketing and communications
Act as an architect’s plan, not a builder’s toolkit
Allow the entire organisation to understand how competitive advantage will be achieved
Not specifically about service provision

Four strategies
NICHE
EXTERNALLY/FUNDING-DRIVEN
DIFFERENTIATION
AWARENESS

Four strategies
Niche
Externally/Funding-Driven
Differentiation
Awareness

Niches
Differentiation based on the actual work of the charity
Work can also be done by larger charities
Single mindedness is the key
Use PR and fundraising to own the niche
Geographically distinct - but the same work as others
High local awareness - the local charity
e.g. Donkey Sanctuary, Woodland Trust, Cats Protection League, County Naturalists Trusts

Four strategies
Niche
Differentiation
Awareness

Externally-driven strategy
Carried along by external sources of revenue
Legacies, grants, investments make fundraisers marginalised
React to the news, not make it
Pervasive feeling that ‘money grows on trees’
Trustees and Directors focused elsewhere
In marketing terms, there is little to recommend it
Most charities are moving (slowly) towards other strategies

Four strategies
Niche
Differentiation
Awareness

Differentiation through audience
A clear audience based on lifestyle or demographics or attitude
The audience needs to be coherent and stable
All activities centred around relationship with audience
e.g. Christian Aid, Jewish Care, CAFOD

Differentiation through product
Product means recognisable communications relationship
Membership, child sponsorship, etc.
Product used as basis for other marketing e.g. legacies
e.g. National Trust, Action Aid

Differentiation through beliefs
Strong beliefs can build a distinctive organisation
Beliefs about working method, about symptoms and causes, about new ideas
e.g. Greenpeace - non-violent direct action

Pure product strategy Pure audience strategy Spectrum of differentiation strategies Mix of product and audience strategy ActionAid National Trust RSPB Christian Aid CAFOD

Four strategies
Niche
Differentiation
Awareness

Awareness strategy
All communications directly or directly increase awareness
Awareness is not the same as advertising
Regular monitoring of awareness
Have a clear set of beliefs and values
Make all your activities work together
Structure is important

Awareness strategy
PR must be very strong
Be prepared to be visible
Create activities to get in the news
You should have a spokesperson
Comment on everything
Be prepared to be outspoken

Externally- driven strategy Awareness strategy Differentiation strategy Niche strategy The development sequence of competitive strategies KEY TO ARROWS UNCOMMON DEVELOPMENT USUAL DEVELOPMENT COMMON DEVELOPMENT

Strategies in context
AWARENESS
Oxfam or Save the Children
DIFFERENTIATION
CAFOD - audience
Action Aid - product
Practical Action - beliefs
EXTERNALLY-DRIVEN
World Emergency Relief
NICHE
WaterAid

The challenge of competition
Our task is to envisage the future and prepare for it, to make our organisations ready for the changes and the competitive times ahead.
Our task is to create strategies that make our own organisations excel, and to communicate those strategies across the organisation from trustee to volunteer.
Our task is to prepare a vision of a better world and share it with our supporters. We are not charity workers, but fulfillers of people’s dreams about who they are and what they believe in.

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How does your organisation stay competitive

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