How does your organisation stay competitive

nfpSynergySummer Insights

Wednesday 16th June 201020 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

ProfitProvision 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 peopleSource: How does your organisation try to get a competitive advantage? nfpSynergy Feb 2010

5%

7%

7%

7%

7%

13%

18%

36%

36%

36%

36%

42%

42%

0% 5% 10% 15% 20% 25% 30% 35% 40% 45% 50%

Other

Investing in a highly skilled workforce

Strong branding and corporate postioning

Large database of loyal supporters

Emotive issue on which to fundraise

High level of public awareness

Having a unique purpose and activities

Strong organisational beliefs and values

Ensuring a breadth of income sources

Constant innovation and development

All of these strategies are important

Ability to demonstrate success and achievement

Keeping close to the needs of stakeholders

8Base: 56 peopleSource: How does your organisation try to get a competitive advantage? nfpSynergy Feb 2010

5%

3%

10%

12%

16%

16%

19%

21%

28%

30%

37%

41%57%

0% 20% 40% 60%

Other













Strategies for maintaining a competitive advantage Organisations earning between £500k and £5 million


9Base: 58 peopleSource: How does your organisation try to get a competitive advantage? nfpSynergy Feb 2010

6%

5%

12%

17%

20%

24%

24%

24%

25%

25%

27%

39%

46%

0% 20% 40%

Other














Strategies for maintaining a competitive advantage Organisations £5 million +

10

How does your organisation try to get a competitive advantage?Strategies for maintaining a competitive advantage under all categories


Base: 170 peopleSource: How does your organisation try to get a competitive advantage? nfpSynergy Feb 2010

0% 20% 40% 60%

Other




Strong branding and corporate positioning






Keeping close the needs of stakeholders



Less than £500k£500k - £5 million

Over £5 million

The research from 1994

STRATEGY Resp Rate (% resp)

£££< 500K (% resp)

£500K- £5000K (% resp)

£££ > £5000K (% resp)


37 37 31 42

Ability to demonstrate success

31 35 37 23

Unique purpose 30 41 29 19

All of the strategies 28 21 29 36

Strong branding 24 23 25 21

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

Marie Curie

Red Cross

Royal British Legion

British Heart Foundation

Amnesty International

0

1000

2000

3000

4000

5000Dogs trustMarie Curie Red CrossBattersea Dogs HomeRoyal British LegionBritish Heart FoundationBreakthrough Breast CancerAmnesty InternationalSt John AmbulanceWoodland TrustVoluntary Service Overseas

Number of media mentions per month Nov 2009 – March 2010

Dogs trust

Marie Curie

Battersea Dogs Home

Royal British Legion


Breakthrough Breast Cancer

Amnesty International

St J ohn Ambulance

Voluntary Service Overseas

0

250

500

750

1000

Nov '09 Dec'09 Jan '10 Feb '10 Mar '10

Dog

s tr

ust

Dog

s tr

ust

Briti

sh R

ed C

ross

Briti

sh R

ed C

ross

Red

Cro

ss

Red

Cro

ss

Mar

ie C

urie

Can

cer

Care

Mar

ie C

urie

Can

cer

Care

Mar

ie C

urie

Mar

ie C

urie

Batter

sea

Dog

s H

ome

Batter

sea

Dog

s H

ome

Popp

y D

ay

Popp

y D

ay

Briti

sh H

eart

Fou

ndat

ion

Briti

sh H

eart

Fou

ndat

ion

Brea

kthr

ough

Bre

ast

Canc

er

Brea

kthr

ough

Bre

ast

Canc

er

Amne

sty

Inte

rnat

iona

l

Amne

sty

Inte

rnat

iona

l

St J

ohn

Ambu

lanc

e St J

ohn

Ambu

lanc

e

Woo

dlan

d Tr

ust

Woo

dlan

d Tr

ust

VSO

VSO

Volu

ntar

y Se

rvic

e O

vers

eas

Volu

ntar

y Se

rvic

e O

vers

eas

10000

100000

1000000

10000000

100000000

1000000000

Google Search Bing Search

Google and Bing searchNumber of hits

Spontaneous awareness of certain charities

Amnesty


British Legion/Poppy Appeal

Red Cross/The British Red Cross

Marie Curie

0%

5%

10%

15%

20%

Jul-98

Mar-99

Nov-99

Jul-00

Mar-01

Nov-01

Jul-02

Mar-03

Nov-03

Jul-04

Mar-05

Nov-05

Jul-06

Mar-07

Nov-07

Jul-08

Mar-09

Amnesty British Heart Foundation British Legion/Poppy Appeal Red Cross/The British Red Cross Marie Curie VS0/Voluntary Service Overseas Dog's Trust Woodland Trust Battersea Dogs Home Breakthrough Breast Cancer

Oxfam

Red Cross

CAFOD

Help the Aged

0

20,000

40,000

60,000

80,000

100,000

120,000

140,000

160,000

180,000

200,000

1980 1982 1984 1986 1988 1990 1992 1994 1996 1998 2000 2002 2004 2006 2008

Oxfam

Christian Aid

ActionAid

Save the children

Red Cross

World Vision

Tearfund

CAFOD

Help the Aged

Growth patterns of development charities since 1980

Vol In

com

e

£ ,

00

0s

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 senseo Number of applicants per jobo Staff turnover rateo Success rate in tenderso Direct marketing response rateso And many more

But the outside world is changing too

Budget deficitPublic Sector Net Borrowing as a percentage of GDP

-6%

-4%

-2%

0%

2%

4%

6%

8%

10%

12%

14%19

48-4

919

50-5

119

52-5

319

54-5

519

56-5

719

58-5

919

60-6

119

62-6

319

64-6

519

66-6

719

68-6

919

70-7

119

72-7

319

74-7

519

76-7

719

78-7

919

80-8

119

82-8

319

84-8

519

86-8

719

88-8

919

90-9

119

92-9

319

94-9

519

96-9

719

98-9

920

00-0

120

02-0

320

04-0

520

06-0

720

08-0

920

10-1

120

12-1

3

Base: UKSource: HM Treasury/nVision

50%

55%

60%

65%

70%

75%

80%

85%

90%

95%

100%

1945 1950 1951 1955 1959 1964 1966 1970 1974(Feb)

1974(Oct)

1979 1983 1987 1992 1997 2001 2005

Declining Voter TurnoutAs percentage of the UK electorate

Base: UK electorateSource: British Electoral Facts: 1832-2006, Parliamentary Research Services, House of Commons Library data

Type of household in EnglandTrend and forecast, 2006-based projection

Base: UK 2005 Source: Social Trends, National Statistics/nVision

0

2,000

4,000

6,000

8,000

10,000

12,000

married couple cohabitingcouple

lone parent other multi-person

one person

1979 1989 1999 2009 2019 2029

Age structure of the UK populationNumber of people and proportion of total UK population of each age, 2009 projection

0

2,000

4,000

6,000

8,000

10,000

12,000

14,000

16,000

0-14 15-29 30-44 45-59 60-74 75+

0%

5%

10%

15%

20%

25%

Millions 2009 Millions 2019 Millions 2029% population 2009 % population 2019 % population 2029

Base: UKSource: National Statistics/nVision

-600

-400

-200

0

200

400

600

80019

91

1992

1993

1994

1995

1996

1997

1998

1999

2000

2001

2002

2003

2004

2005

2006

2007

2008

Inflow Outflow Net migration

International migrationNumber of people moving into and out from the UK, in thousands

Base: UKSource: International Migration, National Statistics/nVision

Household disposable income growthTotal increase from 1980 in real terms – January 2010 nVision forecast

Base: UKSource: National Statistics/nVision

-20%

0%

20%

40%

60%

80%

100%

120%

140%

160%19

8119

8219

8319

8419

8519

8619

8719

8819

8919

9019

9119

9219

9319

9419

9519

9619

9719

9819

9920

0020

0120

0220

0320

0420

0520

0620

0720

0820

0920

1020

1120

1220

1320

1420

15

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+, GBSource: nVision

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%To

tal

Mal

e

Fem

ale

15-2

4

25-3

4

35-4

4

45-5

4

55-6

4

65+ AB C1 C2 DE

Spring 01 Spring 03 Spring 06 Spring 09

0%

10%

20%

30%

40%

50%

60%

Tota

l

Mal

e

Fem

ale

15-3

4

35-5

4

55+

ABC1

C2D

E

Autumn 2006 Spring 2008 Spring 2009

Participation in social networking websitesAs 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+, GBSource: nVision Research

Volume of SMS messages on UK cellular networks among the four main operatorsIn millions

Base: UKSource: OFCOM/nVision

0

5,000

10,000

15,000

20,000

25,00019

99 Q

1Q

2Q

3Q

420

00 Q

1Q

2Q

3Q

420

01 Q

1Q

2Q

3Q

420

02 Q

1Q

2Q

3Q

420

03 Q

1Q

2Q

3Q

420

04 Q

1Q

2Q

3Q

420

05 Q

1Q

2Q

3Q

420

06 Q

1Q

2Q

3Q

420

07 Q

1Q

2Q

3Q

420

08 Q

1Q

2Q

3Q

420

09 Q

1Q

2

Orange

T-Mobile**

O2*

Vodafone

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

33

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

35

Four strategies


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


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

42

Four strategies


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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London E1 7NH

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(e) [email protected]

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How does your organisation stay competitive