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Friday, August 18, 2017

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The Strategy of Disruption
Nell Edgington

June, 2010

Competition is often a dirty word in the nonprofit sector.  Indeed, playing nice is the norm. But to truly solve social problems, nonprofits have to  not only compete, but compete well.  This means understanding how their strengths compare to their competitor’s weaknesses, and how to take advantage of that.

Umair Haque, Director of the Havas Media Lab, writing on the Harvard Business Review blog argues that rather than trying to beat their competitors at their best game, businesses need to follow the “golden rule” of competitive strategy, which is “What your fiercest rival does badly, do incredibly well.”

He finds fault with the normal competitive strategy in the business world, which is to compete on similarities. This kind of competition leads to mediocrity. To truly be disruptive, innovative, game-changing, businesses must be markedly, competitively different: “In difference lie the seeds of disruption. In similarity, only obsolescence, and decay.” He cites the auto, food and media industries that were suddenly overtaken by competitors who realized that disruption was the way to go:

Ford, Chrysler, and GM spent a decade trying to best another at churning out the biggest, hungriest SUV — but none tried to do what all sucked at: make a smaller, cheaper, more fuel efficient car instead…Big Food has spent half a century trying to make food cheaper, with artificial flavors, colors, and ingredients — but none tried to do better what all sucked at: make food more nutritious instead…[Media] incumbents tried for decades to lock down content in walled gardens — but none tried to open it, unlock it, and free it. Enter a new set of revolutionaries, wielding the Golden Rule like a superweapon. Who did well what auto incumbents did badly — making a smaller, more fuel efficient car? Tata, with its revolutionary Nano. Who did well what food incumbents did badly — delivering healthier food? Whole Foods. Who did well what media incumbents did badly — freeing and unlocking content, so it was easily discoverable? Google.

Nonprofits can learn a lot from this argument. The sector is by definition about disruption. It exists to change some sort of disequilibrium, to right some wrong, to fill some gap not addressed by the market. Disruption is the name of the game.

But in order to be truly disruptive, nonprofits must be strategically competitive. It is of no use to recognize a gap in the market (children who are not being fed, elderly people who are not being housed, sick people who are not receiving medical attention), create a solution to address that gap, and then sit back and “collaborate” with other nonprofits or government agencies who are delivering a mediocre solution.

Don’t get me wrong. I understand that the nonprofit sector, unlike the business sector, is based on concensus and collaboration. But sometimes those concepts serve as a crutch rather than a tool.

If the ultimate end goal is to solve a gap in the market, doesn’t it make sense to analyze the other solutions out there, their strengths and weaknesses, and then create a strategy accordingly?  If a nonprofit exists alongside another nonprofit that is delivering an inferior solution, doesn’t it make sense to compete in order to make better use of the funding, support, volunteers and other resources that the inferior organization is collecting?  The alternative is that solutions become mediocre instead of disruptive. And we need a lot more disruption right now.

Learn more about Nell Edgington and Social Velocity at  http://www.socialvelocity.net/



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