We often talk about strategy, competitive advantage, and differentiation from a traditional business perspective in our work. We consider these concepts essential for arts leaders given the range of competitors cultural organizations face today for money, attention, and time. We also consider this understanding essential for effective collaboration across arts organizations: each player in the community needs to know exactly what they do best and what unique benefit they contribute to the cultural “ecosystem,” so together they can assemble experiences that best serve the community.
I found this short summary of the role of strategy in for-profit business and in philanthropy, in Tom Tierney and Joel Fleischman’s “Give Smart: Philanthropy that Gets Results,” a nice reminder of the two sides of strategy: competition and collaboration.
The aim of strategy in business is winning: relentlessly outcompeting competitors in the quest for customers, in order to generate the financial returns that propel shareholder value. The aim of strategy in philanthropy is fundamentally different: instead of revolving around competition to earn profits, it revolves around collaboration to achieve social impact. For a donor trying to determine how to change the world for the better, popular business concepts like competitive strategy, business definition, and customer loyalty may not always be applicable. Where philanthropy and business do overlap is in the idea that the essence of strategy, be it collaborative or competitive, is resource allocation. The more effective your resource allocation, the more likely you are to achieve the results you really want… Outstanding strategies do have a few proven hallmarks: build on your core strengths, maintain an external orientation, rigorously pursue facts, measure the few things that matter most, and never ever become complacent.