Giving Compass' Take:

• In this book excerpt, Stanford Social Innovation Review examines what it means to have strategic focus in the nonprofit sector — a commitment to doing what it does best — and how to achieve it.

• The example here is the Equal Opportunity Schools program, but the advice could be applied across many different sectors. Rigorous research, targeted recruiting and measuring performance are universal best practices.

• Another key to powerful nonprofit leadership: humility. 

We define a nonprofit’s strategy as a planned set of actions that are designed to achieve its mission. By contrast, the strategy of a for-profit business is a planned set of actions that aim to maximize shareholder value by achieving sustainable competitive advantage. Fortunately, academics and consultants have developed many tools and frameworks to guide leaders in their strategic thinking.

Now, since we are career-long strategy consultants, we have a secret that we must confess at the outset: strategists, like many knowledge-based professionals, are prone to make their knowledge appear more complicated than it is. However, we believe that the nonprofit sector has an urgent need for clarity and simplicity in its strategic thinking — and that it can benefit from adapting the concepts of business strategy.

We developed our engine-of-impact model by closely observing nonprofits that have mastered the essentials of strategic leadership — organizations like Equal Opportunity Schools (EOS).

In its first five years, EOS served more than twenty-five thousand missing students in more than eighty school districts across the country and developed a funding model wherein earned revenue covered 75 percent of program costs. This early success can be attributed to EOS’s ability to deploy distinctive skills across its value chain.

This value chain has five core segments:

  1. Conducting rigorous research to identify the regions or districts that present opportunity.
  2. Activating the moral agency of district leaders through sales and marketing.
  3. Selecting the best applicants.
  4. Executing the program with participating schools, leveraging EOS’s expertise in incorporating “growth mind-set,” and developing insights for every student.
  5. Measuring performance.

Read the full article about essentials of nonprofit leadership by William F. Meehan III and Kim Starkey Jonke from the Stanford Social Innovation Review.