Shaping your Strategy

the concept of sustainable competitive advantage is usually at the heart of company strategy.

Strategic management is necessary to achieve success in all types of organizations. However, the way strategy is understood and applied differs depending on the sector in which your organization operates, whether it is private, public, or voluntary.

The private sector is defined by competition. Companies continue to exist only if they provide products or services that are better than those of their competitors, so the concept of sustainable competitive advantage is usually at the heart of company strategy. Another key dimension or private sector strategy is time Lead times (the time it takes for a process to be completed, from the start of that process to its completion.) for developing new products and getting them to market are often short, and tension can exist between delivering short-term profits and planning and resourcing long-term strategy.

The public sector delivers public policy and undertakes functions such as collecting taxes. It is largely immune to the forces of competition, although competition does exist internally, such as between departments seeking funding form a limited government pot. If public sector organizations spend less than they receive, the difference is known as "surplus", not "profit". Strategy in the public sector is usually centered on delivering goals to satisfy the political process and producing conspicuous efficiency and value for money to reassure taxpayers. Political pressures commonly lead to changes in priorities to gain voter support, and to a short-term view that impacts upon longer-term strategic planning.

Voluntary organizations can be considered to fall between the public and private sectors. While their objectives may be social or political, they are subject to the same competitive forces as the private sector. The must compete for funding from public or private organizations, and from individuals. Unlike the private sector, however, it is not always clear who the customers of a voluntary organization are--is it the recipients of funding, the donors, the trustees, or the volunteers who help make it run? Consequently, strategic management of voluntary sector organizations is heavily based upon satisfying all of these different groups, through careful stakeholder (anyone who has an interest in your organization and how it is run) management. Voluntary sector organizations must be careful not to spend more than they receive in donations. Like public sector organizations, if a voluntary organization spends less than it receives, the difference is is know as "surplus" rather than "profit", for social, political, and presentational reasons.

ACTION POINT: Provide products and services that are better than those of your competitors.