External Environmental Scanning - Session 3

I think that the external opportunities and threats in the technology industry are particularly interesting right now, because it is easy to see organizations succeed and fail based on their ability to adapt. For example, Google seems like an organization that does a particularly good job of environmental scanning since they seem to be ready to respond to a constantly changing external environment. The organization's purchase of Android and emphasis on the mobile phone industry was a very smart move that turned a potential threat into an opportunity. Google has always made almost all of its profits from companies that pay for advertising on its search engine. Smart phones have changed the way people use the Internet, and today there are many more Internet users on mobile devices than on computers. This change in the external environment could have caused serious problems for Google, but instead they saw this change coming and bought Android. Google then scaled up Android and made it the most common operating system on smart phones. The interesting thing is that Google doesn't make any money on these phones, but it knows that every Android phone out there is another phone using Google for mail and search insuring that the organization's original product could survive and thrive in the new smart phone dominant Internet environment.

I think the key to environmental scanning is that you want to identify opportunities and threats in the external environment before they become obvious. Clearly Google did this with mobile phones. It bought android before anyone realized just how important that purchase would be for the company. In the same way, Google is currently being threatened by Facebook, and the shift to social networks away from traditional search engines. Google is reacting to this change as well, with social network attempts of its own, but I think they may be less successful here because they did not identify this threat as early, and thus are now forced to be more reactive than proactive.

As the readings point out, non-profits compete in a constantly changing external environment just like Google. Before any organization can determine an appropriate strategy, it must analyze the threats and opportunities that exist in the external environment in which it operates.

Distinctive Competency - Session 2

I was really struck by the term distinctive competency in this week's class/readings. It seemed an excellent point to me that an organization should only do things in which it has a distinct advantage over its competitors. It caused me to reflect on both my work at NYU and on Malawi Children's Village.

NYU's Office of Global Programs competes against other schools and third party study abroad providers to recruit students for our study abroad programs. I think we have some clear distinctive competencies. One is that our programs are academically rigorous and offer students to get credit from a fairly prestigious institution while studying abroad. Another is that we make it very easy for students to study abroad. Our study abroad counselors walk students through the visa process, we provide pre departure orientations, and have well staffed academic centers abroad that help meet students needs. We are able to do these things because we don't try to compete in other areas. Our programs are very expensive; we do not try to compete on cost. We limit our study abroad sites to major world cities so that we can be assured of getting high quality faculty and offering our students lots of services. NYU will not attempt to run a program in a small city in a developing country, because that would not utilize our distinctive competencies.

Malawi Children's Village (MCV) on the other hand does not have clearly defined distinctive competencies. I think that our village volunteer program has the potential to give us a distinctive competency, but I don't know that it is easily defined anymore. It gave us an advantage in delivering village based care, but how does it give us an advantage in running a school or health clinic. If it doesn't give these programs a distinctive competency, what does? I'm not sure I could say, and I think this is a clear sign that our organization is in need of more strategic planning. In our newsletter last year we had a volunteer that was quoted as saying "MCV is great because it is so many things." Since we help with food, health care, and education we try to meet all of the needs of our orphans. Perhaps this comprehensive approach is our distinctive competency, but I think that it's a bit of a stretch. I think that I will be bringing this up at our next board meeting as the fact that we don't have clear distinctive competencies seems a big problem to me.

What is Strategy? - Session 1

I was particularly struck by Porter's explanation that the essence of strategy is deciding what not to do. I knew that it was important for an organization not to try to do too much, but had never really considered just how important deciding what not to do is. Porter's description of Continental Airlines failed attempt to imitate Southwest Airlines was really interesting because brought home this point. Southwest doesn't just succeed in providing cheap no frills flights because they are simply better at doing this than other airlines. They succeed precisely because that is all they do. When Continental tried to imitate Southwest, but also tried to provide their traditional services they were unable to imitate.

I have definitely seen other organizations struggle because they did not decide what not to do. Malawi Children's Village (MCV), an nonprofit I am on the board for has definitely become less effective because we have not decided what not to do. I was originally attracted to the idea of MCV because it focused on village based orphan care, relying heavily on orphan's extended families and village volunteers to deliver cost effective care. While this part of the project remains intact it has become less effective because other projects have come to dominate MCV staff members time. The village based care was the core of the program because there was no central campus with other projects. By taking on other projects such as schools and clinics, the project stopped being extremely cost effective since extended families and village volunteers no longer provide a large proportion of the program's care.

MCV now runs a wide range of programs, and I believe that all are well intentioned and many provide valuable, quality services. However, it is difficult to identify anything we have decided not to do, and even more problematic, I am not sure that I could say what our distinctive competency is. Surely, when the program started the village volunteers seemed to provide the program with a unique advantage over other nonprofits, however I don't think this is still true if a majority of the programs budget goes to support activities that are taking place on campus and thus do not utilize the efforts of the volunteers. I am not sure what the solution is right now for MCV, and I think that the organization is in need of some serious strategic planning for the future. In this strategic planning MCV should definitely decide what it will not do, and perhaps even decide to stop doing some things it currently does.