How to define your organization’s unique value

In my last post, I discussed how a theory of change can help your organization to focus its mission. This is the result of better defining your organization’s unique niche within the system in which it operates.

But how do we identify our organization’s unique value proposition? What parameters can guide us to determining our unique niche within the system? What will tell us how we can be most effective at creating the change we wish to see?

There are three components to a unique value proposition:

  • The benefit you offer to your constituents
  • How you are solving the problem
  • How you are different from others

The first describes the good stuff you do or provide, while the second identifies how that good stuff actually responds to the need and solves the problem you’re tackling. The third point is about how you distinguish yourselves from others working on the same issue, whether it be in approach, methods, or focus (thematically or geographically).

The theory of change is critical for laying the foundation of understanding about the problem, the other actors in your problem space, and the difference approaches to solving the problem and creating your vision.

Then when it comes time to define an organization’s unique value proposition, I ask questions around three areas:

Competencies. What is your organization good at? What skills and technical expertise does your staff bring to the table? What have you accomplished in the past as evidence of this? And conversely, what are you not good at? In what areas are you weak that you are less likely to be successful? Where have you not been successful or where have others been more successful than you in the past?

Need. Sure, you may be good at something, but is it needed? When you look at the system in which you work, do your strengths align with one or more areas that will contribute to transforming the system? How does your work make a significant contribution to solving the problem in the long run? How is what you’re doing today going to make it easier for people tomorrow? And conversely, in what ways does your work not solve the problem? What other approaches are needed that you will not do or that you are not prepared to do?

Position. So you’re good at something, and that something can help solve the problem, but is this something that others are already doing? Is what you’re offering different from what is already being done? If so, can you define and demonstrate those differences? Conversely, are there areas of need where others are not intervening that fit your competencies? Is there something that needs to get done that no one else is doing and you could do successfully? Could you adapt your organization to do what’s needed?

By looking at what an organization can do well, how what it does affects change, and its positioning relative to others, it becomes much easier to understand the unique value proposition. This in turn makes it easier to attract support for your work, because it is important, effective, and unlike anything else out there. And who wouldn’t want to support a worthy cause like that?

Do you know your organization’s UVP? Do you have a clear theory of change that helps you understand your organization’s purpose and positioning? How would understanding your organization’s UVP help you with your messaging and fundraising?

If you’re interested in developing a theory of change that does all of the above, check out The ToC Workshop, a special eight-week program designed to help you get the most out of a theory of change for your organization.


How a theory of change should inform your mission

Many of my clients have difficulty articulating their work in a clear, concise, and compelling way. In my initial conversations with these potential clients, it quickly becomes clear that they do not fully understand the rationale behind their work, or how their work has broader, longer-term impacts on the problem they’re trying to solve. This isn’t unusual, but it is a problem for the organization. This lack of understanding leads to a lack of focus, a lack of clarity among staff and Board members, and a resulting lack of collective purpose and drive. And so inevitably I end up working with these clients on developing a theory of change, one that brings greater clarity, greater focus, and greater cohesion to the organization.

Working with one organization, I was approached by a Board member who was brought in to participate in the process. She asked me a keen question: how might developing a theory of change affect the organization’s mission?

To answer this, let me back up a bit. When an organization is created, it is created with a purpose (hopefully a singular one). The organization’s statement of purpose is what we call a mission statement. It defines what an organization does and what problem it aims to solve. The mission may evolve over time, but the essence of the mission generally remains consistent for the organization.

Most founders of nonprofits have a clear purpose in mind – they know what the organization will do and what it hopes to achieve – but they may not understand the bigger picture. They don’t consider much outside the scope of their own organization’s work, or worse yet, they believe they can solve the whole problem by themselves. But the truth is this: every organization works within a larger system of actors who are working on the same issue.

Some of these actors are working on the same issue from a different angle, but some are taking the very same approach, though they may not be aware of each other. In fact, some organizations aren’t even aware of other groups working in the same geographic area on the same issue with the same partners or constituents! And when this happens, and there are redundant and even competing organizations, it becomes difficult to define an organization’s unique value proposition – what does it offer in solving the problem that no one else can or does?

In other cases, organizations have been doing the same work for years and years with no seeming reduction of the problem. In this situation, they fail to understand the larger system and how their organizations are actually creating impact. How does your organization’s work actually solve the problem in the long-term? Systems are complex, with many different interacting parts. Transformation of the system will require thoughtful planning, clear focus, and working with others who are tackling the same issue. Without knowing the system and its different points of leverage, how can you truly understand what is needed to create lasting change?

This is where a theory of change comes in. A theory of change is not a statement of what will happen when your organization achieves its mission. A theory of change describes what is needed to transform the entire system in which your organization works. It goes beyond the work of your organization because your organization alone cannot solve the problem (despite what you may think). In fact, the vision of the system is your organization’s vision statement, but hopefully it is not unique to your organization and instead is shared by the other actors working in the system. Because you are all working in the same system towards solving the same problem. A theory of change not only provides a view of the system but also where your organization fits within it.

I think of the theory of change as the nonprofit equivalent of a business plan. A business plan is used by for-profit companies to define what the company is about – its product, its customers, and its operations – but it also describes the market it will enter. This way the business owners (and potential investors) will understand how the new business will compete and survive in the long term by providing a unique value to the marketplace. Similarly, a theory of change describes the system an organization is entering and what unique value the organization contributes to the system.

So will a theory of change alter an organization’s mission statement? Actually, yes, it might. Ideally, a theory of change is done as part of the organization’s formation – like with business planning – so its mission statement accurately reflects its unique role in the system. But since most if not all organizations do the theory of change after their mission statement, the theory of change will likely alter the mission somewhat. Not usually in its essence, but in its focus and how it is articulated.

(Side note: It’s backwards to do a mission statement or strategic plan before doing a theory of change – like planning your route to a destination without first looking at a map of the region – but most people don’t know of a theory of change until after they form an organization and a funder asks them what their theory of change is….)

For instance, in understanding the system, your organization may realize that there is a particular need that you alone can fill, and that may become a more important element of your organization’s work. Conversely, there may be areas of your work that overlap with other organizations’ work, and you may cease those programs or at least spend less resources on them, focusing your mission on what is unique to your organization. If parts of your organization’s work tackle different aspects of the system, you may decide to focus on just one, narrowing your mission. Or through the theory of change development process, you simply may gain greater clarity on the true value that your organization can provide, and reframe your work through that lens.

The particular Board member who asked me the question got to experience some shifts to her own organization’s mission. Again, the essence was the same but the focus and purpose was more specific and focused. The organization understood what needed to get done, where it could add the most value, and how it could best solve the problem, and that led to greater articulation of its mission.

I’ve seen organizations shift their missions in light of a new theory of change, but in the end, the organization benefits from a greater comprehension of what needs to get done and how it can best add value to transforming the system into their vision.

Does your theory of change bring greater clarity to your organization’s mission? Does it take a broader view of the system and identify your organization’s unique value within it? Does it help you articulate your organization’s work and purpose?

If you’re interested in developing a theory of change that does all of the above, check out The ToC Workshop, a special eight-week program designed to help you get the most out of a theory of change for your organization.

Are you really solving the problem?

During my time in philanthropy, I reviewed many grant proposals, many of which were pretty good. They did a good job describing the project, and usually did a good job describing the problem they hoped to solve. However, nearly every proposal had the same flaw, something missing, something that inevitably led to tough questions from the Program Officer who was in charge of developing the grant. What was the missing piece? A failure to connect the project to the problem. In other words, how will this project actually solve the problem?

Let’s take an example. Say the problem you’re trying to solve is hunger among the homeless in the Bay Area, and let’s say you’re requesting a grant to provide free meals for 100,000 homeless people over the course of a year. We can understand the problem and its importance, and we can understand the project and its importance, but at the end of the grant, will you really be any closer to solving the problem? Will there really be less hungry people in a year? Is it possible there could even be more hungry people?

I’m not suggesting that feeding the hungry is a bad idea. It’s a good idea. In fact, it’s necessary in order to help these people survive another day. However, it’s also just a short-term solution to the symptoms of a much bigger, long-term, systemic problem. If your mission is to solve hunger, feeding the homeless is a necessary but ultimately insufficient step to take.

This is why organizations benefit from developing a Theory of Change. Yeah, we know. “Theory of Change.” It’s one of those fluffy, jargony buzz words tossed around by foundations and consulting wonks. But when developed effectively, it helps an organization to clarify what it does, and more importantly, why doing what it does helps to solve the problem.

The truth is, a solid, articulate theory of change helps organizations to be more strategic by identifying the key opportunities for influencing the system. Oftentimes a theory of change is equated to a strategy (“we do this therefore we get this”), but a good theory of change is a system-wide view that provides the context and rationale for a strategic plan. Done well, a theory of change makes a strong case for why your strategy is a smart, practical, and effective approach to achieving your mission and solving the problem.

Does your organization have a clear theory of change? Do you feel confident in explaining why your approach and programs are effective mechanisms for solving the problem? Have you had to face the tough questions from funders to explain the rationale of your programs? Post your comments below.