A recent article at Adage.com on how Starbucks' move beyond coffee to fast foods, music and movies might backfire got me thinking about the importance of sticking to your core business, even when you're business is not for profit.
The concern is that Starbucks--and its competitor Dunkin Donuts--will dilute its strong reputation for coffee if it continues to extend its offerings to products and services for which it has no credibility.
It's the same old story. A company narrows its focus and becomes a big brand and a big success. Then it gets arrogant, cocky and greedy and decides it can take over the world and be all things to everybody. Wrong.
When will company leaders learn? Starbucks is a strong coffee brand because its brew packs a powerful punch. Dilute the thing with too much water and you'll end up with a lousy brand and a terrible cup of coffee.
Watered-down philanthropy is just like diluted coffee, it sucks. But in our struggle to raise every dollar possible, we're tempted to be all things to all people. Help women? Sure. Cure for cancer? You bet. Reversing ozone depletion? Top priority. Before you know it your brand is a mile wide and paper thin.
Take a nonprofit like the United Way, which raises money from employee payroll deduction and then distributes the funds to many worthy charities. Efficient? Yeah. Effective? Not really. Sure, UW touches many, many lives, but like a cheap blanket it lacks the thickness, warmth and comfort that donors want from nonprofits. This might have been okay twenty-five years ago when choices were limited, but not today.
Not so with Share Our Strength. SOS has one focus: hunger. That's it. Their whole mission is about keeping hungry people--especially kids--fed. They can't even be called an anti-poverty organization. They are an ANTI-HUNGER organization. But even SOS couldn't resist the siren song of brand extension.
A few years ago, they tried to move beyond their core business into a consultancy to help nonprofits start for profit businesses and other types of ventures. Frankly, I thought it was a good idea--like Starbucks they had been SO successful--but it definitely took them outside their sweet spot. I'm not sure what happen to it, but I bet SOS heard the sucking sound and dumped it. Now they're back to doing what they do best, feeding hungry kids.
In a way, nonprofits are lucky they're not flush with dough like Starbucks and Dunkins. Money has its curses and it certainly doesn't make you any smarter. Most nonprofits have no choice but to stay focused on their core mission so mischief is less of a problem. No one has to tell them to wake up and smell the coffee.