Strategic Planning

Is it always necessary to strategic plan? While strategic planning is useful, it is not essential to every organization. New organizations, organizations with a strong or charismatic leaders, or busy organizations which are too successful to slow down can survive with unarticulated strategies that respond to day-to-day emerging issues. It is also important to note that strategic planning has opportunity costs, because valuable energy, time and resources can be wasted. Therefore, it should not be used indiscriminately. Even a good strategic plan can end up in the ‘bottom drawer’ without an effective implementation plan.

The most common reasons for strategic planning are:

• Funders ask for strategic plans as a condition of granting to ensure that the organization has a strong sense of direction or can absorb a higher level of funding;
• Strategic planning is used as a solution to a crisis of loss of direction or of a changing external environment. However when a crisis arises from funding or staffing, other tools may be more appropriate.
• The calendar says “it’s time”. If conditions inside or outside the organization have changed substantially since the last strategic plan, strategic planning may be helpful. However, it is better to ‘drive’ a strategic plan out of need, rather than schedule.

How can we make strategic planning more effective with better processes and better outcomes?

1. Identify what your organization can do best – elevate good work to great work through effective strategic planning
No organization can do everything well. As activities get added on each year, an organization may risk losing the perspective of what it can deliver best. Organizations are similar to individuals: we cannot reach our goals if we try to take on too much. Discover what your organization does really well, what is needed in its service area and what is under-served by other organizations. Focus maximum effort on these activities. For multi-service organizations, try to find a common thread between activities and concentrate on those activities that are a good fit for the organization.

There are no easy solutions to dealing with activities that an organization does less well. Several options: outsource the activity if it supports a core activity, seek partnerships with an organization that does the activity better or make the decision to discontinue an activity.

2. Passion drives successful organizations. Align the existing core values within your organization to targeted social needs and priorities
While this is true in all organizations, no organizations are more driven by passion and values than nonprofit organizations. Staff, directors and volunteers of nonprofit organizations often see themselves as having a ‘calling’, however this passion often runs up against the realities of day-to-day management, resource constraints and continually growing needs. In addition, in any organization passions can take the leadership in different directions. The strategic planning challenge is to clearly articulate the strongest passions of the organization’s leadership team and define the focus around these passions. This is not about motivating people but about tapping into what already motivates the leadership and building the organization around this motivation. An exploration of these motivations requires an honest and open conversation which may require an outside facilitator.

3. Measure performance and strive for improvement in outcomes – identify one crucial measure of success and track it
While quantitative and financial measures are more easily found in businesses, they can also be identified in not-for-profits. As more and more funders look for some measurement of performance, it is important for nonprofit organizations to develop one critical measure of organizational success and measure it carefully. Strategic planning is in part the process of clarifying the objectives of your organization, how to reach these objectives and identifying an appropriate measurement of these objectives. Other values such as the qualities of “human experience”, “social justice” or “dignity” are all important even though they cannot be measured. Measurement does not mean becoming more narrow; it means focusing the organization on becoming more effective.

Why limit performance to one measure? This approach focuses on knowing what is the most important measure for your organization and then applying it in a disciplined way throughout the organization. Choose a measurement of outcomes which closely links your mission in relation to the available resources. This measurement is implemented in a disciplined way within the organization and then tracked over a number of years to ensure that program effectiveness has increased over time. In addition, incorporate the measure (along with other tools) into your program evaluation. Can the measurement ever be changed? Yes, it is likely inevitable and even desirable as the organization becomes experienced with the discipline of tracking a measurement.

Avoid the trap of choosing many different measurements, as your valuable staff time and resources are likely to be drawn away from program delivery.

4. Good strategic planning is about making choices between competing priorities
Even well-positioned organizations face continuous trade-offs in managing programs and activities. For example, in an organization focused on children’s services, both service delivery and advocacy are currently carried out by the organization and could be compelling paths. However the organization sees a value in specialization. Their strategic planning exercise considers trade-offs between the two activities in part based on the passions of the leadership group.

Too often organizations engage in strategic planning by simply re-stating what they are currently doing without questioning why – this is an example of poor strategic planning with high opportunity costs for an organization.

5. Align mission, activities, processes and resources – when these four come together, your organization will deliver better outcomes

• Mission – a simple statement of why the organization exists. Keep it simple and up to date.
• Activities – programs and services that the organization is engaged in to advance its mission.
• Processes – how activities are carried out – who is involved, what standards and rules are used.
• Resources – what is required to carry out the activities (skills, people -volunteers and staff, money and space).

Strategic planning identifies what you can do best and aligns it with the passions and values of the organization, and then picks the best way to measure the outcomes of what you do and defends the choices the organization has made between the trade-offs. The strategic planning process is partly about ‘finding and destroying’ inconsistencies between the four areas.

Who should participate in the strategic planning process? In general, a broader consultation is better than an exercise done more exclusively, for example, by only the board of directors. However, there is a trade-off between an inclusive model involving everyone in the organization versus selecting key members of the organization’s leadership team. Inclusiveness can be resource-wasteful and can raise unrealistic expectations if all participants’ views are not represented in the final strategic plan and its implementation.

A final word…your final strategic plan needs to be practical and flexible. Participants should ask themselves: Do we have the resources and staff to pull this off? If the situation changes, can our strategic plan be adapted to accommodate new circumstances?

Good Resources on Strategic Planning

Henry Mintzberg, John Voyer & James Brian Quinn, The Strategy Process: Concepts and Contexts. Prentice Hall, 1992.
Various classic readings on organizational strategy and strategic planning.
Jim Collins, Good to Great: Why Some Companies Make the Leap… and Others Don’t. Harper Business, 2001.

A study based on business case studies with a number of conclusions applicable to all types of organizations.
Jim Collins
Website of resources by management guru and author of “Good to Great”, Jim Collins.