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Every nonprofit organization faces at least one
central strategic issue vital to its continued wellbeing
and effectiveness. Whether large or small,
wealthy or poor, old or young, complex or simple,
there is typically a fundamental strategic concern
— or concerns — on which the future of the
organization depends.
The strategic issue confronting an organization will
vary, depending upon its particular purpose, circumstances,
history and leadership. It may, for
example, be one of the following: Should we grow,
can we afford to grow, can we afford not to grow?
What should we make of emerging competitors?
How can we reverse a decline in our audiences?
How do we deal with too many applicants, visitors,
patients or regulators? Why can't anyone accurately
articulate our mission? Is our mission, as currently
stated, still relevant? How will the disruptive nature
of information technology transform our business
model? How can we become more visible? What do
we want to be when we grow up?
An organization is significantly handicapped without
clear answers to questions like these — particularly
in a world that is changing so rapidly and in such
unforeseeable ways — for it otherwise runs the risk of
blindly responding to opportunities or challenges,
failing to transform itself, and becoming troubled or,
worse, irrelevant.
Rigorous and continuous strategic thinking offers the
best shot for an organization to recognize clearly
who it is, where it is and where it wants to go and
thereby increase the odds that it will constructively
determine its future. And when an organization's
ambitions are clearly and concisely expressed, its
leaders and managers gain guidance about how to
evaluate and solve particular issues.
At its simplest level, strategic thinking is continuing,
thoughtful attention by its leadership to the longerterm
future of an organization. It is a mindset, an
active alertness to the circumstances and possibilities
of an organization and how that organization can
best move forward. By continuously scanning the
horizon, taking account of emerging trends and new
ideas and seeing how other organizations are dealing
with similar matters, an organization's leadership is
better prepared to make informed decisions about
future directions and then act upon them.
The best strategic thinking focuses on a big, audacious,
long-term goal and sustains a long-term commitment
to realize it. By looking ahead rather than behind and
focusing on opportunities and possibilities rather
than being overwhelmed or discouraged by current
constraints or limitations, an organization has the
best odds of successfully thriving in today's complex
environment. New York University decided in the
1970s that it wished to become the equal of an Ivy
| The best strategic thinking
focuses on a big, audacious,
long-term goal and sustains a
long-term commitment to
realize it. |
League institution, then an unimaginatively bold
aspiration — and look at it now. This clear strategic
aspiration linked the work of many leaders, across
time and divisions, making growth not solely
dependent on any particular individual. Similarly,
Columbia and Harvard are planning extensive
expansions of their campuses that will require
decades and billions to realize — but are necessary
for them to thrive in the years ahead.
The best strategic thinking also recognizes the old saw
that "nothing succeeds like success" and incorporates
integrated approaches to create — and maintain — a
sense of active forward momentum. Because nonprofit
organizations are immensely complex organisms
and need to be highly and carefully managed, significant
thought and attention must be given — day
in and day out — to making certain that each program
and each activity bespeaks, at least incipiently, the
longer-term goal.
By thinking continuously about opportunities, vulnerabilities,
changes in the environment and the
like, strategically oriented institutions can adapt
more thoughtfully to changing circumstances, make
better tactical decisions and achieve greater levels of
sustained performance.
There are a number of reasons why continuous and
informed strategic thinking can be beneficial to
an organization:
- Everyone connected with an organization wants
to know what its mission is, where it's going, how
it can be more effective. A robust strategy provides
the ideas and the words to build commitment,
strengthen morale, improve communications and
gain supporters — and, fundamentally, build organizational
confidence.
- Good strategic thinking can help an organization
dispel myths it may have about itself and allow it
to confront, directly and honestly, what it does
well and where it is not up to speed; what its true
strengths are and where it needs improvement.
- Most organizations have unrealized potential in
both people and context: leaders, staff and volunteers
are energized by bold organizational
ambitions and will stretch to help gain them;
reframing of mission or vision often excites the
world-weary board member or discouraged executive;
looking analytically at key trends, evolving
competition and new opportunities helps unlock
unseen institutional possibilities and generate
new organizational energy.
- Patterns of competition — and the intensity of
competition — are increasing rapidly in the new
"flat" world created by the Internet and globalization.
While no institution is safe from a competitor
down the block or on the other side of the world —
particularly as the cost of communications continues
to fall, unmet needs for service increase and ambitions
for organizational success grow —
vigorous strategic thinking permits institutions
to understand the character and
nature of their competition and deal with
it proactively and effectively.
- Successful fundraising depends upon clear
strategy. Those organizations that have
gone through the difficult work of thinking
through their mission, aspirations and
objectives have the best shot at raising
significant philanthropic resources. Those
institutions that have not done so lack a
compelling rationale to discuss with
prospective donors, may raise money for
the wrong purposes and are likely to
underachieve their financial targets, possibly
significantly so.
- Successful branding also depends on clear strategy.
Branding involves developing and consistently
communicating a clear vision of the organization's
aspirational identity. Branding helps an institution
move toward its own envisioned future by
establishing and maintaining a clear identity, a
| Successful fundraising depends upon clear strategy. |
process that is more likely to be successful when
built on a foundation of a clear and vigorous
organizational strategy.
- Being clear about strategic directions allows every
executive, every staff member and every volunteer
to decide whether a meeting, telephone call or
e-mail helps him or her — and the entire organization
— move towards the agreed-upon goals or
is a waste of time, energy and resources.
From time to time, an organization may make a
concentrated effort to summarize its strategic thinking
and undertake strategic planning, which will typically
involve individuals throughout an organization who
are formally charged with thinking systematically
about its direction over the following five to ten years.
The purpose of strategic planning is to chart a multiyear
road map — a strategic plan — that will provide
a framework for action, but not a detailed blueprint.
But process is as important as the resultant planning
document — without the right process, the document
will be useless.
Strategic planning is time-consuming and demanding
for executive leadership, staff and volunteers, and
there are better and worse times to undertake it. A
strategic planning process is not likely to benefit
organizations whose raison d'etre is in doubt, organizations
in financial crisis or organizations without
stable governance or executive leadership. But it is
likely to benefit organizations that are stable, but
face difficult and complex choices of future direction
in the context of a rapidly and continuously
changing environment.
The experience of Anthony Knerr & Associates suggests
there are several critical ingredients for making
strategic planning work:
- The planning process should be tailored to the
culture, dynamics and personality of the organization
— there is no effective "one size fits all"
way of doing it. It is crucial to ensure that the
process is appropriate for the organization,
engages the right people in the right ways at the
right time and has all of the participants pleased
and excited with both the process and the strategic
plan at the end of the process. A process that
works for the American Red Cross is not likely to
be effective for Swarthmore College. Thus, for
example, a planning process we helped design
for a leading liberal arts college began with establishing
the deep involvement of the board, whose
members would fund the plan. By contrast, a
strategic communications plan we devised for
another institution was created with extensive faculty
input, not only because their input helped
strengthen the messages, but also because the faculty
would decide whether the themes and messages
were credible.
- Strategic planning needs to focus on the most
important issues and opportunities. At any point in
time, organizations face more strategic issues than
they can usefully analyze and resolve. If strategic
planning attempts to be comprehensive and
address all of the strategic issues, it is likely that
nothing will be accomplished. The strategic planning
agenda should include — or aim to identify —
a relatively small number of highly important issues
that need to be resolved. One organization may
need to focus on rethinking its mission and realigning
its program focus whereas another may be fine
with its mission and programming but confront significant
issues about its governance and fundraising.
For an international service organization that
effectively operated as a franchise with a central
headquarters, our analysis disclosed that the key
challenge of sustaining and increasing membership
depended on solving two other issues: developing
a consistent international positioning, and revising
standards for chapter activities that balanced flexibility
with the need for alignment with international
goals. The power of strategy is that it signals
choices about both what to do and what not to do.
- The planning process should be designed to permit
sufficient opportunity for rigorous analysis that
lays out "the facts of the case." The process should
be structured to ensure that the right questions are
squarely on the table, analyzed in an appropriately
tough-minded way and discussed collegially
and openly. But because key insights often arrive
serendipitously, it should also include appropriate
time for reflection about key ideas, issues and
objectives. The strategic planning process for one
college was suddenly "unlocked" when it began to
imagine where it wanted to be in 20 years rather
than five — there was instantaneously a cascade of
bold and exciting new ideas on the table.
- While the planning process should be focused
and rigorous, it should also be informed by a
sense of fun and lots of good humor. Strategic
thinking is hard enough without its being dreary,
overly serious or just dull. Building in a cocktail
hour or a non-working lunch provides more than
liquid or solid refreshment — it creates bonds of
trust that make it easier for people to venture
insights, propose different ideas and, importantly,
tolerate disagreements about goals and strategies.
- The document coming out of the strategic planning
process — the strategic plan — should be concise,
crisp and "big-picture." It should include the organization's
mission and vision; delineate four to five
key strategic objectives, with underlying goals for
each objective; lay out means of measuring progress
towards the realization of the objectives and goals;
and provide an implementation plan and, often, a
financial plan in an appendix. Moreover, it should
do so in as few pages as possible.
- Strategic planning needs to be action-oriented to
| The planning process should be
tailored to the culture, dynamics
and personality of the organization. |
be effective — there should be a seamless process
linking planning and implementation, a consideration
that has a major impact on who should be
involved in each stage of the planning process. A
strategic plan that is too comprehensive and not
linked to action usually ends up as a "book on the
shelf." As the Chinese general Sun-Tzu observed
2,500 years ago, "Strategy without tactics is the
slowest route to victory. Tactics without strategy is
the noise before defeat."
Successful strategy sometimes seems — and is —
extremely difficult to achieve, for a number of reasons:
- Strategy is inherently messy, time consuming and
threatening. It is not easy to figure out — and agree
upon — an organization's future, let alone what the
organization, in fact, is. Strategy means wrestling
to the ground the most profound issues that any
organization faces, reconciling differing perspectives
about these issues and, often, overcoming
deep-seated anxieties about whether the organization
has the ability to change course and
(re)adapt itself.
- The press of the ongoing responsibilities is often so
demanding that it seems impossible to find the
time to think — or act — strategically. Sometimes it
just feels easier to simply show up every day, hoping
that somehow things will
work out for the best.
- Bringing together different
constituents can seem daunting,
particularly if internal
communications are not
superb. Key players often have
different organizational (and
personal) ambitions, anxieties
or tolerance for risk. Talking
candidly about the most essential
elements of an organization
can reveal radically different
perspectives, which then
need to be dealt with constructively
and thoughtfully.
- It sometimes seems risky to
make key strategic decisions,
for in doing so the organization
is publicly putting a
major stake in the ground
about direction, intention and outcomes with no
guarantee of success. But not reaching a bold aspiration
is surely better than making only marginal
improvements and letting the world define the
organization's future by default.
- Reaching agreement on the exact words to express
strategic goals — let alone an organization's mission
and vision — is never easy, and it must be a shared
exercise to be successful. Not only does everyone
| Strategy is inherently messy, time
consuming and threatening. |
around the table seemingly fancy themselves an
excellent writer, skilled editor or superb wordsmith,
it is not easy to craft accurate, cogent and
compelling statements of purpose and aspiration.
- Linking execution with strategy on an ongoing
basis — by tying the day-to-day and month-tomonth
activities of all constituents to agreed upon
strategic goals and objectives — is complex and
requires persistence, patience and tough choices.
Strategic planning in the nonprofit sector differs significantly
from that in the private sector in focus,
purpose and design. Nonprofit organizations are, by
definition, mission-driven, and so central to every
nonprofit is its mission statement, the encapsulation
of what it seeks to accomplish, whom it serves
and how it does so. Every aspect of a nonprofit's
strategic planning flows from its mission statement —
though oftentimes the mission statement needs to
be revisited, refined or rewritten in the course of
completing a strategic plan.
Though every business firm must be clear about what
business it is, statements of mission are not central
to them — whereas the "bottom line" is, of course.
Thus, a firm's strategic plan is typically driven from
the top down, relatively short-term in orientation
and focused on achieving certain clear financial
|
Every aspect of a nonprofit's
strategic planning flows from its
mission statement. |
objectives — market-share, revenues, profitability
and return to shareholders, for instance. It may (or
may not) actively involve many individuals within
the firm, but rarely anyone from outside; it will be
more concerned with numbers than ideas; and it
will be typically updated (or thrown out) within six
months to a year. It is usually more of a business
plan than a strategic plan — though the wise and
profitable firm is continuously thinking strategically
and long-term.
Successful business people who sit on nonprofit
boards sometimes have difficulty understanding why
nonprofit strategy is inherently more participatory,
long-winded and complex than what they are used
to in their day jobs. It's a different process, serving
different purposes and having different outcomes.
The wise nonprofit thinks strategically, understanding
that the realization of its mission is dependent upon
a longer view that is periodically reassessed and
reset, informed by a set of clear three- to five-year
goals and objectives and embodied in a formal
plan that serves as a road-map for everything the
organization is doing.
It uses its strategic plan as a key tool to measure
organizational performance, undergird development
planning and management, inform external and
internal communications and branding and, in general,
serve as the "operational charter" for guiding
the organization.
Further, it sees strategic thinking as critical to successful
fundraising — for it realizes that major donors are
interested in knowing about an organization's aspirations,
take comfort in a track record of successful
realization of prior strategic plans and typically concern
themselves with a longer-term investment horizon.
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