– Ed Bogle
Planning in the nonprofit world has largely been based on the continuance of past trends and the assumption that constituents’ needs, environmental factors, funding sources, and staff and volunteer commitment will remain fairly constant. However, those things have become less dependable. Change is largely unpredictable, often comes in big waves at great speed, and is often discontinuous from the past.
Today’s organizational leadership must read the tea leaves, lay out a road map to the future with a believable vision and a constancy of purpose, build staff competency, gain commitment from the workforce and volunteers, and watch for early warnings and opportunities derived from change.
From Alvin Toffler’s Future Shock in 1970 to Nassim Nicholas Taleb’s The Black Swan in 2007, we have been told repeatedly that change is the only constant. Organizational success today is more about developing management techniques, processes and commitment to manage and adapt to change for strategic growth and impact, than in predicting the future, and today’s success does not constitute grounds for future optimism.
Principles of Strategic Management
- Embrace change as opportunity and stem the tide of threat. Be willing to change everything except the basic values underpinning the conduct of the organization. Most organizations’ mission and vision evolve as their reach and impact progress.
- Engage the board, management, staff and volunteers in a strategic process to periodically evaluate the evolution of the impact on, and changing needs of, those you serve. This involves developing short- and long-term horizons of clear vision and objectives.
- Build a strategic framework to view changes in the external and internal environment, assess opportunities and threats, and measure progress against all objectives. This plan will serve as the guiding document for renewing strategy and evaluating progress, and to evaluate new ventures, projects, or significant undertakings for strategic fit. It should keep decisions focused within the context of your vision, mission and purpose.
The strategic framework should be tight enough to focus resources, yet loose enough for organizational units to be opportunistic, but accountable. It communicates the vision and mission of the organization to the employees and defines their role/engagement in achieving that vision.
Several key principles underpin the success of a strategic planning process for change-oriented management.
- The organization must focus on the constituency it serves and be vociferous in measuring the impact of its works. The growth of its impact will come from staying close to the customers and their evolving needs, and services provided evolve within the mission.
- The doers must be the planners. Strategic planning should in large part be undertaken by those responsible for the plan’s implementation. Wide participation in the process creates ownership of the strategy and their role in fulfilling the vision and mission. It also creates a greater ability to identify and manage change and delivers discretionary effort, whereby staff and board will put in extraordinary effort to achieve the objectives.
- Measurement is essential for recognizable achievement. Vision and mission statements must be qualitative to survive in a rapidly changing world, but they only become practical if they have quantified objectives that define their accomplishment in any given time period. These objectives are unlikely to be reached unless they have equally specific resource commitments focused on their achievement. Most strategic planning failures can be attributed to the lack of rigor in one or both of these steps.
- If the effort does not result in action plans, it is probably wasted. An action plan consists of a set of tasks, the responsibility for undertaking it, and a time frame for accomplishing it. Without these steps, the plan is merely aspiration or left to individual discretion, and is generally futile.
- Strategy implementation is more about commitment than correctness. An excellent strategy with adequate implementation will always lose to an adequate strategy with excellent implementation. However, the adequate plan must have deep personal and organizational commitment for truly excellent implementation. With that commitment, organizational momentum will easily overcome minor strategic imperfections.
- Change will occur, either by chance or design. It is never the case that everything runs smoothly. Strategy is the deliberate attempt to evolve and be opportunistic. In a dynamic environment, management of change is the central purpose of strategic planning.
The Focus Strategic Framework and Grand Strategy
With this framework, the organization can capture its collective thinking. It is usually best to build this with input from various components of the organization and have a facilitator to drive the process.
The organization identifies its vision, values, and purposes, its mission grand strategy, its strategic excellence positions, and its long-term objectives, strategies, and action plans. This process clearly establishes the link between the vision and mission, and the strategies and actions required to carry them through. It allows the organization to evaluate progress against objectives, assess impacts of changes in the environment, and respond without recreating the plan. It keeps decisions focused within the concept of the mission and strategic goals, and serves as the focal point for communication about, and management of, the firm.
Brief Definitions of the Focus Framework Components
Vision of the Future: A clear and compelling vision of where we want to be, defining what success will look like. Focuses on outcomes and impacts the overall direction.
Core Values: The shared beliefs that will drive our conduct. Those things we hold inviolate which will build competency around execution of values.
Purposes: The principal reasons we exist.
Mission: The central concept for which we serve constituencies. Should define the key outcomes, impacts or benefits of our services.
Grand Strategy: The basic compelling things that our organization will do better than anyone else. The uncontested value we will create.
Strategic Excellence Positions: Our distinctive capabilities with high value to our market segment and delivery of our grand strategy. Areas or things at which we must excel to achieve strategic advantage and create value for our customer.
Underlying Capabilities/Competencies/Core Processes: Capabilities required for excellence. Competencies our people must have to excel. Core processes required to run our organization effectively and renew strategies as the market and results unfold.
Long-term Objectives: Longer-term targets (generally 12-60 months) or measurements that will show our progress toward the mission and vision.
Short-term Strategies/Goals/Actions: Short-term objectives or targets, plans of action and resources to achieve business and cultural objectives, supported by specific tasks and resources (money and people), and defined in terms of milestone completion dates.
The Phased Growth Plan
This is another key tool in great strategic management. It maps the phases of growth and is updated periodically, usually quarterly. The following parameters are determined for each period:
- Objectives Impact: What are the measurable outcomes?
- Strategic Focus: What is our focused strategy?
- Offerings/Development: What is our brand offering/ promise and its migration over time?
- Channel Partners/Alliances: What alliances will help us get to market/manufacturing?
- Operations/Organization: What are our underlying capabilities and competencies?
- Revenues: What base revenues do we expect?
- Capital: What are our estimated capital requirements?
Strategic Management of Rolling Horizons
The Focus Strategic Framework and the Phased Growth Plan should be reviewed and updated quarterly. With short weekly meetings and monthly review of basic objectives, the heart of great strategy is the quarterly meeting which we break into two parts, the rearview mirror and the windshield. Organizations that spend most of their focus on the windshield, or what is out in front of us, make the greatest gains in their evolution. Here is a sample agenda.
Rearview Mirror – What has happened and why?
- Patterns among those we serve, impact measurements
- Competitive pressures
- Client satisfaction levels
- Changes and problems
- Progress against target objectives
- Favorable and unfavorable trends, external factors
- Evaluation of long-range goals and objectives
- Significant accomplishments/celebrations
Windshield – What is changing?
- Cost structure and revenue trends
- Opportunities to generate revenues
- Operational trends and impacts
- Changes in the industry/technology/regulations
- Competition/market changes
- Add detail quarter to 12-month rolling financials
- Add high-level quarter to 36-month financial horizon
- Strategic Framework and Phased Growth Plan changes
Ed Bogle is a Strategic Planning Consultant working closely with entrepreneurs and nonprofits to develop innovative solutions in market-seizing strategy and revenue production, implementation and brand execution. Ed has more than 35 years of strategic and marketing consulting experience with several years as senior practice leader in Arthur Young’s (Ernst & Young) Southwest Strategic Management Consulting Practice. He frequently works with nonprofits as a give-back to aid them in positive impact on our society.
This article is reprinted from Vol. 3, No. 2, of Nonprofit Performance Magazine. Subscribe today.
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