VALUABLE COMPONENTS THAT EXTEND ACROSS STRATEGIC PLANNING MODELS
Here, we look at a few approaches to strategic planning. There are many options (and no, they don’t all take tons of time and paper), so you’ll ultimately need to determine what’s best for your organization. Still, there are many components that are common across strategic planning models – mission and vision identification, organization assessments, environmental scans, goal and objective development, and metrics, for example. We take a look at all of these here and serve up some user-friendly resources to help you drive things forward.
Strategic Planning FAQ’S
The first part of the answer may seem obvious, but give it serious consideration: Ask the people who are actually charged with executing the plan whether or not it’s realistic. For example, plenty of people have been told to “create a viral video” without being given any direction as to its purpose, content or dissemination. Unless that staff person moonlights as a creative director at a leading ad agency, such a directive will fail.
While that is, we hope, an extreme example, your plan will likely include many expectations of the people who are working to advance your mission. Our advice? Engage them in the process and openly invite their feedback when action plans and timelines are established.
Another way to determine the feasibility of your strategic plan is to look at other organizations with similar missions and size that have achieved what you want to achieve. For media awareness, consider using Google Alerts to track others in your field and geographic area. In terms of fundraising, the Foundation Directory Online (www.fconline.foundationcenter.org) is a great resource to see how much other organizations have received, and from whom.
While crafting the strategies, be sure to build a budget for all of the costs and resources needed for each strategy. Many of the costs may be related to staff time, and realistic assessments of staff availability need to be made.
One caveat: It’s not uncommon to hear a nonprofit of any size announce that it wants to be, for example, the next Susan G. Komen for the Cure. Komen is a case study to be sure, and a lofty goal for any nonprofit. But remember that reality is the key to executing your plan. Looking at organizations with far more resources than you have is only helpful in thinking about what you may want (or not want) in the future. The important thing is to understand who you are, and to establish standards based on that reality.
There is no single right way to do strategic planning. The best way to do it is the way that suits or will best serve your organization. That’s going to depend on your resources, internal capacity, engagement of your staff and board, and the goals of your organization.
That said, it’s important to approach strategic planning as a collaborative process. Your board and high-level staff should be actively engaged in the development of your plan. This generates buy-in, ensures diversity of thought and involves them in fundamental choices about the direction of the organization.
The scale and scope of ways to involve your board and staff vary drastically – from completing interviews and questionnaires, to retreats facilitated by an outside consultant, and board committees dedicated to driving the process. What works for you will depend on your organizational culture and resources. As you begin to define your process, we recommend sharing it with key team members for feedback. This will allow you to gauge how realistic it is as it relates to available time, and begin to set expectations with those who will be involved.
Carter McNamara, MBA, Ph.D., author of the Field Guide to Nonprofit Strategic Planning and Facilitation, has developed a useful summary of the basic steps of a strategic planning process, which includes:
- Identifying your mission.
- Clarifying the goals that must be achieved to realize your mission
- Identifying the strategies necessary to achieve each goal
- Creating action plans needed to implement each goal
- Monitoring and updating your plan.
McNamara also suggests that many organizations evolve from these basics to conduct strategic planning that’s based on issues an organization faces, or its specific goals. Such an approach would require an assessment of strengths, weaknesses, opportunities and threats (better known as a SWOT analysis), an effort that’s recommended by many strategic planning professionals.
In recent years, some strategic planners have proposed alternatives to the widely used approach described above. They argue that the traditional strategic planning process takes too much time and is no longer responsive to our rapidly changing world.
For example, in the book The Nonprofit Strategy Revolution, author David La Piana proposes that strategy development is a constantly evolving process that neither requires, nor benefits from, an isolated strategic planning process. The author proposes a model that, among other things, identifies criteria that are evaluated in real time to determine whether a particular strategy will be implemented.
The point is, there’s no right or wrong way to plan. The most important thing is to take a look at the available options and figure out what approach offers the best match with your organizational culture and resources.
A strategic plan outlines where your organization wants to be – typically over a fixed period of time – and defines how you are going to get there. The word “how” is important. That’s where the strategy comes in. It’s easy to make a list of the things you want or need to achieve, but you must also understand how you’re going to achieve them. To do otherwise is to leave the direction of your organization to chance.
The foundation of your strategic plan is your organization’s vision and mission. As with everything you do, the plan should always tie back to these. It’s likely that you’ve already formulated these, but if you haven’t (say, if you’re consulting this book as you consider launching a new organization), it’s definitely the place to start.
A good strategic plan (either through a document or a collaborative strategic planning process) will spell out the goals everyone in the organization is seeking to achieve. From there, it’ll identify the action steps necessary to achieve each goal. This includes the staff resources, time and financial support involved (along with where these will come from). As we dig deeper, a detailed timeline and budget will also be included, and often a brief history of where the organization has been.
At the end of the day, your plan could be one, five or 100 pages. Truth be told, it might even be on one PowerPoint slide. What’s most important is what you do with it. Ask yourself these questions:
- Do your clients, staff and board understand the mission and vision?
- Have they all agreed upon the goals designed to achieve the mission and vision?
- Are they committed to executing the plan at every turn, externally and internally?
- Do they understand the steps necessary and resources required (time, money, etc.) to get the organization where it wants to be?
All of these are essential ingredients of a sound strategic plan. What the product itself looks like really doesn’t matter as long as it reflects your organization’s heart and soul.
There are many compelling reasons to hire a consultant. Perhaps you don’t have the expertise to guide the strategic planning process on your own. The right consultant will have experience in your field and bring context to the table – based on his/her experience – that may not be available to you independently. He or she can help facilitate a lay process so that all staff can participate, as well as offer an outside point of view that may very well yield some insights you haven’t considered.
If you do consider a consultant, make sure he or she understands and has experience with the various planning models available, so that he or she can assist you in making the best choice for your nonprofit. A good consultant should be able to provide multiple examples of his or her work that have been tailored to the needs of nonprofit clients. You’ll also want to make sure that a potential consultant’s style and process are a good fit for your organization. Take your time and get to know the people you may be engaging.
That said, hiring outside help is not always practical or even possible for smaller nonprofits. That’s one of the reasons we’ve developed this section. The decision to rely on internal vs. external resources should be made based on the availability of funds and the availability of in-kind support (such as a board member with expertise in this area).
If resources are particularly limited, you might consider hiring a consultant to facilitate and guide the process at fixed intervals (e.g., a board planning retreat). A trained facilitator can stimulate discussion and ask the right questions, while ensuring that the discourse remains objective and civil. He or she should also be willing to share observations about the discussion and thoughts on related implications. So, while a facilitator would not technically write the plan or implement the entire process, he or she is often in a position to jump in at just the right moment.
Is that the same thing as a SWOT analysis?
An environmental scan is an objective review of the current and anticipated environmental factors that impact your organization. These can include, for example, the political, economic and demographic environment in which you’re operating.
A few other important areas to consider are: the regulatory environment, philanthropic and donor trends, and other organizations providing similar services or competing for the same funds. The latter point is often overlooked, but it’s extremely important. You can use services like Charity Navigator (www.charitynavigator.org) to get a good sense of who is operating in your area and providing similar services. Keep in mind, this need not be a negative. You might find that someone is doing something complementary and you can actually enhance each other’s work. Another place to gather intelligence is the Foundation Directory Online, a database of grantmakers and grantees (www.fconline.foundationcenter.org) developed by the Foundation Center. This is an efficient way to learn who’s funding organizations like yours.
The environmental scan helps you to understand the broader context in which you’re operating. By investing the time to identify key trends and environmental factors that impact your nonprofit, you can begin to think through the implications and, where appropriate, plan a course of action.
Organizations frequently choose only to look at the external factors, although a strong case can be made for considering your internal environment. This includes looking at your organization’s internal capacities and resources, and projecting how those may need to change in the future to meet your objectives.
A SWOT analysis is derived from your environmental scan. “SWOT” stands for strengths, weaknesses, opportunities and threats. Identifying these can help to focus your scan’s findings. For example, let’s say you represent an organization that provides small loans to low-income entrepreneurs. Your environmental scan may reveal that a new regulation is being considered that changes how you track and report on beneficiaries. That’s an objective observation in your scan. However, as you drill down into your SWOT analysis, you might note that such a regulation would create privacy issues for your clients or cost significant money to be in compliance. Those are identified “threats” in your SWOT analysis.
Strengths and weaknesses tend to be associated with the internal environment, or the situation inside the organization (operations, performance quality, infrastructure, governance, etc.). These also tend to be in the present. Opportunities and threats, therefore, relate to the external environment – the situation outside of the organization. These tend to be posited in the future (competition, trends, political landscape, etc.).
When you conduct a SWOT analysis, be direct, be concrete and focus on constructive observations. For example, under “strengths,” it isn’t particularly useful to say your staff is committed to your mission. Many nonprofits share that trait (although the opposite would certainly be a weakness). Instead, focus on areas that indicate a distinctiveness and that result in action. Here are a few examples to stimulate your thinking:
- If yours is the only organization providing X and Y services within 300 miles, that is probably a strength. The resulting action could be that you plan to expand services to the surrounding counties.
- A weakness could be that you rely too heavily on certain types of funding. A possible resulting action? Develop and implement a strategy to diversify fundraising.
- An infusion of new government funding aimed at your target audience and the services you provide would present an opportunity. In that event, you’d probably want to identify strategies to make your organization known amongst the decision-makers and, of course, apply for the funding.
While there are many consultants who specialize in this area of analysis, many smaller organizations find they have little choice but to go it alone. An excellent place to start is to consider your target market. What, for example, is the current and projected population? What trends affect your target audience as it relates to education, health, income, employment, etc.?
Another useful component to the assessment phase is to survey external stakeholders (e.g., funders, clients, community leaders, etc.) about your organization. External perspectives on such issues as your organization’s greatest contributions, challenges observed, anticipated (or missed) opportunities, and even basics like how others would describe your organization, can lead to some surprising insights.
It should also be noted that the environmental scan and SWOT analysis should be key parts of the assessment phase.
There are many resources that can assist you in the development of an environmental scan. For example, government agencies such as the U.S. Census Bureau (www.census.gov) and Bureau of Labor Statistics (www.bls.gov) can serve as rich sources of demographic and economic data. Local United Way affiliates (www.liveunited.org) also produce periodic reports that offer valuable information to nonprofits. In addition, colleagues in your field should be able to provide valuable insights.
Of course, current and potential clients should also be tapped as key resources to understand subjective points of view regarding realities on the ground.
An organization assessment – also commonly referred to as an organizational audit, taking stock, or an information-gathering phase – lays the groundwork for your strategic plan. As such, it should be conducted very early in the planning process. Its primary purpose is to help stakeholders understand the past and current state of your organization as a launching pad for thinking about the future.
A good starting place is to gather all relevant documentation – annual reports, program reports to funders, past strategic plans and assessments, financial reports, etc. Many strategic planners then recommend developing an assessment tool for use by those involved in the planning process.
An assessment tool is typically organized as a survey around various programmatic and functional areas such as
- Human resources
- Marketing and communications
- Specific major programs
A common approach is to develop questions within each area that provide a snapshot as to how the organization is doing. For example, under a specific program, questions might include: “Do we have the resources committed to maintain the program?” and “Is the program in line with our mission?” Questions for the human resources category might ask, “Are we staffed at appropriate levels to carry out our goals?” or “Is staff compensation appropriate to industry standards?”
There are several organizations that offer free assessment tools to guide you in this process, including the Center for Nonprofit Excellence (http://www.cnpe.org/) and Centerpoint for Leaders (http://www.centerpointforleaders.org/).
The end product of this effort should be a report that lays out key findings and implications. Many of these will form the basis of your strategic plan.
The easy answer? Be open to both.
Your strategic plan should make sense to the average person who cares about your issue. It should, therefore, be pragmatic in laying out goals, strategies and action plans. This can include all sorts of “standard” tools, including media, PR, fundraising and marketing, among many others.
At the same time, there should be plenty of room for out-of-the-box thinking. The implementation ideas you put forth in your plan are not cast in stone. The key is to be open to new ideas, test them and refine when appropriate. Not every idea will work, so it’s important to be open to and learn from failure.
A collaborative process that invites and embraces new ideas is an important element in stimulating creative thinking. Build brainstorming into your planning experience and make it clear that all ideas are welcome.
Once you’ve decided on a direction, the big ideas can be made a lot more tangible by thinking through the practical steps that need to be taken to execute them. You might also find that it’s helpful to break action steps down into phases. For example, a major ad campaign might be phased every six months as: preparation, research, fundraising, creative development, production, placement and evaluation. That’s clearly an oversimplified example, but the point is that by outlining each of these six-month phases, you can assess how realistic your goals are, put a course of action into play, and help people to see how the big idea will actually unfold.
The most important thing to remember? You can’t achieve big things unless you’re open to the possibilities.
Strategic plans can cover anywhere from 0 to 10 years. The most common is a three-year timeframe, but the final decision depends on your needs. The three-year (or more) timeframe was at one time well-suited to an organization that knew exactly where it was headed and was not likely to be thrown off-course by technological advances or changes in the economy. We know now that very few of those organizations actually exist.
If you determine that the best course of action calls for a malleable plan that responds to in-the-moment needs, then you might be best served by a plan that establishes your vision and defines strategies that enable you to respond to issues in real-time. Such plans evolve constantly over time.
Other factors to consider are anticipated changes in the policy and economic environment in which you’re operating. For example, let’s say it’s 2008 and you run a community health center. In 2009, the American Recovery and Reinvestment Act (more commonly referred to as the “stimulus”) allocated $2 billion in extra funding for such centers. This was anticipated well in advance. If your organization was a strong candidate for this funding, you would have needed a strategic plan flexible enough to respond to the opportunity.
The larger point is that flexibility is of critical importance to any strategic plan, regardless of the timeframe it covers. There will always be changes that can’t be anticipated – some positive (such as the launch of a large new foundation in your service area) and some negative (such as a rise in unemployment). Likewise, unforeseen opportunities are likely to present themselves (e.g., a speaking invitation at a major conference or a high-profile media request). Your plan must anticipate that some things can’t be anticipated, and offer a system for taking advantage of them.
Also keep in mind that once plans are developed, it’s important to review them regularly to assess your progress, regardless of the timeframe you’ve outlined. Many organizations choose to do this quarterly. For example, you might begin the quarter by reviewing what has been accomplished in the prior 90 days, aligning these developments with your overall goals, and laying out where you expect to be 90 days from now. This information should also be tied to the metrics outlined in your plan so you can assess progress regularly.
Or, our funders tell us what and how they want us to operate, so why do we need to plan?
It’s not unusual for the strategic planning process to reveal that key stakeholders have different ideas about “what we want to do.” A strategic plan helps to build consensus and clarity on the organization’s mission, values and goals. Also, you may very well find that the planning effort stimulates new thinking and strengthens organization-wide collaboration.
Importantly, knowing what you want to do says nothing about how you’re going to do it, nor does it take into account the external factors that are likely to impact your activities. This is the job of your strategic plan. When it’s done well, the plan will serve as a rallying point for everyone involved in your organization and focus them on the end goal: accomplishing the mission.
Responding to the wishes of your funders is not a substitute for strategic planning. While it’s very likely that your budget includes restricted funds that are tied to a donor’s requirements, this shouldn’t define your overall strategy. A strategic plan charts a course of action for your whole organization. It also helps you to identify the characteristics of programs and activities that are the right fit for your vision and mission. Ultimately, your plan should increase your odds for impact and sustainability. There’s no substitute for it.
Who should do this?
A strategic plan should have measurable outcomes (or “metrics”) as a key component of content. These will vary widely depending on your goals, but a few common measures include:
- Increased number of clients served.
- Lower cost per service.
- Increased revenues from fee-for-service.
- Increased percentage of clients transitioning from the program due to self-sufficiency.
- Increased media mentions.
- Growth in monthly website users, time on site, pages/downloads accessed, etc.
- Increased awareness in the community served or among specific target populations.
- Growth in corporate sponsorships.
- Number of policymakers briefed on objective research and analysis.
Whatever your metrics, your plan should establish realistic goals over time that can easily be referred to and assessed. For example, an online education provider might seek to have a 10 percent increase in users requesting more information over six months, and a 20 percent increase in the conversion rate (meaning that 20 percent more people seeking information ultimately subscribe as compared to today). If the provider has laid out strategies to achieve that (e.g., through marketing, advertising, social media campaigns, etc.), then these may well be realistic goals. And, these are easy, cost-efficient and realistic to measure (for more information, see Evaluation).
The individuals responsible for measuring your progress are likely to vary. For example, those involved in online marketing would measure web analytics, while development staff would report on sponsorships, and finance specialists would be best positioned to track trends in fees for service.
Of course, a smaller nonprofit may not have the benefit of dedicated departmental staff. Fortunately, there are still plenty of cost-effective tools available to you, such as:
- Google Analytics (www.google.com/intl/en/analytics) is a free service that allows for a detailed analysis of your Web traffic, including, among other things, numbers of users (new and returning), where they are from and how they are getting there.
- Your bookkeeper (even if it’s you) should be able to run reports on financial metrics from standard bookkeeping software such as QuickBooks or Peachtree.
- Awareness and opinions can be measured through in-person and online surveys (SurveyMonkey – www.surveymonkey.com – is one free resource) and discussion groups conducted at your facility.
- Google Alerts (www.google.com/alerts) sends free real-time updates of media and Web mentions of keywords you set via email.