In Part 1 of this two-article series, we discussed some of the ways in which strategic planning processes have served nonprofits poorly. One key reason is that strategic planning is the primary organizational change process that nonprofits know about, that boards are comfortable with, and that funders will fund. In this article we give some alternatives, in part because it's helpful just to have choices when facing organizational decisions.
Strategic planning -- when done appropriately for your organization -- can be exactly the right tool for the job. But, too often, strategic planning is undertaken for reasons that would be better served by other methods: engaging the board, getting everyone on the same page, getting buy-in from stakeholders, and so forth. And sometimes when boards are unhappy with their executive director, a strategic planning effort is the one thing they both can agree on.
Different processes are better for different types of decisions and challenges. Here are some tips to strengthen any process as well as some specific alternative planning processes.
Focus on the questions that need answers
Begin a planning process by asking this: What are the four or five questions to which we must have unambiguous answers by the end of this process?"
And at least at the beginning, make yourselves frame them as yes/no questions. For instance, rather than ask a question in the abstract, such as "How big do we want to be?" ask, "should we aim to grow to 35 staff within the next two years?" It's easy to modify the question as you go forward, but starting with razor-sharp questions will focus the decision-making process, and result in clearer decisions. Other examples: If we are offered $50,000 to open in another city, should we do it? Do we have what it takes to get a contract with the school district within the next six months? Do we have the right people on the board to carry out the planned major donor campaign? (If not, we have to change either the people on the board or the plan.)
Once you know the core questions to answer, the planning process becomes clear: it is a series of specific decisions. And once clear decisions are set, the board and staff can figure out what needs to be done in order to answer those questions.
So: what are the four to five questions that we must unambiguously answer?
Strategic Learning Agenda
Organizational bewilderment about what to do is more common than we like to admit. For example, we might say, "We know we need to do something about immigration, but what?" Consider taking an exploratory, creative approach: Identify what you need to learn about, and undertake a Strategic Learning Agenda.
A McKinsey study of Fortune 500 boards showed that board members felt inundated with information about their own companies; in contrast they crave information about trends in their industry and about the competition. A learning agenda that's part of the planning process can get board members and senior staff to plunge into new situations, and it can stimulate the perspective and creativity in decision-making.
For example, create a board-staff committee (of perhaps 5 people) to learn how other food pantries are responding to fundraising challenges. Each person can do 2 interviews with nonprofit leaders, food pantry board members, or funders. The committee can then make a presentation to the board about what they saw as relevant, affordable ideas, and trends. Such a discussion leads naturally to changes and crossroad decisions for the organization.
Formalizing a Strategic Learning Agenda into a board-staff process has several benefits. Rather than a task taken on by the executive director or program director, it structures exploration to involve more people at multiple-levels and in smaller groups. Secondly, a Learning Agenda involves and engages the board with the "industry" and its trends; these are things board members may not know well. And the exploration results in many cross-organizational relationships that reside not just with the executive director: relationships that often bear unexpected fruit later on.
Getting everyone on the same page
If the issue is "getting everyone on the same page," often there are ideas that have been rolling around in the minds of the senior staff and board chair, but they can't figure out how to get the organization to move.
Jumpstart organizational movement by having a small leadership team come up with a draft of "The Page": a bold new vision in one page. One organization came up with the following to take to the full board:
- Downsize our major annual event by 50% with a smaller venue and higher profit margin.
- Add three concert-based, small fundraising events during other parts of the year.
- Seek foundation funding for replication, but only undertake it if $400,000 or more can be raised.
- Take the "American Idol" idea off the table (this has been a recurring, never-quite-resolved question for years).
- Spin off the high school program to another organization where we can be a partner to it rather than having to bear all the responsibility for it.
The board was glad to have such an explicit and concise plan to react to and scrutinize. The organization was able quickly to make changes in the plan, and get moving on it.
Many planning processes are undertaken because fundraising revenue is trending downward. In some cases a planning process that starts with a Fundraising Revamp can lay a realistic foundation for traditional (or alternative) planning processes. Have a board-staff task force look at all fundraising activities and mark each one as something stop, to change dramatically, to put on hiatus, invest more staff or consultant time in, or a new activity to explore.
For each one on the list, show Before & After projections for amount of effort, money raised, and non-financial impacts (such as raising the organization's visibility). Such a chart makes it easy for a group to evaluate and adjust the fundraising plan as a whole.
Business Model Adjustment
If a main concern is financial vulnerability, begin by looking at both programs and revenue efforts together. Nonprofits can't really look at program goals without thinking about money, and we can't really look at fundraising and earned income without thinking about what programs we have now or should start in the future.
Business planning tools and scenario planning are methods to get more directly at this core strategic element. A simple model for business model adjustment is also the Matrix Map, outlined in the book Nonprofit Sustainability, and also the subject of a recent free Blue Avocado webinar. We'll be publishing more about the Matrix Map in a future issue.
Low-grade dissatisfaction with the executive director
For board members: if there is a lack of confidence in the executive director on the part of the board, rather than embark on an open-ended planning process, conduct a thorough performance review including 360 degree assessment, and establish milestones for the coming six-months or year. Perhaps ideally this would take place in the context of a highly-developed plan, but coming to grips with a severely flawed executive should be done in a more rapid, more direct way. And whatever you decide -- whether to fire the executive or that you've cleared the air and set a specific plan of action -- you will be better prepared to consider organizational choices.
Community-oriented decision making
In some ways, traditional strategic planning is organization-centered. It often starts with the question: What are our goals? Another way to put this might be: "What do we want to do and achieve?" Although strategic planning processes often incorporate environmental assessment, that information is typically used to set a context rather than to drive decisions. (For one reason, most environmental assessments rely heavily on what other people have to say, and they hardly ever say something you should start or stop doing.)
One approach to community-centered decision-making is this question: "Who is our constituency, and what do they need our organization to be doing right now?"
A follow-up question that brings out new kinds of thinking: What kind of organization do they need us to be right now?
Often these questions lead to activities that are not just around units of service or reflect the role our organizations play as community focus points...not just as service providers. Answering these questions helps us re-focus on who we represent and to whom we hold ourselves accountable. Remember what makes our organization meaningful to all our constituents is not just to our direct beneficiaries or to our funders.
Logic models and theories of change
Despite the off-putting abstractness of the term "theory of change," some organizations successfully use this framework for planning that focuses on constituents and what changes (outcomes) the organization is trying to achieve with those publics.
CompassPoint CEO Jeanne Bell noted some advantages of a theory of change (TOC) approach to planning:
- A TOC forces the creation of language around specific impacts, rather than just updating language around services (which is what a lot of strategic planning does).
- Values are meaningfully embedded -- not just a parallel document -- in a theory of change.
- It answers the core questions -- why do we exist, and why do we do what we do -- in one page, and in a visual way that serves as a stable anchor for departmental and annual planning.
- Doing a TOC is helpful for organizatons that are mentally and systemically ready to commit to impact and evaluation, rather than staying at describing programs and identifying internal capacity needs.
Bold (maybe unachievable) ambitions
In the nonprofit sector we have been trained by government contracting and foundation grants to be very cautious about over-promising. We see success as fulfilling the plan and failure as falling short of what's in the plan.
In contrast (and to oversimplify), entrepreneurs in the for-profit sector promise all kinds of things, and don't feel the least bit bad when the plan doesn't "come true." We don't want to emulate the recklessness with investments or the glib lack of responsibility that such entrepreneurs often have, but we could be bolder about putting forward the ambitions that are we often keep to ourselves. Put another way, we must not let planning encourage to establish only goals which we have great confidence in meeting.
Any process can be done well or poorly, and it's too easy to defend strategic planning practices by saying that it wasn't done right over there. And by staking too much on strategic planning, we have neglected the other tools we could use to make decisions, to move organizations or to learn. And foundations, by over-investing in consultants -- relative to investing in grantee capacity -- rather than in nonprofit abilities to learn and frame decisions, have too often succeeded more in strengthening the "philanthropic-consultant industrial complex" than in strengthening community nonprofits.
Use the right tool for the job, as Mr. Natural says. And before picking up that hammer, look through your toolbox. You'll discover you have a great many tools and competences you may not have realized you had.
My appreciation in particular to Marla Cornelius at CompassPoint, and to Jeanne Bell and Steve Zimmerman for the thinking and practice we did together as we worked on the book, Nonprofit Sustainability: Strategic Decision-Making for Financial Viability.
Jan Masaoka is Editor of Blue Avocado.
See also in Blue Avocado: