Judging by articles I've read recently, it seems that many nonprofits are avoiding strategic planning. With titles like "Don't Give Up on Strategic Planning" and "No Time to Plan?" one has to wonder-why the resistance? According to nonprofit strategy expert David La Piana, it's not you, it's the process.
David is known for his leading-edge thinking on strategic restructuring (he coined the phrase) and strategy development. In his newest book, The Nonprofit Strategy Revolution: Real-Time Strategic Planning in a Rapid-Response World, La Piana presents a "revolutionary" alternative to traditional strategic planning.
In this article, I will attempt to give you the Reader's Digest version of why the nonprofit sector needs a strategy revolution.
WHY TRADITIONAL STRATEGIC PLANNING ISN'T STRATEGIC
As an executive director and then as a consultant, David has seen first-hand the problems with traditional planning: nonprofits spending large amounts of time and money developing a formal three-year plan, only to find that it needs revision in a few months. Or worse yet, it ends up sitting on the shelf (or in the broom closet in David's experience).
Why does this happen? David and his team at La Piana Associates spent four years researching the issue. They found that strategic planning is still a useful tool-just not for setting strategies.
"Strategic planning should make the organization more 'strategic'-that is, better able to meet the challenges of a dynamic environment," explains David. "Experts stress that the most important outcome of strategic planning is to instill strategic thinking in the organization which leads to strategic action by management."
Ironically, true strategy formation is not a role traditional strategic planning plays very often. La Piana's research shows that the current process is used primarily to produce annual workplans and to communicate the leaderhip's intentions-not to form, adjust, and implement organizational strategies that will carry out those intentions.
You see this disconnect between the far-reaching mission and vision statements included in many strategic plans and the relatively mundane goals that are set to achieve them. For example, one organization's mission is to "end hunger in our community," but after an environmental scan and several meetings of the strategic planning committee, staff, and board, it arrives at a set of goals that includes
- Increase the diversity of our board of directors
- Develop a new staff training program that raises the quality of our services
- Investigate the possibility of and requirements for establishing an endowment fund
No doubt about it, these are important activities, but it's hard to trace a direct path from these concerns to the advancement of the organization's mission. How does this disconnect arise?
PROBLEMS WITH THE CURRENT PROCESS
Mistaking goals for strategy
When you focus on goal-setting rather than strategy formation you get goals that, while valuable in themselves, may not add up to anything bigger.
Generating more goals than can reasonably be pursued
Most plans cover seven standard areas of concern: board, programs, finances, human resources, fundraising, facilities, and outcomes. Let's assume you have three programs. You set three goals per program (subtotal 9) and three goals for the other areas (subtotal 21). Now, each goal will need at least three action steps. That leaves you with a total of thirty goals and ninety action steps. David says he's come across plans with more objectives than this! No one is going to be able to keep track of all these goals and steps, much less work steadily on so many disparate issues at once. The result is either to pick and choose, or to ignore the document entirely.
Expecting strategies to fit within a rigid timeline
The typical time frame for a strategic plan is three years. In our rapid-response world, it's impossible to anticipate what's important to work on years, or even one year, in advance. David finds that most goals projected anywhere beyond the first year are not taken seriously. Yearly check-ups help but, even then, goals may not match reality a few months later.
Confusing strategic planning with consensus building
The well-meaning nonprofit drive for consensus can undermine difficult, but necessary, priority-setting decisions. Seeking consensus can in fact be damaging. The organization is stymied: unable to reach consensus, yet unable to move forward without it. Reaching consensus is not a good reason in itself to form strategies, but rather, it's a by-product of a good strategic process.
Forecasting the future from a snapshot in time
The process of researching your market (the "environmental scan") usually done at the outset of the process, is often poorly focused. "Tell us what people think of our organization, what our strengths and weaknesses are, and what opportunities we should pursue next," is a common starting place handed to consultants. There are two problems with this approach. First, unless the consultant takes time to focus their research on the issues most pertinent to the organization at the time, the results can be both broad and shallow. Second, outsourcing the environmental scan doesn't help the organization learn how to do its own on-the-ground research. This skill is key to thinking and acting strategically on an ongoing basis.
Pretending to be objective
Another popular tool of traditional strategic planning is the Strengths, Weaknesses, Opportunities, and Threats, or "SWOT" analysis. While this could be a useful exercise, in David's experience the strengths and weaknesses portion of almost every SWOT analysis is essentially the same. For example, strengths typically include: we have a great leader, we have a talented and dedicated staff, we have a great reputation, our clients love us. Under weaknesses, you rarely see: we have a weak leader, we have terrible staff, no one knows who we are, our clients are impossible to please. This exercise could almost be done with a checklist of fifty choices. When the opportunities and threats are then juxtaposed with the generally meaningless platitudes in the strengths and weaknesses list, most groups fail to take any actionable meaning away from the exercise.
Frustrating staff through bad data, inaction, or both
Finally, and probably the worst of the difficulties with traditional planning is this trio of problems: 1) over reliance on under reliable data, 2) time delays that put the organization on hold, and ultimately, 3) the frustration of the very staff and volunteers who must act on the strategies.
Over reliance on under reliable data-It's a fundamentally flawed belief that good data, if it's available, will yield good strategy. Most nonprofits mistakenly believe that if they ask the right questions on a regular three-year cycle, they can predict major demographic or market shifts and then figure out what to do about them. In practice, it seldom works out this way. Traditional planning puts too much distance between prediction and action. Instead, nonprofits need to continuously scan and engage with their environment as part of their strategic effort.
Time delays that put the organization on hold-Research shows that the typical planning process takes six to twelve months to complete. Until the plan is finished, the organization may come to feel as though it's "on hold." Unfortunately, strategic opportunities don't wait to turn up until the strategic planning process is complete. In fact, they usually pop up at the most inconvenient times. Hesitating to respond can be costly, particularly when the organization passes on stellar opportunities that require immediate action.
Frustration of staff and volunteers-Perhaps the worst effect of traditional strategic planning is that it wears out participants just when the game is supposed to begin. After months of planning, there's a collective sigh: "At least that's out of the way for the next three years!" The end of the planning process sends exactly the wrong message: that the project is "done." And, too frequently, the strategic plan simply fails to make any significant difference in the organization's life. This would explain why traditional strategic plans aren't exactly at staff's fingertips (unless they have to move boxes of the things to reach the cleaning supplies).
DON'T THROW THE STRATEGIC BABY OUT WITH THE PLANNING BATH WATER
It's not as though the strategic plans that so many nonprofits have developed are useless. Also, the process itself is helpful for many goals such as motivating staff and board around the organization's vision, mission, and values, and fostering communication and inclusiveness. Plus, the above problems can be overcome by good processes and good consulting.
But nonprofits need a system that responds to today's rapidly changing environment and doesn't require clever workarounds. Fortunately, good strategic thinking is available to all nonprofit leaders, right in their own heads, and in the heads of their colleagues. We just need a better system in which to undertake it. We need a strategy revolution.
LEARN MORE ON THE WEB
Strategy Formation Research Project
Provides background information on the four-year project that culminated in The Nonprofit Strategy Revolution book. It includes lists of people interviewed, a description of the project's design, and other material of interest to readers who want to know more about the research behind this work.
Source: "Tools You Can Use" e-newsletter from the Fieldstone Alliance. Becky Andrews has summarized David La Paina's book The Nonprofit Strategy Revolution: Real-Time Strategic Planning in a Rapid-Response World.