Strategic Planning - Are Your Strategies Right?

This blog post was provided to the Center by Michael Farley, MA, CFRE, a Center faculty member and Partner in Advancement from EMD Consulting Group.

So, you have developed a strategic plan with your organization; but how do you know you have identified the right strategies to get the organization to where it wants to go?

All the pieces seem to be in place: defining where you are – your current position as informed by multiple voices and perspectives; knowing where you want to go and clarifying what is most important – the big issues and priorities that seem critical to success; defining what you must have to address the priority issues; and determining who is accountable for strategies, action plans, calendar, and budgets needed to allocate time, human capital, and money. The strategic plan has become the sum of actions the organization intends to take to achieve agreed upon near and long term goals.

Yet are you confident that the strategies you’ve adopted will get you there? And what does strategy really mean? Arguably, when it comes to defining strategy, McKinsey & Company said it best:

“A strategy is an integrated set of actions designed to create competitive advantage where it does not exist.”

The essential truth for both business and nonprofit sectors remains the same – the purpose of strategy is to create competitive advantage where none exists and to strengthen competitive advantage where it does exist. In the nonprofit world, competitive advantage is the presence of visible, obvious, and measurable ways in which the organization differs from and is better than its peers in the eyes of its customers, viz. retail customers, clients, donors, current and potential board members, staff members and the public at large.

However, strategic planning may not be truly strategic unless it meets the challenges of a dynamic environment. The most important result of the strategy development process is not a laundry list of goals and action steps, but rather strategic thinking which leads to strategic action by leadership and management.

Strategy must also be constantly reassessed in a dynamic and ever-changing world, just as philanthropy is always evolving – new players, new giving models, new tax laws, new opportunities and threats with which to contend.  That’s why strategy development and strategy management is a process, never an endpoint.

Here are some questions to keep in mind when assessing the appropriateness of one strategy over another. The questions help the organization evaluate the impact of the strategy using specific decision-making criteria to enable leadership and management to select among several strategies being considered:

1) Is the strategy consistent with organizational mission and values?
2) Does it build on or reinforce current competitive advantage?
3) Does it increase the quality of programs and has quantifiable outcomes?
4) Does it improve the organization’s financial position?
5) Does it elevate the organization’s profile and visibility?
6) Will it likely yield a result that is sustainable?
7) Will it put the organization in competition with its collaborating partners who are essential for organizational success?
8) Can it be adequately supported by existing administrative capacity or does it expand capacity?

These questions help the organization screen strategy options. For example, do we want to expand service to reach new audiences; or do we want to focus more narrowly on services to a particular target client base? Do we want to collaborate with other organizations to build upon our core competencies; or do we want to invest in building our own organizational capacities? Do we want to invest in our current human capital; or do we want to add new talent with the added skillsets we seek?

Each strategy has different requirements and risks, so using a scan to help assess the merits of each becomes critical. Further, depending on the mission and vision for the organization, the questions used for scanning strategies should change to best fit the nonprofit enterprise.

(See David La Piana’s Strategy Scan, discussed in his book, “The Nonprofit Strategy Revolution”)

Further, strategies can be developed at several different levels. At the organizational level, strategy is needed to determine how to advance mission, realize vision, and deliver value to the constituents it serves. At the programmatic level, approaches to programs and services are decided upon to create specific outcomes related to targeted audiences. Finally, operational strategies address systems, policies and personnel that oversee finance, human resources, communications, information technology, etc.

Taken together when screened through criteria and strategic thinking, they provide a path forward for staying focused, adjusting to change, and increasing the likelihood that the approaches ultimately adopted will lead to success.

For more information or to discuss your strategic planning needs, please email Michael D. Farley, M.A., CFRE at mfarley@emdconsulting.com.