Category Archives: Strategic Planning

Nutshell

Strategic Planning in a Nutshell

Here are some questions that your strategic planning process should answer:

  1. What is your vision for the future? You should have this memorized before you even start. This vision rarely changes because it is the reason for your existence. It is usually stated in vague terms. It should contain no strategies, goals, nor values. This is a view of the outside world, not a description of your organization.
  2. What does the future look like in three to five years? This is specific. This is your practical vision. These comments represent the criteria you use to judge the rest of your plan. What do you expect to see, hear, feel? What is taking place?
  3. What are the roadblocks that keep you from achieving the practical vision? What are the kinks in the hose, the dragging brakes? What must change to achieve the practical vision?
  4. What innovative, substantial actions will deal with the underlying contradictions (the roadblocks) and move you toward your vision? These will give you your broad strategic direction. They typically build on your strengths.
  5. What will be your specific, measurable accomplishments in the first year? What will you accomplish in each quarter?
  6. What will you do in the first 90 days? Who will do these actions? When will they do them? What resources will they have? Who is responsible for tracking progress?

Now you have your strategic plan. Document it. Add it to your Operating Plan.

Now go do it.
Strategic Workshop Overview

The Thinker

Do You Really Want to Update Your #Nonprofit Strategic Plan?

It seems that about every three years nonprofits get an itch to update their strategic plan.

But do they realize what they are asking?

They are asking to scan the external environment for changes that impact their approach to achieving their vision. Then they review their current strategies to see if they are accomplishing their mission efficiently and effectively.

But this is worthless unless they put into place some Strategic Actions that are innovative and substantial.

Strategies without strategic actions are just paper weights.

Strategic actions that are not innovative are just the same old thing. Innovative means new and different. Not just what you are doing now.

“Insanity is doing the same thing over and over and expecting different results.”
– Attributed to Einstein, Mark Twain, an old Chinese proverb, and Benjamin Franklin

But most, if not all, nonprofits are already over-busy and over-scheduled. How do you fit in something new? You start by taking out your eraser and deleting something you are doing now. Hopefully, that will the be the least effective activity…or the least efficient. You may have to delete your favorite activity, or as author guides say, “Kill your darlings for the greater good.” This is really tough.

“Kill your darlings, kill your darlings, even when it breaks your egocentric little scribbler’s heart, kill your darlings.”
– Stephen King, stolen from William Faulkner,  Oscar Wilde, Eudora Welty, G. K. Chesterton, “the great master Chekov”, and originally from Arthur Quiller-Couch.

Strategic actions that are substantial are those that have an impact. If they don’t have an impact, they must either be killed or not started. Why do them? Your vision is the reason why your nonprofit exists. Having an impact is another way of saying they are effective.

There are many good things to do, but not all of them advance you towards your vision. Doing good things that do not move you towards your vision is a common problem. See the Stephen King quote above.

The impact, however, does not have to happen immediately. Jim Collins, in his book Good to Great, uses the image of a flywheel that gets many small pushes, but builds up tremendous momentum over time.

So, before you embark on a strategic plan, think about some of the changes you must make and your willingness to make them.

How to Use the Cause Effect Chain

Nonprofits start with the recognition of a problem, a vision of the problem solved, and a mission to achieve the vision and solve the problem. This is basis foundation for strategic planning and is the key to winning donors, grants, and volunteers. One of the biggest problems in grant applications is not properly stating the problem, or, more commonly, not stating the right problem.

Everything is driven by the definition of the problem. Once you get that right, the rest comes much more easily. But defining the problem is more complex than it looks.

I frequently see grant applications for funding to provide additional reading interventions for early elementary students. They will state the problem as x% of third grade students reading below grade level, and the goal is y% (y > x) of third grade students reading at or above grade level. but as a potential donor, funder, or volunteer, I want to know why that is important.

They will respond that reading proficiency is an important factor in high school graduation rates. OK, so why is that important?

High school graduates have higher earnings as an adult. So economic well-being increases.

So we have a chain of causes and their effects (problems):

Low reading proficiency ⇒ more high school dropouts ⇒ fewer graduates  ⇒ lower incomes  ⇒ more crime and dependency  ⇒ lower GNP & GDP

But the chain also goes the other way. Why is proficiency low? It could be because there are too few teachers for close attention. It could be because most do not have reading opportunities at home, or they have english as a second language, or reading is not valued at home, or they don’t have breakfast in the morning, or any of a hundred other reasons.

Understanding the causal factors is important. Remember the old illustration of the townspeople who saw a baby floating in a river. They rescued him. Then there was another, and another, and another. They were very busy rescuing babies. Finally, they sent someone upriver to find out why the babies were in the river in the first place. (Usually the answer is something like a troll was grabbing them off his bridge and throwing them in the river.)

Hint:
In the long run, it is better to address the root cause than to just keep addressing the immediate issue over and over again.

Some people will attempt to solve a problem by  prohibiting the problem.  This usually makes the problem worse or creates new problems as the root causes still exist.

For example, the Eighteenth Amendment prohibited the sale of liquor without removing the root cause. People with a thirst quickly found many ways around it and crime gangs arose to meet the needs.

Looking at the reading score example, some people have suggested that we just require everyone to graduate from high school, ignoring the fact that many people don’t have the necessary skills…and there are reasons why they don’t have the skills. Mandating the expected outcome just does not work. You must address the root cause to permanently solve the issue.

Private versus Public Outcome.

Note in the reading example that outcomes related to the initial parts of the cause and effect chain provide an benefit to the individual client, such as a higher reading score. This is called a private outcome.

The outcome related to the final effect impacts society as a whole. This is a public outcome.

To be effective, the ultimate public outcome should always be clearly defined.

Summary

Always focus on the root causes to achieve a permanent solution.

Always state a clear public outcome.

Overview of The Big Picture

The Big Picture – Redux

My prior post, The Big Picture, described the high level view of nonprofit strategic planning and management. Overview of The Big PictureIt showed that all nonprofits start with the recognition of a problem and a vision of the world where the problem is resolved. The mission is the commitment to achieve the vision. The vision and mission are why the nonprofit exists and should never rarely change.

The strategies are the broad actions the nonprofit will take to accomplish the mission; how they will achieve the vision. Strategies should be reviewed every 3 to 5 years or when there is a significant change in the environment.

The actions are the detailed plans for the next couple of years. These are what they will do to execute the strategies.

Managing the Nonprofit

The Logic Model, described in this post, is the basis for detailed management…and it’s often mandatory for grant applications.

A logic model is used to describe the whole process, starting with stating the problem, then the resources to be applied to the problem, the activities to be performed (including dosage, frequency, and duration) and the specificLogic Model  outputs of the activities.

There is usually an accompanying narrative  that describes the problem in more detail and giving proof that the problem really exists and indicating the severity of the problem. The narrative may also discuss the root causes of the problem.

The Resources-Activities-Outputs columns represent the efficiency of the organization in addressing the problem. Typically, these activities and outputs are focused on addressing the root causes.

The last three columns detail the outcomes. This is the “So what?” describing the change in the external environment  as a result of the activities and the outputs. This tells of the effectiveness of the activities and outputs.

 Managing the Efficiency

So how do we manage the efficiency? The first step is to make sure that you have a Delegation of Authority in place. This authorizes budgeted expenses and allows for variance approvals.

Where does the budget come from? The board issues guidelines that represent their criteria for evaluating the budget. The budget funds the activities shown in the logic model using the resources they are willing to provide. The board should pay close attention to the measures of efficiency, usually expressed as ratios. Ratios such as dollars per student or clients per employee, or classes per month.

The staff prepares the budget and, if done according to the guidelines, the board approves it.

Monthly Report

This budget is the baseline for the next year. Every month the board receives a report that shows 1.) the performance relative to the planned actions (budget) for the prior month, 2) the performance relative to the planned actions for the year-to-date, and 3 )the projected performance relative to budget for the full year. See the post on the Financial Ladder.Projected Year End Variances

This report provides a roadmap for drilling down into the details to assess performance and to direct future actions. Note what the report does NOT include: 1.) references to last year. Last year is not the baseline. The budget is the baseline. Last year should have been considered when developing the budget. 2.) nor does it report how much budget remains. That is irrelevant when you have a baseline budget and projections on how it will be spent.

This report also provides the basis for projecting future cash needs.

Managing the Effectiveness

Managing effectiveness is a more difficult problem, but ultimately, it is the more important. The logic model has three columns under Outcomes. A near-term, a mid-term, and a long-term.

Near-term effectiveness is the easiest to measure. This is the immediate impact of our activities. This can be measured by observing clients; their awareness, knowledge, skills, behavior, practices, motivations, etc. You can just ask them, using surveys. We can tell right away if our activities have an impact. These measures often focus on root causes.

Mid-term effectiveness is a little more difficult. The real impact may take three to five years measure. We want to actually observe the changes in attitudes and behaviors. This can tell us if our near-term outcomes are really persisting, or are they just transitory. For example, does our middle-school reading intervention actually improve high school graduation rates. These measures have a middle-ground focus between root causes and the problem/vision.

Long-term effectiveness is quite difficult to measure. This is the achievement of the vision. (Remember the start of this post?) The real impact may be years away. It may be the impact of elementary school reading interventions on high school graduation rates. It may be a decrease in joblessness from GED training.

Quite often this happens long after the founder has passed from the scene. It may be Martin Luther Kings dream. It may be landing on the moon well after JFK’s death. It may be finding a cure for polio years after FDR died. But it is still the dream, the vision, and why we exist.