At business and networking events, after answering the inevitable “What do you do?” I’m often asked, “So, what is strategic planning?”
The question is understandable for nonprofits pressed with daily management issues and resource limitations. Those matters push planning down the list of priorities.
For those who have experienced strategic planning processes that were poorly conducted or included no clear implementation, strategic planning means frustration. Eyes roll as they remember fruitless planning exercises that sucked time and allowed valuable insights to slip into a black hole of inaction. The resulting aversion to strategic planning is often the most difficult barrier to creating a viable organizational strategy.
Without a clear strategy, the organization’s mission suffers and its sustainability is constricted. Effective strategic planning, on the other hand, offers key payoffs:
1. Clarifies Organizational Mandates
Mandates are things an organization is required to do by documents such as its constitution and bylaws, its regulatory agencies, its 501(c)(3) status, and the professional organizations it relates to. These are formal mandates. Informal mandates include the expectations of stakeholders such as clients, donors, staff, board members, the community, and peer organizations. Formal mandates are explicit in governing documents. Informal mandates can be trickier because they are implicit—implied but not usually written down. They are still stakeholder expectations that an organization fails to factor at its peril.
2. Identifies Stakeholders
Stakeholders include all those who can impact or are impacted by an organization. A stakeholder analysis provides a clear understanding of stakeholders. It analyzes areas such as their influence level, their expectations, their stake level, their relative power, their needs, and how the organization depends on them.
3. Establishes Performance Criteria
From the stakeholder analysis, we can determine the criteria stakeholders use to evaluate organizational performance. This helps planners identify strategic priorities and operational areas that need to be strengthened to achieve the mission, retain support, and secure critical funding.
4. Analyzes the Operating Environment
Every organization has an operating environment that includes:
- community context
- funding sources
- mandatory regulations
- economic and political realities
- service population
- competitors and collaborators
- staff and board members
- intangibles such as reputation
Analysis identifies your strengths, reviews your weaknesses and options for overcoming them, creates ways to capitalize on your opportunities, and finds options for mitigating your challenges. Grasping the forces and trends impacting the organization is integral.
5. Creates a Viable Business Strategy
Effective strategic planning will identify a list of strategic issues to address. Often more issues will be identified than can be resolved in a typical three- to five-year plan, so these will be prioritized. Goals for strategic issues and capitalizing on the opportunities will be clarified, along with strategies for funding the plan. Time and resources will be aligned with the priorities and mission.
6. Demonstrates Organizational Viability to Potential Funders
Competition for grant dollars can be fierce. Grant makers frequently require a strategic plan as part of the application. A compelling strategy is critical for setting your organization apart as the most viable funding recipient.
7. Directs Follow-Through Via an Implementation Plan
Strategic planning creates a concrete implementation plan. That plan is complete with specific action steps and assignment of persons or groups responsible, as well as monitoring of plan progress. Monitoring includes an implementation review, with those responsible for each goal reporting on progress. The goals and action steps become part of the work plan of each department or area.
8. Creates an Organizational Learning Baseline
Strategic planning consolidates organizational knowledge. That can inform new staff and board members and facilitate their onboarding process. Since strategic planning is an iterative process, meaning that a new cycle of planning is begun when most of the steps in the current plan have been accomplished, the organization will not have to begin planning again from scratch in the next round. Subsequent planning cycles can build on what was learned in prior cycles, building continual layers of understanding and organizational competence.
Amber Hurdle, in The Bombshell Business Woman: How to Become a Bold, Brave, and Successful Female Entrepreneur, wrote: “Creating a plan to bring in more business in a way that does not ultimately support your annual goals is fighting against yourself.”
Strategic planning clarifies our goals and strengthens our mission impact. The “how” becomes clear as we better understand the “why” and the “what” of our work. It enables us to do more of what brings us closer to the purpose of what we do.