Kicking the tires of the current strategy

Photo credit: Emotion Finder/flickr under CC license

Before holding that next “strategic planning” retreat, I’d suggest that the nonprofit’s Board chair, executive director and strategy/finance committee chair meet to kick the tires on the existing strategy.

In thinking about how to do that, I was struck by an article published by Chris Bradley, Martin Hirt and Sven Smit in the January 2011 issue of McKinsey Quarterly. Of course, the process of strategic planning is a lot different for a small nonprofit than it is for organizations that have the resources to work with McKinsey, but helpful things can be learned from these strategy experts.

Here are the eight strategy tests I adapted from the McKinsey experts:

  1. Will our strategy beat the market? The assumption here is that we have to be better than average to compete for donors and funders, and develop a positive reputation among clients and referral sources.  Good strategies are those that differentiate when compared to others who serve the same market or audience.
  2. Does our strategy tap a true source of advantage?  Distinct competencies like managing stakeholders or delivering programs in a unique way can be sources of advantage.  By definition, these capabilities have to be something we’re really good at that others are not.
  3. Is our strategy “granular” about where to compete and serve?  The idea here is to think about all of the distinct segments we serve rather than considering clients as a bloc.  A granular strategy might call out specific groups we want to serve well, such as seniors, medically fragile people, groups at risk of chronic conditions, or people who live in specific areas.
  4. Does our strategy put us ahead of trends?  Besides the obvious, we need to “look to the edges.”  How are competitors innovating?  Are there new entrants that are approaching what we do differently?  If an organization wanted to really shake things up and tackle a need, what might they do?
  5. Do we have proprietary insights about the need we address – or need in general?  Can we help our clients solve their problems in a new way?  Or do we just know what others know?
  6. Does our strategy embrace uncertainty?  Have we identified the variables that would influence how we prioritize or make an important decision about resources?  Have we thought about how we would respond to a range of scenarios?
  7. Do we avoid being contaminated by bias?  Are we overly optimistic or do we put too much emphasis on avoiding risk and the downside?  Do we identify objective criteria that help us to make decisions?
  8. Have we translated our strategy into an action plan?  Does everyone know what to do?  Do we know what we need to shift from and to? Do we know what the major change initiatives are to implement the strategy successfully, and are they resourced appropriately?
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