A Nonprofit’s D.I.Y. Strategic Planning Process Blooms

blooms

[Sixth in a series: When a strategic plan is not a strategic plan, really; kicking the tires of the current strategy; an approach to strategy for nonprofits; now we’re getting somewhere; and the hard spade work of strategic planning.]

[Author’s note: While “Philanthrophile” — a.k.a. Betsy Stone — has been offline here for six months during the last stages of her father’s remarkable 96-year life, she has been busily blogging about aging, gratitude, father-daughter relationships, end-of-life, hospice, siblings, memory, faith, love and loss at The Henry Chronicles.]

Last night, a hard-working and engaged nonprofit Board concluded 18 months of work by formally approving a five-year strategic direction. Woo hoo!

I called it a “D.I.Y.” strategic planning process because this small nonprofit (~$1 million budget), like most nonprofits, didn’t have the luxury of hiring a fancy shmancy consulting firm to figure out how it might best focus its strengths and resources to have the greatest impact on the community, and differentiate itself in the process. Instead, it used a methodical approach that relied mostly on volunteer resources to analyze the situation and investigate options, as well as four mini-retreats where Board members came to a common understanding. The process took about a year, although due to two sudden family health emergencies, the formal approval of the draft plan was pushed out to last night.

This sixth post about the nonprofit strategic planning process outlines what’s happened since the staff investigated the potential strategic directions identified by the Board in May 2012, and shares the Board discussion process that culminated in unanimous approval.

Up to this point, three potential strategic directions were in play, identified by the Board in May 2012. To formulate a recommendation, exploratory work was needed – work that couldn’t be done during the course of a meeting or a retreat. The work that ensued over the summer months investigated:

  • Changing need within the nonprofit’s sector. This included reviewing a lot of secondary research into underlying causes and the size and growth of the need addressed by the nonprofit.
  • The “competitive” landscape. We collected information from the community’s 2-1-1 service and met with several key nonprofits who provide related services in the community. Our goal was to understand how need is being met by other nonprofits and government agencies recognizing that they may be potential allies in addressing needs. As a small nonprofit, our intent was to identify a niche where a community or group was not adequately served by other nonprofits.
  • Best practices. We conducted discussions with well-regarded local nonprofits about how they monitor and evaluate outcomes, and analyzed best practices of similar nonprofits in other communities by combing through public documents and websites.
  • Impact measurement. All nonprofits are being pushed to demonstrate that their approach has a positive impact and this nonprofit’s entire sector is struggling with how to measure results. We were able to meet with a nationally-regarded academician about outcomes measurements related to self-reliance.
  • What those in need want. We created and fielded a client survey, met with government agencies and community services knowledgeable about community need, and conducted focus groups with potential clients.

Any situation assessment also requires understanding how well a nonprofit is performing now. This nonprofit was fortunate to have a partner with substantial operating expertise step up to evaluate its operational capacity. Without that partnership, we would have had to do our own capability assessment. After looking at a variety of self-evaluation tools, I turned up this excellent Capacity Assessment created by McKinsey and available through Venture Philanthropy Partners, a “dot.org” that is driving much of the national conversation about impact and evaluation. (I previously shared a case study about how a nonprofit stopped doing what didn’t work and began to concentrate its efforts on a program with tremendous impact, which I discovered through VPP’s book, Leap of Reason.)

One last, important piece of the equation needed to be in place before choosing the strategic direction: establishment of financial targets. Too often, strategic planning processes consist of nonprofit Boards brainstorming new programmatic objectives without addressing the financial requirements to sustain the mission.

Targets establish performance-related goals to be achieved by the end of a period and are used to inform budgeting and guide the strategic plan. The inherent tension between current financial performance and desired performance helps to drive changes that encourage the stability and success of the organization. This nonprofit’s targets were developed in discussion with the executive director, external accounting firm (which specializes in nonprofits), and chair of the finance committee after considering what financial measures are important to a high-performing nonprofit and/or a high-performing organization of this type, as well as the organization’s current state of evolution and development.

By September, highlights of the investigation were rolled into a briefing that was reviewed with the executive director. The executive director felt that the findings – and her own experience on the front lines of the nonprofit – unambiguously pointed to one direction.

The waters were tested when the executive director presented her recommendation to the Executive Committee of the Board. She concluded by asking, “Are there things we haven’t considered? How do we make sure we have the right kind of discussion with the Board?”

With the full support of the Executive Committee, the Board was brought together for a retreat to hear and discuss the recommendation, using the following agenda:

Welcome and introductions – Board chair

What’s in a strategic plan? What’s the Board’s role?

Where we are in the strategic planning process

What we’ve learned – highlights of the situation assessment

Environmental update, and findings from the capability assessment

Recommended strategic priorities

Board discussion of pro’s, concerns and risks to consider

Determination of next steps

  • Implications for budget
  • What are the next deliverables for review by the Board?
  • Check-in points: how should the Board monitor progress? Through a committee? At Board meetings?

As indicated in the author’s note at the top of this post, “life intervened” when I had to suddenly leave the retreat, although the outcome was as hoped: the strategic direction was approved.

Last night’s retreat was an opportunity to confirm and polish the strategic plan. A draft Strategic Plan document was circulated in advance to the board, with the following table of contents:

  • Recognition of Board participating in development
  • Introduction
  • Mission statement
  • External situation factors (social, economic, giving/grants, government/political, technology, competition/other providers)
  • Internal situation factors (capacity, operations, financial stability, facilities and operating hours, programs, management, Board, strategic partnerships, quality, donor base, volunteers, corporate sponsorships and relationships)
  • What are we trying to do and how will we get there? (summary of strategic direction)
  • Goals and objectives (including financial targets)
  • What will have to change to accomplish our goals (“from”/”to” table)
  • What will stay the same?
  • What are the expected outcomes when we get there?
  • What are the risks and how can we mitigate them? (risks/possible mitigations table)
  • Acknowledgements

During last night’s mini-retreat, the group expanded the discussion of changes that would be required to achieve the plan as well as potential risks and mitigation strategies. Goals, objectives and outcomes were approved, and the Strategic Plan in its totality was enthusiastically and unanimously approved.

Are we finished? Hardly! Now the hard work of implementation begins as well as the development of new tools to monitor progress toward the strategic plan and the factors most critical to its success.

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