Category Archives: Strategy

Top Planning Retreat DON’Ts

Courtesy kccollegegameday.com

Ah… September is around the corner. And with the return of fall, college football, a fresh season of The Big Bang Theory,  and… planning retreats.

I’ve been to a lot of planning retreats over the years and facilitated a fair number, for organizations big and small, for for-profits and non-profits.

For your consideration, here is a list of my top “don’t’s” for retreat planning:

1. Don’t turn the planning retreat into making a new list of stuff to do. One Board I used to serve on created a new “strategic plan” every three years. Every three years, they started over, brainstormed a list of possible new programs, prioritized it and called that the strategic plan. We did not get a chance to talk about how the environment was changing, how the portfolio of current programs did or didn’t make a difference. Planning retreats were about adding rather than winnowing and refining.

2. Don’t let fun and games dominate the agenda. If you’re Herb Kelleher and a fun-loving attitude is a core value, that’s one thing. Touchy-feely stuff has its place, but people are time challenged and resent what they view as a waste of time. Volunteers on an effective nonprofit board presumably are there for the right reason: they want to share their expertise, talents and connections to help achieve the mission. That means they need to use their brain cells and contribute. Retreats must feel productive.

3. Don’t wring the juice out of it. I know one CEO who was so terrified by the prospect of free-ranging discussion that he turned the retreat into a three-ring circus of management presentations. Discussion was to consist of limited opportunities to react to the presentations capped by a request for approval of management’s strategic plan. I said “was to” because the Board chair hijacked the agenda and said the Board was going to have the conversation that it wanted to. He even drew a picture of himself wearing a cowboy hat. Yee ha!

4. Don’t forget where the group is in its formation. Despite the warning about the “touchy-feely” stuff, Boards with new members need to take time to loosen up. Ice breakers have their place even among grown ups. Have some fun! The facilitator has an important role in setting discussion rules including reminding participants that everyone, even new members, are there for a reason. The facilitator can also help to draw out participants.

5.  Don’t assume the CEO or executive director knows where the Board is. Board interviews or a survey can be very helpful in discovering issues that may need to be discussed, or concerns that could take the retreat off in an unexpected direction if not accommodated or dealt with. I’ve seen CEOs conduct the interviews themselves (which can be relationship-building) or they can be undertaken by the facilitator.

6. Don’t ignore pacing. We as humans are primed for stories: we need a hook that grabs us, a desire to achieve something, conflict we can gnash our teeth over, rising energy, and satisfying resolution. Good stories don’t drone on. In a retreat, pay attention to the movement created by the length of the presentations, their point, and the balance between presentation and dialogue. Avoid death by Powerpoint!

7. Don’t forget to start with clear objectives for the retreat itself. You know the old dialogue from Alice in Wonderland:

Would you tell me, please, which way I ought to go from here?”
“That depends a good deal on where you want to get to,” said the Cat.
“I don’t much care where–” said Alice.
“Then it doesn’t matter which way you go,” said the Cat.

As an example, yesterday, I met with an executive director to discuss objectives for an upcoming retreat. Here were the five we identified based on her perception, Board interviews and a Board survey: 1)  Check in on the progress of the strategic plan to ensure alignment and/or identify any new steps that need to be taken to ensure its implementation; 2) Engage the entire Board in a strategic discussion about a new program, in development; 3) Continue to develop relationships among Board members, since the Board has a number of newer members; 4) Identify ways to enhance the Board’s functioning so that they are fully and appropriately engaged throughout the year; and 5) Enhance Board understanding of their group governance role and their individual responsibilities.

With that under control, you can worry about the important things this fall. Will the Huskies get back in the national conversation? Will Cal’s new coach be able to speed up the Bears? Will Leonard return from his research trip and Amy and Sheldon get together? Stay tuned…

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Greenpeace Gets Brand Tone, Donor Motivations Right

Greenpeace membership renewal

Great example, Greenpeace!

Driving from North Carolina to Washington, D.C. last week, my old colleague and pal Sharon Swanson (producer of the Elizabeth Spencer documentary among other career hats) and I had plenty of time to talk. About street signs like the one posted below, sure, but also about how nonprofits sometime miss the mark with events and promotions that aren’t in keeping with their brands.

herritage

This got in here because it just cracked me up

Then this little blurb caught my eye this morning, thanks to The Nonprofit Times:

Individual donors contributed about 73 percent, or $217.79 billion to nonprofits in 2011, out of a total of nearly $300 billion, according to Giving USA. Knowing your donors’ motivations can help you create more targeted asks and get more contributions to your organization. Eric John Abrahamson, Ph.D., outlined seven types of donors in his book Beyond Charity.

  • Communitarians give out of a sense of belonging to a community, using their gifts to reinforce collective efforts.
  • Devout donors are motivated by faith, adherence to religious teachings, and loyalty to religious institutions.
  • Investors view money as a means to create social change.
  • Socialites participate in philanthropy as a social activity.
  • Altruists see philanthropy as a way to fulfill their life purpose.
  • Repayers give out of a sense of gratitude.
  • Dynasts are born into families with deeply embedded philanthropic traditions.

Exactly. Individual donors need to be described in terms of profiles that reflect their attitudes and motivations. When I was wearing my corporate marketing hat, we called it psychographics.

So the piece at the top of this post caught my eye. I thought this membership renewal piece was downright brilliant. It appeals to the group of people who define themselves as nonconformists and 99%’ers. It is a great execution right down to the creepy charcoal illustrations, the ironic reverse psychology, and even the use of snail mail to reach an audience that uses snail mail rarely. My son will love it.

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Where will the money come from?

Speaking at the Nonprofit Resource Center annual conference on Wednesday, Jan Matsaoka of the California Association of Nonprofits (formerly with Blue Avocado) put things in plain terms: “You can’t talk about what you’re going to do… without talking about where the money will come from.”

For that conversation, she advocates using a “Matrix map” (a version of the BCG corporate portfolio analysis for you MBA types) to evaluate nonprofit activities according to their impact on mission and money. In Matsaoka’s tool, every major activity is a line of business — not just programs, but any activities that require significant management time or money. Fundraising events, holiday appeals, direct mail campaigns, etc., are just as much a line of business as a career closet.

What’s the point of putting your major activities in a fancy-schmancy 2×2 grid? Ultimately it’s about understanding and decision making.

Understanding comes first. You might discover that some things you’ve always done aren’t really valued, and they take resources that might be used in better ways. Her examples included a little-used resource library and a program that used to have funding. Matsaoka says these are “stop sign” activities (BCG called them “dogs”). You might discover other activities that are profitable but don’t have a lot of impact (“money trees”). The trick here is to see if there is a way to make them reach more people or achieve greater results. “Hearts” (or “question marks” in the original nomenclature) are activities that have high impact, but low profitability. Many close-to-the-mission activities fall here, but identifying them as money-losing (or at least not money-making) helps bring into relief the need for revenue that subsidizes these activities. And “stars,” of course, are activities that have high impact and high profitability. Highly effective fundraising strategies that do something to foster awareness of the nonprofit or cause AND support the general fund would fall in this quadrant of the matrix.

A completed example of a matrix map

Key to the Matrix Map: the strategic imperatives associated with each quadrant

The mechanics: a portfolio analysis like this one uses three variables. Matsaoka uses profitability and impact to plot a program’s position on the X and Y axes. A program’s profitability is defined as the revenue tied specifically to the program (fees, contract, restricted grants) minus “all in” expenses (including some allocation of administrative and overhead costs). Obviously, “impact” is a subjective indicator. You’re going to have to do some thinking about the criteria to determine how much impact a program has (see the next paragraph). The size of the program circle is determined by the cost of the program. (As an alternative, I imagine the number or volume of clients or encounters could be used instead of program cost/budget.) Creating such a chart in Excel is easy; once you have the three variables in their appropriate columns, select “bubble chart.”

If you lack reliable numbers, you can create a scale for any of the variables. For example, you could use a 5 point scale with 1 being low profitability and 5 being high profitability. For impact, you will have to create a scale since it’s subjective. Matsaoka suggests using no more than four factors when figuring impact. Examples: alignment with core mission, excellence in execution, scale/volume/reach, depth/comprehensiveness, fills important gap or need, community building. To that list I would add effectiveness/outcome. For example, you might rate a program 5 in terms of alignment with core mission, and 2 in terms of filling important gap if there are many similar programs in the community.

You may be wondering why a nonprofit’s fund development and marketing programs would be evaluated in the same tool with client- or market-serving programs. I admit that was my first reaction. But I do think it may be helpful to look at the array. If most of a nonprofit’s programs don’t generate revenue (as is the case with many aid-oriented programs), it is important to see that there are enough offsetting money-making programs.

Which brings us to decision-making. This tool isn’t just for understanding the situation facing a nonprofit. It’s intended to foster decision making. Considering a new program? Put it in the portfolio and consider how you’re going to get it to perform in a way that supports both mission and financial sustainability. The portfolio analysis can also be used to cull. By letting go of some programs that may be draining the organization, what will you be able to do, or do better?

Jan, with two co-authors, has a book out – Nonprofit Sustainability. Based on my quick scan as it made its way around the room, it looks like it has lots of examples of Matrix Maps. I’ve ordered a copy and will let you know what I think! Here’s a link to a pdf of a very similar presentation Jan gave a couple of years ago, with all of the slides.

Jan told the sell-out crowd for NPR Center, “The most previous and scarcest resource is the time and attention of its senior leaders.”

“Be ruthless,” she added, about making sure that your resources are invested where they will make the greatest difference.

P.S. If you get the chance to hear Jan speak, do it. Fastest, funniest presentation of this type you’ll ever see.

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What happened when a nonprofit focused on what really works

Roca Inc.’s intervention model from a participant timeline perspective

Over the past year, I’ve written over six posts about the slo-mo strategic planning process that I’ve been engaged in on behalf of a small nonprofit. Influencing part of my thinking has been the work of Venture Philanthropy Partners, which published Leap of Reason earlier this year.

The Leap-of-Reason folks just shared a very thoughtful research paper written by Roca about their work on outcomes. Roca, based in Massachusetts, serves young people “that most people give up on.” Starting with creation of their first Theory of Change model in 2005 (they finished their third in 2011), they’ve been steadily improving their approaches to help high-risk kids.

What struck me is their eventual decision to give up a “multi-service youth development model” for “a single service intervention model designed to intentionally move a targeted group of very high risk young people to outcomes.”

The depth of work, research and resources that organizational leaders have put into honing their approach is beyond that of small nonprofits.

But this is not: the courage to try to document their Theory of Change and be willing to focus on the things that do the most good.

More often, I see nonprofits expanding the services they provide in an attempt to address root causes, when they may have little more than a hope that these interventions make a difference. Or worse, when they think the services will attract grant dollars. Experimentation is good, but broadening for its own sake does a disservice to the organization’s mission and clientele.

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Hot topic: should nonprofits scale for greater impact?

My very dog-eared copy of the book I review here

[Sixth in a series related to strategic planning]

A critical place to start any strategic planning process is a good self-assessment of an organization’s capabilities. Woven throughout many of the self assessment tools out there (I mentioned two good ones in the last post, and the Nonprofit Resource Center has posted another bevy) are two implicit notions: 1) bigger is better when it comes to impact, and 2) nonprofits  must develop enterprise funds as a way to stabilize their revenues.

I’m not sure either of those two premises are true for all nonprofits, but nonprofits interested in scaling and/or enterprise funds should check out “Scaling Your Social Venture: Becoming an Impact Entrepreneur,” by Paul N. Bloom, adjunct professor of social entrepreneurship and marketing with the Center for the Advancement of Social Entrepreneurship (CASE) at Duke University (Palgrave Macmillan 2012).

Scaling, Dr. Bloom reminds us, is defined as “achieving more efficient and effective adoption of your innovation.” Scaling is hot, hot, hot in the funders’ community, and in a not-unrelated trend, hot in the nonprofit community. Why? “These folks want to change the world,” Dr. Bloom says in his preface, “not just run a sustainable and effective do-gooder organization.”

Even a nonprofit that intends to stay focused on a local community, however, can learn from this book. He offers four assessment tools:

1) A self assessment of scaling success with scale (1 through 7) responses to questions including “…we are satisfied with how much we have alleviated the problem,” and, “…we are in better shape than anyone else to have an impact on the problem.

2) A self assessment of the theory of change. I agree with Dr. Bloom that organizations must “think deeply about the actions or initiatives you are trying to implement and the effects, outcomes and impacts that you want to achieve as a result of what you are doing.” His assessment tool in chapter 10 can help organizations pinpoint the lever that organizations are most reliant on to create change. For example, if an organization depends on labor-intensive interventions to provide the program services, then you’d better have staffing and management figured out, which he says includes: inspiring leadership; managers with planning and supervision skills; board members who contribute monetarily and/or with know-how; productive recruiting and training programs; employees or volunteers capable of delivering high quality services or solutions to problems; and roles and responsibilities for employees and volunteers that are understood and function well.

3) A self-assessment of starting resources — my personal favorite — that includes such scale statements as “…we have people in place who possess the skills necessary to run our programs,” and, “…we are not just scraping by financially.”

4) And finally, a self-assessment of organizational capabilities.

Scaling may be generating a lot of buzz, but as Dr. Bloom suggests, it isn’t easy. Considering his structured approach, clearly described in the book, is a good place to start. For an overview of his SCALERS model, check out this description on the Harvard Family Research Project. Then buy the book for great case studies and how-to tips.

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The Hard Spade Work of Strategic Planning

[Fifth in a series.]

In May, I reported that the strategic planning process I was facilitating for a small local nonprofit was right on track. After engaging the Board in identifying three possible directions, following a discussion of the environment and potential outcomes, the time came to dig in.

As Patrick Bell, who teaches the Non Profit Resource Center’s “Board Leadership: The Essentials” workshop tells Board members, a Board should provide input for long-range goals and the strategic plan and forge a strong partnership with staff in leading the organization.

That “strong partnership” has to respect the fact that the nonprofit’s leader is the one in day-to-day contact with clients and constituents. Staff should be in the best position to understand the operational challenges of potential directions. And, of course, they are going to be the ones held accountable for achieving the desired results.

This summer, I’ve been helping the staff of a small nonprofit explore three potential directions. By the end of August, we hope to be in a position to cue up the options so that the executive director can choose the best course, and prepare to recommend a five-year strategy.

Here’s a peek at the streams of work that have been underway:

  • Deep diving into outcomes: According to some studies, organizations that commit to outcomes* and evaluate them actually perform better than organizations with a looser sense of impact. Most nonprofits (especially those that operate in the sector that this one does) do not have true outcome goals. They measure output (for example, clients served), but not outcome. The “deep dive” has included interviewing several well-run local nonprofits, investigating the literature about outcomes related to this sector, meeting with a top national academician on the topic, surveying 20 nonprofits in the same sector in similar-sized communities, and collecting feedback from existing clients. The survey of 20 nonprofits (based on public sources) turned up a fourth direction that is now being considered.
  • Investigating targets: Successful for profit companies recognize that they have to be as good as competitors, or their lunch will be eaten. Nonprofits compete, too. They compete to be deserving of funders’ and donors’ confidence. They would benefit from knowing how their “competitive set” is performing with respect to indicators like administrative efficiency and contribution to overhead (total revenues minus total expenses, divided by total revenues). My hope is that this nonprofit will not only land on a couple of indicators that will help them to assess how they are doing, but set specific targets for where they need to be as part of the metrics related to strategic plan progress. A nonprofit, for example, can’t break even. It must be “profitable” enough to fund basics like IT infrastructure (increasingly expensive and critical) and program development. An emerging (but still debated) measure for nonprofits is the amount of funds contributed by social enterprise; McKinsey’s capability model (see link in next paragraph) assumes that nonprofits should develop sources of revenue beyond grants and donations. The survey of 20 organizations revealed a net “profit” ranging from -10% to over 10%, so it’s going to be interesting to figure out the right target for this organization! (One approach would be to decide which organization they most want to be like “when they grow up.”)
  • Assessing capability: We identified several helpful tools to help the organization assess its strength across every aspect of its management, from the Board through operations through communications and fundraising. Here are a couple of resources worth checking out: McKinsey’s tool adapted from its extensive work in the commercial sector, and United Way of Minneapolis’ tool posted on managementhelp.org.
  • Qualitative research into the possible directions: We’ve been out talking to nonprofits serving related clients as well as holding focus groups with people facing the kinds of problems that we hope to alleviate. There is no substitute for going straight to the horses’ mouths, and there have been some surprising insights that have come from this work.

Along the way, our understanding of the external environment has greatly expanded, insights that we’re weaving into the partially completed strategic plan document. When we’re done, the executive director should be in a position to put in front of the Board a well-researched recommendation and plan that answers the questions:

  • Where are we now?
  • What are we trying to do?
  • What will have to change?
  • How will we get there?
  • What do we expect to happen when we get there?
  • What are the risks and how can we mitigate them?

McKinsey, in a recent article entitled “How Strategists Lead,” did a great job of describing what we’re trying to build: “A great strategy, in short, is not a dream or a lofty idea, but rather the bridge between the economics of a market, the ideas at the core of a business, and action. To be sound, that bridge must rest on a foundation of clarity and realism, and it also needs a real operating sensibility.”

* Outcomes are defined as, “Socially meaningful changes for those served by a program, generally defined in terms of expected changes in knowledge, skills, attitudes, behavior, condition, or status. These changes should be measured, be monitored as part of an organization’s work, link directly to the efforts of the program, and serve as the basis for accountability.” — adapted from the Glossary of Terms of the Shaping Outcomes Initiative of the Institute of Museum and Library Services, Indiana University and Purdue University Indianapolis; The Nonprofit outcomes Toolbox: A Complete Guide to Program Effectiveness, Performance Measurement, and Results by Robert Penna; and the Framework for Managing Programme Performance Information of the South African government. As published in “Leap of Reason: Managing to Outcomes in an Era of Scarcity, Venture Philanthropy Partners

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Now we’re getting somewhere – a nonprofit strategic planning process

Image

photo credit: alexabbound under CC license via flickr

[Fourth in a series. Read more about what’s wrong with most nonprofit’s strategic plans, how to evaluate the current strategy, and see an agenda to kick off a strategic planning process.]

This post might as easily be titled, “How to avoid the syndrome ‘we’re lost but making good time*.'”

The strategic planning process that I’m facilitating for a local Sacramento nonprofit is getting really exciting as its reaches the half-way point.

Having decided in October that it wanted to establish a direction and measurable outcomes goal to guide its efforts for the next five years, the Board set aside an evening in February to brainstorm. Before jumping into idea creation, the group received a refresher course on changes in the internal and external environment from the executive director. A substantive discussion followed about potential audiences or groups that the agency might choose to focus upon. But perhaps the most interesting discussion was about potential outcomes.

Small nonprofits usually think — and report — output, not outcomes. How many clients have they served? How many sites were they in? Organizations rarely have the resources to collect or analyze data about long-term impact such as whether a problem was prevented or fixed. And as a result, they usually don’t think in those terms, even if their mission statements are visionary and ambitious.

The discussion of outcomes set the table for a very productive brainstorming session about potential directions the agency could adopt. As members offered ideas, they were asked to suggest a specific target and provide an example measure of success. Their ideas filled the better part of two flip chart pads.

By the end of the three-hour meeting, 10 draft goal statements had been formulated. Participants used the time-honored sticky dot method of voting to identify ideas worth exploring. Three goals emerged with a preponderance of dots.

Board members were then invited to volunteer to join one of three subgroups that would develop a draft goal into a proposal for the full Board to consider at its next mini-retreat. Using a common template, the groups met to discuss:

  • The target audience: Is the description specific enough?
  • Outcomes: What meaningful changes would we aim to achieve (1-3 measures)?
  • Need:  What objective information is available about the need and the trend in that need?
  • Service gap: Is there a gap in addressing this need?
  • Before-and-after: How would the organization change if it adopted this goal? What likely programs would be developed, changed (or even eliminated)?
  • Assets: What capabilities or allies do we have that could help the organization achieve the goal?
  • Models: Are we aware of successful models in other communities we might emulate?
The three proposals were presented at a mini-retreat earlier this month. It was not expected that one would emerge as the clear choice. And that was the case! However, it did result in two goal ideas going to the next step of development. More information will be collected to help inform the Board as it chooses its five-year directions.
Observations to date
  • Nonprofits typically don’t have real long-term strategic plans in part because they don’t have staff or consultants to develop them. A good strategic plan takes a ton of work.
  • The step-wise process we’ve used so far has made it possible to engage the brain power of the Board and to let them do the initial tilling of the field. New Board members have become connected and engaged faster than they would have by attending monthly meetings, while the wisdom of longer-term Board members has been tapped.
  • The challenge now will be for the group to identify what information will help them to take a step back and be good governors and risk-managers for the organization. They will have to distance themselves from the ideas they have helped to bring to the table.
  • It’s time for staff – with a little third-party help from me – to put effort into developing both ideas. As we move closer to a draft direction, the executive director should have a stronger leadership role. The executive director knows the most about the capacity of the organization, the resources of the community, and the appetite of funders.
Stay tuned!

*’We’re lost but making good time’ is taken from Venture Philanthropy’s Leap of Reason Managing to Outcomes in an Era of Scarcity, featuring essays by top nonprofit management consultants, nonprofit leaders and philanthropists.

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