The Strategery

Many NFP organizations do not understand how to construct a strategic plan, or even know why one is needed. In this little article, I  discuss how to start your strategic plan.  First let’s start with why a strategic plan is necessary.  Without one, the organization could be likened to the Biblical Israelites wandering in the desert for forty years.  I have seen NFP organizations lurch from one activity to another, often without any guiding principle.  The strategic plan will often eliminate that problem by focusing the actions of the organization.  It guides the management in its daily decision making.  One famous management consultant used the phrase “sticking to your knitting” as the focus an organization needs to have to succeed, preventing it from losing its way and undertaking activities that are not core to its mission. 

The strategic plan is a communication tool as well.  It aids in fundraising and procuring bank loans.  Donors have a vast array of potential organizations they can contribute to. Your strategic plan tells them why they should give their scarce resources to your organization at the expense of all others. The strategic plan also has signal value, showing management is capable and will not fritter away funds secured from  lenders and patrons.  Finally, the strategic plan can also aid in budgeting.  

 Okay, so you understand why you need a strategic plan. Now it is time to build the plan. Unfortunately, many organizations do not even know where to start. They fear that this could be a massive undertaking. It is precisely this fear that prevents many organizations from building a strategic plan.  My suggestion would be to start with some core elements of the plan and then successively build on that model.  Let me try to demystify the process a little, by starting at the top.   You need to define the mission and vision of your NFP.  In broad terms, The mission of the organization is what you are doing now.  The vision of the organization is where you want your organization to be and what you want it to do. The mission and vision statements should be short, no more than a few sentences as most. They will become the mantra of the organization.  All the metrics you set up to measure the plan performance will flow from them. 

Sadly, the next step is sometimes not taken in the strategic planning process.  That is, how do I get from here to there?  What steps do I need to take to undertake that journey? Many NFPs will just spin their wheels in attempting to cross that gulf. The strategy map is your plan of how you will  do that. It is the general plan of action.  The strategy map was the brainchild of Robert S. Kaplan and David P. Norton, and came out of their work on the balanced scorecard. I have written about balanced scorecards already and can be found in another section of this website.The strategy map  is a visual representation of a company’s strategy, laying out the key objectives and how they connect to each other. It  usually includes  four key perspectives:

1. Financial Perspective: This perspective focuses on the financial outcomes the organization wants to achieve through its strategy.  The annual budget will need to tie into the strategic plan.  That being said, management must be careful not to overemphasize the financial perspective, since by definition it is working in a not-for-profit environment. Objectives related to financial sustainability include funding operational expansion  and required human capital growth. 
2. Constituent Perspective: This perspective identifies how the company will create value for its constituents and do it well. Objectives might relate to customer satisfaction and service  innovation.
3. Internal Processes Perspective: This perspective shows the internal processes the company needs to excel at to deliver its value proposition to its constituents. Some common objectives would be  operational efficiency or process improvement.
4. People/Learning & Growth Perspective: This perspective focuses on the human capital and knowledge required for successful strategy execution. Objectives might include employee and volunteer training, talent development, management succession or fostering a culture of innovation.

The strategy map is a tool ensuring everyone understands how their role contributes to the overall strategy. They can see how their actions contribute to the success of the program.   Above all, It’s a dynamic document that can be revisited and revised as the business environment or the company’s strategy changes.

Oh BTW. For those of you who don’t know where the term strategery comes from….