Strategic Planning: A Roadmap for the Future!
By Mark Koscinski and Susan Hornak
Strategic planning charts the course for your organization. It provides over-arching guidance for the entire operation. A good strategic plan informs management, employees, volunteers and consumers about the Not-For-Profit’s (NFP) direction. Careful thought should be given to strategic objectives, measurable goals and quantifiable benchmarks for evaluating results. Unfortunately, many NFP managers attempt to run their organization without such a plan.
In the last article “Not-For-Profit. Not-A-Problem!” we talked about the top ten things a new NFP board chairman needs to know. The list included the importance of strategic planning. As a businessperson you were aware strategic plans existed and may have even contributed to one but how much do you know about reviewing or constructing one? Here is a list of things to consider when creating a NFP strategic plan.
Elements of Strategic Planning
Planning analysis- List the organization’s strengths, weaknesses, opportunities and threats. It is critical to get input from a wide variety of stakeholders: clients, vendors, regulators, management, volunteers and employees. Remember, when gathering information, the team must be open minded about all feedback. Rank the findings in order of importance. Incorporate the findings into the strategic plan.
Mission Statement– Every NFP needs a mission statement. Ask yourself the following questions when writing or revising the statement. Does your current mission statement still accurately reflect your NFP? Has the organization grown or changed in a way that needs to be clearly explained in a revised statement?
Revenue Plan– Without funding the best intentions of helping others will fall flat. Ample cash flow enables the organization to thrive. Define how the organization will acquire revenue and how it will grow. Examine the health and well-being of current funders. Identify new grant opportunities and how to pursue them. A solid strategic plan also outlines private fundraising efforts and goals.
Capital Plan– The purchase of big ticket items must be identified in your plan. Consider the following questions. Is your technology outdated? Does your physical plant meet consumer and employee needs? What equipment is needed to meet your goals over the next few years? Anticipate these needs in advance so you can secure adequate funding. Good strategic planning includes the anticipated amount of the capital expenditure and when the expense will occur.
Marketing Plan- A good marketing plan attracts funders and makes potential consumers aware of your services. Identify what marketing efforts will reach your niche market. Examine all avenues of marketing from social media, traditional print collaterals and web-presence. Remember success is often all about name recognition and awareness.
Human Resources Plan– Commission a market study to determine if your compensation and benefit package is sufficient to attract real talent and not just warm bodies. Determine how and when the study will be conducted and the subsequent steps once the study is completed. Succession planning is included in this part of the strategic plan.
Board Development-Remember a volunteer board of directors is an ever-changing group of people. Members come and go depending on their availability and interest. A good strategic plan anticipates member attrition and the constant need to cultivate new members. How will this need be met? Who is responsible? What is the vetting process? What is the on-boarding process and will the directors need continuing education? Define a list of expectations for the board to achieve.
Board Structure– How will board operations be managed once your dream team is assembled? Consider committee structures to accomplish specific tasks such as grant writing, governance and event planning to name a few. Some committees may even be assembled for a finite period or to accomplish a specific task such as an executive search committee. Not all functions require full board participation.
Administrative Planning– This plan encompasses general governance and organizational management. Policy and procedure manuals and internal controls are defined in this section.
Financing Plan– In this section discuss budgeting and cash flow projections for the organization, among other things. These are critical to the health of the NFP as adequate cash flow is needed for the organization to carry out its mission. The annual budget needs to be compared to the strategic plan to make sure the NFP is staying true to its mission statement.
Importance of Strategic Planning
It is a misconception to believe strategic plans are only for large public companies. The depth of the plan and its detail will vary based on the size and complexity of your NFP but each organization needs this valuable roadmap to grow and prosper. Here are a few additional tips for board members contributing to a strategic plan:
- Plans are built “top down” and “bottom up”. Senior management should take the lead and begin the planning process by providing operating assumptions. It should also be ready to change those assumptions if subsequent evidence is indicated.
- Make sure there is an executive summary and key financial targets at the beginning of the plan. Graphs and charts in the summary are an immense help as well.
- Strategic plans need to be quantifiable and measurable. Progress towards plan objectives need to be measured each quarter, just as the budget and management incentives are measured each quarter.
- Management incentive plans need to be tied to the strategic plan. A good plan will provide key performance expectations.
- Revise and reassess the plan on an annual basis. Learn from the experience and do not continually make the same forecasting and planning mistakes. The idea is to learn and grow from the past.
A strong strategic plan tells your organization’s story by speaking to many audiences. For example, new managers will find it helpful to learn about the company during their orientation period. Potential lenders and donors are impressed with a solid strategic plan with quantifiable and measurable goals. The financing decision becomes easier for lenders when criteria for success is spelled out and progress to the goal is measured.
Every NFP needs a strategic plan regardless of its size or mission. Failing to plan is planning to fail. Before setting out to create your strategic plan conduct a SWOT analysis to gain a full understanding of the organization’s issues. Is the mission of your organization understood by all the stakeholders? Can you quantify its goals and measure progress to those goals? A good plan addresses fundraising, recruiting the right people and letting the world know you exist. Strategic planning sets the course for the future and the entire organization.
Mark Koscinski is a visiting assistant professor of accounting at Moravian College in Bethlehem, PA. He currently serves as Board Chair at MOCEANS CIL, a center for independent living serving people with disabilities in Monmouth and Ocean Counties. Susan Hornak, MBA is a ghost writer and editor as well as an advocate for people with vocal disabilities. She serves as Secretary of the Board of Directors at MOCEANS CIL and is a graduate of Moravian College.