Setting aside uncertainty in strategic planning

Uncertainty. The word describes not only the economic reality that not-for-profit organizations are facing, but also an emotion generated by that reality ― one that often prompts leaders to resort to short-term plans instead of minding important long-term strategies.    
Setting aside uncertainty in strategic planning
Leaders who take a longer-term perspective and seek to truly plan often ponder questions such as these: What impact will current economic changes have on future program viability? What will the business climate be like in three years, and how can we begin to position our fundraising efforts? In formulating a successful strategic plan, leaders also must realize that an analysis of external factors is just one component. At least as valuable are comprehensive internal and competitive assessments, perspectives on potential outcomes, and the ability to adapt to change.

All of these components require flexibility and a keen eye for trends. Until recently, boards and executive management did well to rely on long-standing strategic planning techniques, but in a dynamic environment giving rise to serious revenue challenges, these techniques need to evolve.

Consider these emerging approaches during the design, implementation and execution of your organization’s strategic plan:

1.    Holistically assess the state of the internal and external environments.
Organizations of all kinds have a tendency to focus on immediate operational challenges, primarily during the assessment phase of a strategic plan. In recent times, this has led to prioritization of factors that can affect revenue generation. These factors should not be ignored and do carry significant weight, but they can also encourage a short-term focus. It is critical to take into account other important issues, including leadership competencies, competition for personnel, cost structures, program development, technology capabilities, risk profile, mission and culture.  

2.    Contemplate potential changes to the initial assessment.
The not-for-profit sector no longer operates in a static environment. By the time an organization understands and documents the current state, the environment has most likely changed. It is difficult to prognosticate, but a thorough process needs to postulate a variety of outcomes or scenarios to stay nimble during the implementation phase. Bringing external perspectives from peer organizations or outside experts can be helpful in providing a well-rounded viewpoint of the future of the sector.

3.    Be wary of consensus during strategy formulation.
Human nature is such that it is easy to adopt insular thinking. When individuals share similar experiences within the organization, discussions and decision-making can become groupthink, resulting in a more-of-the-same view of the appropriate way to progress. This can lead to a narrowly focused strategic plan and a limited ability to identify when course corrections are needed. To avoid this, welcome into the planning committee a variety of individuals with differing functional responsibilities and perspectives. Seek opinions contrary to the norm.  

4.    Link your strategic plan to your operational and tactical plans.
An organization has plans that are much less encompassing than the strategic plan. They include program, property, budget, IT and development plans, to name a few. Often, day-to-day activities in support of these annual operating plans take place independently of strategic priorities. These activities were aligned with early strategic planning formulation, but as time went on, they drifted from the original intent or they were reactively executed in response to nonstrategic priorities. To ensure that resources are expended on strategic imperatives, periodically evaluate operational plans to ensure that they are fully aligned with the strategic plan.

5.    Keep in mind that executing the plan is not linear.
Agility in execution and monitoring is as important as the actual plan. Development of a strategic plan is time-consuming — one of the main sources of failure is the collective sigh of relief that sometimes occurs after the initial plan is developed. Too often the plan is completed, put on a shelf and not revisited for the duration of its time horizon. Periodic monitoring of the environment — and your plan — helps to determine when changes to strategic priorities and goals are necessary. In light of the current dynamic environment, this monitoring is critical, as significant changes in the level or use of resources or changes in strategic or programmatic direction may be needed in the strategic plan. Consider forming a strategy analysis response team to monitor strategy and lead the charge for identifying when modifications need to be made.

Strategic planning has always been a vital component to the long-term success. Given the broader context of change in the competitive landscape, a realistic, flexibly designed and closely monitored strategic plan is fundamental to ensuring financial sustainability and success.

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