Design Success Into Your Organization’s Strategic Planning Process

1. Failure to assess the organization’s current strategic position before launching a strategic planning effort
   
   To lead and manage a formally stated, integrated, and properly deployed strategy is a major challenge for any nonprofit organization. To do so without the necessary preparatory steps will, in all probability, result in wasted time, energy, misdirected efforts and can even lead to the resulting plan failing. More importantly, nonprofit leadership teams will be at a disadvantage attempting to create a new strategic direction and plan without taking into account their current aspirations and plan.
   
   Before undertaking any significant effort to develop, improve, and/or manage strategy, there needs to be a shared understanding of the scope and depth of the change effort to be undertaken. This, in turn, needs to be grounded in a fact-based assessment of the organization’s strategic direction and strategic management capabilities currently in place. The initial assessment, in large measure, will determine the basis for making changes.
   
   Having a clear understanding of where any journey begins is vitally important and too often a missed step in many strategic planning processes.


View a flow diagram of a thoughtful and practical strategic management process and our one page exercise to help you assess current strategic direction.


2. Failure to “read the tea leaves” and make the necessary changes
   
   In a rush to define strategy and approve annual operating budgets, judgments and decisions are made upon an uneven understanding of the strategic environment and its capability to influence the future.
   
   All too often nonprofit leaders move into and through the strategy setting process without building a common information base upon which sound strategic decisions can be made. This fundamental “knowledge gap” amongst the board and senior leadership and down through the organization serves to undermine the strategic management process in several important ways by:
   
   
   • Failing to leverage the existing repository of strategic knowledge available to the planning team via the board, key stakeholders and workforce, and via accessible information resources inside and outside the organization.
   • Decreasing the likelihood an effective strategy will be selected and eventually made operational.
   • Unintentionally enabling work force resistance to change as the reasons for change are not clearly communicated.
   
   When we see nonprofit organizations make this mistake we are reminded of Spencer Johnson’s timeless book, Who Moved My Cheese? You may remember that in this story four characters living in a maze face unexpected change when they discover their "Cheese" has gone missing. Two mice and two tiny people the size of mice, each adapt to change in their maze differently. One of the characters in the story didn’t adapt at all.
   
   This enduring story reveals insightful truths about nonprofit organizations dealing with change. In short, most people (and organizations) don’t like change. And for good reason: It disrupts established patterns of behavior and processes, and almost always results in changes to resource allocation which leads to increasing levels of stress, anxiety, uncertainty and even anger. To avoid these challenging human feelings, nonprofit leadership teams sometimes become overwhelmed and choose to revert to the status quo or at best make incremental steps forward, rather than confront (let alone embrace) a new paradigm, hoping that threats and challenges will just go away.
   
   The wisdom of “The Great Gretzky” (a legendary professional hockey player) comes to mind, e.g., “I skate to where the puck it is going, not where it has been.”
   
   When nonprofit leadership teams fail to read the tea leaves plans fail.



3. Failure to successfully engage in “team based” strategic thinking
   
   To become a well functioning leadership team who can execute a strategy is no easy task. Nonprofit leadership teams become effective in identifying and creating effective and sustainable competitive strategies by incorporating rigorous disciplined thinking with open inquiry, team discussions, regular feedback, and interaction.
   
   In contrast to a team-based approach, strategies based only on the perceptions of the “all knowing leader” or without board or staff involvement severely limit the development of optional approaches to moving forward and—more important—the opportunity to build a multilevel strategic leadership team. It is no longer effective for top leadership to formulate strategy and simply relegate lower levels of leadership to its implementation. Consequently, we strongly advocate that all levels of leadership be involved throughout the process—continuously.
   
   Using a team approach helps ensure strategy formulation and implementation are more likely to be incremental processes that leverage existing capabilities to build on the current strategic direction. Thus, deciding on a small number of carefully selected areas in which to develop and implement strategic change is usually more effective than attempts to make sweeping changes.
   
   The essence of team-based strategic thinking consists of developing multiple options for realizing the vision and a repertoire of feasible responses to deal with the ever-changing environment and unexpected events.
   
   Developing a set of strategy alternatives, even if several are not selected for current implementation, can be viewed as pragmatic contingency planning. Using a team approach not only increases the number of feasible options to consider, it also increases the level of commitment and the effort of team members responsible for strategic management.



4. Failure to use a balanced set of performance measures to monitor execution and make mid-course corrections
   
   In many nonprofit organizations implementing a strategic plan often results in a gap, i.e., a gap between the strategies as they come from the top of the organization and the level of employee understanding of how their daily activities contribute to achieving the vision. This gap appears because a strategic plan is by its nature a series of long-term goals and objectives, while most managers are trained to gauge their progress using short-term actions.
   
   These short-term evaluation criteria are all too often focused exclusively on financial performance. Financial criteria most often center importance on managing physical and financial assets. However, today’s competitive rewards increasingly are being reaped by those nonprofit organizations that best manage their intellectual assets – their “brain trust”.
   
   A more balanced approach to performance measurement which supplements traditional financial measures with criteria that measure performance from three additional perspectives - customer, internal operations, capacity building are often neglected.


5. Failure to Execute
   
   Execution of a strategy requires much more time, commitment, and resources than the planning process ever consumes. Moreover, while the competencies required for implementation and ongoing management are just as complex and demanding as those required for planning; they are simply different. The common error is to value them less and give them less attention, often delegating them to lower management levels. This is not a trivial matter; it remains the single most common reason for faulty and incomplete implementation of strategic plans.
   
   It is not uncommon for nonprofit managers and top executives (in particular) to think that their responsibility for strategic management ends when the plan is completed. In fact, their work has just begun. This is because management processes pertaining to strategy implementation require management’s careful attention to delegate responsibilities and diligent oversight to ensure the work gets done.
   
   Implementation is a continuous process. Long after the formal and scheduled process of implementation (annual operating cycle) has been completed, processes tied to strategy implementation continue, at least at the organizational and cultural levels as well as at the individual level as members of the nonprofit organization make their own personal adjustment to the emerging changes in the strategic direction and changes throughout the organization.
   
   Failure to acknowledge that the implementation processes are long-term and continuous in nature, accounts for many of the difficulties encountered in nonprofit organizations. When changes initiated in previous years are not yet fully integrated and operational, they result in understandable resistance to a perceived “new wave” of strategic thinking and planning.