Is your strategic plan both strategic and a plan?

There is a lot of discussion about strategic planning in not-for-profit circles lately. Evidently, moving through a global pandemic and all the changes it wrought is a trigger for rethinking strategy.

The idea of reestablishing strategy originates from several different angles. Some organizations realize that the strategic plan they put together before the COVID era is no longer useful. Some believe they need to reestablish strategy in response to the disruption we’ve all experienced over the last two years along with what is perceived as a “new normal.” For others, the organization’s financial position has changed markedly since 2019 (for better or worse) and there is a desire to capitalize on the opportunity the improved financial condition affords or to reassess capabilities and goals based on a weakened financial situation.

I’m in the incredibly fortunate position of being able to talk through strategy and see the output of many organizations’ strategic planning processes. This includes a fairly high volume of recently revised and in-process strategic plans.

There are some common themes to strategic plans and the process by which such plans are conceived, established, articulated, and even executed. This article is not about how to create a strategic plan; instead, let’s discuss some specific elements that we’ve observed presenting challenges as organizations formulate strategy. Here are some of the more common themes, along with thoughts on how the way these items are handled can have a major impact on the ultimate effectiveness of your strategic plan.

It starts with consciously and proactively articulating what the organization is about and even why the organization exists. Hopefully your people are familiar enough with your organization that this serves as a reminder rather than new information. Don’t assume that everyone involved knows or consistently understands the organization’s mission and purpose. This can be particularly challenging in organizations with multiple program activities that may not seem to relate to each other or the organization’s stated mission. Making sure people understand how the organization’s activities tie together in furtherance of the organization’s mission, and what is the purpose of what you do, allows for the strategy discussion to start from a common place in stakeholders’ minds.

There is a temptation to skip this step. Often, a strategic planning work group just assumes that everyone who is part your organization’s strategic planning process has a shared understanding of why the organization exists and the purpose of its activities. There is also a desire to spend the limited time available talking about go-forward plans as opposed to the past or “current state.” Individuals may have differing understandings, or even misunderstandings, about the organization’s mission and purpose. Ensuring a consistent understanding on the front-end promotes effective communication about go-forward strategy as the process develops. Be open to the possibility that meaningful discussion on this may result in modifications to your organization’s stated mission and purpose.

Which brings us to the key element of any strategic plan – people. Sometimes the role of people gets lost as the strategic planning process gets into the details of data, timelines, graphs, projections, and the like. Who are you including in the strategic discussion? Have you explained this process to them? Do they come prepared to consider strategy and overall direction? Have expectations been established for participants in the strategic plan discussion?

Potential pitfalls in the people element are plentiful, as are opportunities. Start by making sure you have the right people driving the process. This should include board leadership and senior management for most of the “legwork.” If this working group is too large the conversation can get unwieldy. When and how to involve other stakeholders will vary based on organization structure and culture.

Soliciting input from stakeholders is critical. Do you have an adequate awareness of the needs and desires of stakeholder groups? These include the groups your organization serves, the families and other caregivers, your front-line staff, your supervisory and leadership personnel, funders, donors, etc. Have you asked them for feedback or input? Is it worthwhile to have representatives from some of these groups participate more directly and actively in the strategy process?

Often, these representatives already sit on your organization’s governing board; therefore. involving board members serves to cover their perspectives but spending a little time on the front end of the process, identifying gaps and addressing them, is typically worthwhile as it avoids missing things as the process moves forward.

Setting and “enforcing” ground rules can present another challenge. When individuals come to the process with their own agenda, wish list or specific objectives to derive some kind of advantage for themselves or the part of the organization in which they work or that they favor, the process and the overall result is weakened. Often an outside facilitator or other person who can generally be seen as impartial can identify, call out, and curtail this kind of behavior.

Right now, strategic planning processes face a different challenge specific to our times: fatigue. There is a general sense that people are tired. Tired of change. Tired of thinking about more change. Tired of thinking. I was recently struck by this quote from a participant in an organization’s strategic discussion: “When are we going to stop making changes so people can do their jobs?” One of the other participants in that meeting expressed, basically, that managing and implementing change is the job. But there will be people who resist.

After defining the mission and addressing the people element, you need information. How reliable is the information about how your organization is doing financially, operationally, and, in terms of sustainability, on an overall and component unit basis? Is the information reliable enough that the working group will feel adequately informed  If relevant data is incomplete or unavailable, can reasonable assumptions be articulated and utilized in place of that data? Do you have or can you establish relevant benchmarking data?

Establishing an understanding of the environment in which you operate and the specific challenges and opportunities within that environment is also important. There are a lot of uncertainties, not the least of which are staffing challenges and wage pressure, inflation, state funding changes, the effect of recent stock market performance on donor behavior, and many others. Talking about the potential short and long-term impacts environmental factors have or may have on the organization is necessary when considering go-forward strategy.

Often the plan for communicating the results of the strategic planning process is left to the end. But it can be of value to consider communication throughout the process. Stakeholders need to know not only what the strategy is going forward, but what that strategy means to them. Is there an actionable plan or mainly just a conceptual framework? Will your employees understand what they need to do differently? How can those you serve expect to interact with the organization differently? Is the plan’s effect on what the organization will do going forward understandable to donors in terms of what organizational impact they are supporting with their donations to the organization?

Think about the last time you rolled out a strategic plan. Did it drive positive change or kind of get filed away? Consider this: could your typical employee locate your organization’s last strategic plan document, either on paper or electronically? Could a typical employee tell you anything about the last strategic plan off the top of their head? Did you measure and report on progress and results from your last strategic plan? If you don’t have good answers for these questions regarding your last strategic plan, arrange this strategic plan to do better.

To the extent your new strategy includes the discontinuance of an unsustainable program, which might include layoffs and/or no longer serving a specific population, are you communicating this in a manner that is respectful to those who are negatively impacted? What kind of transitional efforts do you intend to engage in for those affected? The objective is to tackle these challenging conversations directly while also maintaining focus on the positive outcomes of these strategic changes.

Periods of significant change offer both challenges and opportunities. Revisiting and reestablishing your organization’s strategy during a period of change offers a great chance to take advantage of the opportunities while also effectively addressing the challenges.

Jeff Paille is a CPA and partner at the Bonadio Group and has consulted with tax-exempt organizations for almost 30 years.