Growth Strategy: Adapting to Life on the Ground

Nonprofit organizations are built on aspirations. An individual or group of people decide to make the world a better place by targeting a specific need, gap, or opportunity in the community in which they live. With little more than a founding purpose and some startup funding, the organization begins what is, in a very real sense, the testing of a hypothesis: we think we can provide this particular service; we think we will reach this particular group of people; and we think our services will benefit them in this specific way.

Then life happens. Some things work as planned. Others do not. Some assumptions hold up while others prove to be faulty. And some expectations are met while others fall short. Regardless of what happens, the Startup phase provides valuable information by which the organization can evaluate the grand hypothesis that launched the organization. It is this same information that will form the basis of the strategy that will guide the organization through the Growth stage of its evolution.

The first step in developing a Growth strategy is to review what has been happening during the Startup phase. In other words, you need to look backward before looking forward. The strategy review process is ideal for this purpose in that it utilizes the expectations, assumptions, and intentions embedded in the Startup strategy as the baseline for the Growth plan. The Growth strategy begins with discussions around three key questions:

1. What did we think would happen?

2. What actually happened?

3. What do we do next?

The strategic objective when moving out of the Startup stage is disciplined growth. The primary theme in the development of a Growth strategy is adaptation. The strategy itself is driven by the need to balance client demand with organizational capacity. Achieving the proper balance typically involves one or more of the following types of adaptation:  

• Responding to the level of demand for the services.

• Refining the program model to meet client expectations and preferences.

• Revising the staff and funding model to ensure optimum efficiency and impact.

The need for discipline at the Growth stage introduces an additional element into the formula for strategy: boundaries. Boundaries come in a variety of forms but generally address the following:

• What we will always do (mandates)

• What we will never do (limitations)

• How we will decide (criteria)

The movement from Startup to Growth means that the founding purpose of the nonprofit has shown early signs of relevance. However, it is not a guarantee of long-term viability. The discipline required to create a Growth strategy – to focus efforts and accept limitations – is a defining moment for a nonprofit in the ongoing quest for mission impact and financial sustainability.