July 07, 2020

How Strong are Your Strategy Bones?

“The house don’t fall when the bones are good.”

(The Bones, by Maren Morris)

A crisis reveals our true colors. Misfortune lays bare the strength of our principles. Ambiguity tests our leadership. These aphorisms point to the belief that our behavior in trying times is more indicative of who we really are than is our behavior during normal times. Simply stated, we never fully understand ourselves until we are tested by stressful circumstances.

Stress tests are conducted on things as varied as the human heart, bridges and dams, and the banking system. In all cases, the point of stress testing is to apply pressure on key parts of the system to identify weak spots in design, construction, or functionality. For nonprofits, the effects of COVID-19 have provided a stress test for the fundamentals of organizational capacity and strength…the bones.

Over the past few weeks, I have heard a number of stories of resilience and adaptation, from the formation of new partnerships, to the creation of new service delivery models, to new forms of board engagement.  At the same time, the weak spots in the organizational infrastructure of some nonprofits have been exposed, as illustrated by the following statements:

  • “We don’t have an operating reserve because we have been focused on program growth to the neglect of long-term financial stability.”
  • “We don’t have the financial expertise on our board to create realistic scenarios for the future.”
  • “We have lost significant revenue because we are reimbursed based on the number of people served. We have no discretionary cash.”

Of particular interest to me is how strategic plans have held up during the current crisis. Comments from people in the nonprofit sector have ranged from “our plan immediately became obsolete”, to “our plan had to be revised”, to “our plan is helping us stay focused on what matters most”. Of the three, I prefer the third scenario…by far…hands down…not even close. Those are good bones.

In short, the strength of a nonprofit strategy is its ability to adapt to a wide range of unexpected and sometimes extreme changes in circumstances, while remaining focused on what matters most. Even in the best of times, strategy is about managing trade-offs. I have yet to encounter a nonprofit whose leadership has simply run out of ideas. It is usually the opposite problem: nonprofits cannot afford to do everything they believe they need to do to help the people they serve. In the worst of times, the trade-offs become more consequential as the nonprofit has to balance the short-term crisis needs with its long-term strategic aspirations.

There is nothing pleasant or easy about crisis planning. However, difficult decisions are made less contentious when the crisis plan is built on the foundation of a strong long-term strategy. What are those strategic fundamentals that will help your nonprofit engage in productive crisis planning?

  • A deep understanding of to whom you matter most and why.
  • A clear sense of where you fit within your domain of operation, relative to others providing similar services.
  • Clarity around mission priorities, core values, and bedrock principles.

A recent article in the Harvard Business Review states that “under uncertainty, traditional approaches to strategic planning can be downright dangerous.” The danger resides in the assumption that we can predict, plan, and control our way toward our strategic destination. Our current circumstances have debunked the illusion of prediction and control.

Absent a predetermined set of instructions, the ability of a nonprofit to weather a severe storm begins with a solid grounding in the fundamentals of strategy. To paraphrase the song lyric above, the organization is more likely to prevail in a crisis if its strategy bones are good.

Need Additional Assistance?

If you are interested in going deeper into your nonprofit strategy or if you wish to review your organizational strategy more broadly, click the link below to schedule a 30-minute phone or zoom consultation with Mike Stone.

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