February 20, 2022
If the title of this article took you back to Olivia Newton John getting physical in her leggings and head band…well, that is on you. What I am offering is something a little deeper for you to consider.
To paraphrase the philosopher-theologian Soren Kierkegaard, life must be lived forward but can only be understood backwards. When it comes to nonprofit strategy, we get it half right. We all agree that strategy is about looking forward: where we are going and how we will get there. But it is the other half, the looking backwards, that is under appreciated and ultimately ignored.
I was reminded of this during a conversation I had recently with a group of nonprofit funders, executives, and consultants. One of the participants spoke admiringly of a foundation grant that was given to a large local nonprofit for the purpose of “stepping back and reflecting on the history and evolution of the organization.”
Why is it news when an organization, in the words of Kierkegaard, attempts to understand its current position by first looking backwards? Isn’t that just part and parcel of strategic planning? Apparently not.
This philosophical dictum from Kierkegaard is a useful lens for looking at two different approaches to strategy. The first, and most common, is strategy from the outside in. From this perspective, strategy is driven by the discovery or creation of new market space for the organization to occupy. Strategy development is guided by questions such as: Where are the opportunities for growth? What are funders willing to pay for? Who else is operating there? What are our competitive advantages?
Often, moving into a new space requires the organization to perform programmatic, financial, and administrative contortions to satisfy the CEO’s entrepreneurial itch or the funder’s requirements. But fear not. If the contortion is severe enough, there is always the default rationale of moving ahead under the banner of “funding diversification” (snark intended).
So, what would Kierkegaard do with a nonprofit? More to the point, how can we approach strategy in a manner that places reflection and sense-making at the core of strategy development? Simply put, we need to approach strategy from the other direction, strategy from the inside out. This approach includes three steps, as presented below.
Step 1: Looking Backwards – Step 1 focuses on figuring out how we got to where we are now. What were the major decisions over the course of our history? Why were certain programs added and others eliminated? Were we consistent in the rational for our decisions? No finger pointing and no second guessing is needed. Instead, the objective is step 1 is simply to understand the conditions that brought you to where you are today.
Step 2: Looking Inward – The purpose of step 2 is to learn from your past by uncover patterns, trends, and ultimately lessons embedded in your history. Specifically, we are in search of the essential elements that captures your core purpose. Key questions include:
Step 3: Moving Forward – Now that we understand how we got to where we are and accept what the journey reveals about our strategic intentions (or lack thereof), we are prepared to start thinking about where to go next. The goal of strategy from the inside out is to build on the core elements in a manner that allow us to create the greatest mission impact in the most sustainable manner. The answer is found at the intersection of three final considerations:
For most nonprofits, strategy is not about reinventing. It is about evolving. More to the point, strategic positioning is about understanding who you are at your core so that you can find the place that allow you to express the best of who you are. It is difficult to understand how any organization could plan for a future without this solid grounding in their past.
Now, let’s get philosophical.
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