August 29, 2017

Strategy Made Simple

There is a certain elegance in the simple presentation of a complex idea. From science, we know that E equals MC squared. And from the Old Testament were are instructed to love kindness, seek justice, and walk humbly. Easy to understand in both cases, but equally profound in their implications.

When it comes to strategic planning, I doubt that either of those words – elegant or simple – come to mind immediately. More likely, the thought of strategic planning induces thoughts of dread over the prospect of long meetings, rivers of data, and endless compromises, all of which end up in a long document that reads, in the words of Peter Drucker, like a hero sandwich of good intentions.

Let’s be clear: planning is a complex process. There usually is more information than the brain can process, and decisions must be made in light of changing economic, political, and cultural conditions. Indeed, the planning process can become very messy very quickly. But let’s acknowledge also that we make the process even more cumbersome by packing the strategic plan with everything from broad visionary statements, to due dates for specific activities; and we cover everything from internal effeciencies to broad community impact.

All things considered, the development of a strategy for a nonprofit organization is guided by three simple questions:

1. What difference are we trying make?
2. What makes us different?
3. Who will care?

Simple enough. And for starters, simple is good. Now, let’s examine the implications of each question.

Question #1: What difference are we trying to make?

At the heart of this question is the bottom line propsition for your nonprofit. The response to the question is found in three supporting questions: what do you do, for whom, and to what end? In other words, strategy is founded on and is in support of your ability to create impact relative to mission. It is not about survival. It does not begin with profitabilty. Clearly and simply, it is first and foremost about impact. From a strategic standpoint, then, the considerations are these:

  1. How well we are achieving results with your existing clientele.
  2. Emerging needs among your current clientele.
  3. The recognition of new populations that can benefit from the work you do.

The result of this process is a broad position statement regarding the organization’s  program strategy, either affirming its current focus or identifying the shifts in focus necessary to remain relevant.

Question #2: What will make us different?

In launching a nonprofit, a founding board presumes the need and room for another organization to enter into the domain of charitable work. In planning for the future, the current board is stating that its founding purposes remain relevant and that it is able to maintain or solidify its place in the larger system of service providers. Especially in times of declining resources and increased scrutiny, a nonprofit needs to be crystal clear on its place in the larger market. A market position is achieved through one of four primary drivers: quality, meaning that you are the best; cost, if you are able to demonstrate the higher return on investment; niche, if you are the only one doing what you do; or convenience, meaning that you are the easiest to access.

If an organization is unable to substantiate its position in the broader market, its challenge is clear.

Question #3: Who will care?

Removing all jargon related to stakeholders and value-added activities, the reality for nonprofits is that 1) those who care are those who pay, and 2) not everyone will care about what you do. The strategic challenge for nonprofits is to clarify the nature of the benefits it creates through its work. For example, private benefits are those that accrue to the participant and usually are paid for through user fees. Think of private school tuition or tickets to the symphony. Many nonprofits operate in the domain of group benefit, whereby the work benefits an identifiable sub-group within the larger population. Youth, low-income families, and teen moms are examples of group beneficiaries. In this instance, the benefits are not so private that third-parties are not interested, and are not so broad that it becomes everyones problem. It is this middle ground where those who share your concern about the group served can be found. In the case of broad community benefit, government funding often is the primary means of support. Examples include child welfare funds to support foster care and department of health funding for case management of AIDS patients.

In any case, the strategic issue for a nonprofit is to develop a comprehensive funding strategy that takes into account the likelihood of finding supporters based on who believes they have a stake in your outcomes.

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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