November 29, 2022

“You Are Here…For Now”: The Changing Focus of Nonprofit Strategy

Michael E. Stone, Ph.D., Stone Consulting

(This article is based on the author’s latest book, “Nonprofit Strategy: A Phase-Based Approach to Relevance, Impact, and Sustainability”).

There is one lesson about nonprofit strategy that stands above all others: there is no there. That is, there is not a point at which a nonprofit can say, “we are now achieving the greatest mission impact in the most sustainable manner”. If the past few years have reminded us of anything it is that nonprofits do not operate on the still waters of a pond, where minimal navigation skills are sufficient. Instead, the nonprofit environment has proved to be a flowing river that has the potential to turn into raging rapids on short notice.

In short, the world does not stand still for us once we think have things figured out. What we might have thought was there for us today may no longer be there at all in the future.

While there is no there in strategy, there is a past and a present that can help us think more intentionally about the future. The nonprofit’s founding purpose, for example, provides the grounding to gain a clear understanding of how your organization got to where it is now. What were the significant shifts in our programs? What motivated those changes?

Further, we can acknowledge what we have learned about ourselves and the people we serve from a deep reflection on that history. When were we most successful? When did we fail? Which of our programs seem to be most effective with our clientele?

And finally, we can understand what is happening now and how it might affect our ability to remain relevant, impactful, and sustainable. Are the needs of our core clientele changing? Have the priorities of our key funders shifted? Are new competitors entering our domain of operation?

It is the accessibility of our past and the present that provides the opportunity for more effective and useful nonprofit strategy. How is this so? Because the issues, challenges, and questions that drive nonprofit strategy changes based on the current standing of your organization. The key to effective strategy is the ability to figure out where you are…at least, where you are for now.

Like the map in the center of the shopping mall, nonprofits need something to tell them “You are here” to help them gain their strategic bearings. In my experience, the best tool for locating your nonprofit in the shopping mall of organizational development is the lifecycle stages framework.

Strategy Phases: “You are Here”

In a nutshell, nonprofit organizations move predictably (though not always steadily) from startup, to growth, to maturity, and if things don’t go well, to turnaround or decline. The first task in nonprofit strategy development, then, is to determine the lifecycle stage of your nonprofit to understand the corresponding strategic focus of your planning activities.

Table 1 below aligns the nonprofit strategy phases with the familiar lifecycle stages. Of greatest importance is recognition that the strategic focus changes at each phase of organizational development. In essence, startup strategy shifts the focus from what we were thinking in our heads to what is occurring on the ground. Startups are trying to “get it right” after a successful launch, which often requires a refinement of the program model and the funding mix. Strategy for nonprofits moving toward maturity, in contrast, occurs at a higher altitude and is based on clarification and affirmation of the core program model, ensuring leadership continuity, and securing long-term assets.

The information in Table 2 is intended as an assessment tool to help you determine where your nonprofit is now. Of greatest significance in the model is the attainment of the indicative milestones at each phase. The startup still trying to get it right will know it is moving out of the startup phase when it has the staff and resources to fully implement its core program model. For the nonprofit in the growth phase, movement toward maturity occurs when the organization has adapted to achieve consistent program quality while accumulating an operating surplus for three consecutive years.

Before delving into the two tables, it is important to consider a few key points about nonprofit stages and phases. First, nonprofits are never completely here nor there (Heisenberg, anyone?). Instead, nonprofits are always in motion, operating mainly in one stage while simultaneously moving to the next one. This is the liminal point at which strategic exploration intercedes. Knowing the appropriate focus of that exploration is critical.

Second, movement from one stage to the next is seldom smooth or seamless. There are common obstacles and challenges (what I refer to as disruptors) that can delay movement forward. Startups rarely get everything right the first time, while mature organizations must remain vigilant to resist the complacency that places them on the slippery slope to decline.

The last point comes from the statistician George Box, what said that “all models are wrong, but some are useful”. The utility of the strategy phases framework is that it provides an entry point into intentional, focused conversations about the relevance, impact, and sustainability of your nonprofit.

Happy Shopping.

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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