There is broad agreement among not-for-profit leaders and experts that planning is a critical component of good management and governance. Planning helps ensure that an organisation remains relevant and responsive to the needs of its community, and contributes to organisational stability and growth. It provides a basis for monitoring progress, and for assessing results and impact. It facilitates new program development. It enables an organisation to look into the future in an orderly and systematic way. From a governance perspective, it enables the Board to set policies and goals to guide the organisation and provides a clear focus to the Executive Director and staff for program implementation and agency management.
Most organisations understand the need for annual program objectives and a program-focused work plan. Funders require them, and they provide a basis for setting priorities, organizing work, and assessing progress. A growing number of community-based organisations go beyond funder requirements to develop annual objectives and operating plans which also include a systematic plan for resource development, organisational development, and in some cases Board development. Most groups find it practical to define objectives for a 12-month period, and to design strategies and programs to meet them.
Longer-range planning – planning beyond the next year or two – often seems more difficult and less rewarding. With the external environment changing so rapidly, Board members and senior staff ask, how can we expect to develop plans that will remain relevant? With so little control over external events, how can we hope to influence them in a way that benefits our community?
In fact, planning is no less important in a changing environment; it may well be more important. Most community-based organisations exist to serve a specific community. To do that, they need to be very clear on their community needs and then work to address them through similarly clear organisational missions, priorities, target groups, and objectives. If the external environment – funding, the economy in general, government legislation, etc. – is changing, then organisations must be that much more effective in defining needs and marshalling internal and external resources to meet them. It is here that strategic planning can be the most helpful. Planning is designed to help an organisation define its vision for the future and then determine systematically how it will get there, understanding obstacles and figuring out ways to overcome them.
Planning that focuses on a period of three years or more requires an organized, serious effort which takes time and energy. There may need to be a formal community needs assessment as input to planning. This is extremely valuable, but also demanding. Moreover, planning is not a one-time effort; any plan needs to be reviewed, monitored, and updated. The benefits to an organisation can be significant — a clear focus, a sense of joint purpose and agreed-upon priorities, consensus on strategies, and a basis for measuring progress and impact.
There are many different models and action steps for strategic planning. One approach is summarised below. It assumes a cooperative effort between Board and staff, perhaps with a special strategic planning committee of Board members and staff taking responsibility for the effort. Some of the work can be done in committee, while Board and staff planning sessions or retreats are also likely to be required, both early and late in the planning process. Typical steps are described below.
Frequently, Steps 1-3 occur before a strategic planning retreat, Steps 4-7 during the retreat, and Steps 8-10 after the retreat.
Step 1: Agree on a strategic planning process.
This may be done at a Board meeting with key staff present or may require a special meeting or retreat, including Board, key staff, and some external stakeholders. The critical issue is to have leaders and opinion-makers in the organisation agreed about the value and need for the process. At the session, also consider the costs of doing strategic planning, in terms of staff and Board time and other resources.
Agree upon a process and establish responsibilities for the various steps in the process, including at least one day (or several half-days or evenings) devoted to a Board and (all or senior) staff planning retreat or a series of planning meetings.
Except for a very small organisation, it will probably be desirable to set up a strategic planning committee or task force. Choose participants carefully, assuring their commitment to the process and their willingness to devote significant time to the planning effort. The organisation may also want to include an outside facilitator or consultant who will assist with the process and with the preparation of the strategic planning document.
Step 2: Carry out an environmental scan.
This helps provide an understanding of how the organisation relates to its external environment. The scan usually includes an external component — identifying and assessing opportunities and threats in the external environment — and an internal component — assessing organisational strengths and weaknesses. This process is often referred to as “SWOT”: strengths, weaknesses, opportunities, and threats.
The external component of the environmental scan should include a review of the target or service community and the broader environment in which the organisation operates, to identify the opportunities and threats facing the organisation. This process may involve something as extensive as a community needs assessment with interviews, focus groups, and surveys conducted by a consultant or may be limited to a small number of informal discussions with clients and other community residents, heads of other organisations, public servants, funder representatives, and other appropriate individuals.
The internal component of the environmental scan includes an assessment of the organisation’s strengths and weaknesses.
You may want to assess current organisational performance in terms of financial and human resources (inputs), operating methods or strategies (processes), and results or outcomes (outputs) otherwise referred to as the “IPO Assessment”. Try to understand how key players or stakeholders in the broader community — as well as constituents or clients — view the organisation. Once you have this information, be sure to further analyse the reasons — in terms of inputs and processes — for perceived weaknesses in outcomes.
It is often valuable to identify critical success factors for the organisation. Try to understand what factors are necessary to the future and continued success of the organisation.
The result of the environmental scan should be an analysis of organisational strengths and weaknesses and external opportunities and threats. This may be oral or written and requires careful review and discussion by the strategic planning committee. The Board and staff should be familiar with the findings before strategic planning decisions are made.
Step 3: Identify key issues, questions, and choices to be addressed as part of the strategic planning effort.
This may mean specifying “strategic issues” or questions that the organisation should address, and setting priorities in terms of time or importance. If there is little disagreement about issues and priorities, it may be possible to move immediately to the organisational vision and then goals. If there is no agreement on general directions and organisational goals, it may be important to explore issue priorities and identify critical choices.
Whatever the method used, the discussion of the issues should generate some level of agreement about issues or choices to be considered and decisions to be made as part of the strategic planning process.
Once Steps 1-3 have been completed, you are ready to develop a strategic planning retreat agenda and schedule a one- to two-day retreat or a series of shorter meetings.
Step 4: Define or review the organisation’s values, community vision, and mission.
Be sure there is consensus on why the organisation exists, what goals or outcomes it seeks to achieve, what it stands for, and whom it serves. If it has specific mandates –things it must do or not do based on its articles of incorporation or bylaws, or long-term contracts or grants – then these should be clearly defined. Consider beginning your strategic planning by agreeing on organisational core values or operating principles, community Vision (this is your vision for the community, not your vision of what the organisation will look like in three to five years or more), and your Mission – the stated purpose for your organisation’s existence.
Step 5: Develop a shared vision for the organisation.
In some strategic planning efforts, a vision for the organisation is developed after a vision for the community has been discussed — with the assumption that a shared organisational vision may be dependent upon a shared vision of what society should become. Whenever this is done, it is important to agree on where the organisation wants to be in three to five years (It is often helpful to focus on where you want to be at the end of the period covered by the strategic plan).
The development of a shared vision is usually best done with both Board and staff involvement. For a small organisation, a joint Board-staff process may be practical. For a large organisation, a two-stage process might be useful, with staff first working together on a vision, then having the Board and key staff participate in a similar process, in which they review and incorporate the staff vision with their own.
Step 6: Develop a series of goals or organisational status statements which describe the organisation in a specified number of years – assuming it is successful in addressing its mission.
It is usually a short step from the vision to goals – sometimes the statements describing the vision are essentially goal statements. It is extremely valuable to transform the vision into a series of key goals for the organisation, preferably in the form of status statements describing the organisation. For example, goals might cover a variety of categories, such as goals for programs, Resources, Status, Relationships, Organisational development, and Governance.
During the development of goals, it is always important to ask two questions of every goal submitted for consideration:-
- Vision, Mission, Values – Does the goal help the organisation achieve its vision, is it within the definition of the organisation’s mission, will achieving it subscribe to the organisations core values?
- Is the goal, and the phrasing of it, SMART (Specific, Measurable, Achievable, Result-based, Time-defined)?
If the answer to both is not an unequivocal “yes” then the goal must be discarded.
Step 7: Agree upon key strategies to reach the goals and address key issues identified through the environmental scan.
The major emphasis should be on broad high-level strategies (not lower-level action steps), including current and new program, advocacy, collaborative, or other approaches. These strategies should be related to specific goals or address several goals. The process requires looking at where the organisation is now and where its vision and goals indicate it wants to be, and identifying strategies to get there. The Board needs to provide a broad view to guide this effort, while the planning group or staff can do much of the detailed analysis.
Whatever the specific approach used, specific criteria for evaluating and choosing among strategies should be agreed upon. They might include such criteria as the following:
???? Value – Will the strategy contribute to meeting agreed-upon goals?
???? Appropriateness – Is the strategy consistent with the organisation’s vision, mission, values, and operating principles?
???? Feasibility – Is the strategy practical, given personnel and financial resources and capacity?
???? Acceptability – Is the strategy acceptable to the Board, key staff, and other stakeholders?
???? Cost-benefit – Is the strategy likely to lead to sufficient benefits to justify the costs in time and other resources?
???? Timing – Can and should the organisation implement this strategy at this time, given external factors and competing demands?
You are likely to complete Steps 4-7 during a strategic planning retreat. Someone, a consultant, the Strategic Planning committee or task force, or a staff member will need to take the notes from the retreat, the results of the environmental scan, and other relevant materials and begin to draft a written strategic plan. Once this draft has been prepared, the next step can begin.
Step 8: Develop an operational business plan that addresses goals and specifies objectives and work plans on an annual basis.
Once the longer-term elements of a strategic plan have been developed, it is time to ensure a specific operational plan to begin implementation. Strategic planning recognises that strategies must reflect current conditions within the organisation and its environment. Thus it is rare to attempt to develop detailed annual objectives except for the first or perhaps the first and second year covered by the strategic plan. However, annual operational business plans are needed. Annual program objectives should be time-based and measurable. The annual plan may be a part of the strategic plan or, preferably, may be an annual addendum to it.
However the annual plan is viewed, it is important that any work or workshops relating to the annual plan is conducted totally separately from those of the strategic plan – it is important two distinct paradigms are maintained, being a long-term strategic focus and a shorter-term details focus.
Step 9: Finalise a written strategic plan that summarizes the results and decisions of the strategic planning process.
There is no set format, but be sure to include the outputs of each major step. The addendum at the end of this article provides a suggested format, but it is only one possibility.
Step 10: Build in procedures for monitoring, and for modifying strategies based on changes in the external environment or the organisation.
Be sure progress towards goals and objectives and use of strategies is monitored regularly, with strategies revised and annual objectives developed yearly, based on the progress made, obstacles encountered, and the changing environment. Have procedures for taking advantage of unexpected changes such as more sympathetic government policies or appointed officials, improvements in the economy, changes in local funder priorities, or changes in the target population. Define annual objectives at the start of each year. Look back to see what progress has been made in critical success factors. Use the plan as a compass, but not an inflexible blueprint for action.
If you want to know more about writing your Not-For-Profit Strategic Plan, OTS Management has a free white paper available at www.otsmanagement.com.au