At the controls
Pesh Framjee examines how non-profit organisations can develop an effective strategic plan...
A strategic plan requires the input of management as well as the board. The plan must belong to the organisation and it is important that there is agreement and commitment to the strategic planning effort and the key planning steps.
Getting started
To begin with, you will seek to answer some key questions such as:
- What are the most appropriate objectives for the organisation?
- What are the strategic options available to meet these objectives?
- What is the current strategic intent and vision of the organisation? And, most importantly,
- Why is the organisation in its current position?
Based on the strategy, the organisation will create an effective business model for its operations.
Political, economic, social and technological factors (PEST) provide a framework for analysing a situation and should be used to review a strategy or position, direction of an organisation, a marketing proposition, or idea. The SWOT (strengths, weaknesses, opportunities and threats) analysis is also vital to assist decision making.
These tools develop answers to some fundamental questions:
- Why are we here? The organisation’s mandate and mission, vision and values.
- Where are we now? The organisation’s competitive positioning, income streams other resources and structures (PESTs and SWOTs).
- What are the options? The strategic choices available to the organisation.
- Where are we going? The existing and proposed goals and objectives.
- How do we get there? The tactics, strategies, critical enablers and operating imperatives.
- What might prevent us from getting there? The understanding and management of risk and uncertainty.
- Are we getting there? Considering the organisation’s information for decision making and to define appropriate frameworks to define critical success factors and measurable performance indicators.
- Do others know? How does the organisation identify, record and report on what matters to key stakeholders.
Strategic analysis
The monitoring of the external environment should include a review of stakeholder groups to protect the special relationship between the organisation and its stakeholders.
The organisation should also look within itself at its own strengths and weaknesses. It should consider its resources and how it has used these or will use them in the future to sustain performance.
Understanding the linkages between inputs, activities, outputs and outcomes is vital and clarifying the concepts may be helpful.
It is very important for charities to concentrate more on performance information. Without some form of performance criteria and monitoring it is difficult to establish and evaluate the effectiveness of alternative strategies and the use of the organisation’s resources.
Strategic issues and aims
The second stage is to properly identify strategic issues and strategic aims. This is done by focusing on the purpose, the vision, the mission and the values of the organisation. This will help define the key strategic aims – which are often expressed in terms of ‘we will…’. The ‘we wills’ are underpinned by the action to deliver the aims. This can be depicted by way of a strategy tree.as shown in figure 1 for an organisation whose goal was to make a sustainable difference to the lives of people living in poverty.
As the strategy tree grows each ‘We will’ aim is supplemented by a series of ‘by’s’. For example, Aim 1 ‘We will build financial and people capacity so as to increase our outputs, outcomes and impact’ by:
- identifying the skills gaps in our people – staff, trustees and volunteers and filling thse gaps through training and recruitment;
- Developing a corporate partnership and sponsorship programme; and so on.
An intuitive approach is to identify those issues which the organisation is trying to address and which it can do something about. It should set out what the issue is, why it is an issue and what are the consequences of not dealing with the issue. This process will help prioritise problems and is most important for charities with limited resources.
There are several different approaches to identifying issues – many of these are discussed by John Bryson in his book Strategic planning for Public and Non-Profit Organisations (1988).Theconventional favoured approach involves the organisation establishing its goals and objectives and the formulating the strategies to achieve them.
The goals approach requires detailed and specific goals, which should have wide acceptance. It has been used successfully in charities with dominant leadership who have often imposed their goals and is perhaps easier when there are fewer objectives and fewer functions.
Another approach is the direct approach, and this is best when there is no proper consensus on goals or if they are nebulous and/or abstract and is useful when the goals are changing so fast that they may be superseded and obsolete in a short time span.
Many charities use the direct approach because their diverse activities and disparate stakeholders make it difficult to achieve full goal or value congruence. It can be successful but demands a strong and dominant team to make it work.
Others favour the approach of ‘looking’ at the organisation in the future, to consider how it should look in ideal circumstances. This visionary approach to identify strategic issues may appear conceptual but can assist with the important task of seeing what needs changing. It is used when it may be difficult to identify issues and has been used successfully in the earlier stages of strategic development.
Strategies and tactics
The next stage is to identify how to manage the issues. This is the whole conundrum of policies, programmes, actions and resource allocation that will govern.
It may be necessary to consider a whole range of alternate strategies to match the issues. Some may appear far fetched and unreasonable and those that really are will be discarded by focusing on the impediments and barriers that currently would prevent a particular strategy from being successful. This step can be quite important as it identifies practical strategies and also strategies that may be inappropriate at present but could be useful later.
The strategy should address both the long and short term and define the tasks that need to be performed over the next two to three years and also set a plan of action for the immediate future. Short-term actions should aim at enhancing long-term goals. It is important for the organisation to identify its own key success factors. These are the key areas that should be performed well if the organisation is to achieve success. Success can be much harder to define in charities than in the ‘for profit’ sector which often measures success by the bottom line.
Feedback and review
Non-profit organisations’ work is a volatile environment with pressing needs, which may require immediate response. There should be strategic action and a continuous process of feedback and review to ensure that strategic as well as financial controls are operating. Developing the plan is only part of the process and without implementation and evaluation, the whole planning exercise is a waste of time and resource.
The end game is the impact but this can be positive or negative. Regular monitoring and evaluation is vital. An example of this is an organisation I worked with in India which had the aim of increasing literacy in all the villages in a particular district. Many years on it had achieved this but the young people they had educated had all gone off to the big cities to look for jobs – many returned disillusioned and did not have the traditional skills that they needed. The organisations had achieved its outputs and outcomes but not the impacts it was seeking. It has now changed and ensures that it provides relevant training coupled with its literacy programmes.
Author: Pesh Framjee
Pesh Framjee Pesh Framjee, Head of the non-profit unit at Crowe Clark Whitehill is Special Adviser to CFDG and is a member of the Charity SORP Committee. He has worked with charities for over 35 years and advises charities on financial, governance and strategic matters.
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