Should your organization invest in strategic planning? (includes related article) Bill J. Harrison.

Abstract: Nonprofit organizations may benefit from the use of strategic planning methods, which have been proven effective in business enterprises. Failure to appreciate the value of strategic planning, fear of major staff changes, fear of rapid obsolescence of the strategic plan and fear of the expenses involved are some of the barriers that prevent nonprofits from using strategic planning methods. The positive experiences of several nonprofits with the use of strategic planning are presented.

Full Text: COPYRIGHT Hoke Communications Inc. 1995

Non-profits that have used strategic planning successfully say it helps move the organization from short-term to long-term thinking and helps integrate the donor and the mission.

Strategic planning is a very hot topic. Attend any gathering of professional development directors and you'll hear the term bandied about. Unfortunately, not everyone agrees on its value for not-for-profit organizations. Some charitable organizations swear by the strategic planning process, while others swear at it.

What is strategic planning and would it benefit your organization?

"The strategic planning process is one in which an organization determines where it wants to be in the future, and what action steps are necessary to arrive at that point," explained Christine M. Strong, CFRE, president of the Strong Resource group of Rancho Santa Margarita, CA.

Ms. Strong, who works with many not-for-profit organizations, is a firm believer in strategic planning. "The process is valuable for any organization. It helps articulate questions that ordinarily would not be addressed, which helps create a more successful and sounder future for the organization. The process will also help develop a vision that's formulated by the ceo, board members, the development director, volunteers and other key players. A strategic plan helps establish budgets, identifies resources and establishes benchmarks for spending philanthropic income. The process encourages ownership and commitment from all the parties involved, and helps move the organization from short-term thinking to long-term thinking. Overall, the finished strategic plan serves as a tremendous resource, one you can use for board recruitment, marketing materials, and of course the case for support."

With all these benefits associated with strategic planning, why are so many not-for-profit organizations reluctant to begin the process?

"They're scared of it," Bernd Brecher, president of Institutional Advancement Programs of Tuckahoe, NY stated. "It takes people away from their daily operations and duties. It also makes them address issues that board and staff don't want to discuss because they feel that some things are better discussed behind closed doors."

There are six basic reasons why organizations don't plan strategically:

1. They don't know what strategic planning is or its value,

2. Fear of major staff changes,

3. It's a very lengthy process,

4. The plan will quickly become obsolete,

5. Fear of endless planning with no action,

6. It's an expensive process.

What Is A Strategic Plan?

"The strategic plan needs to be a living document," commented Strong. "It should not sit on a shelf to gather dust. Tied into this document are position descriptions, budgets, marketing materials and the case statement. It should be integrated into all the functions of the organization. The strategic plan articulates key priorities, which may or may not change dramatically over a 3-5 year period of time. It articulates a vision and direction the organization wants to go for a period of time and that wouldn't change necessarily within an 18-month period unless something dramatically changes in the external/internal environment of the organization."

Peter Drucker, management guru, takes a very positive stance on planning strategically. In his book "Managing the Nonprofit Organization, Principles and Practices" (1990 Harper Collins Publishers) he discusses the importance of strategic planning. "Strategy converts a non-profit institution's mission and objectives into performance. Despite its importance, however, many non-profits tend to slight strategy. It seem so obvious to most of them that they are satisfying a need, so clear that everybody who has that need must want the service the non-profit institution has to offer. One central problem is that too many non-profit managers confuse strategy with a selling effort. Strategy ends with selling efforts. It begins with knowing the market - who the customer is, who the customer should be, who the customer might be. The whole point of strategy is not to look at recipients as people who receive bounty, to whom the non-profit does good. They are customers who have to be satisfied. The non-profit institution needs a strategy that integrates the customer and the mission."

Fear of Major Staff Changes

Not-for-profit organizations have an inherent problem that undermines their ability to plan effectively - staff turnover. Nationally, not-for-profit executives stay with their organization an average of only 18 months, certainly not long enough to forge a dynamic future vision.

A number of years ago, while serving as the foundation director of a large metropolitan hospital, I was asked to participate in a strategic planning retreat that involved all senior management and selected board members. Over a period of several weeks a strategic plan was developed. Unfortunately, within six months, five of the key participants, including the ceo and cfo left the hospital. The strategic plan was abandoned, and no new plans were ever developed.

"If the ceo or key development individual changes in the middle or even at the end of the process, it can have a dramatic affect," commented Brecher. "However, the strategic plan is an institutional process, not the ceo's vision. Once the plan is in place it's a consensus building plan and it involves a lot of ideas and opinions. If one leg of a ten leg table is suddenly removed, the table doesn't wobble too much. If it's a four legged table, you may have a problem; but if it's a three legged table, it will fall over immediately. So the question always is of involving the appropriate internal and external constituency so that if there is a sudden change in the middle, it will not undermine the strategic plan."

Strategic Planning Can Be A Lengthy Process

Organizations interested in beginning a strategic planning process should be fully aware it's not a short-term activity.

"A strategic plan can take up to two years to complete, and often does," explained Brecher. "In a lesser amount of time you can develop an annual plan, a working plan, or a marketing plan, but if you do a strategic plan, the process is as important as the plan itself. The process of people thinking strategically is what makes this type of an effort worthwhile."

Although Strong advocates a shorter time-frame of 12 months for completing the strategic plan, she does agree there is a great deal of work to be accomplished to successfully complete the process.

"The data gathering phase is very time-consuming. If you're talking about a strategic plan for fund raising you will want to take a look at all the different kinds of fund-raising programs that you've utilized and what has happened with those over the last 2-5 years. You will need to gather information on industry perspectives, local perspectives, social trends, demographic trends, economic and legal issues as well as regulatory issues. How long it takes to gather that data is going to be dependent on your access to that kind of information, and how much time the director of development or the CEO can dedicate themselves to the information gathering. Just this phase of the process could take up to three months."

The Plan Will Quickly Become Obsolete

Changes in executive management, financial disasters, scandals or any number of other unfortunate circumstance can render a strategic plan impotent. It's a common scenario with charitable organizations.

"At a presentation earlier this year I was addressing a group of forty people," explained Brecher. "I asked the group how many had done strategic planning? About two-thirds of the participants held up their hands. Then I asked how many of them were unhappy with their strategic planning results? Nearly every hand went up. Many of these organizations, at one time or another, developed a plan, but because of management, or other organizational changes, weren't using it."

Planning With No Action

One of the most common complaints of the strategic planning process is the lack of immediate results. Staff and volunteers work for months discussing demographics, strengths, weakness, opportunities, threats, problems and possible solutions - with no actions ever being taken.

"We hear countless stories of people saying, 'Yes, we went through the process, we had good board involvement, we did our mission vision and values work, and we produced a plan,' explained Gary Hubbell, senior consultant with Growth Design Corporation of Milwaukee, WI. "And now there it is in a nice 3-ring binder, sitting on the shelf. Three years from now we'll dust it off, take another look at it because that's what you're supposed to do."

Strong agrees that without some positive actions, participants in the strategic planning process could become bored and disillusioned. "People on the committee must be able to see some results. For example, one of my clients has a goal of strengthening their board of directors over the next 3-5 years. Their short-term goals will include developing position descriptions and conducting an analysis of their existing board of directors. They can also begin to identify other individuals who would qualify based on the position description and the strategic plan that articulates what kinds of leadership they will need in the future. They can also begin to develop recruitment materials and develop the training process for new board members."

Strategic Planning Is Very Expensive

When a consultant is used you can expect substantial expenses, especially if you're involved with something as time-intensive as strategic planning. However, if you carefully plan before retaining a consultant, fees could be considerably less.

Strong has worked with many organizations, and each one is different in their requirements of the consultant. "There are some organizations that want the consultant to come in and write the whole plan for them, they want minimal committee work, they want minimal staff work. There are other organizations that see the role of the consultant as a facilitator, particularly helping them work through critical issues. Most organizations want a combination of the two. You need to clearly define what it is you want your consultant to do. Do you want them to be really hands-on or do you want them to be more of a facilitator and a guide at meetings?"

Does Strategic Planning Work?

No program is guaranteed to work for everyone, all the time. This is certainly true with strategic planning. Many organizations have tried and failed, however, many have tried and succeeded. Committed staff and volunteers is the key to a successful strategic planning effort.

"As a development officer I find the strategic planning process very exciting and a wonderful experience," stated Reverend Brian Friedrich, assistant to the president of Concordia College in Seward, NE. "It's giving us the opportunity to meaningfully engage people from the outside of the institution to help us not only address the multiple issues we face but also help us develop strategies and tactics to implement solutions to those issues.

"For nearly a century we were internally focused with a 'Field of Dreams mentality - if we build it, they will come.' What we realize now is that philosophy won't work any more. We have to be much more connected to our entire constituency. We can't just plan what we think will work, we have to listen to the market and involve our constituency in a much more significant way. And it's working. People are starting to say 'I believe in this, I'm committed to this effort, and I'm willing to help not only with my time, but with my financial resources.' This strategic planning process is the best thing Concordia has done in a hundred years.

"There is always a great fear of the unknown. Strategic planning can cause that kind of anxiety. For us it's a life-giving experience. It's really going to make our institution much more focused and much stronger as we move into the future."

Does Your Organization Need A Strategic Plan?

It depends on what you're trying to accomplish. Some organizations simply need an annual plan, which deals in specific programs and activities over a twelve-month period. An annual plan details special events, mailings and other development programs and their fiscal impact on that given year. However, a strategic plan is much more global in its outlook. It defines strategies, goals and the actions necessary to achieve a defined organizational vision. A strategic plan generally covers a 3-5 year period.

"Not all organizations should do a strategic plan," stated Brecher. "It is not an automatic Band-Aid for everybody. It takes a certain amount of commitment, dedication, time and money. Some organizations may just not be able to do all the things we are talking about. They will spend more time on the plan, which then becomes part of the problem, instead of part of the solution."

Strategic planning will continue to entice not-for-profit organizations. Its ultimate allure is in the creation of the perfectly run organization with a dedicated and active board who are helping to raise untold wealth on an annual basis. A strategic plan has all the glamor of the pot of gold at the end of the rainbow.

Hubbell has heard all the pros and cons of strategic planning and still advocates its use for charitable organizations. He is well aware of its ultimate value. "What most organizations are looking for is a way to be successful, a way to feel like they are making a difference. An organization will work through the bumps they encounter throughout the strategic planning process and emerge feeling tighter as an organization, feeling more confident in their organizational abilities and their abilities as individuals, and certainly feeling more committed. These are wonderful by-products of a well done strategic planning process."

RELATED ARTICLE: Do Your Homework First!

Before you hire a consultant to help you with strategic planning, make sure you're serious about the process. Have some level of agreement and commitment within the organization that this is a priority for your future growth. Your organization should have a budget for the process as well as a time commitment from key players. The questions you have to answer are how much are you willing to spend and how much time are you willing to invest?

Consider the following questions carefully:

* What role do you want the consultant to play? Will they be required to attend every meeting? Will they be required to write the meeting minutes or file numerous reports?

* What role will staff play? Who will be responsible for what activities?

* Is it an annual fund-raising plan you want or an organizational strategic plan? Do you know the difference?

* How much are you willing to pay for a consultant? (Fees can run as high as $50,000). Will there be incidental expenses? Are you willing to pay for mileage, travel, lodging and meals? Will you pay on a retainer basis or for the entire project? Will there be a charge for phone and fax?

* What happens if you ask the consultant to work beyond the scope of the project?

Address these and all questions with the prospective consultant and expect all answers in writing.

Bill J. Harrison is the director of fund development for Blood Systems, Inc. in Scottsdale, Arizona. He has more than 20 years of fund-raising experience and is the author of the award-winning book "Fund-raising: The Good, The Bad, and The Ugly (and how to tell the difference)." He teaches university courses on fund raising, special events and not-for-profit management and is a frequent speaker at national conventions.