Creating a Dynamic Nonprofit: Tools for Strategic Thinking. Steve Lew, Senior Project Director, CompassPoint Nonprofit Day 2008
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1 Creating a Dynamic Nonprofit: Tools for Strategic Thinking Steve Lew, Senior Project Director, CompassPoint Nonprofit Day 2008
2 Thoughts on Strategy If we do not change direction, we are likely to get where we are headed. - Chinese proverb If you do not know where you are headed, anywhere will get you somewhere, but not necessarily where you need to go -- Jude Kaye, inspired by Alice in Wonderland We need to forget who we think we are, so that we can really become what we are. Paulo Coelho
3 I m not a businessman, I m a business, man Kanye West Understand the Market competitive analysis Know your business model Performance Measures Indicators of Impact
4 Strategic Thinking Strategic thinking is the way in which people in an organization think about the current work and plan the future work- by setting priorities which are essential to mission, that are responsive to the operating environment and well matched to the organization s strengths & capabilities.
5
6 Strategic thinking is often about: clarifying the existing work assessing financial and mission performance of core activities monitoring trends in the operating environment testing the assumptions behind strategic plans adjusting or discarding a strategy deciding to do less things in order to do things better.
7 Questions to Encourage Strategic Thinking What did we once know to be so that s no longer true? How are we smarter about doing our work than before?
8 Clarifying the Existing Work Theory of Change for strategies Logic Models for programs Dual Bottom line: (mission & money) Business Model Analysis Market Mapping
9 Analyze Core Activities For Activity A Activity B Activity C Revenue $250, , ,000 Expenses $ , ,000 Surplus/ Deficit Staff deployed (50,000) (25,000) 20,000 60% 30% 10%
10 Dual Bottom Line: Mission Criteria Activity A Activity B Activity C Reach Educational Impact Cultural Competence
11 Dual Bottom Line Dual Bottom Line Analysis Activity A Activity C Mission Impact Activity B Profitability
12 Market Landscape Other Existing Organizations New Approaches Your Organization Funding Group User Group External Environment
13 Market Mapping Policy Advocacy Health Strategies Group US Fund for Health Equity ECenter NET ACT Clinic Direct Service Regional National
14 MacMillan Matrix for assessing competitive position and developing a competition strategy Program Fit : Is this program congruent with the overall purpose and mission of our organization, and does this program/could it draw on existing skills in the organization and share resources/coordinate activities with other programs? Yes No
15 MacMillan Matrix Competitive Position: Do you think your program is in a strong competitive position? Can your organization provide this service better than any other organization? Yes No [Good logistical delivery system, client & community loyalty, superior tract record/image of service delivery; large market share of the target clientele; better quality service/product/service delivery than competitors; superior technical skills; cost effective delivery of service.]
16 MacMillan Matrix Ability to Attract Resources: Does this program currently attract or have the potential to attract resources? Yes No [the ability to attract resources deals with issues of market demand, stable funding or strong current and future support, appeals to volunteers, high visibility]
17 MacMillan Matrix Competition/Alternative Coverage: Are there many organizations, or few organizations, providing similar services in the community? Many Organizations Few Organizations
18 CHANGE STRATEGY ANALYSIS: (MacMillan Matrix) Potential to Attract Reso urces: YES Alternative Cover age: MANY Alternative Cover age: FEW Potential to Attract Reso urces: Alternative Cover age: MANY NO Alternative Cover age: FEW Strong Competitive Position AGGRESSIVE COMPETITION STRATEGY GROW TH STRATEGY EXIT STRATEGY (build up the best competitor) ŅSOUL OF THE AGENCYÓ Strong Fit with Mission Weak Competitive Position EXIT STRATEGY BUILD STRENGTH OR GET OUT EXIT STRATEGY JOINT VENTUR E Weak Fit with Mission
19 Should and Can We Plan In Times of Uncertainty? Yes, because planning is not about predicting the future but about making better current decisions: Strategic planning helps leaders to be intentional and pro-active in allocating resources to achieve these priorities. (Allison and Kaye, Strategic Planning for Nonprofit Organizations, Revised Edition, John Wiley, 2004)
20 Tools for Strategic Thinking Zero Based Budgeting Contingency Plans Scenario Thinking
21 Contingency Plans List the most important factor(s) that might impact negatively the success of this program: Develop contingency plan of action to respond to each potentially negative factor, including trigger points that would indicate when the potential contingency plan should be put into place If (factor) occurs, we should consider (contingency plan of action). This contingency plan should be put in place when (trigger point) happens.
22 Scenario Planning Consider different stories about the way the world might turn out tomorrow.scenarios can help us adopt to changing aspects of our present environment by helping us understand the different pathways or choices available. To act with confidence, one must be willing to look ahead and consider different uncertainties. -- Peter Schwartz, The Art of the Long View
23 Planning in Times of Uncertainty: Scenario Planning Most common process developed by Global Business Network Define a question Articulate environmental trends that are most important and certain and those that are most important and uncertain Select two of the critical uncertainties, describing both ends of the spectrum Develop a matrix placing each of the two uncertainties on each axis Discuss the implications of each scenario for your future
24 Scenario Planning Example Major Grant/Substantial $ Received in next 3 months No viable partners Many viable partners To collaborate with $ is not sufficient to sustain organization
25 To Be Dynamic- Manage to Strategies, Monitor Strategies Core strategies guide your annual/quarterly operating goals, budget, and staff discussions of impact Business and mission strategies are evaluated regularly by senior staff & board Others are engaged to monitor trends that directly affect the existing strategies
26 Create Buy In Strategic thinking & planning is not exclusive to the board or senior mgmt. Charge a team or committee. Increase the amount of internal data that people have access to- big picture information that cuts across programs and shows relationships finance and mission. Be transparent and consistent in how you analyze & discuss the data.
27 Help people to manage change Help people understand the need for change, from mission and business reasons Prepare those most affected, and those who need to lead the change Acknowledge the loss, and recognize each new positive change in the new direction
28 Strategy Resources CompassPoint Strategy Consulting, CompassPoint.org Taproot Foundation Service Grants TaprootFoundation.org Print resources: Strategic Planning for Nonprofit Organizations, Jude Kaye and Mike Allison, 2005, CompassPoint The Nonprofit Strategy Revolution, David La Piana, 2008, FieldstoneAlliance.org Financial Leadership for Nonprofit Executives, Jeanne Bell, Liz Schaffer, CompassPoint, 2005 Online Resources: Theory of Change description and approach: TheoryofChange.org Scenario Thinking: GBN.org
29 Worksheet Encouraging Strategic Thinking In order to remain competitive and successful, ongoing strategic thinking 1 is imperative. Asking and answering some of these hard questions is one of the primary ingredients of success. Whether in small groups or in a retreat, these powerful questions can form the basis of new and improved ways of doing things. Select 4-5 of these questions for discussion. What have been the key factors that have contributed to our organization s success to date? Where have we not been as successful and why? What implications does what has worked and what hasn t have for the future? What did we once know to be so that s not? How are we smarter about doing our work than before? What are the two or three really big questions that we absolutely have to answer if we are going to be successful/maximize the achievement of our mission? If we had to start from a base of zero, what would this organization look like programmatically and administratively? What do we need to redesign -- how might our current mission, vision, products, services, and structure need to change if we are going to be a successful business? What should we be worried about? And what should we do to either prevent these concerns from happening or be pro-active in developing a response should these events occur? In pursuit of excellence, What 5 things might we do more of, less of, or strikingly differently to ensure being focused, flexible, and impactful? What 5 things do you want to make sure does not change? What do you hope will be most strikingly different about this organization in five years? 1 Richard Chait is the source or inspiration of many of these generative questions. Jude Kaye jude.intentiontoaction@yahoo.com
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