Strategic Planning - Islamic University of Gaza



Strategic Planning | |

|(1) |What is strategic planning? |

|(2) |What are the key concepts and definitions in strategic planning? |

|(3) |What are the basic steps in a strategic planning process? |

|(4) |What do I need to know before I start the planning process? |

|(5) |What are the individual roles in a planning process? |

|(6) |What's in a mission statement? |

|(7) |What's in a vision statement? |

|(8) |What is a situation assessment? |

|(9) |How can we do a competitive analysis? |

|(10) |What is a strategy and how do we develop one? |

|(11) |What should a strategic plan include? |

|(12) |How do you develop an annual operating plan? |

|(13) |How do we increase our chances of implementing our strategic plan? |

|(14) |Should I use an external consultant? |

|(15) |How do I use retreats in the planning process? |

| 1 - What is strategic planning? |

|Overview |

|Strategic planning is a management tool, period. As with any management tool, it is used for one purpose only: to help an organization do a better|

|job - to focus its energy, to ensure that members of the organization are working toward the same goals, to assess and adjust the organization's |

|direction in response to a changing environment. In short, strategic planning is a disciplined effort to produce fundamental decisions and actions|

|that shape and guide what an organization is, what it does, and why it does it, with a focus on the future. (Adapted from Bryson's Strategic |

|Planning in Public and Nonprofit Organizations) |

| |

|A word by word dissection of this definition provides the key elements that underlie the meaning and success of a strategic planning process: |

| |

|The process is strategic because it involves preparing the best way to respond to the circumstances of the organization's environment, whether or |

|not its circumstances are known in advance; nonprofits often must respond to dynamic and even hostile environments. Being strategic, then, means |

|being clear about the organization's objectives, being aware of the organization's resources, and incorporating both into being consciously |

|responsive to a dynamic environment. |

| |

|The process is about planning because it involves intentionally setting goals (i.e., choosing a desired future) and developing an approach to |

|achieving those goals. |

| |

|The process is disciplined in that it calls for a certain order and pattern to keep it focused and productive. The process raises a sequence of |

|questions that helps planners examine experience, test assumptions, gather and incorporate information about the present, and anticipate the |

|environment in which the organization will be working in the future. |

| |

|Finally, the process is about fundamental decisions and actions because choices must be made in order to answer the sequence of questions |

|mentioned above. The plan is ultimately no more, and no less, than a set of decisions about what to do, why to do it, and how to do it. Because it|

|is impossible to do everything that needs to be done in this world, strategic planning implies that some organizational decisions and actions are |

|more important than others - and that much of the strategy lies in making the tough decisions about what is most important to achieving |

|organizational success. |

| |

|The strategic planning can be complex, challenging, and even messy, but it is always defined by the basic ideas outlined above - and you can |

|always return to these basics for insight into your own strategic planning process. |

| |

|Strategic Planning and Long-Range Planning |

|Although many use these terms interchangeably, strategic planning and long-range planning differ in their emphasis on the "assumed" environment. |

|Long-range planning is generally considered to mean the development of a plan for accomplishing a goal or set of goals over a period of several |

|years, with the assumption that current knowledge about future conditions is sufficiently reliable to ensure the plan's reliability over the |

|duration of its implementation. In the late fifties and early sixties, for example, the US. economy was relatively stable and somewhat |

|predictable, and, therefore, long-range planning was both fashionable and useful. |

| |

|On the other hand, strategic planning assumes that an organization must be responsive to a dynamic, changing environment (not the more stable |

|environment assumed for long-range planning). Certainly a common assumption strategic thinking has emerged in the nonprofit sector that the |

|environment is indeed changeable, often in unpredictable ways. Strategic planning, then, stresses the importance of making decisions that will |

|ensure the organization's ability to successfully respond to changes in the environment. |

| |

|Strategic Thinking and Strategic Management |

|Strategic planning is only useful if it supports strategic thinking and leads to strategic management - the basis for an effective organization. |

|Strategic thinking means asking, "Are we doing the right thing?" Perhaps, more precisely, it means making that assessment using three key |

|requirements about: a definite purpose be in mind; an understanding of the environment, particularly of the forces that affect or impede the |

|fulfillment of that purpose; and creativity in developing effective responses to those forces. |

| |

|It follows, then, that strategic management is the application of strategic thinking to the job of leading an organization. Dr. Jagdish Sheth, a |

|respected authority on marketing and strategic planning, provides the following framework for understanding strategic management: continually |

|asking the question, "Are we doing the right thing?" It entails attention to the "big picture" and the willingness to adapt to changing |

|circumstances, and consists of the following three elements: |

|formulation of the organization's future mission in light of changing external factors such as regulation, competition, technology, and customers |

|development of a competitive strategy to achieve the mission |

|creation of an organizational structure which will deploy resources to successfully carry out its competitive strategy. |

|Strategic management is adaptive and keeps an organization relevant. In these dynamic times it is more likely to succeed than the traditional |

|approach of "if it ain't broke, don't fix it." |

| |

|What Strategic Planning Is Not |

|Everything said above to describe what strategic planning is can also provide an understanding of what it is not. For example, it is about |

|fundamental decisions and actions, but it does not attempt to make future decisions (Steiner, 1979). Strategic planning involves anticipating the |

|future environment, but the decisions are made in the present. This means that over time, the organization must stay abreast of changes in order |

|to make the best decisions it can at any given point - it must manage, as well as plan, strategically. |

| |

|Strategic planning has also been described as a tool - but it is not a substitute for the exercise of judgment by leadership. Ultimately, the |

|leaders of any enterprise need to sit back and ask, and answer, "What are the most important issues to respond to?" and "How shall we respond?" |

|Just as the hammer does not create the bookshelf, so the data analysis and decision-making tools of strategic planning do not make the |

|organization work - they can only support the intuition, reasoning skills, and judgment that people bring to their organization. |

| |

|Finally, strategic planning, though described as disciplined, does not typically flow smoothly from one step to the next. It is a creative |

|process, and the fresh insight arrived at today might very well alter the decision made yesterday. Inevitably the process moves forward and back |

|several times before arriving at the final set of decisions. Therefore, no one should be surprised if the process feels less like a comfortable |

|trip on a commuter train, but rather like a ride on a roller coaster. But even roller coaster cars arrive at their destination, as long as they |

|stay on track! |

| |Strategic Planning FAQ Index |[pic] |What are the key concepts and definitions in | |

| | | |strategic planning? | |

|2- What are the key concepts and definitions in strategic planning? |

|Values That Support Successful Strategic Planning |

|The Support Centers of America has adopted the following guiding principles to support its consulting practice in strategic planning. These are|

|self-explanatory and are offered as one way to approach this work. |

| |

|Successful strategic planning: |

|leads to action |

|builds a shared vision that is values-based |

|is an inclusive, participatory process in which board and staff take on a shared ownership |

|accepts accountability to the community |

|is externally focused and sensitive to the organization's environment |

|is based on quality data |

|requires an openness to questioning the status quo |

|is a key part of effective management. |

| |

|Key Concepts |

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|What is the difference between strategic planning and long range planning? |

|The major difference between strategic planning and long range planning is in emphasis. Long range planning is generally considered to mean the|

|development of a plan of action to accomplish a goal or set of goals over a period of several years. The major assumption in long range |

|planning is that current knowledge about future conditions is sufficiently reliable to enable the development of these plans. For example, in |

|the late fifties and early sixties, the American economy was relatively stable and therefore predictable. Long range planning was very much in |

|fashion, and it was a useful exercise. Because the environment is assumed to be predictable, the emphasis is on the articulation of internally |

|focused plans to accomplish agreed upon goals. |

| |

|The major assumption in strategic planning, however, is that an organization must be responsive to a dynamic, changing environment. Some would |

|argue that this was always the case. Nonetheless, in the nonprofit sector a wide agreement has emerged that the environment is indeed changing |

|in dynamic, and often unpredictable ways. Thus, the emphasis in strategic planning is on understanding how the environment is changing and will|

|change, and in developing organizational decisions which are responsive to these changes. |

| |

|In planning lingo, what is the difference between purpose, mission, and vision? |

|There is a lot of confusion about these three words in the nonprofit planning literature. For the sake of clarity, the following definitions |

|are used consistently throughout this series of response sheets. |

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|A purpose is an end result, a goal which an organization is seeking to accomplish. Purpose is the answer to the question, "Why does this |

|organization exist?" The answer is to achieve the purpose. |

| |

|Mission is typically understood as a broader concept. Mission is synonymous with mission statement and includes three major concepts: the |

|purpose (as above), the "business" an organization engages in to achieve this purpose, and a statement of values guiding the accomplishment of |

|the mission. |

| |

|Finally, vision is the most global concept. A vision is quite literally a mental image of the successful accomplishment of the mission, and |

|thus the purpose of the organization. |

| |

|What is strategic thinking? |

|Strategic thinking means asking, "Are we doing the right thing?" It requires three things: |

|purpose or end--a strategic thinker is trying to do something |

|understanding the environment, particularly of the opponent, or opposing forces, affecting and/or blocking achievement of these ends |

|creativity in developing effective responses to the opponent or opposing forces. |

| |

|What is strategic management? |

|As you might guess, strategic management is the application of strategic thinking to the job of leading an organization. |

| |

|Dr. Jagdish Sheth, an expert on marketing and strategic planning suggests that strategic management means continually asking the question, "Are|

|we doing the right thing?" Strategic management is focused on the future within a context of a changing, but relatively predictable |

|environment. Strategic management consists of the following three activities and decisions: |

|formulation of the future mission of the organization in light of changing external factors such as regulation, competition, technology and |

|customers; |

|development of a competitive strategy to achieve the mission; and |

|creation of an organization structure which will deploy resources to successfully carry out its competitive strategy. |

| |

|It requires attention to the "big picture" and a willingness to adapt to changing circumstances. |

| |

|Dr. Sheth distinguishes strategic management from two other approaches to management, a tradition-driven approach and an operations-driven |

|approach. A tradition-driven approach is characterized by the saying "if it ain't broke, don't fix it," and is focused on past practices. The |

|tradition-driven approach works best in a non-changing environment. An operations-driven approach asks, "Did we do things right?" It is focused|

|on current practices and works best in a highly volatile environment. |

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|Key Definitions |

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|Strategic |

|In the dictionary, the word strategy has to do with war and deception of an enemy. In nonprofit management, strategy has to do with responding |

|to a dynamic and often hostile environment in pursuit of a public service mission. Thinking strategically thus means being informed and |

|consciously responsive to this dynamic environment. |

| |

|Planning |

|Strategic planning is planning because it involves intentionally setting goals (choosing a desired future) and developing an approach to |

|achieving those goals. |

| |

|Fundamental |

|Because it is impossible to do everything, strategic planning implies that some decisions and actions are more important than others. The most |

|important decisions have to do with what an organization is and why it exists; the most important actions have to do with what it does. On the |

|other hand, strategic thinking is deciding on and carrying out the fundamental, or most important actions. |

| |

|Disciplined |

|Discipline highlights the relationship between the different steps in strategic planning. Mission depends on environment; which actions are |

|most important are determined by assessing strengths and weaknesses, opportunities and threats. Strategic planning is also disciplined in that |

|there is a sequence of questions typically raised to examine experience and test assumptions, gather and make use of information about the |

|present, and try to anticipate the future environment the organization will be working in. |

| |

|Decision Making |

|Strategic planning is based on decision making because in order to answer the questions raised in the structured planning process, choices must|

|be made. The plan ultimately is no more, and no less, than a set of decisions about what to do, how to do it and why to do it. |

| |

|Long Range Plan |

|Long range is the longest time period for which it makes sense to make plans. The time period varies from organization to organization: the |

|Social Security Administration must plan for the retirement of today's babies sixty five years from now; high tech computer companies are |

|putting out new products every six months. For most nonprofit organizations, a 3-5 year timeframe is appropriate for meaningful long range |

|planning. Three year plans work well for most nonprofits, taking into consideration the fast pace of change (technology, political and economic|

|environment, internal realities, and community conditions). Five year plans may be more appropriate for those organizations with extensive |

|physical plant or very large service constituencies, such as schools, colleges, universities and hospitals. |

| |

|Operating Plan |

|Operating plans are the detailed action plans to accomplish the strategic goals laid out in the strategic plan. An organization should have |

|operating plans for each major organizational unit and correspond to its fiscal year. In addition, an organization may need operating plans |

|which correspond to grant cycles or longer, or cycles that differ from the fiscal year. Each is important. |

| |

|Strategic Management |

|The concept of strategic planning implies managing, day to day and month to month, in a way that focuses on the most important decisions and |

|actions. This requires the kind of longer term perspective and priorities which result from a strategic plan. This concept also incorporates |

|the assumption that the environment is always changing: thus, strategic management requires ongoing reassessment of current plans in light of |

|long term priorities. |

| |

|Inclusive Process |

|An inclusive process means that people who have a stake in the work of your organization participate in the planning process in an appropriate |

|way. This does not mean that every client, funder, volunteer and staff member must come to a joint consensus about what to do. It does mean |

|that these interested individuals have a chance to be heard by the decision makers. |

|Index |What is strategic planning? |[pic] |What are the basic steps in a strategic | |

| | | |planning process? | |

|3 - What are the basic steps in a strategic planning process? |

|[pic] |

|Step One - Getting Ready |

|Step Two - Articulating Mission and Vision |

|Step Three - Assessing the Situation |

|Step Four - Developing Strategies, Goals, and Objectives |

|Step Five - Completing the Written Plan |

|[pic] |

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|Strategic Planning Model |

|Many books and articles describe how best to do strategic planning, and many go to much greater lengths than this planning response sheet, but |

|our purpose here is to present the fundamental steps that must be taken in the strategic planning process. Below is a brief description of the |

|five steps in the process. These steps are a recommendation, but not the only recipe for creating a strategic plan; other sources may recommend |

|entirely different steps or variations of these steps. However, the steps outlined below describe the basic work that needs to be done and the |

|typical products of the process. Thoughtful and creative planners will add spice to the mix or elegance to the presentation in order to develop |

|a strategic plan that best suits their organization! |

| |

|Step One - Getting Ready |

|To get ready for strategic planning, an organization must first assess if it is ready. While a number of issues must be addressed in assessing |

|readiness, the determination essentially comes down to whether an organization's leaders are truly committed to the effort, and whether they are|

|able to devote the necessary attention to the "big picture". For example, if a funding crisis looms, the founder is about to depart, or the |

|environment is turbulent, then it does not make sense to take time out for strategic planning effort at that time. |

| |

|An organization that determines it is indeed ready to begin strategic planning must perform five tasks to pave the way for an organized process:|

|identify specific issues or choices that the planning process should address |

|clarify roles (who does what in the process) |

|create a Planning Committee |

|develop an organizational profile |

|identify the information that must be collected to help make sound decisions. |

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|The product developed at the end of the Step One is a Workplan. |

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|Step Two - Articulating Mission and Vision |

|A mission statement is like an introductory paragraph: it lets the reader know where the writer is going, and it also shows that the writer |

|knows where he or she is going. Likewise, a mission statement must communicates the essence of an organization to the reader. An organization's |

|ability to articulate its mission indicates its focus and purposefulness. A mission statement typically describes an organization in terms of |

|its: |

|Purpose - why the organization exists, and what it seeks to accomplish |

|Business - the main method or activity through which the organization tries it fulfill this purpose |

|Values - the principles or beliefs that guide an organization's members as they pursue the organization's purpose |

| |

|Whereas the mission statement summarizes the what, how, and why of an organization's work, a vision statement presents an image of what success |

|will look like. For example, the mission statement of the Support Centers of America is as follows: |

|The mission of the Support Centers of America is to increase the effectiveness of the nonprofit sector by providing management consulting, |

|training and research. Our guiding principles are: promote client independence, expand cultural proficiency, collaborate with others, ensure our|

|own competence, act as one organization. |

| |

|We envision an ever increasing global movement to restore and revitalize the quality of life in local communities. The Support Centers of |

|America will be a recognized contributor and leader in that movement. |

| |

|With mission and vision statements in hand, an organization has taken an important step towards creating a shared, coherent idea of what it is |

|strategically planning for. |

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|At the end of Step Two, a draft mission statement and a draft vision statement is developed. |

| |

|Step Three - Assessing the Situation |

|Once an organization has committed to why it exists and what it does, it must take a clear-eyed look at its current situation. Remember, that |

|part of strategic planning, thinking, and management is an awareness of resources and an eye to the future environment, so that an organization |

|can successfully respond to changes in the environment. Situation assessment, therefore, means obtaining current information about the |

|organization's strengths, weaknesses, and performance - information that will highlight the critical issues that the organization faces and that|

|its strategic plan must address. These could include a variety of primary concerns, such as funding issues, new program opportunities, changing |

|regulations or changing needs in the client population, and so on. The point is to choose the most important issues to address. The Planning |

|Committee should agree on no more than five to ten critical issues around which to organize the strategic plan. |

| |

|The products of Step Three include: a data base of quality information that can be used to make decisions; and a list of critical issues which |

|demand a response from the organization - the most important issues the organization needs to deal with. |

| |

|Step Four - Developing Strategies, Goals, and Objectives |

|Once an organization's mission has been affirmed and its critical issues identified, it is time to figure out what to do about them: the broad |

|approaches to be taken (strategies), and the general and specific results to be sought (the goals and objectives). Strategies, goals, and |

|objectives may come from individual inspiration, group discussion, formal decision-making techniques, and so on - but the bottom line is that, |

|in the end, the leadership agrees on how to address the critical issues. |

| |

|This can take considerable time and flexibility: discussions at this stage frequently will require additional information or a reevaluation of |

|conclusions reached during the situation assessment. It is even possible that new insights will emerge which change the thrust of the mission |

|statement. It is important that planners are not afraid to go back to an earlier step in the process and take advantage of available information|

|to create the best possible plan. |

| |

|The product of Step Four is an outline of the organization's strategic directions - the general strategies, long-range goals, and specific |

|objectives of its response to critical issues. |

| |

|Step Five - Completing the Written Plan |

|The mission has been articulated, the critical issues identified, and the goals and strategies agreed upon. This step essentially involves |

|putting all that down on paper. Usually one member of the Planning Committee, the executive director, or even a planning consultant will draft a|

|final planning document and submit it for review to all key decision makers (usually the board and senior staff). This is also the time to |

|consult with senior staff to determine whether the document can be translated into operating plans (the subsequent detailed action plans for |

|accomplishing the goals proposed by the strategic plan) and to ensure that the plan answers key questions about priorities and directions in |

|sufficient detail to serve as a guide. Revisions should not be dragged out for months, but action should be taken to answer any important |

|questions that are raised at this step. It would certainly be a mistake to bury conflict at this step just to wrap up the process more quickly, |

|because the conflict, if serious, will inevitably undermine the potency of the strategic directions chosen by the planning committee. |

| |

|The product of Step Five is a strategic plan! |

|Index |What are the key concepts and definitions in |[pic] |What do I need to know before I start the planning |

| |strategic planning? | |process? |

|4 - What do I need to know before I start the planning process? |

|[pic] |

|To Plan or Not to Plan |

|Level of Planning |

|Once the Decision to Plan Has Been Made |

|[pic] |

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|The following addresses the concerns of the pre-planning stage. This stage is divided into three phases, each addressing different issues and|

|questions. They are: |

|To plan or not to plan |

|The level of planning |

|Once the decision to plan has been made |

|To Plan or Not to Plan |

|The Benefits of Planning |

|Planning consumes resources, a precious commodity for all nonprofits. As a process that eventually defines the direction and activities of |

|the organization, it can be an overwhelming and daunting task. Despite the overwhelming nature of the process, the benefits of planning can |

|far outweigh the hardships. |

| |

|There are benefits to be gained from the actual planning process, as well as from the final planning document. The very activities that |

|nonprofit staff and boards conduct as part of the planning process empower them to be more effective in their roles-more informed leaders, |

|managers, and decision makers. In addition, the final planning document becomes a tool that can be used to effectively and efficiently manage|

|the organization. |

| |

|The time devoted to the planning process varies from organization to organization and depends on the resources available to devote to the |

|process. Whether you decide to devote only a two day retreat to the process or engage in a twelve month process, your organization will begin|

|to realize the benefits from the start. Some of the fundamental benefits to the planning process and the development of the final plan |

|include: |

|a framework and a clearly defined direction that guides and supports the governance and management of the organization |

|a uniform vision and purpose that is shared among all constituencies |

|an increased level of commitment to the organization and its goals |

|improved quality of services for clients and a means of measuring the service |

|a foundation for fund raising and board development |

|the ability to set priorities and to match resources to opportunities |

|the ability to deal with risks from the external environment and |

|a process to help with crisis management |

| |

|Prerequisites for Planning: Key Factors that Must be in Place Before Beginning the Planning Process |

| |

|As with any major effort, a planning process has its proper time and place in the organization. There are certain organizational elements |

|that must be in place in order to ensure that the planning process will provide the maximum benefit to the organization. It is important to |

|be candid when assessing the organization's readiness to engage in the planning process. Even if you get half way through the planning |

|process before you realize that the organization is not ready, stop and remedy the situation before continuing with the process. |

|Unfortunately, many organizations plan when the organization is not ready. They always have an unsatisfactory planning process and subsequent|

|results. Make sure the following elements are addressed before making the commitment to plan: |

|a commitment of active and involved leadership, with continuous leadership engaged throughout the planning process |

|a resolution of major crises that may interfere with the long range thinking during, commitment to, and participation in the planning process|

|(e.g., insufficient funds for the next payroll, the organization is not operating legally, etc.) |

|a board and staff that are not embroiled in extreme, destructive conflict |

|a board and staff who understand the purpose of planning and what it can and cannot accomplish, as well as consensus about expectations |

|a commitment of resources to adequately assess current programs and the ability to meet current and future client needs and |

|a willingness to question the status quo and to look at new approaches to performing and evaluating the "business" of the organization |

| |

|Level of Planning |

|As with any other organizational effort, you can do a little planning or a lot of planning. "Enough planning" is when your organization's |

|leadership understands and has consensus about a clear organizational direction. |

| |

|Planning Resource Requirements |

|As a nonprofit organization, it is critical to examine what needs you are attempting to address from the planning process and the resources |

|available to engage in the process. It is safe to assume that an organization can expect more benefits from a more informed, more resource |

|intensive process. |

| |

|The key resources required for planning are staff time, board time, and dollars (e.g., market research, consultants, etc.). Specific examples|

|of time resources consumed by the planning process might include time spent: |

|collecting and analyzing environmental information |

|engaging key stakeholders |

|gathering historical financial information, projecting future budgets, and cash flow projections and |

|analyzing options and consequences for potential organizational and program strategies. |

| |

|The amount of resources, time, and money spent on planning should reflect the complexity of the issues you are addressing and the |

|availability of information and resources. Resource requirements will vary for every organization. |

| |

|The Role of an External Consultant |

|For an organization with little or no experience in planning, an external consultant can enhance the planning process by providing the |

|following services: |

|Facilitating of retreats, meetings and the planning process as a whole: The use of a consultant to serve as the "conversation traffic cop" is|

|one method of ensuring that good ideas do not get lost in the emotion of the process or personality of the participants. A consultant can |

|work with an organization to minimize planning barriers that impact effectiveness, using his or her experience as a source of tried and true |

|processes. |

|Training in planning information and processes: It is critical for everyone involved in the planning process to be speaking the same language|

|and using the same planning tools. External consultants can provide that conduit of information flow and education. |

|Providing an objective and different perspective in the process: As an outsider to the organization, the consultant can ask questions and |

|challenge existing traditions, assumptions, and routines more objectively than staff and board members. Often planners do not realize that |

|they are using jargon or have made certain assumptions about their constituency. Having an outside consultant participate in the planning |

|process helps ensure that organizations stay true to one of the prerequisites of engaging in the planning process, the willingness to |

|question the status quo. |

|The process expert role: The consultant who has facilitated and conducted many strategic planning processes can provide significant |

|information and advice on tools and processes that can best accomplish your process and content goals. |

| |

|For a more extensive discussion of the role of the outside consultant, refer to FAQ 14 in this series, Should I Use an External Consultant? |

| |

|Once the Decision to Plan Has Been Made |

|The planning process is like any other process, it needs to be managed. People have many expectations when they hear the word planning. It is|

|important to make sure that everyone is operating from the same set of expectations and knowledge base. Organizations often train key board |

|and staff members in process and planning language before embarking on the planning process. |

| |

|Large groups of individuals are not conducive to the creation of documents and quick decision making. They are more suited to producing |

|feedback, ideas, and suggestions about existing documents or modifying draft decisions after the initial analysis has been completed. A |

|strategic planning committee is one tool that is used to focus the energies and responsibilities of the process. The planning committee |

|spearheads the process, serving as the quarterback of the team, but it does not take sole responsibility for all decision making and all the |

|nuts and bolts work. |

| |

|It is also important to identify the potential information needs of the process. Key decisions will be made during planning. In order for |

|these decisions to be high quality, decision analysts and decision makers need to have appropriate financial, program, and client |

|information. |

| |

|Another tool used in the management of the planning process is a work plan, or a plan to plan. It is an outline of the steps and activities |

|that will take place during the planning process. The plan specifies the tasks, outcomes, resources to be expended (time and financial), and |

|the person(s) responsible in each of the phases in the process. |

| |

|Steps to Prepare for Planning |

|The following items summarize the steps necessary to prepare for the planning process: |

|Obtain a formal commitment to conduct planning, including education of board and staff, if necessary |

|Select a strategic planning committee of no more than five to seven people, a combination of visionaries and "actionaries," or a planning |

|liaison to spearhead the process |

|Develop a workplan or a plan to plan that outlines who is responsible for each outcome and time frames |

|Consider the adequate level of resources (dollars and time) required to conduct an appropriate planning process |

|Index |What are the basic steps in a strategic planning |[pic] |What are the individual roles in the planning |

| |process? | |process? |

|5 - What are the individual roles in the planning process? |

|When involving individuals in a planning process, you must ask and answer several key questions to ensure that each individual's involvement |

|is appropriate and will contribute to the successful execution of the strategic planning process. The key questions that should be answered |

|for your organization include: |

|Why is it important to have a variety of people involved in the planning process? |

|Who should we include in the planning process? When we say stakeholders, who exactly are they? Are there individuals who we might not |

|traditionally think of including, but who might be able to contribute valuable perspectives? What are the issues that must be considered when|

|evaluating an individual's appropriateness and applicability to the planning process? |

|How do we involve individuals in the planning process? What role do these individuals play? What do we expect as a result of their |

|involvement? |

| |

|Planning Should Be an Inclusive Process |

|A planning process should be designed to include all board, staff, and other individuals invested in the success of your organization. An |

|inclusive process: |

|helps to build both internal and external enthusiasm and commitment to the organization and its strategies. Individuals take on ownership of |

|the goals and efforts to achieve the stated outcomes |

|ensures that your informational data base reflects the needs and perceptions of internal individuals and external constituents |

|incorporates a level of objectivity into the process. "Outsiders" can identify jargon or ask critical questions around which "insiders" might|

|make assumptions |

|develops foundations for future working relationships |

|develops uniformity of purpose among all stakeholders |

|establishes a continual information exchange among staff, management, customers, and other key stakeholders. |

|Who Should the Planning Process Include? |

|Ideally, all key stakeholders should be involved in the planning process at some level. Stakeholders are individuals that are invested in the|

|success or failure of your organization's mission. Key stakeholders include those persons who can either significantly help or hinder the |

|implementation of your plan. |

| |

|Key stakeholders may include individuals or groups who you do not traditionally think of including, but are able to contribute valuable |

|perspectives. Examples of key stakeholders may include: |

|Board of Directors: The role of the full board is one of governance and oversight. As the entity responsible for governing the organization, |

|its focus should remain on the ultimate and overreaching goals and strategies necessary to achieve organizational success. Therefore, the |

|full board should be involved in processing environmental information and the approval of the vision, values and priorities. As the governing|

|body, it should formally vote on adopting the plan as the management framework around which the organization will develop its operating |

|plan(s). |

|Staff: Nonprofit staff are a critical ingredient to successful planning - they are the link between the visions and the every day activities |

|of an organization. In an inclusive process, the philosophy is to give staff input and, when appropriate, authority when determining the |

|means of the organization. These individuals have the experience and knowledge around critical success factors that should not be ignored. |

|When staff are not an integral part of the planning discussions, they need to be informed of the decisions that have been made. Involving |

|staff will: |

|ensure the realism of the plan |

|encourage all levels of the organization to take ownership of organizational vision and goals |

|involve the organization's future leadership in the development of its identity and vision |

|unite individual visions into a single collective vision for the organization. |

|You should include staff who are both current (part and full time, salaried, and unpaid) and previous employees. |

|Clients: As nonprofit organizations, our sole reason for existence is to improve the condition of a segment of our society, whether it is |

|feeding hungry or homeless individuals, providing quality cultural experiences to patrons of the arts, or increasing independence for |

|individuals with disabilities. In a planning process, it is critical to ask and answer, "How well are we meeting the needs of our |

|customers/clients or members?" Directly involving these constituents (both current and previous clients) in the planning process is one of |

|the best methods for assessing organizational performance and receiving guidance for future client needs and program foci. |

|Other External Stakeholders: In order for a planning process to be strategic it must address external issues and their potential impact on |

|the organization. Including external stakeholders in the process is one fundamental way of ensuring that these issues will be incorporated |

|into discussions and considered in the organization's future. External stakeholders can educate staff and the board on the perception of the |

|organization in the community, as well as identify areas where services are being duplicated. Involving external key stakeholders in a |

|planning process can establish a solid rapport on which you can develop powerful business relationships. |

| |

|External key stakeholders include: funders (existing and potential), community leaders, competitors, potential collaborators, other agencies |

|in parallel or related fields, volunteers, etc. |

| |

|The Planning Committee |

|It is important to have a formal planning team or committee that spearheads the planning process. The planning committee is not responsible |

|for doing all of the work it is responsible for ensuring that the work gets done. In essence, it becomes the cornerstone of the team: |

|creating initial drafts of planning documents deciding which stakeholders to involve - how and at what stage and prioritizing or narrowing |

|information for the organization to discuss and evaluate. The committee serves to maintain the efficiency of the process. |

| |

|The planning committee should be: |

|limited to no more than five to seven individuals |

|a combination of visionaries (individuals who see what the organization can be) and "actionaries"(those who ask what the current |

|organizational resources will support and ensure that the projected goals and tasks are realistic) |

|a group of individuals who has formal or informal power and the respect of the rest of the organization |

|a combination of board and staff members, including the executive director and the individual who will write the final plan. |

|Index |What do I need to know before I start the |[pic] |What's in a mission statement? | |

| |planning process? | | | |

|6 - What's in a mission statement? |

|[pic] |

|The Need for a Mission Statement |

|What Should be in a Mission Statement |

|How to Write a Mission Statement |

|[pic] |

| |

| |

|In just a few sentences a mission statement needs to communicate the essence of your organization to your stakeholders and to the |

|public. For example: |

|At the Developmental Studies Center we develop, evaluate, and disseminate programs that foster children's ethical, social, and |

|intellectual development. While nurturing children's capacity to think skillfully and critically, we also strive to deepen children's|

|commitment to prosocial values such as kindness, helpfulness, personal responsibility, and respect for others - qualities we believe |

|are essential to leading humane and productive lives in a democratic society. |

| |

|Often, however, organizations want to say more about who they are, what they are doing, and why they are doing it. Therefore, another|

|example of a mission statement format is illustrated by the mission statement developed by the Forest Service. After a brief |

|statement, the Forest Service uses three pages to elaborate its mission, vision, and guiding principles. Excerpts from the expanded |

|statement include: |

|The phrase, "caring for the land and serving the people," captures the Forest Service mission. As set forth in law, the mission is to|

|achieve quality land management under the sustainable multiple-use management concept to meet the diverse needs of people. |

| |

|It includes advocating a conservation ethic... |

| |

|Vision: We are recognized nationally and internationally as a leader in caring for the land and service people... |

| |

|Guiding Principles: To realize our mission and vision, we follow 13 guiding principles ... |

| |

|Neither approach is necessarily the "right" one for your organization. What is important about your mission statement is that one |

|guiding set of ideas is articulated, understood and supported by the organization's stakeholders, board, staff, volunteers, donors, |

|clients, and collaborators. |

| |

|The Need for a Mission Statement |

|In Profiles of Excellence, the Independent Sector lists a clear, agreed upon mission statement first among the four primary |

|characteristics of successful nonprofit organizations. Specifically, the four primary characteristics include: |

|a clear, agreed-upon mission statement |

|a strong, competent executive director |

|a dynamic board of directors |

|an organization-wide commitment to fundraising. |

| |

| |

|The primary importance of the mission statement means that failure to clearly state and communicate your organization's mission can |

|have harmful consequences, including: |

|organization members can waste time "barking up the wrong tree" |

|the organization may not think broadly enough about different possibilities if its mission statement is unclear or overly narrow |

|the organization may not realize when it is time to go out of business |

| |

|Finally, the importance of mission statements is summarized quite eloquently by Lewis Caroll through the words of the Cheshire Cat in|

|Alice in Wonderland, "If you don't know where you're going, it doesn't matter which way you go." Indeed! |

| |

|What Should Be in a Mission Statement? |

|The following concepts are critical in defining "who" your organization is: |

|The Purpose Statement |

|The purpose statement clearly states what your organization seeks to accomplish: Why does your organization exist? What is the |

|ultimate result of your work? |

| |

|Purpose statements usually include two phrases: |

|an infinitive that indicates a change in status, such as to increase, to decrease, to prevent, to eliminate |

|an identification of the problem or condition to be changed. |

| |

|An example of a purpose statement is "to eliminate homelessness." |

| |

|In defining purpose, it is essential to focus on outcomes and results rather than methods: How is the world going to be different? |

|What is going to change? Thus, the purpose of a mental health counseling agency would never be simply "to provide counseling |

|services," for that is describing a method rather than a result. Rather, the purpose might be "to improve the quality of life" for |

|its clients. |

|The Business Statement |

|This statement outlines the "business(es)" (i.e., activities or programs) your organization chooses in order to pursue its purpose. |

|Specifically, you must answer, "What activity are we going to do to accomplish our purpose?" For example, there are many ways to work|

|on the problem of homelessness: |

|to construct housing for homeless individuals |

|to educate the public and advocate for public policy changes |

|to provide job training to homeless individuals. |

| |

|Each of these are different businesses, but they may be different means of achieving the same purpose. |

| |

|Business statements often include the verb "to provide" or link a purpose statement with the words "by" or "through." For example: |

|"To eliminate homelessness by providing job training to homeless individuals." |

| |

|A cautionary note: If the word "and" is in your purpose or business statement, ask yourselves, "Are we really committed to both ideas|

|connected by the word" and, "or have we simply not been able to accept that one idea is more important?" |

|Values |

|Values are beliefs which your organization's members hold in common and endeavor to put into practice. The values guide your |

|organization's members in performing their work. Specifically, you should ask, "What are the basic beliefs that we share as an |

|organization?" |

| |

|Examples of values include: a commitment to excellent services, innovation, diversity, creativity, honesty, integrity, and so on. |

|Values may include beliefs such as: "Eating vegetables is more economically efficient and ecologically responsible than eating beef."|

|(Vegetarian Association) |

| |

|Marvin Weisbord writes in Productive Workplaces that values come alive only when people are involved in doing important tasks. |

|Ideally, an individual's personal values will align with the spoken and unspoken values of the organization. By developing a written |

|statement of the values of the organization, group members have a chance to contribute to the articulation of these values, as well |

|as to evaluate how well their personal values and motivation match those of the organization. |

| |

|The example of a mission statement cited at the beginning of this response sheet includes all three elements of what should be |

|included in a mission statement. To review: |

|At the Developmental Studies Center we develop, evaluate, and disseminate programs [business] that foster children's ethical, social,|

|and intellectual development [purpose]. While nurturing children's capacity to think skillfully and critically, we also strive to |

|deepen children's commitment to prosocial values such as kindness, helpfulness, personal responsibility, and respect for others - |

|qualities we believe are essential to leading humane and productive lives in a democratic society [values]. |

|Below is another example of a mission statement which includes all three elements: |

|The YMCA of San Francisco, based in Judeo-Christian heritage [values], seeks to enhance the lives of all people [purpose] through |

|programs designed to develop spirit, mind and body [business]. |

|In addition to the three elements discussed above, you may want to address the following questions in developing your organization's |

|mission statement: |

|What is the problem or need your organization is trying to address? |

|What makes your organization unique? |

|Who are the beneficiaries of your work? |

| |

|Clearly, the answers to the these questions could be included in the mission statement or added as elaboration of the mission |

|statement. |

| |

|How To Write a Mission Statement |

|There is no formula for finding the wording that best expresses the collective intention of your organization. It can be drafted by |

|one person alone or after input gathered at leadership retreat. The most important issue is that there is consensus on the answers to|

|the questions used in developing the mission statement. |

| |

|One approach is to use time at a board retreat to discuss these questions and find out where the areas of consensus are and where |

|there are differences. There is a "process" benefit to hashing over an organization's mission statement as well. In the course of |

|discussion and debate, new members are introduced to nuances of an organization's mission and changes in the environment, and old |

|members refresh their understanding of both. As a result, the group will have confidence that the mission statement which emerges |

|(whether it is a new statement or a rededication to the old mission statement) is genuinely an articulation of commonly held ideas. |

| |

|Groups are good at many things, but one of them is not writing. Have group discussions about big ideas and concepts and then let one |

|or two individuals draft and redraft the wording before submitting a reworked version for the group to respond to. It is important to|

|circulate the draft mission statement a few times to board, staff, and other stakeholders. Some consultants advise organizations to |

|also seek an outside opinion from someone unfamiliar with the organization to see how easily the mission statement can be understood.|

| |

| |

|Mix with passion, humanity and an eye on the big picture, and keep refining the mission statement until you have a version that |

|people can actively support. |

|Index |What are the individual roles in the planning |[pic] |What's in a vision statement? |

| |process? | | |

|7 - What's in a vision statement? |

|[pic] |

|How a Vision Is Used |

|The Impact of Vision |

|The Process of Creating a Vision |

|[pic] |

| |

| |

|Martin Luther King, Jr. said, "I have a dream," and what followed was a vision that changed a nation. That famous speech is a |

|dramatic example of the power that can be generated by a person who communicates a compelling vision of the future. |

| |

|Management author Tom Peters identified a clear vision of the desired future state of the organization as an essential component of |

|high performance. |

| |

|Widely-read organizational development author Warren Bennis identified a handful of traits that made great leaders great. Among them |

|is the ability to create a vision. |

| |

|So, What Is a Vision and How Do I Get One? |

| |

|A vision is a guiding image of success formed in terms of a contribution to society. If a strategic plan is the "blueprint" for an |

|organization's work, then the vision is the "artist's rendering" of the achievement of that plan. It is a description in words that |

|conjures up a similar picture for each member of the group of the destination of the group's work together. |

| |

|There is one universal rule of planning: You will never be greater than the vision that guides you. No Olympic athlete ever got to |

|the Olympics by mistake; a compelling vision of his or her stellar performance inevitably guides all the sweat and tears for many |

|years. The vision statement should require the organization's members to stretch their expectations, aspirations, and performance. |

|Without that powerful, attractive, valuable vision, why bother? |

| |

|How a Vision is Used |

|John Bryson, the author of Strategic Planning for Public and Nonprofit Organizations, states that typically, a vision is "more |

|important as a guide to implementing strategy than it is to formulating it." This is because the development of strategy is driven by|

|what you are trying to accomplish, your organization's purposes. A mission statement answers the questions: Why does our organization|

|exist? What business are we in? What values will guide us? A vision, however, is more encompassing. It answers the question, "What |

|will success look like?" It is the pursuit of this image of success that really motivates people to work together. |

| |

|A vision statement should be realistic and credible, well articulated and easily understood, appropriate, ambitious, and responsive |

|to change. It should orient the group's energies and serve as a guide to action. It should be consistent with the organization's |

|values. In short, a vision should challenge and inspire the group to achieve its mission. |

| |

|The Impact of Vision |

|John F. Kennedy did not live to see the achievement of his vision for NASA, but he set it in motion when he said, "By the end of the |

|decade, we will put a man on the moon." That night, when the moon came out, we could all look out the window and imagine... And when |

|it came time to appropriate the enormous funds necessary to accomplish this vision, Congress did not hesitate. Why? Because this |

|vision spoke powerfully to values Americans held dear: America as a pioneer and America as world leader. |

| |

|In an amazing longitudinal study on goal setting, Yale University surveyed the graduating class of 1953 on commencement day, to |

|determine if they had written goals for what they wanted their lives to become. Only three percent had such a vision. In 1973, the |

|surviving members of the class of 1953 were surveyed again. The three percent who had a vision for what they wished their lives would|

|become had accumulated greater wealth than the other 97 percent combined. |

| |

|Great wealth, a man on the moon, brother and sisterhood among the races of the globe... what is your organization's vision? |

| |

|Shared Vision |

|To a leader, the genesis of the dream is unimportant. The great leader is the servant of the dream, the bearer of the myth, the story|

|teller. "It is the idea (vision) that unites people in the common effort, not the charisma of the leader," writes Robert Greenleaf in|

|Leadership Crisis. He goes on to write: |

|Optimal performance rests on the existence of a powerful shared vision that evolves through wide participation to which the key |

|leader contributes, but which the use of authority cannot shape.... The test of greatness of a dream is that it has the energy to |

|lift people out of their moribund ways to a level of being and relating from which the future can be faced with more hope than most |

|of us can summon today. |

|The Process for Creating a Vision |

|Like much of strategic planning, creating a vision begins with and relies heavily on intuition and dreaming. |

| |

|As part of the process, you may brainstorm with your staff or your board what you would like to accomplish in the future. Talk about |

|and write down the values that you share in pursuing that vision. Different ideas do not have to be a problem. People can spur each |

|other on to more daring and valuable dreams and visions -- dreams of changing the world that they are willing to work hard for. |

| |

|The vision may evolve throughout a strategic planning process. Or, it may form in one person's head in the shower one morning! The |

|important point is that members of an organization without a vision may toil, but they cannot possibly be creative in finding new and|

|better ways to get closer to a vision without that vision formally in place. Nonprofit organizations, with many of their staff and |

|board members actively looking for ways to achieve a vision, have a powerful competitive and strategic advantage over organizations |

|that operate without a vision. |

| |

|Perceptions of Ideal Futures: An Exercise in Forming Vision |

|This section outlines an exercise you may employ to assist your organization in defining its own vision. By using this exercise to |

|develop your organizational vision, you may be better assured that the vision statement that is developed is a shared vision. |

| |

|At a retreat, or even at a board meeting or staff meeting, take an hour to explore your vision. Breaking into small groups helps |

|increase participation and generate creativity. Agree on a rough time frame, say five to ten years. Ask people to think about the |

|following questions: How do you want your community to be different? What role do you want your organization to play in your |

|community? What will success look like? |

| |

|Then ask each group to come up with a metaphor for your organization, and to draw a picture of success: "Our organization is like ...|

|a mariachi band - all playing the same music together, or like a train - pulling important cargo and laying the track as we go, or |

|...." The value of metaphors is that people get to stretch their minds and experiment with different ways of thinking about what |

|success means to them. |

| |

|Finally, have all the groups share their pictures of success with each other. One person should facilitate the discussion and help |

|the group discuss what they mean and what they hope for. Look for areas of agreement, as well as different ideas that emerge. The |

|goal is to find language and imagery that your organization's members can relate to as their vision for success. |

| |

|Caution: Do not try to write a vision statement with a group. (Groups are great for many things, but writing is not one of them!). |

|Ask one or two people to try drafting a vision statement based on the group's discussion, bring it back to the group, and revise it |

|until you have something that your members can agree on and that your leaders share with enthusiasm. |

|Index |What's in a mission statement? |[pic] |What is a situation assessment? | |

|8 - What is a situation assessment? |

|[pic] |

|Gathering Perceptions About the Organization |

|Evaluation of Programs |

|[pic] |

| |

| |

|Strategic planning must include an assessment of the organization's environment because no organization operates in a vacuum. The |

|very definition of strategic planning stresses the importance of focusing on the future within the context of an ever-changing |

|environment - the myriad of political, economic, social, technological, demographic, and legal forces that change our world daily. |

|Skill at assessing the environment and then being proactive in responding to that environment (i.e., strategic planning, thinking, |

|and management) determines who is effective in using their resources and, ultimately, who survives. |

| |

|The situation assessment outlines the process of gathering and analyzing the information needed to make an explicit evaluation of an |

|organization in its environment. The situation assessment includes the following activities: |

|collecting internal and external stakeholders' perceptions about the organization |

|evaluating programs' impact on clients |

|evaluating programs through cost/benefit analysis |

|analyzing programs through competitive analysis |

|defining previous implied strategies |

| |

|At the conclusion of a situation analysis, a strategic planner will have a database of quality information that can be used to make |

|decisions and a list of critical issues which demand a response from the organization -- the most important issues the organization |

|needs to deal with in the strategic planning process. |

| |

|Gathering Perceptions about the Organization |

|Part of getting a clear view of the environment and dynamics of an organization is to look at it through others' eyes; both internal |

|and external stakeholders' perceptions of the organization will add valuable information to the situation assessment. The SWOT |

|technique, a simple and effective vehicle for collecting this information, helps focus the process by breaking it down into four |

|broad categories: |

|S - What are the organization's internal Strengths? |

| |

|W - What are the organization's internal Weaknesses? |

| |

|O - What external Opportunities might move the organization forward? |

| |

|T - What external Threats might hold the organization back? |

| |

| |

|Evaluating an organization's general strengths and weaknesses, as well as the strengths and weaknesses specific to each of its |

|programs, typically includes assessments of: |

|staff and board capabilities |

|quality of programs |

|reputation of both the organization and individual programs |

|management information and financial systems |

|office facilities and equipment, etc. |

| |

|Successful organizations exploit strengths rather than just focus on weaknesses. In other words, this process isn't just about fixing|

|the things that are wrong, but also nurturing what is right. |

| |

|The same kind of thinking should apply to how an organization approaches its opportunities and threats -- the external trends that |

|influence the organization. These are usually categorized into political, economic, social, technological, demographic and legal |

|(PESTDL) forces. These external forces include such circumstances as changing client needs, increased competition, changing |

|regulations, and so on. They can either help an organization move forward (opportunities) or hold an organization back (threats) -- |

|but opportunities that are ignored can become threats, and threats that are dealt with appropriately can be turned into |

|opportunities. |

| |

|Gathering Board and Staff Perceptions of the Organization |

|Since SWOT analysis is a primary means of receiving input from a broad and representative constituency, it is important to include as|

|many staff and board (your internal stakeholders) as possible in this process. Their ideas and opinions might be collected through |

|questionnaires, telephone or in-person interviews, facilitated organization-wide or small-group meetings, or a combination of these |

|methods. Some organizations have board and staff meet together to discuss their ideas and opinions, while others have them meet |

|separately. A common and useful approach used during meetings is to brainstorm ideas onto flipcharts. |

| |

|After the lists of strengths, weaknesses, opportunities, and threats have been recorded, the listed ideas can be grouped into logical|

|topic or issue groups (e.g., all the ideas related to staffing or program development should be grouped together) to make the data |

|easier to present and analyze. |

| |

|Gathering External Stakeholders' Perceptions |

|Just as the above SWOT assessment allows an organization to collect a wide variety of perceptions from internal stakeholders, a SWOT |

|assessment of those outside the organization can also add a great deal to the situation analysis. External stakeholders (such as |

|clients, funders, community leaders, and potential collaborators) can give the planning committee insight into community opinions of |

|what the organization does well, where it can improve, unmet community needs it might address, and other potential opportunities or |

|threats. Again, this information might be gathered through telephone or in-person interviews (preferably), questionnaires, or focus |

|groups. In addition to their general perceptions of the organization's strengths, weaknesses, opportunities, and threats, external |

|stakeholders might also be asked some questions specific to their outsider perspective. For example: |

|What are the organization's strengths and weaknesses? What opportunities and threats does the organization face? |

|What does the stakeholder need or expect (criteria for performance) from the organization? |

|How well does the organization perform against those criteria (excellent, good, fair, or poor) and why? |

|How well does the organization perform relative to its competitors? |

| |

| |

|Evaluation of Programs |

|A key component of an organization's situation assessment is the evaluation of its programs' effectiveness and efficiency. This |

|evaluation will provide data about whether to continue or discontinue each program, maintain it at its existing level, expand or |

|change its direction, market it aggressively, and so on. Most program evaluations focus on both outcome, or results, and process, or |

|methods. Outcome evaluation looks at whether a project achieved its planned results. Process evaluation looks at internal project |

|management, both staff performance and the extent to which the project is successfully implemented. |

| |

|The program evaluations can be based on quantitative and/or qualitative data. Quantitative data consists of fact-based information |

|such as records review, descriptive statistics, inferential statistics, examinations results, and the like. It is more easily |

|collected and less easily disputed because it translates experience into quantifiable data that can be counted, compared, measured, |

|and manipulated statistically. Qualitative data consists of what people "say" about the programs, based on interviews, focus groups |

|or other meetings, direct or field observation, reviews of written materials, informal feedback, satisfaction surveys, and |

|questionnaires. |

| |

|Program Outcome Studies |

|In addition to examining the resources required to operate a program, an organization can also more generally assess the program's |

|impact on clients, using the following considerations: |

|inputs - the resources that are required to operate the program; |

|throughputs - how the program is operated |

|outputs - the immediate, observable results of the program |

|outcomes - how the program affects the client's life or society |

|impact - the program's benefit to the client or society |

| |

|The key measures of effectiveness, outcomes, and impact are the most difficult to measure but are important to keep in mind. |

| |

|Cost/Benefit Analysis of Program Services |

|One approach to evaluating organization programs is a cost/benefit analysis. As the name indicates, this entails comparing the costs |

|of providing a service or product with the benefit to be gained. The analysis begins by answering a series of important questions: |

|What are the projected costs (direct and indirect) of the program? |

|What are the revenue benefits to be gained? |

|What are the direct service benefits? |

|What would it cost to purchase the benefits on the open market? |

|What intangible benefits are gained by either the organization or the client? |

|What assumptions, risks, organizational capabilities, alternative methods, foreseeable changes, and other considerations need to be |

|taken into account? |

| |

|Unfortunately, doing a cost/benefit analysis on a particular service often proves difficult for nonprofits. Unlike the for-profit |

|sector which uses the measurement of profit gained for owners and stakeholders as its primary benchmarks for benefits, nonprofits do |

|not usually have an explicit indicator of benefits. Moreover, there may not be comparable services or products with clearly defined |

|prices available on the open market. Finally, some benefits may be difficult to quantify because they are intangible, or literally |

|unmeasurable. How, for example, could an organization measure the benefit gained by providing one woman and her child shelter and |

|support for two weeks? Yes, the cost of comparable services or products could be calculated, if they were available, but that would |

|not begin to measure the intangible value. |

| |

|If an organization offers a service for which no comparable alternative exists, or if the organization cannot define what the cost |

|would be to society if the service were not provided, a cost/benefit analysis will be difficult to do. If, however, competing |

|products exist whose benefits can be readily measured, then an organization should be able to calculate and compare its costs and |

|benefits to those of the competing product. In any case, cost/benefit analysis should not be used as the sole criteria for accepting |

|or rejecting a project or even measuring success, but it can prove a helpful tool when it comes time to make difficult choices about |

|how to use scarce resources. |

|Index |What's in a vision statement? |[pic] |How can we do a competitive analysis? |

|9 - How can we do a competitive analysis? |

|Nonprofits have not traditionally been thought of as organizations that need to be competitively oriented. Unlike for-profit |

|businesses, which compete for customers and whose very survival depends on providing services or products to satisfied, paying |

|"clients," many nonprofit organizations operate in a non-market, or grants, economy - one in which services may not be commercially |

|viable. In other words, the marketplace may not supply sufficient resources to support an adequate, ongoing provider base. Moreover, |

|the customer (client) does not decide which provider gets adequate, ongoing funding. (In fact, many nonprofits are considered |

|"sole-source," the only place to get the service, so there is not necessarily any choice in which provider receives funding even if |

|the client does have some say). Consequently, nonprofit organizations have not necessarily had an incentive to question the status |

|quo, to assess whether client needs were being met, or to examine the cost-effectiveness or quality of available services. |

| |

|The competitive environment has changed, however: funders and clients, alike, are beginning to demand more accountability; |

|sole-sourced nonprofits are finding that their very success is encouraging others to enter the field and compete for grants; and |

|grant money and contributions are getting harder to come by, even as need and demand increase. This last trend - increasing demand |

|for a smaller pool of resources, requires today's nonprofits to rethink how they do business, to compete where appropriate, to avoid |

|duplicating existing comparable services, and to increase collaboration, when possible. |

| |

| |

|The MacMillan Matrix for Competitive Analysis of Programs |

| |

|The MacMillan Matrix is an extraordinarily valuable tool that was specifically designed to help nonprofits assess their programs in |

|that light. The matrix is based on the assumption that duplication of existing comparable services (unnecessary competition) among |

|nonprofit organizations can fragment the limited resources available, leaving all providers too weak to increase the quality and |

|cost-effectiveness of client services. The matrix also assumes that trying to be all things to all people can result in mediocre or |

|low-quality service; instead, nonprofits should focus on delivering higher-quality service in a more focused (and perhaps limited) |

|way. The matrix therefore helps organizations think about some very pragmatic questions: |

|Are we the best organization to provide this service? |

|Is competition good for our clients? |

|Are we spreading ourselves too thin, without the capacity to sustain ourselves? |

|Should we work cooperatively with another organization to provide services? |

| |

|Using the MacMillan Matrix is a fairly straightforward process of assessing each current (or prospective) program according to four |

|criteria, described below. |

| |

|1. Fit |

| |

|Fit is the degree to which a program "belongs" or fits within an organization. Criteria for "good fit" include: |

|congruence with the purpose and mission of the organization; |

|ability to draw on existing skills in the organization; and |

|ability to share resources and coordinate activities with programs. |

| |

|2. Program Attractiveness |

| |

|Program attractiveness is the degree to which a program is attractive to the organization from an economic perspective, as an |

|investment of current and future resources (i.e., whether the program easily attracts resources). Any program that does not have high|

|congruence with the organization's purpose should be classified as unattractive. No program should be classified as highly attractive|

|unless it is ranked as attractive on a substantial majority of the criteria below: |

|high appeal to groups capable of providing current and future support |

|stable funding |

|market demand from a large client base |

|appeal to volunteers |

|measurable, reportable program results |

|focus on prevention, rather than cure |

|able to discontinue with relative ease, if necessary (i.e., low exit barriers) |

|low client resistance to program services |

|intended to promote the self-sufficiency or self-rehabilitation of client base |

| |

|3. Alternative Coverage |

| |

|Alternative coverage is the extent to which similar services are provided. If there are no other large, or very few small, comparable|

|programs being provided in the same region, the program is classified as "low coverage." Otherwise, the coverage is "high." |

| |

| |

|4. Competitive Position |

| |

|Competitive position is the degree to which the organization has a stronger capability and potential to deliver the program than |

|other agencies - a combination of the organization's effectiveness, quality, credibility, and market share or dominance. Probably no |

|program can be classified as being in a strong competitive position unless it has some clear basis for declaring superiority over all|

|competitors in that program category. Criteria for a strong competitive position include: |

|good location and logistical delivery system; |

|large reservoir of client, community, or support group loyalty; |

|past success securing funding; |

|superior track record (or image) of service delivery; |

|large market share of the target clientele currently served; |

|gaining momentum or growing in relation to competitors; |

|better quality service and/or service delivery than competitors; |

|ability to raise funds, particularly for this type of program; |

|superior skill at advocacy; |

|superiority of technical skills needed for the program; |

|superior organizational skills; |

|superior local contacts; |

|ability to conduct needed research into the program and/or properly monitor program performance; |

|superior ability to communicate to stakeholders; and |

|most cost effective delivery of service. |

| |

|After each program is assessed in relation to the above four criteria, each is placed in the MacMillan matrix, as follows. For |

|example, a program that is a good fit, is deemed attractive and strong competitively, but for which there is a high alternative |

|coverage would be assigned to Cell No. 1, Aggressive Competition. |

| |

|High Program Attractiveness: |

|"Easy" Program |

|Low Program Attractiveness: |

|"Difficult" Program |

| |

| |

|Alternative Coverage |

|High |

|Alternative Coverage |

|Low |

|Alternative Coverage |

|High |

|Alternative Coverage |

|Low |

| |

|GOOD FIT |

|Strong Competitive Position |

|1. Aggressive Competition |

|2. Aggressive Growth |

|5. Build up the Best Competitor |

|6. "Soul of the Agency" |

| |

| |

|Weak Competitive Position |

|3. Aggressive Divestment |

|4. Build Strength or Get Out |

|7. Orderly Divestment |

|8. "Foreign Aid" or Joint Venture |

| |

|POOR FIT |

| |

| |

|9. Aggressive Divestment |

|10. Orderly Divestment |

| |

| |

|Once all programs have been placed in the appropriate positions on the matrix, an organization can review its mix of programs, |

|sometimes called a "program portfolio," and decide if any adjustments need to be made. Ideally, an organization would have only two |

|types of programs. The first would be attractive programs (programs that attract resources easily), in areas that the organization |

|performs well and can compete aggressively for a dominant position. |

| |

|These attractive programs can be used to support the second program type: the unattractive program with low coverage. The |

|unattractive program is considered unattractive by funders, with low alternative coverage, but makes a special, unique contribution |

|and in which the organization is particularly well-qualified. These programs typically fall under Cell No. 6, the soul of the agency.|

|These programs are known as the "soul of the agency" because the organization is committed to delivering the program even at the cost|

|of subsidizing it from other programs. An organization cannot afford to fund unlimited "souls," and it might have to face some |

|difficult decisions about how to develop a mix of programs that ensure organizational viability as well as high-quality service to |

|clients. |

| |

|For example, five years ago there was little funding for case management by AIDS Service Organizations. Unwilling to let clients fend|

|for themselves in getting the help they needed, many organizations devoted staff time to this service. At the time this was a "soul |

|of the agency" program. These days, this program is more attractive (i.e., fundable) though there is also growing alternative |

|coverage. Therefore, organizations in a strong position to serve the clients well, with cultural competence and program expertise, |

|should aggressively compete: those in a weak competitive position should get out of the business. |

| |

|Articulating Previous Strategies |

| |

|Most organizations operate within the guidelines of certain program and organizational strategies, although often these have neither |

|been recognized or articulated as actual strategies. Once an organization is in the process of strategic planning, however, it is |

|time to make explicit these unspoken strategies and incorporate them into this deliberate consideration of the organization's future |

|directions. This should happen as part of the situation assessment: look for past patterns of operation or allocation of resources --|

|these are your previous strategies; analyze whether those strategies were effective, and why; and consider whether or not they should|

|be held as strategies for the future. |

| |

|Identification of Critical Issues |

| |

|Upon completion of the situation assessment, a planning committee should be in a position to identify all of the critical issues, or |

|fundamental problems or choices, facing the organization, and then begin to address those issues and identify priorities. A first |

|attempt will probably result in a very long list of "critical" issues. Some might indeed be critical, but require no action at |

|present and should, therefore, be monitored; some will require immediate attention, and as such should be dealt with accordingly; and|

|some will be of critical importance to the long-term viability and success of the organization. Those are the issues (usually no more|

|than six to eight issues qualify) that become the framework for the decisions that must be made next: decisions regarding strategies,|

|long-range goals and objectives, and financial requirements. |

| |

|To arrive at this final list of true critical issues, the planning committee should brainstorm a list of issues that might qualify |

|and then assess each issue by asking: Why is it an issue? What are the consequences of not responding to this issue in the near |

|future ? Why does the issue need immediate attention? Why is it a critical issue? Again, the final list should include no more than |

|six to eight items; beyond that, the organization is in danger of losing focus and sabotaging its own best intentions. |

| |

|Finally, additional research may be needed, in order to gather specific information about new opportunities which can be pursued. |

|This might include: description of new target markets and their needs; description of new products and/or services with descriptions |

|of start-up costs, competitor analysis, long-term financial projections, and break-even analysis. |

|Index |What is a situation assessment? |[pic] |What is a strategy and how do we develop one? |

|10 - What is a strategy and how do we develop one? |

|[pic] |

|When to Develop Strategies |

|How to Develop Strategies |

|Additional Strategies for Your Organization |

|[pic] |

| |

| |

|In strategic planning it is critical to formally consider how your organization will accomplish its goals. The answer to this |

|question is a strategy. There are a variety of formal definitions for strategies, but everyone fundamentally agrees that a strategy |

|is the answer to the question, "How?" |

|"Strategies are simply a set of actions that enable an organization to achieve results." |

|MAP for Nonprofits, St. Paul, MN |

|"Strategy is a way of comparing your organization's strengths with the changing environment in order to get an idea of how best to |

|complete or serve client needs." |

|Jim Fisk & Robert Barron, The Official MBA Handbook |

|Essentially, there are three different categories of strategies: organizational, programmatic, and functional. The difference among |

|the categories is the focus of the strategy: |

|Organizational strategy outlines the planned avenue for organizational development (e.g., collaborations, earned income, selection of|

|businesses, mergers, etc.). |

|Programmatic strategy addresses how to develop, manage and deliver programs (e.g., market a prenatal care service to disadvantaged |

|expectant mothers by providing information and intake services in welfare offices). |

|Functional strategies articulate how to manage administration and support needs that impact the organization's efficiency and |

|effectiveness (e.g., develop a financial system that provides accurate information using a cash accrual method). |

| |

|When to Develop Strategies |

|Strategy development follows the creation and affirmation of the organization's purpose statement, environmental and program data |

|collection and analysis, and identification of critical issues. It is critical that strategy development follow these steps because |

|the information gathered and decisions made in these phases are the foundation for strategy creation and selection (see also FAQ 1, |

|What is Strategic Planning?, and FAQ 8, What is a Situation Assessment?). Each of these steps provides the following: |

|The purpose statement, the statement of the organization's ultimate goal, provides the direction to which the strategies should |

|ultimately lead. |

|External market data and program evaluation results provide critical data to support strategy development. Without this information |

|and insight, the organization's strategies will not be in alignment with or effective in the marketplace. |

|The critical issues list serves as the specific focus and framework for the activities of the organization and the pattern of these |

|activities (developing and selecting the strategies). |

| |

|How to Develop Strategies |

|Strategy formulation is a combination of rational, scientific examinations and educated, intuitive best guesses. Many individuals are|

|overwhelmed by the idea of developing strategies, but it can be a fun and invigorating process. The process entails: |

|examining the organization's critical issues |

|determining how the organization's strengths and skills can be employed to address the critical issues |

|analyzing opportunities and strengths and looking for ways to synthesize the two |

|exploring and choosing the best approaches for the organization. |

|During this evaluation ask these key questions: Does the strategy meet/address critical issues? Is this aligned with our mission? Is |

|this approach financially viable? |

| |

|One effective method of strategy generation is to list critical issues and organizational strengths onto flipcharts and then have |

|staff or board members brainstorm possible uses of those strengths or other skills to address the critical issues. Once the |

|brainstorm session is completed, use a roundtable discussion to investigate and evaluate the possible strategies. Remember to develop|

|a list of alternative strategies to investigate and keep in the contingency planning file. |

| |

|It is important not to discount the ideas that come to people during non-working hours. The Polaroid camera is the result of a three |

|year old's question to her father: "Dad, why can't I see the picture now?" |

| |

|Strategy of Development Tools |

|A number of analytical tools have been developed to assist organizations with the planning process (see also FAQ 8, What is a |

|Situation Assessment? and FAQ 9, How Can We Do A Competitive Analysis? for a more detailed discussion of these tools). Many nonprofit|

|organizations have adapted these tools, modifying the questions and criteria to align with their own specific services and markets. |

|Listed below are analytical tools frequently used by nonprofit and for-profit organizations. |

| |

|SWOT Analysis |

|SWOT analysis is a methodology of examining potential strategies derived from the synthesis of organizational strengths, weaknesses, |

|opportunities and threats (SWOT). The partnering of the different elements and the extensive data collected as a result of the |

|analysis can serve as a spark for roundtable discussions and refinement of current strategies or generation of new strategies. |

| |

|The MacMillan Matrix |

|This strategy grid, developed by Dr. Ian MacMillan, is specifically designed to assist nonprofit organizations to formulate |

|organizational strategies. There are three assumptions underlying this approach: |

|the need for resources is essentially competitive and all agencies wanting to survive must acknowledge this dynamic |

|given that resources are scarce, there is no room for direct duplication of services to a single constituency -- this is wasteful and|

|inefficient |

|mediocre or low quality service to a large client population is less preferable to delivering higher quality services to a more |

|focused population. |

|These assumptions have implications that are difficult and painful for many organizations and individuals. It might mean terminating |

|some programs to improve core services and competencies, giving programs and clients to more efficient, effective agencies, or |

|competing aggressively with those programs that are less effective or efficient. |

| |

|MacMillan's matrix examines four program dimensions that guide placement on the strategy grid and indicate implied strategies. |

|Alignment with Mission Statement |

|Services or programs that are not in alignment with the organizational mission, unable to draw on existing organizational skills or |

|knowledge, unable to share resources, and/or unable to coordinate activities across programs should be divested. |

|Competitive Position |

|Competitive position addresses the degree to which the organization has a stronger capability and potential to fund the program and |

|serve the client base than the competitive agencies. |

|Program Attractiveness |

|Program attractiveness is the complexity associated with managing a program. Programs that have low client resistance, a growing |

|client base, easy exit barriers, and stable financial resources are considered simple or "easy to administer." The level of program |

|attractiveness also includes an economic perspective or a review of current and future resource investments. |

|  |

|Alternative Coverage |

|Alternative coverage is the number of other organizations attempting to deliver or succeeding in delivering a similar program in the |

|same region to similar constituents. |

| |

|The MacMillan Matrix provides ten cells in which to place programs that have been reviewed in terms of these four dimensions. Each |

|cell is assigned a strategy that directs the future of the program(s) listed in the cell (e.g., aggressive competition, joint |

|venture, orderly divestment, etc.). One cell of the matrix, "Soul of the Agency," requires additional explanation. These are the |

|difficult programs for which the organization is often the clients' "last, best hope." Management must find ways to use the programs |

|in other cells to develop, piggyback, subsidize, leverage, promote, or otherwise support the programs in this category. |

| |

|For more information on the MacMillan Matrix, please refer to FAQ #9, How Can We Do A Competitive Analysis? |

| |

|Additional Strategies for Your Organization |

|Listed below are several strategies applicable to both the organizational and program levels, adapted from Philip Kotler's Strategic |

|Marketing for Nonprofit Organizations. From a social need and services perspective, some are more desirable than others. |

|Surplus Maximization |

|An agency runs its organization in a manner that increases the amount of resources on hand. Usually this strategy is adopted to |

|accumulate resources for expansion or growth. |

|Revenue Maximization |

|An agency manages its organization to generate the highest possible revenues, perhaps in an effort to establish a reputation or |

|critical mass. |

|Usage Maximization |

|An agency works to serve the highest number of users of their services. This strategy can be used to position the organization or |

|program for funding or budgetary purposes. |

|Usage Targeting |

|An agency provides services in a manner that encourages serving a specific number or type of constituents. This strategy is used to |

|address unmet needs of specific populations or to cover the costs associated with providing services. |

|Full Cost Recovery |

|An agency manages its programs and services so that it financially breaks even, providing as much service as the finances will allow.|

|Many nonprofits adopt this strategy in an effort to provide services without entering fiscal crisis. |

|Partial Cost Recovery |

|An organization operates with a chronic deficit every year, providing services that are critical and cannot be provided at a break |

|even level of costs (e.g., mass transit or the Post Office). These organizations rely on public and private foundations, individuals,|

|and governments to cover the annual deficit. |

|Budget Maximization |

|An agency maximizes the size of its staff, services, and operating expenditures regardless of revenue/cost levels. Organizations that|

|are concerned with reputation and the impact of trimming services or infrastructure on that reputation employ this strategy. |

|Producer Satisfaction Maximization |

|An organization operates towards a goal of satisfying the personal/professional needs of a founder, staff, or board of directors |

|rather than the established needs of external clients and customers. |

|Fees for Service |

|An organization provides services to clients for a fee. The fee is typically below market rates and does not cover the full cost of |

|providing the services. |

|New Revenue Strategies |

|An organization uses direct marketing activities designed to generate new sources of revenue from specific funders. Examples include |

|starting a new service or program, approaching a new funder, changing the way services are provided, or setting up a profit making |

|venture. |

|Legitimization Strategies |

|An organization works to communicate to the community that it is conforming to existing standards and norms - that it is a legitimate|

|and worthy participant in the sector. Examples include adapting services to funder priorities, contributing non cash or cash |

|resources to other nonprofit organizations, or seeking endorsements or board participation from prominent individuals. |

|Retrenchment Strategies |

|An organization emphasizes efforts to reduce internal costs to offset the potential or real loss of revenues or grant monies. |

|Examples include increasing staff workloads, increasing use of part time or volunteer staff, eliminating services or programs, or |

|reducing non-fixed expenses such as training or supplies. |

|Index |How can we do a competitive analysis? |[pic] |What should a strategic plan include? |

|11 - What should a strategic plan include? |

|[pic] |

|The Draft and Review Process |

|Standard Format for a Strategic Plan |

|[pic] |

| |

| |

|The end is in sight! Now that everyone has had a chance to contribute their ideas, the options have been wrestled with, the choices |

|have been made, and the details worked out, all that remains is to commit the ideas to paper and make it official. |

| |

|The Draft and Review Process |

|First of all, who actually writes the plan? Remember that writing is done most efficiently by one or two individuals, not by a whole |

|group - the writer simply crafts the presentation of the group's ideas. Often an executive director will draft the plan, or the task |

|may be delegated to a staff person, board member, or a consultant who has been working with the planning committee. In the end, it |

|really does not matter who writes the strategic plan; what matters is that it accurately documents the decisions made, that it |

|represents a shared vision, and that it has the support of those responsible for carrying it out. |

| |

|That is why the process of review and approval is the most important consideration in this step - much more so than who does the |

|writing. The planners should decide in advance who may review and respond to the draft plan; obviously committee members will |

|participate in the review process, but should the full board and the full staff? The guiding principle of participation in the |

|strategic planning process is that everyone who will help execute the plan should have some input into shaping it; whether or not |

|this includes review of the final drafts of the plan is a judgment call that really depends upon the particular circumstances of an |

|organization. |

| |

|Ideally, the big ideas have been debated and resolved, so that revisions only amount to small matters of adding detail, revising |

|format, or changing some wording in a particular section. Still, if reviewers get bogged down in crossing too many t's and dotting |

|too many i's, the plan could linger in draft form forever. The planning committee must exercise leadership in setting a realistic |

|time frame for the review process and in bringing the process to a timely close: the committee needs to choose the level of review |

|appropriate for the organization, provide copies for review to the selected individuals, and set a deadline for submitting feedback |

|(usually allowing one to two weeks is sufficient). Upon receiving all the feedback, the committee must agree on which suggested |

|revisions to accept, incorporate these into the document, and submit the strategic plan to the full board of directors for approval. |

| |

|Standard Format for a Strategic Plan |

|A strategic plan is a simply a document that summarizes, in about ten pages of written text, why an organization exists, what it is |

|trying to accomplish, and how it will go about doing so. Its "audience" is anyone who wants to know the organization's most important|

|ideas, issues, and priorities: board members, staff, volunteers, clients, funders, peers at other organizations, the press, and the |

|public. It is a document that should offer edification and guidance - so, the more concise and ordered the document, the greater the |

|likelihood that it will be useful, that it will be used, and that it will be helpful in guiding the operations of the organization. |

|Below is an example of a common format for strategic plans, as well as brief descriptions of each component listed, which might help |

|writers as they begin trying to organize their thoughts and their material. This is just an example, however, not the one and only |

|way to go about this task. The point of the document is to allow the best possible explanation of the organization's plan for the |

|future, and the format should serve the message. |

| |

|TABLE OF CONTENTS |

|The final document should include a table of contents. These are the sections commonly included in a strategic plan: |

|I. Introduction by the President of the Board |

|A cover letter from the president of the organization's board of directors introduces the plan to readers. The letter gives a "stamp |

|of approval" to the plan and demonstrates that the organization has achieved a critical level of internal agreement. (This |

|introduction is often combined with the Executive Summary below.) |

|II. Executive Summary |

|In one to two pages, this section should summarize the strategic plan: it should reference the mission and vision; highlight the |

|long-range goals (what the organization is seeking to accomplish); and perhaps note the process for developing the plan, as well as |

|thank participants involved in the process. From this summary, readers should understand what is most important about the |

|organization. |

|III. Mission and Vision Statements |

|These statements can stand alone without any introductory text, because essentially they introduce and define themselves. |

|IV. Organization Profile and History |

|In one or two pages, the reader should learn the story of the organization (key events, triumphs, and changes over time) so that he |

|or she can understand its historical context (just as the planning committee needed to at the beginning of the planning process). |

|V. Critical Issues and Strategies |

|Sometimes organizations omit this section, choosing instead to "cut to the chase" and simply present goals and objectives. However, |

|the advantage of including this section is that it makes explicit the strategic thinking behind the plan. Board and staff leaders may|

|refer to this document to check their assumptions, and external readers will better understand the organization's point of view. The |

|section may be presented as a brief outline of ideas or as a narrative that covers several pages. |

|VI. Program Goals and Objectives |

|In many ways the program goals and objectives are the heart of the strategic plan. Mission and vision answer the big questions about |

|why the organization exists and how it seeks to benefit society, but the goals and objectives are the plan of action - what the |

|organization intends to "do" over the next few years. As such, this section should serve as a useful guide for operational planning |

|and a reference for evaluation. For clarity of presentation, it makes sense to group the goals and objectives by program unit if the |

|organization has only a few programs; if some programs are organized into larger program groups (e.g., Case Management Program in the|

|Direct Services Program Group), the goals and objectives will be delineated at both the group level and the individual program level.|

| |

|VII. Management Goals and Objectives |

|In this section the management functions are separated from the program functions to emphasize the distinction between service goals |

|and organization development goals. This gives the reader a clearer understanding both of the difference and the relationship between|

|the two sets of objectives, and enhances the "guiding" function of the plan. |

|VIII. Appendices |

|The reason to include any appendices is to provide needed documentation for interested readers. Perhaps no appendices are truly |

|necessary (many organizations opt for brevity). They should be included only if they will truly enhance readers' understanding of the|

|plan, not just burden them with more data or complicating factors. |

|Index |What is a strategy and how do we develop one? |[pic] |How do you develop an annual operating plan? |

|12 - How do you develop an annual operating plan? |

|Upon completion of the strategic plan, an operating plan for the upcoming year must be prepared. An operating plan is a schedule of events |

|and responsibilities that details the actions to be taken in order to accomplish the goals and objectives laid out in the strategic plan. An |

|organization should have annual operating plans that corresponds to its fiscal year for each major organizational unit. The plan ensures |

|everyone knows what needs to get done, coordinates their efforts when getting it done, and can keep close track of whether and how it got |

|done. |

| |

|Imagine you are driving a car on a camping vacation. It is important to have a destination in mind -- your "long-range goal." The destination|

|alone, however, is not enough to get you there successfully. You need to have detailed instructions about which roads to take, when to make |

|turns, estimated distance and time, where you can stop for food and gas, gauges that tell you how much gas you have in your tank, and warning|

|systems to tell you if the engine gets overheated. |

| |

|Now imagine that you are not driving the car alone, but instead you have twenty people doing different jobs simultaneously: your |

|organization's executive director is at the steering wheel with a couple of board members looking over his or her shoulder, but four others |

|are at each of the wheels making them spin; other people are looking out each window, reporting what they see to the driver, and someone else|

|is in the back making sandwiches. It is going to take an impressive plan to move this crew in the same direction. |

| |

|This is the stuff of operating plans: which programs and management functions are going to do what, by when, and how much "gas" (money and |

|person power) it will require. This level of detail is unnecessary in a strategic plan itself -- in fact, it would clutter up the |

|presentation of the long-range vision: the strategic plan focuses on the swimming hole at the camp you are going to, not which gas station to|

|stop at along the way. |

| |

|Characteristics of an Effective Annual Operating Plan |

|There are three important attributes to good operating plan: |

|an appropriate level of detail -- enough to guide the work, but not so much that it becomes overwhelming, confusing, or unnecessarily |

|constrains creativity |

|a format that allows for periodic reports on progress toward the specific goals and objectives |

|a structure that coincides with the strategic plan -- the goal statements for the strategic plan and the operating plan are one and the same;|

|the objective statements for the strategic plan and the operating plan will be different. |

| |

|Just as monthly financial statements often present a budget for revenues and expenses and then report actual figures for a given time period,|

|so should operating plans allow for the same type of comparison: the plan declares the "budgeted" work in terms of goals and objectives for |

|each program area and management function, and reports the actual progress on a monthly or, perhaps, quarterly basis. This "budget-to-actual"|

|report gives a clear reading on how the "trip" is going. |

|Index |What should a strategic plan include? |[pic] |How do we increase our chance of implementing our |

| | | |strategic plan? |

|13 - How do we increase our chance of implementing our strategic plan? |

|Organizations and their leadership are often reluctant to commit time and resources to a planning process because of the fear of the plan |

|"ending up on the shelf." This article addresses a key question regarding the strategic plan: What can I do to ensure the plan does not end up |

|on the shelf? |

| |

|There are three areas that must be addressed to ensure that the planning process and resulting strategic plan are valuable and useful for the |

|organization: |

|The process that is used to develop the plan can guarantee success or failure. Credibility and ease of use are often direct results of how the |

|plan was created. |

|The format of the plan will influence how and when people use the document in the workplace. Complex, outdated documents are doomed to remain |

|on the shelf. |

|Management's use and respect for the plan influences the acceptance for the rest of the staff and board members. There is no reason for program|

|directors to refer to established goals and objectives if the executive director does not. |

| |

|Ensuring the Plan Has Impact |

|During the strategic planning process, it is important to include the following process, content, and usage elements to ensure the usefulness |

|of the strategic plan to the organization. |

| |

|Process Elements |

|Engage leadership |

|Include the informal and formal organizational leaders when conducting a process. Active involvement communicates a message of organizational |

|importance and priority. |

|Work from a common understanding |

|Provide training on the process and establish a list of expectations and results to ensure that everyone is working towards the same outcomes. |

|Include individuals who will implement plan |

|Encourage all levels of staff to contribute to the process. Involving these individuals will ensure that the plan is realistic and help |

|motivate staff to implement the plan. |

|Address critical issues for the organization |

|Failure or unwillingness to put these critical issues on the table for discussion and resolution might lead staff to implicitly or explicitly |

|challenge the credibility of the plan, its priorities, and/or its leadership. |

|Agree on how the plan will be operationalized |

|Specify who will implement which parts of the plan, scheduling routine evaluation meetings to review progress. |

| |

|Content Elements |

|Include an internal and external focus |

|Remember to address structural, board/staff development, and communication issues in your plan. |

|Do not get too detailed |

|Use the strategic plan to articulate the broad framework, direction and, priorities of the organization and its programs. Extremely specific |

|plans become quickly outdated and end up on the shelf. |

|Create a balance between the dream and reality |

|Ensure that your plan is grounded in the reality of what can and cannot be accomplished. |

|Keep language, concepts and format simple |

|Make sure that the language is easy to understand, especially for those that are unfamiliar with your organization. Structure the document so |

|that it is user friendly. |

| |

| |

|Usage Elements |

|Actively use the plan as a management tool |

|Actively using the plan for short-term guidance and decision making will establish a model for use. |

|Incorporate sections of the plan in everyday management |

|Formalize the usage of the plan into the day-to-day activities of the organization. For example, one organization reads the mission statement |

|at the opening of every business meeting to remind the membership of the organization's focus and purpose. In another organization, the |

|executive director requires that all ideas for program changes or expansion directly address how the changes relate to the organization's |

|mission. |

|Organize the work of the organization in the context of the plan |

|Establish operational goals and activities within the context of the strategic plan (e.g., include goals and objectives in individual and |

|program evaluations or have program directors refer to the plan to provide guidance in decision making). |

|Design a system for controlling the process |

|Ensure that there are mechanisms (e.g., evaluation meetings, monthly reports against plan) to inform management on progress. |

| |

| |

|By employing the strategies listed above, you can be sure that the effort you put into the strategic planning process will direct your |

|organization and become a useful tool to both management and staff. |

|Index |How do you develop an annual operating plan? |[pic] |Should I use an external consultant? |

|14 - Should I use an external consultant? |

|[pic] |

|The Role of the Consultant |

|Checklist for Working with a consultant |

|[pic] |

| |

| |

|The Role of the Consultant |

|When considering whether or not to include consultants in the strategic planning process, a planning committee should first have a |

|clear understanding of what they really want from a consultant, and what assistance a consultant can actually provide. Peter Block, |

|author of Flawless Consulting, describes three main roles that an effective consultant should play. |

|as "a pair of hands," a consultant can do tasks that a client organization knows how to do itself, but does not have the staff to |

|accomplish (e.g., organizing meetings, drafting documents, conducting interviews with clients, and other such hands-on work. |

|In the "expert" role, a consultant provides knowledge or skills that the organization does not have in-house (e.g., doing an |

|evaluation of a program or management function, providing an analysis of the implications of environmental trends in funding or |

|service delivery, etc.). |

|In the "collaborative" role, the consultant works as a partner with the organization, contributing process knowledge, but leaving the|

|rest to the client, who has the task expertise and staff to accomplish tasks once the approach is determined (e.g., providing |

|guidance on the planning process and facilitating planning meetings and retreats, while clearly leaving the content debate to the |

|client). |

| |

|Typically, a consultant proves most helpful to a nonprofit when offering a combination of all three roles with the emphasis on the |

|collaborative role, the consultant can significantly add to the productivity and continuity of the planning process. If no one in an |

|organization has experience with strategic planning, then a consultant's assistance with designing and managing an effective planning|

|process will help focus planners' energy where it is most needed and preclude their wasting time reinventing the wheel. Also, an |

|outside person working with the group offers objectivity and neutrality. Sometimes it takes an outsider to ask the hard or dumb |

|questions, and a skilled facilitator will help surface disagreements about important issues, as well as manage potential conflicts in|

|a constructive way. Still, the reality is that it can be expensive to pay a consultant to do work that a staff could do. If cost is a|

|key consideration, this could in itself determine the role (if any) that a consultant should play in the strategic planning process. |

| |

|In choosing a consultant, an organization must also look for "fit." A consultant may have all the expertise one could ask for, but |

|still should not be hired unless planners truly have confidence in the person. The consultant must be both a good listener and not |

|afraid to speak honestly. Many important issues will be discussed in the planning process, perhaps including delicate issues that |

|demand discretion or could arouse conflict -- so, a good, trusting working relationship between the consultant and the planning |

|committee is crucial to a successful strategic planning process. |

| |

|Checklist for Working with a Consultant |

|The following list delineates many of the issues described above and is a handy reference for organizers as they consider working |

|with and establishing a working relationship with a consultant (the list is adapted from an article by Barbara Davis published in The|

|Grantsmanship Center News, March/April 1983. |

|Clarify your broad expectations of what the consultant will do. |

|Decide roughly how much you want to spend. |

|Talk with at least two consultants and check the references they provide to you. |

|Ask each consultant whom you are seriously considering to submit a written proposal summarizing the work to be performed, the time |

|line and cost. |

|Make sure you feel comfortable working with the person you select. |

|Develop a clearly worded written contract, which should include the following: |

|a list of deliverables |

|a projected completion date |

|a schedule for payment |

|checkpoints along the way at which the client and the consultant can evaluate progress and resolve any problems that may have arisen |

|a mechanism by which either party can terminate the contract before it is completed |

|identification of the person in your organization who has the authority to agree to expenditures or approve the consultant's work |

|an understanding of who will do the actual consulting work. |

|Index |How do we increase our chance of implementing our |[pic] |How do I use retreats in the planning process? |

| |strategic plan? | | |

|15 - How do I use retreats in the planning process? |

|[pic] |

|When a Retreat Should be Used |

|How a Retreat Can Be Formatted |

|Benefits to Having a Retreat |

|Drawbacks to Having a Retreat |

|When a Retreat is Right for Your Organization |

|[pic] |

| |

| |

|A planning retreat is a meeting typically involving board and staff. It can be one to two days long, sometimes using a facilitator to help |

|structure the process. Retreats are usually held away from the workplace or on weekends to ensure that participants can focus wholly on the issues|

|at hand and are not distracted by the everyday interruptions of the office. Sometimes key stakeholders will be invited to join the retreat in an |

|effort to strengthen the relationship between the stakeholder and the organization or to educate individuals around certain organizational issues.|

| |

|Part of the value of the planning process is the opportunity for different elements of an organization to work together in defining the |

|organization's future. Retreats can provide the means for achieving this aspect of the planning process. |

| |

|When a Retreat Should Be Used |

|An organization can have a retreat at any time during the planning process, but the most common times are either at the beginning or at the end of|

|the process. |

| |

|Retreats may be organized at the beginning of the process to educate participants on the process or to build enthusiasm and commitment. These |

|types of retreats are opportunities to begin collecting and processing information about the environment. Some organizations have external experts|

|speak on different strategic issues that may be important to keep in mind during the planning process (e.g., changing client needs, potential |

|duplication of services, or opportunities for collaboration, etc.). |

| |

|Retreats may also be used at the conclusion of the planning process as a means to summarize the analysis and decisions developed during the |

|process and as a communication tool to board and staff. Informing participants of decisions and ideas throughout the process will ensure that they|

|understand and support the plan. The retreat, however, should not be used in place of this routine communication -- it is a time for recognition |

|of commitment and contributions in addition to an opportunity for closure. |

| |

|How a Retreat Can Be Formatted |

|Retreats are a combination of small and large group activities and discussions. The small group is used for extensive discussion and consensus |

|building, whereas the large group is for reporting on small group activities, as well as brief discussions and final decision making. |

| |

|It is important to have a well planned retreat that includes a formal agenda and planned outcomes distributed to retreat participants prior to the|

|retreat. Michael Doyle and David Strauss' book, How to Make Meetings Work, provides an excellent reference guide to planning a successful retreat.|

| |

|Benefits to Having a Retreat |

|A well planned and managed retreat can accomplish several key success factors that may enhance your planning process. They include: |

|Encouragement of creativity - many people in group situations stimulate each other to think beyond traditional boundaries. |

|Teambuilding for the organization - people work together more efficiently once they know each other (e.g., personalities, work styles, methods of |

|communicating, etc.). Retreats provide an opportunity for staff, support staff, and board members to come together and collaborate for the first |

|time. |

|A foundation of common understanding - for many organizations, this is the opportunity for everyone to hear the same information and messages. |

| |

|Drawbacks to Having a Retreat |

|Although using retreats may enhance your planning process, there are several potential drawbacks to having a retreat. They include: |

|Consumption of critical resources - a successful retreat takes a considerable amount of planning. The process also consumes both cash and time |

|resources. |

|Pressure to produce results at the retreat - often the purpose of a retreat is to identify and discuss issues. Not everyone feels that this is an |

|effective use of time, and the retreat can be viewed as a waste of time and other scarce resources. |

|Generation of work the staff cannot or should not handle - participants often assume that because it was discussed, it should happen. Sometimes |

|the group can feel overwhelmed with ideas generated and the planning process as a whole. |

| |

|When a Retreat is Right for Your Organization |

|There are a few questions to consider when evaluating whether your organization should plan a retreat during the planning process: |

|How knowledgeable is the board about the organization and how much will they be able to contribute in this setting? |

|What outcomes are the different parties looking for in the retreat? How realistic is it that all outcomes will be accomplished? |

|How willing are the board and staff to commit the preparation and participation time? |

|Index |Should I use an external consultant? |[pic] |End of Strategic Planning FAQs |

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