Strategic Planning for Non-profits A Worthwhile Endeavor or A Waste of Time, Money and Energy?

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Learn what non-profits can do to improve their success rate to implement their strategic plans. This article explores why so many strategic plans end up on a shelf with other archived strategic plans and what an organization can do to improve the probability of successful implementation and achievement of goals.

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Strategic Planning for Non-profits A Worthwhile Endeavor or A Waste of Time, Money and Energy?

  1. 1. Strategic Planning for Non-profits A Worthwhile Endeavor or A Waste of Time, Money and Energy? James NeilsVolumes of material have been written espousing the need for non-profit organizations to engagein strategic planning. Quickly catching up in number are articles and publications to explain whystrategic plans for non-profits frequently fail. Given the mounting evidence about why strategicplans are unsuccessful, why do non-profits continue to fail? Surely, no one deliberately sets outto be unsuccessful and waste time, money and energy.The writers who explain why strategic planning fails usually identify the five, seven or tensolutions that could have prevented the failure if their suggestions had been known or followed.The implication seems to be that had leaders read the author’s material prior to implementation ofa plan they would not have followed the other lemmings over the edge or were not so naïve as tothink “that it won’t happen to us”. If only it were that simple.It is important, particularly given the mounting evidence, to briefly review a few of the reasonsgiven to explain why strategic planning fails. Rather than detail the growing list of reasons cited,most can be reduced to fit the following categories: ● History of plans not executed well or bad plans that should not have proceeded ● Lack of flexibility, too tactical and little strategic thinking ● Lack of leadership, internal politics and top down design and implementation ● Culture of non-involvement, lack of respect for staff input and ideas ● Lack of: follow-up, feedback, measurement or data collection and deadlines ● General reluctance to change, plans too broad and lacking appropriate resourcesThese categories are by no means exhaustive or completely describe all of the reasons cited.They do however illustrate quite clearly that there are major barriers non-profit organizations mostovercome for any strategic plan to have a chance for success.
  2. 2. The for-profit sector, often portrayed as the model to follow, strategic planning has seen a seriesof ups and down and success rates that are little better than their non-profit colleagues. Once aprime proponent of organizational wide strategic planning, by the late 1980’s GE had given uptrying to create a single strategic plan and had closed their Corporate Strategic Planning office.Others then followed GE’s lead.To get an appreciation for the failure in corporate America to strategically plan, consider the resultsof one survey of corporate executives as reported in an on-line post to Chief Investment Officerswithin Higher Education. Although the statistical percentages vary between surveys, resultsrepeatedly demonstrate the adversity strategic plans encounter. ● Only 25% of executives were motivated by the plans they created2 ● Fewer than 27% of employees had access to strategic plans2 ● 90% of well-formulated strategies failed due to poor execution2 ● 92% of organizations did not report on lead performance indicators2 ● 95% of employees did not understand their organization’s strategy2 ● 85% percent of management teams spend less than one-hour a month on strategy issuesWhile the percentages may change and are certainly not representative of the total corporateenvironment, those statistics might give an organization a reason to pause and consider analternative.Considering the mounting criticism and the negative results from numerous surveys aboutsuccess rates for strategic planning, it would seem many organizations are in fact are wastingtheir employee’s time, their collective energy and finances to engage in strategic planning. It isdifficult to believe that any organization would deliberately set out on a path that many know is ajourney with a high failure rate. Can it be true that executives in both for-profit and non-profitorganizations believe “it won’t happen to us?”One can only imagine the concern that consultants and firms that that earn their livelihood leadingstrategic planning sessions react to the suggestion that strategic planning is a waste of time.There is no denying that there are successes and large organizations like the Gate’s Foundationcontinually use strategic planning to improve. While most authors write about the failures ofstrategic planning a few studies have identified why some succeed while others fail.
  3. 3. A recently released study by the Association of Strategic Planning (ASP) and the PoliticalScience Department at the University of Arkansas details some of the reasons non-profitsexperience successful strategic planning. After analyzing survey responses from more than onethousand 501 (c3) organizations, the report identified three important factors that contributed to anon-profit organization’s success to strategically plan. The results should not come as a surpriseto anyone engaged in strategic planning and implemented or attempted to implement a plan. ● Strategic planning was a routine practice for successful organizations, but not successful for organizations that to often were responding to immediate challenges or to deter increasing risks. ● Organizations that emphasized the execution of the plan experienced success while those that failed could not or were not sufficiently prepared to execute the plan. ● Successful organizations valued strategic planning as a component of their success, while it was not for those organizations that were unsuccessful.What is it about process or the organization that makes a difference? More importantly whatneeds to change to increase the success rate of strategic planning for non-profits? As ProfessorJohn Bryson of the University of Minnesota in his essay, Public and Non-profit Planning in theFuture, points out no one approach will necessarily fit every situation an organization mayencounter. Organizations must recognize the fluid nature of their situation and be flexible andadaptable. It must have staff capable and dedicated to strategic think the about the organizationand future actions.Bryson believes not only will strategic planning continue, but from necessity success rates willneed to increase in the coming decades. Scarcity of financial resources from governmentalsources, changing demographics, the impact of the Internet, social media and computertechnology as well as global issues will all impact public and non-profit agencies as never before.His eight predictions are not far fetched ideas, but seem to be realistic appraisal of the changesthat will face non-profits in the American society.INCREASING THE PROBABILITY OF SUCCESSPerhaps a large part of the solution lies not in the planning process at all. In response to a twopart series by the editor of the Blue Avocado about why non-profits fail at strategic planning, MikeAllison believes it is not the process at fault, rather the conditions under which the processoccurs. The results from the recent study by the ASP seem to confirm his view.
  4. 4. Mike argued too many non-profits engage in strategic planning because of a requirement from afunder, to offset internal or external pressures or decide to shortcut the process to save time ormoney. He is unapologetic for the cost and time involved to develop a flexible, workable andsuccessful strategic plan. He stresses doing it because someone else tells you to do so or as adisguise for another agenda is never a good start to successful completion.Reviewing both survey results and Mike’s comments, it may be that organizations that failed weresimply not prepared for the challenges to implement the strategic plan. Comparing the surveyresults with what critics have identified are reasons strategic planning fails there are strikingsimilarities: lack of communication, lack of measurement, lack of involvement, poor execution andlack of leadership commitment to name just a few.What all of this evidence points may not be poor planning at all, although poor planning by itselfdoes occur. It could be the resulting plan is merely the by-product for the real reasons for thefailures. Consider the statistics earlier cited, but in a slightly different perspective to answer thefollowing questions. 1. Is it strategic for any organization to devote only 12 hours a year in discussion on strategic issues ?Look at what the numbers reveal. There are 2,080 hours in a normal work year. Carving out 12or, worse, fewer hours means that an organization has committed to engage in strategic work,rounding off to the nearest decimal .006% of a work year. And adding more staff does notimprove the percentage since each contribute the same proportion of the 2080 work year hours,assuming a 40 hour work week is the norm in the organization. That hardly seems sufficient timefor strategic thinking that will guide a strategic plan and how it is to be implemented.How strategic is any organization if they devote such a small percentage of time to strategicissues. In their book Execution, Larry Bossidy and Ram Charan make it clear that poor executionwill lead to poor results. They point out execution ● requires discipline to follow through on details and deadlines ● is the responsibility of executives and boards ● should be an integral part of an organization’s culture.Are these characteristics found in many organizations, non-for-profit or for-profit? Bossiday’ andCharan’s book is directed to CEOs of for-profit companies seeking assistance in the quest to
  5. 5. improve. They argue a strategic plan’s success is dependent on the willingness of anorganization to devote all the resources to execute the plan.Organizations that do not engage in strategic thinking, action and operations should not beexpected to successfully execute a strategic plan regardless of how well the plan was developed.Poor organizational execution prior to any strategic plan will probably mean poor organizationalexecution of the plan.How can anyone strategically plan if they do not have time to strategically think? The question ofwho teaches managers and executives the skill of strategic thinking is another matter. Researchhas demonstrated that the skill of strategic thinking is not at all related to positional level in anorganization. Further, given the day-to-day tactical demands on many non-profit leaders andstaff, few have mastered how to devote time to think strategically, even if they are adept at it.To increase the chances that a strategic plan will succeed an organization should culturallyembrace the value of strategic thinking, commit to being strategic continuously and be disciplinedin execution at all levels. It should allocate a constant and recognizable portion of employees,especially senior executives, time to identify, analyze, synthesize and discuss strategic issues. 2. Is it strategic for any organization not to report performance indicators?If there is one area where far too non-profits remain deficient, it is data collection, analysis andperformance measures. Can any non-profit or for-profit company that does not haveperformance measures in place prior to a strategic plan really be expected to have meaningfulmeasurements after a plan’s implementation or to have appropriate performance measures forthe plan itself?Due to the decreased funding and increased oversight, non-profits are facing the task ofdeveloping performance indicators and reporting. In the past, many could escape the hardprocess by claiming it was simply too difficult to identify appropriate performance measures. Notany longer. There is no denying it can be difficult work, but an growing number of professionals,businesses and colleagues are helping non-profits to accomplish it. Tom Ralser, in his work ROIfor Non-profits outlines several ways non-profits can measure their results and societal impact. 3. Is it strategic for any organization employees not to understand the strategy?Abraham Maslow is most noted for his social psychology work and developed a concept nowknown simply as Maslow’s Hierarchy of Needs. But, he was also an organizational consultant
  6. 6. and kept a journal of his observations. Now published, he provided one quote that perhaps is thebest summary response to this question. Here is what he had this to say about mostorganization’s use of its employees. …most of us would argue that we believe in the potential of people and that people are our most important organizational assets. If that is the case, why then do we frequently design organizations to satisfy our need for control and not to maximize the contributions of people?”It is a striking commentary and quite appropriate to any discussion about why strategic plans fail.The lack of respect, communication, openness and a variety of other adjectives to describe howorganizational leaders interact with their personnel prior to a strategic plan is an indicator of aplan’s possibility of success once put into effect. Quite a few strategic plans have beensuccessfully scuttled by employees in response to one more demand on their time and work load. 4. Is it strategic for an executive or board not to value strategic planning?Of all of the issues about why strategic plans fail this one is focused squarely on the quality ofexecutives and Boards. A number of surveys have reported that executives are frequently nothappy by the quality of plans produced. Why, perhaps because it is not that important to them.Do they do it when they have to and not because they believe they should on a regular basis?Part of leadership is helping people achieve success; at least that is what most books onleadership seem to stress.There is one additional factor few identify among the reasons Strategic Plans succeed or fail.For most non-profits, it may well be a more critical issue that needs to be addressed and resolvedprior to any serious discussion of a strategic plan; Capacity.CAPACITYThe one primary difference between non-profits and their for-profit cousins has been the capacityto execute the plan. Although in recent years the quest by for-profits to operate “lean” has alsolessened their capacity to implement strategic plans. As it relates to strategic planning, capacityis having additional employees, excess employee time as well as additional technologicalresources and finances to execute the strategic plan.How many non-profits that can not afford a professional to assist them, embark on their own todevelop a strategic plan and than find little time or money to implement it? It is not enough togenerate enthusiasm, espouse how well the organization will function once the plan is put into
  7. 7. place or highlight the benefits of coming together for a common cause and expect success. Theorganization must have the capacity to carry out the plan.The question that must be at the forefront of any discussion of a strategic plan is quite simply: Isthere excess capacity within the organization’s resources to achieve success? If not, what needsto be done to increase resource capacity? Can additional capacity be found, developed orpurchased? Is it possible to reallocate the resources required for any plan without adverselyimpacting other projects or normal demands on personnel, facilities, finances, volunteers, or all ofthem?To often organizations embark on well developed strategic plans only to find within a few monthsthat it too joined others on the archive shelf. Many organizations commit to making a plan work,but have failed to adequately measure whether they have the capacity to execute the plan.As a consultant to a number of strategic planning committees, capacity has always played asignificant role to determine a plan’s possible success. Admittedly, it is a challenge to help anorganization recognize once people leave the energizing strategic planning retreat or sessionthings change quickly. Far too often the question of capacity is given little serious considerationin the moment of great enthusiasm and excitement.Employees return to their normal work load that more often than not leaves little time to engage inany continuous and committed work on the strategic plan. Scarce financial and organizationalresources are insufficient to allocate to both a strategic plan and new operational challenges thatoccur. Executive and Board Leadership too often move to the next challenge. How many Boardshave, with the President in the lead, have a committee fully committed and meeting frequently tocontinuously monitor and lead the plan to success? The same holds true for senior managementas well.One must always remember that a strategic plan may cause a significant shift in the way anorganization functions, what it does and how it culturally behaves. Lest anyone think that this isnot a major undertaking, consider the roadway to any strategic plan’s success is littered by thedecaying remains of so many failed plans.Is it any wonder so many plans fail? Reviewing again the ASP’s study results, successfulimplementation of a strategic plan occurred because the non-profit organization regularlyengaged in planning, knew how to allocate resources to implement it and valued planning as akey to their success. How many others can say that?
  8. 8. There are possibly many excellent plans that had they been given the appropriate resources theymight have succeed quite well. But without understanding the conditions under which a plan isformulated and attempted, they never had a chance.ConclusionCritics of strategic planning point to the failure rates and the wasted resources as reasons whyorganizations should seek alternatives. Rather than focus on the why Strategic Plans fail, theattention should be placed on preparing or making sure an organization is constantly thinkingstrategically, has recognized the need for excess capacity, uses performance measures andknows how to execute a project.That means organizations and also consultants need to measure prior to any planning beginswhether an organization has: ● been thinking strategically ● the capacity and discipline to execute the strategic plan ● the resources needed to succeed ● accepted and prepared for the harsh reality that it will require attention, time and energy to make the plan succeed. ● the organizational flexibility to adapt the plan and its resources to continue as the conditions requireThe issue is not simply why plans fail, rather how to help non-profit organizations reach a pointthat they are fully prepared to think strategically, engage in flexible strategic planning, developgood plans and have the resources and discipline needed to execute the plans.
  9. 9. ReferencesTen Common Reasons Strategic Plans Fail , Leo Bottary. Executive Street Blog, November 21, 2010Five Reasons Why Strategi c Planning Fails to Produce Desired Results, Kevin Marshall,Marshall Advisory Group, www.MarshallAdvisory.comA new Paradigm for Strategic Planning , Taunya Land and Nancy Galligan, Forum, Association Forumof Chicagoland, June 2007, Vol. 91 No. 5 pp. 28-29.Corporate Lifecycles, How and Why Corporations Grow and Die and What to Do About I t;Ichak Adizes, Adizes Institute Book, Prentice Hall, 1988Can Boards of Directors Think Strategically”? Some Issues in Developing Direction-GiversThinkers to a Mega Level , Bob Garratt, Performance Improvement Quarterly, Hoboken, 2005, Vol. 18,No. 3.Deep Dive, Rich Howath, Greenleaf Book Group Press, Austin, TX, 2009Define Your Association , Donald Freels, National Association of Realtors Fall 1996,Developing Strategic competencies: A starting Point , Keith Ornoff, Information ManagementJournal, Lenexa, July/Aug 2002, Vol. 36,Developing strategic thinking as a core competency , Ingrid Bonn, Journal of ManagementDecision, Emerald Publishers April 2001 No. 1 Vol 3 pp. 63-70Execution, Dave Bossiday and Ram Charan, Crown Business, New York, 2002From Strategic Planning to Strategic Thinking , James Morrison, On the Horizon, Jossey Bass,1994, No. 2, Vol. 3 pp3-4.Historical Notes 2004 , Association for Strategic Planning, www.strategyplus.org/history.htmlIn Defense of Strategic Planning: A Rebuttal , Mike Allison, Blue Avacado Editorial Rebuttal, SanFrancisco, March 12, 2011.Is Your Strategic Plan Dead or Alive? , Paul Meyer and Jean Frankel, Forum, Association Forum ofChicagoland, August 2007, Vol. 91 No. 7 pp. 45-46.
  10. 10. Leading At a Higher Level , Ken Blanchard, Blanchard Management Corporation, Prentice Hall, 2007Learning to think strategically ,Joan Sloan, Sloan International Management Development, New York,NY June 2006.Nonprofit strategic planning alternatives: FINANCE & STRATEGY, Jan Masaoka, Editor, BlueAvacado, San Francisco, March 14, 2011Nonprofit Business Model Statements , Jan Masaoka, Editor, Blue Avacado, San Francisco, March12, 2010Put the ’Strategic’ in Strategic Planning , Phiilip Lesser, Forum, Association Forum of Chicagoland,November 2006, Vol. 90 No. 10 pp. 50-52Strategic Planning , iLEAD, www.ilead.com.au/ideas/strategic thinking/strategic planning.htmStrategic Planning Failure , Reference for Business, Mark E. Mendenhall, Revised ndby Mildred Golden Pryor, Encyclopedia for Business 2 Ed.Strategic Planning: Failures and Alternatives , Jan Masaoka, Editor, Blue Avacado, San Francisco,February 19, 2011Strategic Planning Successful Practices in Non-profit Organizations (501c3) March 2012National Survey – Initial Findings© , reported at the ASP Annual Conference, March 2012Strategic thinking is the key to proactive management , Steven Watson, , techrepublic.com July 8,2003.The Fall and Rise of Strategic Planning . Henry Mintzberg, Harvard Business Review, January-February 1994, 107–11The need for Strategic Thinking is Critical for Effective Continuous Improvement , BriceAlford, EZine Article,The Future of Public and Nonprofi t Strategic Planning in the United States, John Bryson,Public Administration Review, December 2010, Special Issue, pp. s255-s267.What Strategy is – and isn’t , CA magazine.com, Sept 2002,www.camagazine.com/index.cfm/ci_id/9654/la_id/htm
  11. 11. What Makes Associations Remarkable , Mark Golden, Journal of Association Leadership, AmericanSociety of Association Executives/Center for Association Leadership, Spring 2007, Vol. 4 No. 1, pp. 37-45Why strategic plans dont work and what to do about it , Ron Price, posted in Reliable Plant, webpostWhy Strategic Plans Fail , Forbes Blog, Entrepreneurs, November 20, 2011Why Strategic Plans Fail, And How to Avoid the Pitfalls, Ray Gagnon, Gagnon Associates, Boston, Posted: July 19, 2012Why Strategic Plans Fail And How To Make Them Succeed , David Kellogg, Kellogg AssociatesProvidence, RI 02906Why Strategic Plan Implementation Fails , Frank Martinelli, Blog, November 28, 2006Why Strategic Planning Fails , The Higher ED CIO, Blog post August 16, 2011
  12. 12. About the authorJames Neils has served as an Executive manager, Executive Director,Consultant, Board member, Operations Manager and volunteer to a variety ofnon-profit organizations. His career includes positions in Higher Education,Professional Associations, Condominiums, 501(c3) charitable organizations andas an executive in for-profit companies.In recent years he has researched and written several publications on a variety of topics includingstrategic thinking, analytics and strategic planning; Developing the Skill of Strategic Thinking;Using Conceptual Models to Improve an Executive’s Strategic Thinking; Creativity, StrategicThinking and Statistical Models, Data, Non-Profits and the Obama’s Campaign.While he is not writing, Jim enjoys sailing, reading, serving as a volunteer withChicago Greeters and as a mentor to young professionals who work in non-profitorganizations. He remains an active consultant for the Executive Service Corp ofChicago, consulting to non-profits throughout Illinois.His social network includes active participation in LinkedIn a frequent contributorto several groups on non-profits, Facebook and as has posted writings onSlideshare and Scribd. His latest endeavor, in conjunction with work as a mentorwas to establish the KNOWLEDGE COLLEGE. This web portal will provideyoung professionals a on-line classroom where they learn the skills necessary toadvance their careers and a place where operational issues are examined andresolved.James has a twitter feed Nonprofitsage as an outlet for commentary on salientissues and future problems non-profits will confront.James can be reached at james.neils@gmail.com through his twitter feed or onLinkedIn.

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