Assessing the Environment to Identify Strengths and W eaknesses, Opportunities and Challenges You wouldn't think that something as complexly busy as life would be so easy to overlook. - Diane Ackerman, A Natural History of the Senses So it is said that if you know others and know yourself, you will not be imperiled in a hundred battles; if you do not know others, but do know yourself, you win one and lose one; if you do not know others and do not know yourself, you will be imperiled in every single battle. - Sun Tzu, The Art of War To respond effectively to changes in their environments, public and nonprofit organizations (collaborations a11d communities) must understand the external and internal contexts ·within which they find themselves, so that they can develop effective strategies to link the two in such a way that significant and long-lasting public value is created. The word context comes from the Latin for "weave together," and that is exactly what well-done external and internal environmental assessments help organizations do: weave together their understandings and actions in a sensible way so that organizational performance is enhanced. As Weick (1995, p. 104) observes, "Sensemaking is about context. Wholes and cues, documents and meanings, figures and ground, periphery and center, all define one another. Sensibleness de1ives from relationships, not patts." Sensemaking is needed to weave hindsight, foresight, and insight into sensible action. The sheer pace of change in the world at large heightens the need for effective assessments. It seems as if the future is hurtling toward us more quickly, dratnatically, a11d disruptively than ever- and this can be alternately confusing, pleasing, or dowmight scary. There are disputes about whether or not the pace of change is accelerating (Mintzberg, 1994; Barkema, Baum, & Mannix, 2002; Ball, 2004). Whether it is or not, there is enough change all around that wise organizational leaders feel compelled to pay attention. In part this is because change so often occurs where, when, STRATEGIC PLANNING FOR PUBLIC AND NONPROFIT ORGANIZATIONS: A GUIDE TO STRENGTHENING AND SU ... how, and in a form that is least expected- which, of course, is exactly what you should expect in a complex, richly interconnected world (Kelly, 1994; Ball, 2004; Senge, 2006). In other words, the pace of change may or may not have increased, but the complexity of the systems that make up tl1e world almost certainly has. A complex system is: One made up of a large number of parts that have many interactions .... [In] such systems the whole is more than the sum of the parts in the weak but important pragmatic sense that, given the properties of the parts and the laws of their interaction, it is not a trivial matter to infer the properties of the whole (Simon, 1996,pp.184- 185). As a result, change anywhere can result in unpredictable results elsewhere as t ...

1. Assessing the Environment to
Identify Strengths and
W eaknesses, Opportunities and
Challenges
You wouldn't think that something as complexly
busy as life would be so easy to overlook.
- Diane Ackerman, A Natural History of the Senses
So it is said that if you know others and know
yourself, you will not be imperiled in a hundred
battles; if you do not know others, but do know
yourself, you win one and lose one; if you do not
know others and do not know yourself, you will be
imperiled in every single battle.
- Sun Tzu, The Art of War
To respond effectively to changes in their environments,
public and nonprofit organizations (collaborations a11d
communities) must understand the external and internal
contexts ·within which they find themselves, so that they can
develop effective strategies to link the two in such a way that
significant and long-lasting public value is created. The word
context comes from the Latin for "weave together," and that
is exactly what well-done external and internal
environmental assessments help organizations do: weave
together their understandings and actions in a sensible way
so that organizational performance is enhanced. As Weick

2. (1995, p. 104) observes, "Sensemaking is about context.
Wholes and cues, documents and meanings, figures and
ground, periphery and center, all define one another.
Sensibleness de1ives from relationships, not patts."
Sensemaking is needed to weave hindsight, foresight, and
insight into sensible action.
The sheer pace of change in the world at large heightens
the need for effective assessments. It seems as if the future is
hurtling toward us more quickly, dratnatically, a11d
disruptively than ever- and this can be alternately confusing,
pleasing, or dowmight scary. There are disputes about
whether or not the pace of change is accelerating (Mintzberg,
1994; Barkema, Baum, & Mannix, 2002; Ball, 2004).
Whether it is or not, there is enough change all around that
wise organizational leaders feel compelled to pay attention.
In part this is because change so often occurs where, when,
STRATEGIC PLANNING FOR PUBLIC AND NONPROFIT
ORGANIZATIONS: A GUIDE TO STRENGTHENING AND SU
...
how, and in a form that is least expected- which, of course, is
exactly what you should expect in a complex, richly
interconnected world (Kelly, 1994; Ball, 2004; Senge, 2006).
In other words, the pace of change may or may not have
increased, but the complexity of the systems that make up
tl1e world almost certainly has. A complex system is:
One made up of a large number of parts that have
many interactions .... [In] such systems the whole is
more than the sum of the parts in the weak but
important pragmatic sense that, given the
properties of the parts and the laws of their

3. interaction, it is not a trivial matter to infer the
properties of the whole
(Simon, 1996,pp.184- 185).
As a result, change anywhere can result in unpredictable
results elsewhere as the behavior of complex systems often
demonstrates a sensitive and unpredictable dependence on
initial conditions (Gleick, 1988, 1999; Weick and Sutcliffe,
2007).
Some of tl1ese changes might be what Taleb (2007, p.
xxii) calls Black Swan events, where tl1e term black swan
refers to exceedingly rare events in a world where it is
assumed all swans must be white. Black Swan events are
high-impact events that are both unusual- statistically
extreme outliers- and highly consequential. Taleb cites
World War I, the rise of the personal computer, the Internet,
and the events of September 11, 2001, as exan1ples. More
recently we might add the global financial meltdown of
2007- 2009; the eruption of Iceland's Eyjafjallajokull, which
means "island mountain volcano," that stranded millions of
travelers worldwide (including yours truly); and the allegedly
impossible destruction of British Petroleum's Deepwater
Horizon oil platform resulting in one of the worst
environmental disasters in U.S. history. Some may dispute
the unpredictability of these occurrences, but the fact is that
most people were taken by surprise as much of their world
changed dramatically around them, temporarily in some
cases and profoundly in others. Not all of this is new, of
course. Around 400 BCE, Plato observed in the dialogue
Cratylus, "Everything changes and notl1ing remains still"
(paragraph 402, section a, line 8). But the sheer scope and
scale of hard-to-predict changes emanating from unexpected
sources probably is new.

4. PURPOSE
The purpose of Step 4 in the strategic platming process,
therefore, is to provide information on the strengths and
weaknesses of the organization in relation to tl1e
opportunities and challenges or threats it faces. This
information can be used, as Figure 2.3 indicates, to create
ideas for strategic interventions that would shape and guide
organizational decisions and actions designed to create
public value. Strengths and weaknesses are usually internal
and refer to the present capacity of the organization, whereas
opp01tunities and challenges are typically external and refer
to future potentials for good or ill. The distinctions, however,
between internal and external and present and future
orientations are fluid and people should not wony too much
about whether they have drawn them properly.
In addition, collaborations and commw1ities may wish
to focus not on strengths, weaknesses, opportunities, and
challenges, but on their hopes and concerns for the
community. The reason is that the distinction between
internal and external ceases to be ve1y meaningful when
applied to collaborations or communities, because what is
internal and external for groups and organizations who will
be key implementers is not the same as what is internal and
external for the collaboration or jurisdiction. Beyond that,
attention to hopes and fears is more likely to elicit value
concerns (Weick, 1995, pp. 30, 127), which may be more
central to collaboration or community-oriented strategic
planning than to strategic planning for organizations (Provan
& Milward, 2001; Stone, 2002; Agranoff, 2007).
(Interestingly, delineation of hopes often may lead directly to
the articulation of goals and strategic issues; enumerating

5. fears helps identify strategic issues that must be addressed in
order to achieve the goals, in part by avoiding what might be
called negative goals, or serious outcomes to be avoided; see
Bryson, Ackermann, Eden, & Finn, 2004, pp. 161- 163. The
desire to avoid negative outcomes is often more motivating
tl1an the desire to achieve more positive outcomes; see Eden
& Ackermann, 2010.)
The approach to external and internal environmental
assessments outlined in this chapter will set the stage for the
identification of strategic issues in Step 5· It '"rill also provide
valuable information for use in the following step, strategy
development. Strategic issues typically concern how the
organization (what is inside) relates to the larger
environment it inhabits (what is outside). Eve1y effective
strategy will take advantage of strengths and opp01tunities at
the same time it minimizes or overcomes weaknesses and
challenges. In other words, a good strategy will link inside
and outside in effective ways.
Chapter One highlighted several major trends and events
that are currently forcing often-drastic changes on
governments, public agencies, and nonprofit organizations.
Unfortunately, for various reasons, public and nonprofit
organizations typically are not very savvy about perceiving
such changes quickly enough to respond effectively (Light,
1998, p. 66; Weick & Sutcliffe, 2007). Instead, a crisis often
has to develop before organizations respond (Wilson, 1989).
This may open up significant opportunifl.J spaces, but for the
unprepared organization many useful avenues of response
typically •.rill be closed off by tl1e time a crisis emerges

6. (Bryson, 1981, pp. 185-189; Mitroff & Anagnos, 2005). Also,
in ctisis situations people typically stereotype, withdraw,
project, rationalize, oversimplify, and otherwise make errors
likely to produce unwise decisions (Janis, 1989). The result
can be colossal errors and debacles (Tuchman, 1984; Nutt,
2002). A major purpose of any strategic planning exercise
tl1erefore is to ale1t an organization to the various external or
future-01iented threats and challenges that may prompt or
require an organizational response in the foreseeable future.
In other words, a major purpose of strategic planning is to
instill the kind of "mindfulness" (Weick & Sutcliffe, 2007, p.
32) or "suppo1t for sensemaking" (Weick, 1995, p. 179) that
prompts timely learning and action and prepares an
organization to respond effectively to the outside world either
before a ctisis emerges or when one cannot be avoided. Even
in a crisis, however, organizations can use many of the
concepts, procedures, and tools of strategic planning to help
tl1em think and act strategically (Mitroff & Anagnos, 2005).
But any effective response to potential challenges or
oppo1tunities must be based on an intimate knowledge of the
organization's competencies and the strengths and
weaknesses they entail. Strategic planning, in other words, is
concerned with finding the best or most advantageous fit
between an organization and its larger environment based on
an intimate understanding of both. Finding that fit may
involve changing the organization, affecting the environment,
or botl1.
DESIRED IMMEDIATE
OUTCOMES

7. Step 4 produces documented lists of external or future-
oriented organizational oppottunities and challenges or
threats and internal or present strengths and weaknesses.
Ordered differently, these four lists comprise a SWOC/T
analysis, a popular strategic planning tool. Note that
traditionally challenges have been called threats, but
experience and research indicate that talking about threats
may be too threatening to many strategic planning
participants. Characterizing things as threats can lead to
tigidity in tl1inking or, alternatively, excessively risky
behavior in response to the tlueat (see, for example, Staw,
Sandelands, & Dutton, 1981; Dutton & Jackson, 1987;
Chattopadhyay, Glick, & Huber, 2001). My own experience
and that of other consultants with whom I work indicates
tl1at the more neutral label challenges seems to open people
up more to considering a range of possible futures and
actions. If tl1e threat categoty alone is used, tl1e SWOC/T
analysis becomes a SWOT analysis, a more commonly used
term (see Bryson, 2001, 2003).
The SWOC/T analysis, in conjunction with a stakeholder
analysis, can help the team to identify what the organization's
critical success factors (CSFs) (also called key success
factors) are (Johnson, Scholes, & Whittington, 2008). These
are the things the organization must do, criteria it must meet,
or performance indicators it must do well against (because
they matter to key stakeholders) for it to survive and prosper.
Key success factors, in other words, function as important
performance requirements that the organization's strategies
as a set must meet. In addition, the team should be
encouraged to clarify the organization's distinctive
competencies (Selznick, 1957; Prahalad & Hamel, 1990; Van
der Heijden, 2005; Eden & Ackermann, 2010). Here some
definitions are helpful: a competency is an ability, sets of
actions or processes that an organization can manage and
that ideally help it perform well (the desired outcome)

8. against important goals, desired competency outcomes, or
CSFs (which should also be desired outcomes) (Eden &
Ackermann, 2010). In other words, an organization may have
a competency, but if it does not help the organization do well
against a goal or CSF, it is not much of a competency-unless
stakeholders can be convinced to change what their CSFs are.
Competencies usually atise and are perfected through
"leaming by doing" (Joyce, 1999, p. 35). A distinctive
competency is a competency that is very difficult for others to
replicate, and so is a source of enduring organizational
advantage. A core competency is really central to the success
of the organization, that is, crucial to its doing well against
goals or CSFs. A distinctive core competency is not only
central to the success of the organization, but helps the
organization add more public value than alternative
providers. Examples of distinctive core competencies might
be what goes into providing outstanding customer service,
maintaining a strong reputation and the trust of key
stakeholders, or being resilient in the face of crises. Note that
a competency indicates an ability to do something, so
providing outstanding service is not a competency per se, but
the specific abilities that make it possible to do so are.
Outstanding service is the competency outcome of malting
use of the competencies needed and being available to do so.
Usually distinctive core competencies arise from the
interrelationships of a set of competencies and core
competencies. It is the interrelationships that are particularly
hard for others to replicate, for example, because they are
based on tacit knowledge and long-term relationships (Eden
& Ackermann, 1998; Eden & Ackermann, 2010 ). Guidance on
identifying competencies will be found in Resource C.

9. A pa1ticularly useful outcome is the creation of the
organization's current livelihood scheme (Bryson,
Ackermann, & Eden, 2007; Eden & Ackermann, 2010) that
shows how competencies are directly related to aspirations,
including helping to do well against key success factors
necessary to achieve tl1e aspirations. A livelihood scheme
represents the core logic of a strategic plan; namely, mission,
goals, key success factors or performance indicators, and tl1e
necessary competencies to do well against each. Each
aspiration and key success factor must be supported by a
competency, or else it is not achievable. As Hill and Hupe
(2009, p. 195) argue, "an1ong possibly the most relevant
factors" for fostering effective implementation is directly
linking "ambition ('willing') and competence ('being able')."
Guidance on developing a livelihood scheme will also be
found in Resource C. Note tl1at the current livelihood scheme
may well be changed as a result of further strategic planning
work.
Before completing a SWOC/T analysis, it may be
necessary to prepare various background reports on external
forces and trends; on key resource controllers, such as
clients, customers, payers, or dues-paying members; and on
competitors and collaborators (Stone and Sandfott, 2009);
with additional repotts on internal resources, present
strategy, and performance. It may also be necessary to
prepare various scenarios, or stories, that capture important
elements of possible futures for the organization- delineating
strengths, weaknesses, opportunities, and challenges, as well
as key success factors and competencies, which are then
assessed in relation to these possible fuh1res (Schwattz, 1996;
Van der Heijden, 2005; Marcus, 2009). Fmther, once the
lists of SWOC/Ts, key success factors, and competencies is

10. prepared (with or without the help of scenarios), it may be
necessary to commission careful analyses of some listed
items in relation to the overall strategic posture of the
organization.
Another impottant early outcome of these two steps may
be specific, relatively immediate actions to deal with
challenges, threats, and weaknesses; build on strengths
(including especially distinctive core competencies); and take
advantage of oppottunities (including improving
performance against key success factors). As soon as
appropriate moves become apparent, key decision makers
should consider taking action. It is not only unnecessary, but
probably also undesirable, to draw a sharp temporal
distinction between planning and implementation. As long as
the contemplated actions are based on reasonable
information, have adequate support, and do not foreclose
important strategic options, serious consideration should be
given to taking them. The feedback arrows in Figure 2.1 try to
capture this continuous blending and interplay of thinking
and acting, doing and learning, planning and
implementation, and strategic and operational concerns. This
kind of prompt action in response to a rich appreciation of
the interconnectedness of the organization's operations and
its environment is the essence of "mindfulness" (Weick &
Sutcliffe, 2007).
Shott, thoughtful deliberations among key decision
makers and opinion leaders concermng strengths,
weaknesses, oppottunities and challenges, key success
factors, distinctive competencies, and immediate desirable
shott-term actions are one of the most impottant outcomes
of this step. Such deliberations- patticularly when they
bridge various intra- and interorganizational boundaries
- provide impottant quantitative and qualitative insights into

11. 9 · An emphasis on learning. Individuals, jobs,
organizations, and communities cannot stand still,
given the pace of change. People, organizations, and
communities must constantly be learning how to do
their work better and how to make the transitions
they are likely to face if they are to play constructive
roles in shaping the future (Crossan, Lane, & White,
1999; Light, 2005; Senge, 2006; Weick & Sutcliffe,
2007).
10. Transitions with continuity, not revolution. The

12. American tradition emphasizes disjointed
incrementalism involving partisan mutual
adjustment among actors (Braybrooke & Lindblom,
1963; Lindblom, 1965). We had an American
Revolution, and many major convulsions such as
the Civil War and Great Depression, but generally
muddling through (Lindblom, 1959) has been our
preferred strategy as a nation. As the French
observer Alexis de Tocqueville observed in the
mid-1830s in Democracy in America, "They like
change, but they dread revolutions" (quoted in
Damrosch, 2010, p. 205). The good news is that
continuous improvement in institutions is possible;
the bad news is that typically it is very difficult to
stimulate major institutional change in the absence
of a crisis (Kingdon, 2002; Baumgartner & Jones,
2009). Clearly it is a leadership challenge to inspire
and mobilize others to undertake collective action in
pursuit of the common good-producing wise small
or big changes in response to the situation at hand
(Crosby & Bryson, 2005).
In addition to various trends, public and nonprofit sector
organizations might monitor imp01tant stakeholder groups,
especially actual or potential clients, customers, payers, or
members (for voluntary organizations), as well as
competitors and collaborators and the forces driving
competition or collaboration.
In my experience, members of a public or nonprofit
organization's governing board, particularly if they are
elected, are often better at identifying and assessing external
threats and opportunities than are the organization's
employees. Partly this is a reflection of diffe1ing roles; unlike
most employees, a governing board typically has formal

13. responsibility for relating an organization to its external
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