[Peter] Welcome Think about a nonprofit you care about to apply principles What are some challenges nonprofits facing today in planning? Handout: What makes scenario planning with nonprofit organizations challenging? Objective: As a result of this session, you will be able to use scenario planning with a nonprofit you serve or care about. Trim down process while retaining benefits. Time target: 10:50
[Jim] There was a time when society was more stable. Donors were more consistent. The world was more predictable. The needs and wants of people are changing rapidly and in unexpected ways.Many camps built for rustic get-away, today people expect Red Roof Inn. The nature of donors is morphing. Builder generation dutifully supported nonprofits. Donors today want to be involved. Direct mail doesn’t work the same way it used to. Long-range operational plans used to work, now world changing too fast.Strategic plans tossed after September 11 and Hurricane Katrina. Most nonprofit leaders don’t know how to plan given uncertainty.The ground is shifting under their feet and throwing them off balance. [Peter] We have led dozens of scenario planning sessions They face uncertainty, They lack tools
[Jim] People expect Red Cross/Red Crescent to function. They expect local volunteer fire department to be able to put out fires. They Boy Scouts or Girl Scouts to develop character in children. People expect not-for-profits to do what they are supposed to do.They expect them to work. [Peter] Cannot explain it away, can’t blame others.
[Jim] But the world is changing fast. Technology is changing fast. Nonprofits often get left behind.. Nonprofits are often slow to catch new trends. For example, how many today are using podcasts to deliver training to volunteers or inspirational messages to donors or clients? Sometimes, ignoring changing realities can be dangerous. [Peter] Illustration of Canadian Red Cross blood supply.
[Jim] Nonprofits don’t have to be caught by surprise when their market or donors change. They don’t have to remain stuck in yesterday. They don’t have to ride the tail of the change curve. Nonprofits can be prepared for the future and eagerly watching for change to occur and capitalizing on it. They have potential to change and adapt as fast as a business. [Peter] Not predicting the future, but preparing for it.
[Jim] One helpful tool is scenario planning, but time-consuming and expensive. Global corporations spend days on this. Rapid-cycle scenario planning is simply a faster, better, cheaper version that is more appropriate. It works. It helps nonprofit leaders think about the future. It helps them create more resilient strategies. [Peter] Our experience tells us this can be a powerful tool. [Jim] Rapid-cycle scenario planning is simple and straightforward. We will explain this six-step process in a moment. But first let’s form groups of three or four. Time target: 10:55
[Jim] Handout: What are some significant unknowns for a nonprofit that you care about? What keeps the leaders of your nonprofit awake at night? What do you worry about for this organization? Take about five minutes and list the significant unknowns for your nonprofit. In large group: What are some of the significant unknowns you surfaced? Time target: 11:05
[Peter] In mid-1999, less than a year into a new five-year strategic plan, Goodwill Industries of Toronto found itself heading for a 10% financial shortfall on a $33 million budget in Year 1. Isolating the source of the shortfall was easy at the financial level – their were big losses on their retail operation. Getting at the underlying drivers of these losses was more difficult, but we soon saw two main factors: * the simultaneous failure of Goodwill’s three main $ sources * the inability of senior management to accept the changing reality It required radical surgery to remove several blockages to their thinking and to open them up to the need to ‘reconceive’ the organization to create a healthy future.
[Peter] Briefly explain the grid approach, the Goodwill drivers, the four scenarios and the key insights: * abandoning their failing strategy was the only option with a future * their ‘ideal’ scenario was going to require a long-term effort, including significant capacity building * they had two ‘transitional’ strategies worth pursuing, but needed to avoid alienating important future partners Time target: 11:10
[Jim] That’s a vivid example of the value that rapid-cycle scenario planning can deliver. It is high-yield because it can lead to breakthroughs in strategy. It is also high-yield because it can help nonprofits survive during turbulent times. Nonprofit leaders need to think about the future just as much as corporate business leaders. The very survival of their organization might be at stake. The six steps in this process are listed in your handout. You can take notes as we talk through each step.
[Jim] People often assume that scenario planning is simply taking time to have a good long talk about the future. Can be confused with environmental scan or, worse, hearing a lecture from a futurist. You start rapid-cycle scenario planning by pinpointing an area of concern or decision that has to be made. For example, should we launch a capital campaign and build a new office? Should we broaden the services that we offer our clients? Should we start charging a minimal fee for what we provide? Should we change our promotional strategy? Corporations would call this formulating the business question. We call it determining your focus and often revolves around a decision to be made or problem to solve.
[Jim] The next step involves looking outside of the organization at the relevant environment. This step is often done with the decision-makers as a team but it can be done other ways. You can explore driving forces in the immediate working environment as well as the larger context globally. Driving forces in the immediate working environment can include pressures from donors, clients, competitors, partners, communities, and government regulation. Driving forces in the larger context might include trends or changes in society, technology, politics, the environment, or the economy. Naming driving forces in the larger context is like doing an environmental scan. The point in this step is to brainstorm a long list of trends and uncertainties.
[Jim] Questions that matter are driving forces that are both important and uncertain. For example, Will we continue to be the only game in town or will we face new competitors? Will interest in the homeless grow or decline over the next ten years? Will interest rates be higher or lower two years from now? Will we succeed in building our donor base or struggle along with our current level of support? To form the scenario grid, select the top two questions and bisect them to produce four possible futures. We’ll show you several examples in just a few minutes. When you have developed a scenario grid, you are ready to create the stories.
[Jim] One person can write all four scenarios or the group can construct them together in real time. We’ll show you several examples. Some of my clients have produced videos to tell the four different stories. Story: Video of university president leading a tour of the existing campus, leading a tour of campus with the new science building (actually at another college), and the last video with the new university president leading the tour. The team can build the stories together, they can divide into groups and present, or the facilitator can outline the stories for them. The point is to think together about the future.
[Jim] I usually harvest raw ideas for building strategy at the end of discussing each scenario. This leaves you with 4 lists of strategic priorities. Anything can emerge as a strategic priority. With nonprofits, some of the most powerful involve building capacity in an underdeveloped area. The most powerful insights are the no-brainers, good no matter which scenario comes to pass. For example, one group saw a need to develop what they called national-level leaders. Another saw a need to diversify their donor base. If done well, you will surface more potential initiatives than the nonprofit could implement. The last step is selecting a few to put into motion now.
[Jim] If you started with a decision to make in step one, you may be able to make that decision. If you started with a question to answer, you may have your answer. If you started with a problem to solve, you may be able to start working on the problem. Lay out the list of key initiatives or key actions everyone can commit to based on scenario discussions. If you skip this step with a nonprofit they will have had an enjoyable day but it probably won’t bring any organizational results. This last step ensures that the board or staff will take action that leaves the organization better off. Let’s look at a couple of examples of scenario grids. Time target: 11:15
[Peter] One of our early rapid cycle SP opportunities was actually one of our longest-standing clients, who needed help dealing with their ‘over-achievement’ on strategies we had helped them to pursue. This is how their grid changed their thinking about the future:
[Jim] About 4000 Christian schools belong to ACSI. (3948 in 2005) This matrix took one afternoon with about 35 educators participating in the session. 25-year time frame. Government: cannot be supportive to the point of violating the establishment of religion clause. School choice: Paying twice with tax dollars has impact of limiting choice. Same old same old: Government remains neutral and parents have one or two options. Mandatory public education: Increasing government regulation and intrusion makes it too difficult to run a private school. Vouchers: Government allows some of the tax dollars to go to the school the child attends. NEA is a leading voice against a voucher system. Charter schools: All states allow charter schools. Nearly 3,000 new schools have been launched since 1990s. Chartering is a radical educational innovation that is moving states beyond reforming existing schools to creating something entirely new. This is how their grid changed their thinking about the future: They have no idea what which future will come to pass by 2025, so they better not rest on their laurels.
[Peter] One of our most interesting applications was a 28 year-old national association that had resisted change for 25 years despite pressure from their main funders and the criticism or defection of key members. A big part of what held them back, and even prevented them from seeing the changing reality, was the universal admiration of their 25-year Executive Director across the industry. This is how their grid changed their thinking about the future: Take a few minutes for Q & A or comments. [Jim] Following are five benefits of rapid-cycle scenario planning for nonprofits. The five are listed in your handouts. Time target: 11:30
[Jim] Here’s an interesting wire sculpture. Ask, “What do these four photographs suggest that can help us plan more effectively for the future?” [Peter] First key point: it is essential to explore different perspectives. Second key point: the ‘clearer’ picture isn’t necessarily to ‘best’ view – it fails to reveal the messiness of the factors that produce the picture, and may oversimplify reality.
[Peter] Exploring a range of scenarios makes it more likely that key issues will be identified and addressed. By forcing participants to describe how they would succeed under even the worst-case scenario, you make it possible to think about the ‘unthinkable.’ [Jim] One group bought a 20 million dollar piece of property for future expansion and didn’t know if they could hang on to it. When they explored the worst-case scenario, something they were afraid to think about, they realized they could sign a long-term lease for 20 years and still have it for the future.
[Jim] Nonprofits often neglect building capacity until its too late. When the scenarios reveal that building capacity in some area is required or beneficial for all four futures, leaders become motivated to take action. [Peter] One point worth making: capacity-building is often overlooked, especially in traditional strategic planning which focuses on strengths and opportunities. The future may not cooperate with preferred ‘simple plan’ for success.
[Peter] For organizations whose past planning efforts have been problematic, it is even more important to overcome objections re: time and $. But, it’s also the way to engage more people who couldn’t get involved in a more extensive process. (e.g. Regent Park CHC ‘town hall.’) [Jim] I can’t sell a full-scale, five-day scenario planning process to a nonprofit that is dependent on charitable donations from individuals. They have a hard time rationalizing the expense because they don’t know how to explain this to donors.
[Jim] This gives them a sense of confidence that they can morph as community and society changes. They can view themselves as built to change. They can feel confident knowing they will be OK no matter what. Time target: 11:40
[Peter] Say, “What might a useful ‘grid’ be for your nonprofit organization? Working in groups of 4, take a few minutes to brainstorm a list of major uncertainties nonprofits might be facing – start by thinking about your own selected organization. Then, pick two and define the opposite ends of the continuum and use those to label the side and bottom of the grid – be sure to frame the ‘poles’ in terms of mutually-exclusive end results (e.g. success or failure, options a or b, occurs/doesn’t occur, etc.) Next, talk about each cell briefly and imagine a title that captures what is going on in it. (Lead a large group debrief – ask re: drivers, dynamics, insights.) (Go to the next slide to conclude the debrief.)
[Peter] Ask, “How might this kind of process change how your nonprofit thinks about the future?” Now, we’d like to share some tips and tools we’ve found helpful. Time target: 11:55
[Jim] We are going to wrap up with 7 keys to success. You will find these listed in your handout. First, think carefully about who you involve. Should you work with the board or the professional staff? If you are doing this with a board of directors, would you like to include staff or not? Would it be good to involve community leaders or real clients? What about interested donors? Select people who want to think about the future and are positive about the organization. Look for strategic thinkers. Stack the deck for success. You want to walk out of this with new strategy and a clear plan of action.
[Jim] Stakeholders are anyone who has a stake in making sure the organization works. Stakeholders for a nonprofit are like shareholders of a corporation and can include: Donors Clients Community leaders Other agencies Government officials Board members, staff Telephone calls can be a quick and efficient way to research their perspectives and gather information about driving forces. Your handout includes a list of stakeholder interview questions. [Peter] Briefly explain the interview approach, and refer them to the list of interview questions in the handout.
[Jim] Rapid-cycle scenario planning includes the same steps as standard scenario planning. We are only suggesting that nonprofits do each step quickly and cheaply. Always start with a clear focus or you will get lost at some point along the way. You may list driving forces by yourself before the meeting, but you still have to do this step. Skip the last two steps of strategic priorities and action planning and a nice time will be had by all but nothing will really change.
[Jim] When you are telling a story you can talk about cutting staff, finding new clients, shifting away from old services. You can bring up these issues and get away with it because it’s a story. Like a good news reporter, don’t just lob softballs, throw the hardballs that really get people thinking.
[Jim] You honor the story by the way you craft it and the way you hear it. When you create the story, make it believable. Include details that spice it up and make it fun. Try to establish a theme. For some, put in surprise twists in the plot. [Peter] Explain the story-building process and refer them to the list of story-building questions in the handouts.
[Jim] Nonprofits rarely get around to talking about building capacity for the future. Like any business, they have bills to pay and real-life pressures that keep them focused on the here and now. Building capacity usually requires reallocation of precious resources. The breakthroughs for securing their future usually involve capacity-building initiatives.
[Jim] Robust action plans make you feel stronger. They continue to make sense no matter which way the future begins to unfold. Do something that staff and donors can get excited about. Secure the organization’s future. [Peter] Talk briefly about the ‘execution challenge’, and mention some of the tools that can be easily adapted to the nonprofit world (e.g. strategy portfolios & BSC.) Time target: 12:00
[Jim] The nonprofit you work for or care about has an official future. The official future is the unspoken or generally accepted prediction of what the relevant environment will be like for the foreseeable future. It’s like groupthink about the future. Is your nonprofit ready to examine their official future? Are you ready to lend a hand or lead the way?
[Jim] If a nonprofit does not change as the world does, the nonprofit will become increasingly irrelevant and may not survive. Rapid-cycle scenario planning can help nonprofits maintain their edge and their viability.
[Jim] The six steps of Rapid-cycle scenario planning will help them create a sustainable future. They will be less likely to object to the cost or the time required when you minimize them.
[Jim] Uncertainty paralyzes many nonprofit leaders. They can easily feel that long range planning is useless if they can’t project what their future will look like. Using scenarios, you can plan even though the future is uncertain and unpredictable. Time target: 12:05
[Both] We have some time left over to talk together. What comments or questions do you have? End at 12:15
Rapid Cycle Scenario Planning
Rapid-Cycle Scenario Planning Peter O’Donnell, Healthy Futures Group James C. Galvin, Galvin & Associates, Inc. November 13, 2006
Nonprofits face increasing uncertainty and lack appropriate tools
People committed to a cause expect their organizations to be effective
Nonprofits often miss or ignore changing realities
Nonprofits can increase their preparedness for the future
Use rapid-cycle scenario planning to create a sustainable future
What are some significant unknowns for a nonprofit that you care about?