The Board Member's Guide to Strategic Planning A Practical Approach to Strengthening Nonprofit Organizations

by Howe, Fisher

• ISBN13: 9780787908256
• ISBN10: 0787908258
• Edition: 1st
• Format: Hardcover
• Copyright: 1997-03-14
• Publisher: Jossey-Bass
• More Book Details

Summary

Fisher Howe's enthusiasm, insight, and ability to clearly articulate the whats and hows of effective strategic planning provides the reader with the tools to strenghten governance and manage effectively, which leads to results. --Lawrence W. Reger, president, National Institute for the Conservation of Cultural Property Howe's practical, no-nonsense approach demystifies the often intimidating planning process, showing why it is essential and providing detailed instructions for successful execution. Presenting illustrative examples and straightforward action steps, Howe guides board members through each critical step, from preparing and conducting the planning to production of strategic and operational plans. A quick, compact guide for busy nonprofit board members by a veteran board member and sought-after consultant to non-profits.

Author Biography

FISHER HOWE is the author of The Board Member's Guide to Fund Raising (1991) and Welcome to the Board (1995). The former executive of the School of Advanced International Studies at Johns Hopkins University, he lives in Washington, DC.

Table of Contents

Foreword	xi
Howard H. Williams III
Preface	xv
The Author	xxi
Part I: The Board's Perspective on Strategic Planning	1	(26)
Benefits of Strategic Planning	3	(10)
The Board's Responsibility for Strategic Planning	13	(4)
Examples of Strategic Planning from the Board Perspective	17	(4)
The Language of Planning	21	(6)
Part II: Preparing for Strategic Planning	27	(26)
Plans for Planning	29	(8)
Effective Planning Meetings and Retreats	37	(4)
Using Consultants and Facilitators	41	(4)
Examples of Boards Preparing for Strategic Planning	45	(6)
Action Steps: Preparing for Strategic Planning	51	(2)
Part III: Conducting Strategic Planning	53	(32)
Clarifying the Mission: Purpose and Values	55	(6)
Exploring Internal and External Environments	61	(6)
Identifying the Critical Issues	67	(4)
Articulating a Vision	71	(4)
Examples of Strategic Planning Outcomes	75	(8)
Action Steps: Conducting Strategic Planning	83	(2)
Part IV: From Planning to Action	85	(10)
Putting Together the Strategic Plan	87	(4)
Creating Operational Plans	91	(2)
Action Steps: Strategic and Operational Plans	93	(2)
Part V: Keys to Successful Planning	95	(8)
Principles of Successful Planning	97	(4)
Final Tips	101	(2)
Resources	103	(6)
A. Often-Heard Objections to Strategic Planning	105	(2)
B. A Sample Consulting Plan	107	(2)
References	109	(2)
Index	111

Excerpts

Benefits of Strategic Planning

When you look at the benefits of strategic planning, you wonder why every institution doesn't put it at the top of its list. It seems so obvious.

Even when organizations accept in a general way the need for strategic planning, they tend to misunderstand just what such planning means and how to carry it out effectively. Decision making in organizations that exist to serve a public need can be less than crystal clear, and the environment in which such organizations operate is invariably complex. Planning is not easy.

In the simplest terms, an organization undertakes strategic planning to reaffirm or to modify its mission -why it exists, what its purpose is, and what it now does-and to agree on its vision -what it wants to be and do in the coming years. Strategic planning need not be more; it must not be less.

Bryson (1988) emphasizes that "a strategic planning process is merely a way of helping key decision makers think and act strategically." Stoesz and Raber (1994) add that "the purpose of planning is not to decide what should be done in the future but to decide what should be done now to make desired things happen in an uncertain future."

While these descriptions are valid and helpful, boards and staffs need something more to grasp the concept and purpose of strategic planning. They need to know the specific reasons for undertaking strategic planning, and they need to have some sense of the precautions , the things to guard against.

The Whys

A number of concrete, precise reasons can be marshaled to justify the value of strategic planning.

Mission change . Probably the most compelling reason for undertaking strategic planning, and also the most difficult to deal with, is when the underlying mission of the organization, its basic purpose, is brought into question. Several years ago, for example, the March of Dimes, the promotional name for the former National Foundation for Infantile Paralysis, went through a complete transformation when the Salk vaccine virtually removed polio from the scene. It changed its mission, turning its attention in an altogether new direction, becoming the March of Dimes Birth Defects Foundation.

The Washington Post recently carried a front-page article reporting that at George Mason University in northern Virginia students, professors, and local officials have become increasingly divided about the school's mission (O'Harrow Jr. and Lipton, 1996). Should the university provide traditional training for undergraduates, or should it serve the fast-changing needs of high-technology businesses and residents in the region? Any such thought of changing the basic mission of an organization unquestionably calls for strategic planning.

Organizational uncertainties . Nonprofit organizations often have to deal with changing circumstances around them and make adjustments less traumatic than fundamental mission change. Although organizations' fundamental purposes may be clear, the environments in which they act-both external and internal-are ever changing, calling for modification in how organizations do things. The process of strategic planning allows the leaders of such organizations to speculate, to peer into the crystal ball, and to bring to the surface the uncertainties, thus making possible a more informed way of moving forward.

Decision making . Boards, their chief executives, and their staffs all need a comprehensive and understandable basis for day-to-day decision making. Decisions in governance and management are more reliable when made deliberately, with full examination of possible future consequences, within the framework of a set of determined priorities, and in accordance with the perspective of all of the organization's programs and levels of authority. Strategic planning can give decisions that underpinning.

Fund raising . Most nonprofit organizations need to attract contributed money; many are wholly dependent on donations. A successful fund raising program rests on both a realistic determination of funding needs and a persuasive statement of why people should contribute support. These essentials can emerge best, and perhaps only, from strategic planning. Especially for organizations that are embarking on a major capital campaign for bricks and mortar or endowments, strategic planning is requisite; comprehensive planning is one of the key marks of readiness to undertake the commitment that such campaigns require.

Resource allocation. Of course all organizations-nonprofit, for profit, and governmental-must husband their resources and be constantly vigilant in expending their income and assigning their personnel. Board members of nonprofit organizations, as trustees, have a fiduciary role in financial responsibility. The budgets approved by nonprofit boards are financial plans for the short run; strategic planning enables boards to enact sensible resource allocation over longer periods of several budget cycles.

Performance evaluation. Criteria against which to measure and evaluate how well an organization is doing are established through strategic planning. Szanton (1992) makes the point that "the most challenging questions the board can ask, and the most important questions for the board to answer, must ... deal with ends, with what results are being achieved.... There is no way to tell whether an organization is achieving its purposes unless somewhere those purposes are clearly stated."

Organizational effectiveness. Nonprofit institutions function as a team: the board, the executive, and the staff. The process of strategic planning inevitably throws a spotlight on team effectiveness. Particularly revealing is the focus it puts on board leadership. Strategic planning will measure board commitment and fulfillment of its responsibilities, board support and oversight of staff, and any micromanagement or invasion of the staff's management prerogatives. It will pinpoint the need for change in board composition, organization, or procedures.

Beyond giving clear guidelines for future programs, strategic planning can do much to strengthen the organizational fabric; indeed, planning activity can actually become the adhesive in an emerging team effort. While all of the foregoing reasons for doing strategic planning may not apply to all nonprofits, every organization will find meaning in at least some of them. A self-assessment checklist may help the organization to evaluate how it stands relative to each of these aspects of planning and thus highlight the need to embark on strategic planning.

In sum, organizations that avoid strategic planning are likely to miss opportunities to respond to inevitable or desirable change; they risk what no nonprofit organization can afford: falling out of touch with those they seek to serve, with their supporters, and with the general public, to whom they are responsible.

Precautions

Some volunteer board members have an underlying reluctance to face change, or simply have difficulty accepting the role of planner. Others are unwilling to make the commitment of time or expense that may be involved. Still others are fundamentally skeptical, doubting the value of what can be produced in the exercise of planning. Such resistance calls for a clear expression of the advantages of strategic planning and what is involved in the strategic planning process, but it also highlights the need for candor on the difficulties and hazards.

Without question, in some situations strategic planning should not be undertaken. For instance, times of crisis-such as a major financial crunch, the precipitous departure of the chief executive, or turmoil and conflict among board members or between the board and the staff-are not propitious for successful planning. No organization should undertake strategic planning without the uncompromised support of both the board's chair and the chief executive.

Thus successful planning has a lot to do with readiness. A board is not ready for strategic planning if it is distant from the organization's operations or is meeting infrequently-in a word, if it is not leading. A dysfunctional, noninvolved board may well find a candid, uncompromising self-assessment to be the more useful course to take in place of or preceding strategic planning.

A common but unfortunate mistake is to confuse strategic planning, an essentially internal matter, with strategies for an improved public image. If strategic plans focus on how well the mission and vision will appeal to outsiders, the planning document becomes a public relations statement. It won't do the job. A strategic plan and the process by which it is generated are private; they are for the board to use, with staff support, to determine the organization's future. Only after the plan is formulated should the public relations implications be explored.

A survey questionnaire, no matter how elaborate or professional, no matter how wide a canvass of constituencies, and no matter how useful for other purposes, will not by itself accomplish strategic planning purposes. Polls of members or constituencies can be highly valuable as input to the strategic planning process, offering helpful insights and bringing focus to discussions, but they miss the intrinsic value of interaction, of debate. Planning sessions will not only change people's views, they will also generate new outlooks. The late Secretary of State John Foster Dulles used to say that new ideas come only from the clash of ideas.

No strategic planning process will be exactly right for all nonprofit organizations; "one size fits all" does not apply. Nor is strategic planning going to produce a solution to all problems; expectations must be realistic. However, the fear of complexity should not deter planning efforts. Although writers on strategic planning may introduce complex schemes and devices for resolving differing views on organizational purpose and priorities, such schemes and devices need not dominate the process or be reasons for board members to resist involvement. Some common objections to strategic planning are reviewed in Resource A at the end of the book.

Change and Continuity

Because strategic planning is linked to change, it can threaten the timid. While change is of course at the heart of strategic planning, the essence of good planning lies in balancing change and continuity.

In addition to fearing complexity, board members or staff may be reluctant to engage in strategic planning because they fear or are at least resistant to change. This fear or resistance is rarely acknowledged; people will say they are willing to consider change when in fact deep down they are not, perhaps because they fear loss of control or are protecting what they are used to and enjoy. Thus the often-heard expression "If it ain't broke, why fix it?" may stand in the way of thoughtful planning. The implication is, "We're going along fine; why not wait until we have to do something different." Yet change, if needed, can be easier to accomplish, and much more sensible and reliable, if made deliberately in peaceful times rather than in the middle of crisis. Think of it as preventive medicine: you take steps when in good health, you don't wait for the heart attack to stimulate action.

Such resistance to change can be strongest in a founding executive or chair who can't let go. This resistance is known as "founderitis": a strong leader who still contributes significantly to the organization's effectiveness but dominates decisions and consciously or unconsciously doesn't want it otherwise. However, to make changes that are not needed can be as damaging as to fail to make changes when they are needed. A paraphrase of a time-honored prayer is quite fitting to the circumstances of strategic planning:

God give me the willingness to accept the things that

need to change, The courage to hold onto the things that need not

change, And the wisdom to know the difference.

The Business Analogy

One other, frequently misunderstood aspect of strategic planning warrants discussion at the outset-namely, the value of for-profit business models to nonprofit organizations.

Strategic planning in nonprofit organizations originally took its cue from for-profit business, especially corporate planning patterns developed at the Harvard Business School. While some business planning practices, including the exercise known as SWOT (successes, weaknesses, opportunities, and threats) can be helpful to nonprofit organizations (see Chapter Eleven), there remain important differences that limit the value of business planning systems.

For-profit businesses exist to make money. While strongly influenced by many nonfinancial considerations-such as market share, environmental impact, and public image-they always use a profit margin, a quantifiable bottom line, to guide their course, pattern their planning, and judge their effectiveness. Nonprofit organizations, on the other hand, exist to provide a public service, to afford benefits for members, or to support other nonprofits engaged in public service. Although they must never discount the importance of responsible financial management, nonprofit organizations, in determining programs to undertake and in evaluating their effectiveness, depend inescapably on subjective judgments, on balancing imprecise benefits against precise costs.

Business people active in philanthropy are instinctively inclined to seek to apply business planning procedures to their nonprofit affiliations. In some areas, such as financial management, this approach can be helpful, but not if financial considerations so dominate planning and operations that they override the underlying purposes of the organization.

While nonprofit organizations must always be financially responsible, and while many of their programs may have aspects that have useful numerical measures, they have to plan, and the effectiveness of much of what they do must be judged, on the basis of essentially nonfinancial, nonquantifiable, highly varied, and subjective criteria. It helps to start by examining the organization's mission and seeking out ways and criteria against which to measure success without relying on numbers.

Quantification may help, but in the end one doesn't judge the performance of a school or university by the number of students-though the best institutions will attract the most students-or even by their numerical grades but rather by whether their graduates are educated. How do you measure that? Organizations that care for the homeless are not judged by how many people they serve but by the quality of care they provide and the benefits that accrue to the community.

Continues...

Excerpted from The Board Member's Guide to Strategic Planning by Fisher Howe Copyright © 1997 by Jossey-Bass Inc.
Excerpted by permission. All rights reserved. No part of this excerpt may be reproduced or reprinted without permission in writing from the publisher.