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Real-Time Strategic Planning in a Rapid-Response World

Resource
The Nonprofit Strategy Revolution: Real-Time Strategic Planning in a Rapid-Response World

Contents

Overview
The Real-Time Strategic Planning Cycle
    Form an identity statement
    Generate a Strategy Screen
    Recognize and frame Big Questions
    Develop and test potential strategies
    Implement and adapt strategies
The Real-Time Strategic Planning Kick-Off Session

In-Depth
Organization, Know Thyself
   
 What is our business model?
    Where do we fit in the market?
    What is our competitive advantage?
What Organizational Identity Looks Like

Take Away Tool
The Strategy Screen

Conclusion
Real-Time Strategy in a Rapid-Response World

 

From Becky Andrews, Marketing Manager, Fieldstone Alliance:

JOHN LENNON wrote, “Life is what happens to you while you're busy making other plans." With traditional strategic planning, a lot of life can happen while you're making other plans according to a new book by David La Piana..

In the last Tools issue, I summarized David's reasons for why the nonprofit sector needs a strategy revolution as described in his new book, The Nonprofit Strategy Revolution: Real-Time Strategic Planning in a Rapid-Response World.

This issue of Tools presents an overview of David's revolutionary alternative, the Real-Time Strategic Planning Cycle. Then we'll take a more in-depth look at the critical first portion of strategy—understanding your organizational identity. Finally, we'll give you an example of a Strategy Screen that you can adapt for your own use. First, the overview.

The Real-Time Strategic Planning Cycle
As its name implies, La Piana's Real-Time Strategic Planning process takes into account the ongoing nature of forming strategies. "You can't expect to come up with one grand organizational strategy and be done with it for years. Rather, you must constantly monitor the market in which your organization does its work to understand where your organization stands and to plan for the future."

The diagram below shows you how all of the elements in the cycle combine.

Diagram of the Real-Time Strategic Planning Cycle

As you look at the diagram, note the following progression of steps.

Form an identity statement
Steps A, B, and C. These steps help your organization create an identity statement—a description of where your organization fits in its marketplace, who your competitors are, and what sets you apart from the pack. In other words, it helps you articulate your organization's business model, market awareness, and competitive advantage.

Generate a Strategy Screen
Step D. Using your identity statement as a guide, this step helps you you create criteria (a Strategy Screen) by which you'll assess possible strategies. The next time a critical issue (a.k.a. a Big Question) pops up, you’ll have strategic principles in place to respond quickly. (See Strategy Screen example)

Recognize and frame Big Questions
Step E. Big Questions are new opportunities, like an offer to partner, or challenges such as a community emergency that threatens the life of the organization. Big Questions are anything that causes the organization to stop in its tracks and consider what the implications would be to proceed.

Develop and test potential strategies
Step F. Once you've framed your Big Question, you can use the Strategy Screen you created in Step D to develop and test strategies in response to the strategic challenge (or opportunity) your organization faces. This process will help you reduce the chances of picking the wrong strategy.

Implement and adapt strategies
Step G. Once your organization has developed a strategy that passes your Strategy Screen and answers your Big Question, you can implement the strategy. Again, this is a cyclical process, and your organization will continually be monitoring the strategy in light of marketplace changes.

The Real-Time Strategic Planning Kick-Off Session
Step A through E can be completed by leaders and other great thinkers in your organization during a one-day meeting called the Real-Time Strategic Planning kick-off session. (The Nonprofit Strategy Revolution includes a facilitator’s guide to help you organize and conduct the session.) With this groundwork done, your organization will be able to develop and test strategies more quickly when the need arises.

Now let's take a more in-depth look at the first part of the strategy cycle, your identity statement.

Organization, Know Thyself
Unlike traditional strategic planning’s focus on predicting future trends and setting goals to address them, Real-Time Strategic Planning begins with something quite concrete; an understanding of who you are as an organization—what David calls an identity statement. To establish your organizational identity, you need to answer these questions: What is our business model? Where do we fit in the market? What is our competitive advantage?

What is our business model?
A nonprofit’s business model is usually not hard to pin down. A relatively brief, structured conversation among organizational leaders is often all you need. Nonetheless, such a discussion can lead to startling insights. For example, during a business model discussion

An advocacy organization’s board member might ask, “If our mission is protecting the rights of immigrants, why are we involved in a child care initiative? What’s the connection?”

A human services executive director might say, “Our business model just doesn’t work. The programs we offer are not bringing in enough money to support themselves. Something has got to change!”

These seemingly straightforward discussions can forge links among disparate parts of the organization’s life, sometimes for the first time, and can be powerful interventions in themselves. Your organization has a sound business model when it is clear about its mission, what work it does, how it does its work, and how it finances the work.

Where do we fit in the market?
Market awareness is a keen and continuously evolving understanding of your current position in the market, in the field, and in the sector.

It's knowing

  • What your organization’s market is, whether that market is stable, shrinking, or growing, and who else is in the market
  • Where your organization stands relative to other players in the market
  • How your organization got to its current status relative to others
  • Where your organization wants to go next within the market

Market thinking is fundamentally different from the market analysis used in a traditional three-year nonprofit strategic plan. The market changes quickly, and our ability to predict the future is poor. In the dynamic nonprofit environment, developing and honing market awareness is the best way to support good strategic decision making.

Rather than analyzing market trends every three years, as occurs for most strategic plans, you must continually devote yourself to understanding your current market and your competitors so that you can anticipate changes in time to make adjustments.

What is our competitive advantage?
Competitive advantage is the organization's ability to produce social value using a unique asset, outstanding execution, or both.

David and his team were amazed to learn that not a single organization among the twenty-five in their pilot cohorts had ever held an in-depth discussion of competitive advantage in its prior strategic planning efforts. Nor had most of them given much organized thought to their competition. Generally, they found this analysis to be extremely helpful to understanding their market position. As one pilot organization executive director said,

“We have continued to think about our competition. . . . We have one competitor that is definitely the 800-pound gorilla in the field . . . and we began to ask ourselves why we are creating this organization when the competitor is already so well established in this area. We have continued to think about that and we have developed an answer—one that I increasingly use when I am talking with funders and others who ask me about our mission.”

What Organizational Identity Looks Like
Here are some examples of identity statements:

Active Voice (national media organization):
We help people use media for dialogue and social change within the United States. While our work targets the public, our customers are philanthropists and film producers, corporations and movie studios. Our CEO is the recognized field leader and our highly regarded, diverse staff attracts new clients by advancing socially just public policy. We are developing new clients—studios, corporations, and national nonprofits—augmented by foundation grants, building a sustainable revenue mix.

Arc of Hilo (Hawai’i-based human service provider):
We succeed by providing a range of quality services, and being known and trusted by the local community. We serve adults with disabilities in Hilo and other areas of East Hawai’i. Our services include expanded client support, commercial services work opportunities, and residential units. We want to both employ and make employable more individuals with disabilities than any other provider on the island. We will continue to diversify our funding streams, as well as pursue new and sustainable funding through revenue generating business ventures that employ our clients. We strive to become known as the number one provider of disability services on the island of Hawai’i.

Organizations that understand the importance of a well understood identity often find themselves in better positions in their markets. Simply having a clear idea of who you are is a great first step, even if it is only the precursor of successful strategic planning.

Take Away Tool: The Strategy Screen
As mentioned in the overview, a Strategy Screen is a set of criteria that an organization uses to choose whether or not a particular strategy is consistent with its identity. It's a simple but powerful tool that changes the way a nonprofit approaches new strategic opportunities or challenges.

Articulating your values and priorities outside of the process of responding to an opportunity or challenge gives your organization a chance to think through its priorities without the pressure of needing to respond immediately.

Below is a sample Strategy Screen that you can adapt to fit your organization.

Sample strategy screen for a theatre

Sample Strategy Screen

Real-Time Strategy in a Rapid-Response World
The future is famously unpredictable. Constant change is the primary driver of the nonprofit strategy revolution. David asserts, "We don't have the luxury of expensive year-long strategic planning exercises, especially when their impact on the organization’s direction is usually so slight. Nonprofits need to think strategically every day. Otherwise, life will have happened and our plans will be more like a look in the rear-view mirror."

 

All the Best,

Becky Andrews
Fieldstone Alliance

February 20, 2008

 

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