NGO Strategic Planning

Introduction

Several years ago a friend who worked in the private sector suggested that I create a personal vision statement to consider my future. His multi-step process of creating a statement proved to be an effective strategy that I continue to use and recommend. This personal vision statement closely relates to the strategic planning process for nonprofit organizations and non-governmental organizations (NGOs). The planning process establishes a framework for organizations to assess their past, present and future. Such planning is particularly important today as NGOs represent an increasing number of causes around the world and answer to many different interest groups. The following article details the importance of a strategic plan, the variety of methods available to organizations, the implement process in an NGO as well as helpful Internet sites.

Strategic Planning: Definition

Organizational strategic planning is difficult to define because it encompasses a multi-faceted analysis of past and present work with the goal of creating a vision of the future. John Bryson, an expert in nonprofit management, defines “strategic planning as a disciplined effort to produce fundamental decisions and actions that shape and guide what an organization (or other entity) is, what it does, and why it does it” (2004, 6). Henry Mintzberg, author of The Rise and Fall of Strategic Planning, believes “planning is a formalized procedure to produce a . . . result, in the form of an integrated system of decisions” (1994,12). The strategic planning process is organization-specific; some scholars see it as a means of limiting the organization’s scope (Bryce 2000, 585) while others view it as a forum for exploring new options (Bryson 2004, 9). Most important are the factors that guide strategic planning for NGOs and the particular forces that define the process.

The Importance of Strategic Planning

Many NGOs often delay implementing a strategic plan until unexpected events, such as political changes, conflict among partnering organizations, new demands from clients, or changes in donor expectations, force them to reassess their operations; however NGOs continue to struggle between prioritizing resources for clients now versus resources for the organization’s future (Lewis 2003,.331-2). Yet, strategic planning is vital to strengthening any NGO’s current reputation, services to clients, and future capacity, so it should not take a crisis for an organization to contemplate a strategic plan. Bryce enumerates the possible benefits to a strategic plan including better decision-making, more effective organization, and more benefits to those who receive services (2004,11-12).

Externally, the impression that an NGO’s work creates for those in contact with the organization, as well as the general public, can influence future government support, funding streams and partnership opportunities. In the short term, a strategic plan can help meet funding requirements but, in the long-term can generate strategies to increase funding as well as diversification of revenues. Secondly, in the short-term, an NGO with a strategic plan may appear to be stronger in comparison with similar organizations lacking such plans. In the long-term, a strong plan can attract more public/private partnerships, securing the political and financial future of the organization (Moore 2000, 200).

Internally, an NGO working within the framework of a strategic plan demonstrates interest and willingness to invest in the future health of the organization and, in turn, its workers. Such a positive environment can contribute to increased productivity and efficiency, and in the long-term strengthen employee and client loyalty. Bryce, author of the resource book, Financial and Strategic Management for Nonprofit Organizations, highlights the fact that when an organization fulfills a need, it maintains client consistency and organizational validity (2000,605). In addition, the implementation of a strategic plan is important beyond the inclusion and consideration of external and internal groups. As organizations undergo greater scrutiny, there are many issues of responsibility and accountability that a strategic plan can address.

Case Studies:

Citizen’s Committee for Children of New York (CCC)

The consulting firm, TCC Group, cites one important case where they assisted a New York City nonprofit on a strategic plan that experienced positive results. Mittenthal, President of TCC Group, details how the Citizens’ Committee for Children of New York (CCCNY) worked with TCC Group to devise a strategic plan focusing on reassessment of service delivery and available resources and was timed to begin with the organization’s 50th anniversary (Mittenthal 2002, 9). Surprisingly, CCC gained a great deal more than a reassessment of their work, mission and internal resources. As Mittenthal states, “the plan helped CCCNY double its fundraising within two years, becoming an even stronger and more effective advocate for children while eliciting the single largest funding increase for children’s mental health programs in the history of New York State” (Mittenthal 2002, 9). These unexpected results from their strategic plan demonstrate the external benefits of gauging an organization’s current abilities and guiding it into the future beyond the stated objectives. With a strategic plan, CCCNY was able to present an image of a strong organization worthy of funding and able to use that funding appropriately. Project for Pride in Living (PPL)

John Bryson, a nonprofit consultant, details a Minneapolis, Minnesota nonprofit’s transformation under a recent strategic plan in his book, Strategic Planning for Public and Nonprofit Organizations. According to Bryson, Project for Pride in Living’s (PPL) was familiar with the strategic planning process and had regularly enacted such plans every five years, but their new 2002 plan emphasized external pressures of fundraising, accountability measures, and maintaining relevance in a changing world (Bryson 2004, 24). The organization worked hard to assess their strengths, weaknesses, opportunities and threats, and found a surprisingly large number of opportunities, despite the competitive environment (Bryson 2004, 144-5). As PPL worked on creating a strategy from the SWOT analysis the organization identified four goals: “sustainability, measure effectiveness, coordination, and increased leadership in role” (Bryson 2004, 204). These goals meant that PPL’s new strategic plan would focus on programmatic elements; however, the planning process had another, unexpected result in a better decision-making process as well. Bryson points out that strategic planning had inadvertently reduced PPL’s board from an unmanageable 46 board members to a smaller 33 members, each with a more specific and active role on the board, in the organization, and as an educated decision-maker (Bryson 2004,.323). This is yet another example of how an organization sets out to devise a strategic plan with specific goals in mind but is strengthened by unanticipated benefits resulting from the entire process.

Accountability

Strategic planning is not a new management technique; it has been used in various forms for decades in the private and public sectors.(Moore 2000,184). NGOs have slowly evolved from operating without oversight requirements to becoming a recognized part of the nonprofit sector with its own evaluation needs (Lewis 2003, 326-7) so moving towards strategic planning is a logical step. There has also been a shift toward greater management and standardization of organizational practices (Bryce 2000, 612; Lewis 2003,340), particularly as organizations work together across borders. Most importantly, the reason behind the increased accountability requirements for NGOs is clear as David Lewis, an expert in NGO management issues, states: “a powerful global media system and the spread of democratic reforms . . . have brought heightened expectations for participation and transparency” (2003, 327). The bottom line is people want to contribute time, money and resources to worthy organizations. Accountability does not need to be a worrisome issue for NGOs and, instead, it should be embraced as a valuable means to evaluate the organization’s work, its resources and how effectively it meets goals. In fact, this can be viewed as an exciting period for NGOs to measure their work and envision future prospects. Unfortunately, there are concerns that accountability requirements may detract from the organization’s main purpose and work (Lewis 2003,339), but debate continues. Until concerns about accountability are resolved, organizations will need to continue developing strategic plans that include evaluation and may need flexibility to accommodate changes in standards and requests from outside forces (Mintzberg 1994, 185).

The Strategic Plan Steps - Scholars’ Perspectives

Many management scholars have tackled the subject of strategic planning with clear steps; the number and order of steps varies between scholars, but there is a consistent theme of integrating communication, discussion, analysis and evaluation into the planning process. Bryson’s “ten-step strategic planning process” is outlined below:

1. Initiate and agree on a strategic planning process.
2. Identify organizational mandates (listed formally in paperwork filed to create organization and informally the set of ideals workers believe in (Bryson, 37)).
3. Clarify organizational mission and values.
4. Assess the external and internal environments to identify strengths, weaknesses, opportunities, and threats (external examples include competitor organizations, political support and funding while internal examples include staff abilities and resources).
5. Identify the strategic issues facing the organization.
6. Formulate strategies to manage the issues.
7. Review and adopt the strategies or strategic plan.
8. Establish an effective organizational vision.
9. Develop an effective implementation process.
10. Reassess the strategies and the strategic planning process (2004,.32-4).

These steps provide excellent direction, but organizations are often forced to tackle the process at different stages when crises arise (Robert D. Herman & Associates 2005, 192). As previously mentioned, the strategic planning process is organization-specific and influenced internally and externally at the outset of the plan. This means that some organizations may not have the ability to set mandates or a vision, but rather must tackle a plan in the middle of the process. Another scholar, Herrington Bryce, delineates a similar path as Bryson but includes a financial element to the process:

1. Identify needs
2. Define its mission
3. Evaluate its capabilities
4. Assess its external environment
5. Set objectives
6. Select strategies
7. Design programs
8. Determine a budget
9. Evaluate performance (2000, 586).

The inclusion of a financial element is important as NGOs are increasingly forced to consider issues of accountability and ongoing revenues. Generally, any strategic planning process requires organizations to examine the mission, vision, environment, and capacity. Secondly, the process necessitates important decisions about what the organization wants to achieve, how it wants to achieve it, and how long this process will take. At present, there is no clear consensus as to which plan outline is most often used among nonprofits when creating a strategic plan and Mintzberg’s book, The rise and fall of strategic planning: Re-conceiving roles for planning, plans, planners, spends a great deal of time cautioning about strictly following any plan without considering unexpected changes (Moore 2000, 173). Therefore, an important unspoken component of any strategic plan is the ability to make changes and work on different steps as the need arises. This flexibility can bring welcome new opportunities.

Non-Governmental Strategic Plan versus a Business Strategic Plan

A business management approach to strategic planning follows a similar path as an NGO’s but, as Mark H. Moore, an expert in planning in private, public and nonprofit sectors, points out -- the questions a private firm must answer differ as well as the context of the process (Moore 2000, 187-8). Understandably, a business focuses on the bottom line and achieving desired profit margins, but there is also the issue of investors, the most important stakeholders regarding the firm’s strategy (Moore 2000,186-7). It is unclear if the flexibility of strategic planning differs between the private sector and nonprofit sector; however the lower number of stakeholders in most businesses may lend them toward a more flexible planning process, reflected in the ability to change. On the other hand, the opposite may hold true as businesses are always driven foremost by their financial performance, whereas nonprofits have a stated mission (Moore 2000, 195) that can change, with a consensus, to reflect the environment.

Revisiting the Mission and Vision

In order for any NGO to implement a strategic planning process, the organization must consider its mission and vision in relation to its current programs. Insight into the organization’s present mission, vision, and activities will provide the framework for the NGO to define its future work, expansion and changes. For example, if an organization has strayed from its current mission, they must evaluate the new direction to determine if a change of course is what is needed. Was the diversion a temporary shift or does it reflect a stronger issue internally or externally? An important consideration is the future mission, vision and relevancy in a larger context. Bryce calls this issue the “life cycle of needs” (2000,.601); organizations need to be aware of the longevity of their work and how effective their position will be in the future. On the other hand, Moore discusses the problem of “mission stickiness” (2000, 192) where some organizations constrain their work by maintaining a narrow interpretation of their mission, thus limiting their vision and scope of work. Again, flexibility is the key to a successful organization and NGOs must be prepared for future scenarios (Bryson 2004, 4).

Strengths, Weaknesses, Opportunities, and Threats Analysis (SWOT)

Another element of the strategic plan is to consider future needs and address organizational flexibility through a strengths, weaknesses, opportunities, and threats (SWOT) analysis (Moore 2000,.184; Bryson 2004,.129; Mintzberg 1994,.36). This analysis of current operations is integral to pinpointing what areas the organization should focus on and what it should avoid in future operations. As mentioned, recognizing clients’ needs directly relates to the opportunities and threats NGOs may encounter as programs gain or lose relevance. Internally, an in-depth look at the organization’s programs will provide insight into the organization’s strengths and weaknesses, including the caliber of programs, skills and education levels of the staff, and the number of clients. Moreover, Bryce says that such recognition of strong versus weak programs leads directly to the strategy for the organization (2000,.589). Externally, the organization needs to look at the opportunities available in the community for future funding and programs while considering the threats from competing organizations and the resources available.

In order for a full SWOT analysis to take place, an NGO needs to include a diverse and representative group of individuals who have a vested interest in the organization. The inclusion of stakeholders, employees, clients, and others, is important to the success of any strategic planning process (Bryson 2004, 23; Lewis 2003, 334). An informed SWOT analysis of programs and services requires insight from individuals representing those areas. Their participation provides much-needed information into the organization’s true strengths and weaknesses. Secondly, these individuals are important contributors to the creation of any revised mission and vision as well as the implementation of the plan. It seems contradictory for higher level directors and board members to impose a strategic plan on lower-level program staff without gaining valuable insight from those working at the direct-service level. Also, implementing a new plan without approval from the lower staff can lead to resistance and hinder the strategic plan.

Once a well-represented cross-section of the organization’s stakeholders has been chosen and information regarding the internal and external environment has been gathered, then the SWOT analysis can begin. The process is important and there are some excellent resources available such as the outline on the Marketing Teacher website (http://marketingteacher.com/Lessons/lesson_swot.htm) which explains the process of identifying the external opportunities and threats for the organization, and, on the other hand assessing the organization’s internal strengths and weaknesses. Many organizations will identify several items for each part of the analysis and once the SWOT analysis has been completed, the organization should choose the strengths and opportunities to focus on within the creation of the organization’s strategic plan.

SWOT Analysis Example

Let’s use an imaginary international aid organization with a program focus on natural disaster relief as an example for our SWOT analysis. If we think about the external environment, this organization may identify increasing attention on climate change as an external opportunity with the numerous recent natural disasters (tsunami, hurricanes, earthquakes, etc) leading to increased funding and publicity opportunities. That same organization may note the increasing number of organizations serving the same purpose of disaster relief (as a result of more media attention) as an external threat because increased competition limits the amount of funding and attention. On the other hand, imagine the same disaster relief organization has a large group of highly trained volunteers, based in North America, who are ready to travel for such emergency situations. The organization may see this group of highly trained volunteers as an internal strength, but their geographic concentration in North America may be identified as an internal weakness when it comes to response times to the increasing number of natural disasters in South Asia.

After an organization has identified its internal strengths and weaknesses, as well as the external opportunities and threats, it is time to take that information and formulate a plan. If we return to the example of the natural disaster relief organization, perhaps this organization will implement a strategic plan that expands or focuses new programs on climate change in a geographic region best suited to the location of its highly trained volunteers, rather than responding to every natural disaster globally. On the contrary, the organization may decide that their strategic plan should work on strengthening partnerships with other organizations that currently provide better services in regions not as easily accessible from North America. Again, these decisions are best made by the organization as a whole with the support of the various stakeholders.

Implementing the Strategic Plan

Once an organizational assessment has been conducted with all the relevant stakeholders’ input, a strategic plan can be created and adopted. Announcement of an organization’s strategic plan should be a joint effort between the board and executive director to demonstrate leadership support and the inclusion of lower-level staff will show leadership’s recognition of employees and volunteers. Changes in the organization’s mission, vision and emphasis should be straightforward with a clear timeline to guide the NGO staff in changes.

Yet, despite taking a rational approach to the strategic plan, including necessary groups, and maintaining a clear level of communication; there needs to be constant evaluation. Once the strategic objectives are established, a system of accountability must be enforced to determine the effectiveness of the plan, revise any portions that need new vigor, and include the various stakeholders (Robert D. Herman & Associates 2005,.188, 191). Performance measures are vital to retaining credibility both internally and externally, and this reduces divisions within an institution (Robert D. Herman & Associates 2005, 181). Bryce suggests using evaluation, benchmarking and reporting methods to analyze the efficiency of the organization’s strategic plan (2000, 612). These evaluative methods help to illustrate the organization’s effectiveness in reaching its strategic goals, maintaining its position in relation to outside organizations, and building its relationship with the community. Evaluation also means constant communication with key stakeholders and recognizing the need for flexibility.

Conclusion

The strategic planning process is a learning process and tackling management issues will remain an on-going issue for NGOs (Lewis 2003, 341) but, the results can be extremely rewarding. Also, strategic planning, a fluid, on-going process, may be conducted by one organization which addresses its mission before conducting a SWOT analysis, whereas another may see the benefit to conducting a SWOT analysis first. Revisiting the focus and direction on a regular basis provides an opportunity for all contributing members to be tuly a part of the organization, and it gives the institution even more validation for future success. Yet organizations will need to be mindful of finding a balance between the need for stability in the planning process and the need for flexibility to address the changing needs in the outside world (Mintzberg 1994, 183-4). This is a time-consuming process that requires the support and commitment of the organizational stakeholders, or else the benefits may not be longlasting.

Helpful Internet Links

Benchmarking Links

Free Management Library’s Overview of Benchmarking. n.d. http://www.managementhelp.org/quality/bnchmrkg/bnchmrkg.htm (accessed February 25, 2007).

General Physics’ Operational Excellence, Benchmarking page. n.d. http://www.gpworldwide.com/operationalexcellence/benchmarking.asp (accessed February 25, 2007).

iSixSigma’s Benchmarking Methodology. n.d. http://www.isixsigma.com/me/benchmarking/ (accessed February 25, 2007).

Project Evaluation Links

NetMBA’s PERT Chart. n.d. http://www.netmba.com/operations/project/pert/ (accessed February 25, 2007).

Strategic Planning Links

Levinger, Beryl. n.d. Strategic Planning Checklist. http://www.gdrc.org/ngo/bl-stratpla.htm (accessed January 2, 2007).

McNamara, Carter. 1997. Strategic Planning (in nonprofit or for-profit organizations). http://www.managementhelp.org/plan_dec/str_plan/str_plan.htm (accessed January 21, 2007).

SWOT Analysis Link

Marketing Teacher’s SWOT Analysis : Lesson. n.d. http://marketingteacher.com/Lessons/lesson_swot.htm (accessed February 25, 2007).

References

Bryce, Herrington J. 2000. Financial and strategic management for nonprofit organizations: A comprehensive reference to legal, financial, management, and operations rules and guidelines for nonprofits, 3rd ed. San Francisco: Jossey-Bass.

Bryson, John M. 2004. Strategic planning for public and nonprofit organizations: A guide to strengthening and sustaining organizational achievement, 3rd ed. San Francisco: Jossey-Bass.

Bryson, John M. 2004. What to Do When Stakeholders Matter: Stakeholder Identification and Analysis Techniques. Public Management Review, 6, no. 1: 21-53. http://www.columbia.edu/cu/lweb/ (accessed January 16, 2007).

Lewis, David. 2003. Theorizing the Organization and Management of Non-Governmental Development Organizations: Towards a Composite Approach. Public Management Review 5, no. 3: 325-344. http://www.columbia.edu/cu/lweb/ (accessed January 12, 2007).

Mintzberg, Henry. 1994. The rise and fall of strategic planning: Reconceiving roles for planning, plans, planners. New York: The Free Press.

Mittenthal, Richard M. 2002. Ten Keys to Successful Strategic Planning for Nonprofit and Foundation Leaders. http://www.tccgrp.com/pdfs/per_brief_tenkeys.pdf (accessed February 27, 2007).

Moore, Mark H. 2000. Managing for Value: Organizational Strategy in For-Profit, Nonprofit, and Governmental Organizations. Nonprofit and Voluntary Sector Quarterly 29, no. 1: 183-204. http://www.columbia.edu/cu/lweb/ (accessed January 16, 2007).

Robert D. Herman & Associates. 2005. The Jossey-Bass handbook of nonprofit leadership and management, 2nd ed. San Francisco: Jossey-Bass.