Nonprofit

Management

Chapter 7: Strategic Planning and

Strategic Management

Strategy

Focused on the long term, not on the day-to-day

May be articulated in a written plan or it may be
more intangible
Does not require any particular process
Does require creativity and a different way of seeing
reality

Three approaches to formulating strategy for an

organization (Kevin Kearns, 2000)
Visioning approach
Incremental approach
Analytical approach

Strategic Planning and Strategic

Management

Strategic planning -- a process that produces a

strategic plan, which puts meat on an organization's
strategy and points the way to implementing it
Achieves clarity about the organizations mission and
sets priorities (Bryson, 2004)
Builds consensus about the organization's priorities
through the planning process (Allison and Kaye, 2005)
Strategic planning is not the same as long-range
planning, a business plan, operational planning, or
strategy

Strategic management -- an integrated approach to

managing the organization that is based on the
strategic plan (linking strategy and implementation)

Strategic Planning Process

Prepare for planning

Clarify the organizations mission, values, and
vision
Assess the situation
Identify the strategic issues or strategic questions
Develop goals, strategies, and objectives
Write and communicate the plan
Develop operational/implementation plans
Execute the plan
Evaluate results

Prepare for Planning

Need to spend time up front to build agreement

about key aspects of the strategic planning process
Purpose
Steps in the process
Form and timing of reports
Role, functions, and membership of oversight group
Role, functions, and membership of strategic
planning team
Availability and commitment of resources
Any important limitations or boundaries

Clarify the
Organizations Mission,
Values, and
Vision
Mission
"Mission is the psychological and emotional logic that
drives an organization" (Phills, 2005, p. 22)
Mission statement explains the reason the organization
exists and therefore must be the starting point for
strategic planning

Values and vision

Vision statement -- a description of an ideal future
Values -- principles that the organization holds most
important
Debate about when vision and values should be
articulated in the strategic planning process

Assess the Situation

SWOT analysis (Harvard policy model)

Internal survey -- strengths (S) and weaknesses
(W)
External survey -- opportunities (O) and threats
(T)

Identify the Strategic

Issues or Strategic
Questions

Strategic issues -- areas in which the organization

needs to take action
Four types of strategic issues (Bryson, 2004)
Issues that go to the heart of the organizations vision
and goals, which involve some fundamental change
Issues that require no action at present but that must
be continuously monitored
Issues that are on the horizon and likely to require
some action in the future and perhaps some action now
Issues that require an immediate response and
therefore cannot be handled in a routine way

Develop Goals, Strategies, and

Objectives

Goals -- directions that an organization will

pursue with respect to strategic issues
Articulates broad directions but does not state
how they will be accomplished

Strategies -- approaches the organization will

take to address strategic issues and to achieve
goals
Objectives -- specific, quantified targets that
represent steps toward accomplishing the
goals

Write and Communicate the Plan

Written strategic plan -- records the decisions

reached and the goals, strategies, and objectives
to be pursued
Draft is often used to stimulate wider discussion
throughout the organization and its constituencies
Governing board should eventually take formal
action to adopt the plan as the organizations policy
Can vary in length, format, use of year-to-year
objectives, and other ways

Written strategic plan as a tool for communication

and consensus-building

Develop Operational/ Implementation

Plans

Strategic and operational plans

Can combine into one document or create separate documents
Each plan requires separate processes
Each plan usually requires different individuals to be involved

Operational plan -- plan for putting strategic plan into action

Identifying specific tasks to be completed
Establishing a timeline for their completion
Assigning responsibility for each task
Identifying the resources that will be needed
Defining measures by which the completion or success will be
determined
Other operational details

Portfolio Analysis

Portfolio analysis -- a technique used by business

firms to determine if their various programs, products,
and services are in line with their strategies and goals
Portfolio analysis for nonprofits
Kearns

Strengths and weaknesses

Opportunities and threats

MacMillan

Competitive position
Attractiveness
Alternative coverage

Kearns Strategic Issue

Grid

Source: Based on Kearns (2000)

Opportunities
(growing need for the
program)

Threats
(need not as great OR
being met by another
organization)

Strengths

How to expand the

program in one of our
strength areas to meet a
growing need?

How to defend a wellestablished and strongly

supported program from an
imminent threat (such as
declining demand or
increased competition)?

Weaknesse
s

Should we invest into this

high demand program
(given that it doesnt fall
into one of our strengths),
look for a partner to help
us out, or not invest?

In the midst of declining

demand or increased
competition, should we finish
the program, tweak or
improve on this relatively
poorly supported program, or

Criticism of Strategic
Planning for Nonprofit
Organizations

Strategic planning is not synonymous with and

does not inevitably produce strategy
Planning by wishful thinking (Chait et al.,
2005)
Overconfidence in predictions about the future
Failure of build broad consensus (e.g., only
reflecting consensus of the CEO and senior
executives)
Amount of time and effort required
Failure to match up with the needs or situation
specific to every nonprofit organization