Nonprofits: To Which Group Do You Belong – The 5% Having Successful Strategies or the 70% Who Do Not?
By: Eugene Fram
According to a recent Deloitte report, two Harvard Professors issued a recent study* that highlighted the above statistics, also showing the remaining 25% having “middling success.”
I recently attended a presentation by Cynthia Montgomery, also a Harvard strategy professor. Following are some major strategy guidelines she presented, with examples mainly relating to the business community, and how I see them applying to nonprofit and trustee boards.
Board focus should be to lead strategy developmentt.
Evidence prevails that for-profit and nonprofit directors too often become intrigued with operations rather than policy-strategy development. Simply,there are the more interesting aspects to overview with operations. But in the final analysis, the tool of a leader is strategy development. This is a particular difficult problem for human service organizations where operating details and impacts of helping people are more interesting. In contrast , strategy development often involves hypothesizing about the future and reviewing cold data estimates to support the hypothesis.
Who would miss our organization if we were gone?
This question needs to be asked continually as service markets change, to make certain that the nonprofit’s clientele needs are synchronized with the organization’s mission. The question also helps the organization to define what it should be doing. Currently, for example, those offering, counseling therapy can see the needs for their services declining as drug therapies expand. The March of Dimes, years ago, made the mission move successfully and gradually, when polios vaccines were introduced. In summary a board member, asking this question can help the nonprofit provide strategic clarity for a current clientele group and lead to a better understanding of potentials for future clienteles.
Strategy development will occur only if leaders want it.
A strategic program will not usually evolve from the bottom up, especially in the nonprofit environment. It must evolve from the leaders in the organization – the board, senior managers who have visionary personalities. It must become a system of values, which then becomes part of the nonprofit’s DNA. In these nonprofit organizations, it is not the traditional one or a two-day retreat (usually on a weekend, where goals are established, shelved, not examined again until the next year) on which successful strategic plan are developed. The process must be a dynamic engine that is referenced daily or weekly focusing on the clientele that the organization is serving or will be soon trying to serve.
Strategy programs are most successful when the nonprofit’s mission is tied to its economic purpose.
While this may sound like leading the nonprofit to a profit making status, Professor Montgomery provided an example from her consulting experience with a hospital. A hospital’s mission was to save lives. However, the statement did not did not present an economic purpose. What was needed was an understanding that to compete with other hospital facilities, it had to save lives in an efficient and effective manner, or it would not be sustainable as a life saving institution.
According to Professor Montgomery, effective and efficient strategy development and execution bring clarity to what the organization is attempting to do. Thoughtful strategic plans allow both business and nonprofit groups to accomplish their missions and to be sustainable.
Do it well and a nonprofit can be in the top 5%?
*Deloitte Development, LLC (2012) Improving board effectiveness: Oversight of strategy, November, p.2.