Does Your Nonprofit Have A Process For Implementing Strategy?

By: Eugene Fram           Free Digital Image  

My observation is that intense interest in nonprofit organizational strategy only takes place  very three or five years when the strategic plan needs to be reviewed.  The cause, as I see it, is that substantial numbers of nonprofit board members and senior managers lack substantial strategic  backgrounds and interests to enable them to give the plan implementation attention. Most boards I have encountered are fortunate to have one or two  board members with broad based strategic experiences. With nonprofit board members rotating every four to six years, it’s likely that any board member will only participate in one strategic plan change experience.  Also some nonprofit CEOs and senior managers can be directly appointed from staff positions, lacking knowledge of strategy development.    

Based on a survey of commercial organizations by McKinsey, it appears that these boards and their managements have similar strategic challenges as nonprofits. * 

Following (in bold) are McKinsey’s three suggestions for implementing strategy development and my suggestions for adapting them to nonprofit organizations

1. Understanding what strategy really means in… (your nonprofit sector.)   

McKinsey suggests that we are entering the age of the age of the strategist, a significant change.  “It is…”increasing the time ..(a nonprofit’s board & management spend)…on strategy.  Involving more senior leaders in dialogue makes it easier to stay ahead of emerging opportunities, respond quickly to unexpected threats, and make more timely decisions.” *

Nonprofit boards and managements need to think more about fundevelopment, board recruitment, board succession, financial management, marketing opportunities, changes in clientele–to name just a few important topics. 

To help board members and management to better understand the importance of a improved strategy development & implementation, nonprofits can: 

• Provide a current plan update as part of board orientation.
• Ensure that the board focuses on governance rather than micromanagement.
• Have management provide regular updates on operational progress and challenges.  
•  Have a CEO who is knowledgeable about local and national trends in the organization’s mission arena and peer management approaches. 
• Make certain all board meeting items are tied to specific strategies that are noted on the agenda. 
• Have meetings or retreats with board members and senior managers to discuss strategic implementation.  

2. Become expert at identifying potential disruptors

Some local and national nonprofits have sustained themselves for a hundred years or more of disruptions.  For example: Travelers Aid International, founded in 1851, has survived through various disruptions (wars, depressions, pandemics, etc.).  It now consists of 26 social service agencies, 17 airports, seven train stations, and six direct service programs in the United States, Canada, Puerto Rico and Australia. 

Following are potential disruptions with which nonprofit boards and managers might be concerned.

• Technology. This ranges from purchases of equipment/software to cyber security protection via an insurance policy.
• Philanthropy: Be aware of national/local data indicating philanthropic donation levels are increasing or declining.
• Economy: Be aware when national/local salary levels rapidly increase or decline. 
• Succession:  A succession plan should be in place if the CEO should be temporarily or permanently incapacitated. 
•  A plan, developed with the CEO, to determine staff succession potentials needs to be in place.
• Key Person Designation: Acknowledge that key staff persons’ absences could cause serious disruptions. 
• Supply Chain Disruptions: Acknowledge that specific suppliers or service vendors could cause serious disruptions. 
• Competition:  Be alert to for-profits or other nonprofits that want to service your clientele. 

3. Develop communications that can break through.

For nonprofit organizations, in my opinion, it requires several steps. 

First the board must religiously relate actions to the strategy in all agendas for board meetings and board committee meetings. This will surface to the extent to which the board is focusing on strategic or nonstrategic issues.  

Second, the board should elect one of its members to be a Lead Director. **  She/h will be responsible for proactively overviewing the progress the organization is making in strategy implementation, including board reports on his/h findings.   

“This requires discipline, as it is always tempting to invest in further analysis… than in communications design to ensure that … nonprofit boards and management have a good grasp of …(the strategic related issues.)”*

*https://www.mckinsey.com/capabilities/strategy-and-corporate-finance/our-insights/becoming-more-strategic-three

**https://www.icnl.org/resources/research/ijnl/lead-directors-in-public-companies-2