Strategic
planning is essential for all organizations operating in the public, private
and non-profit sectors. Strategic plans help organizations take stock of their
resources, determine long and short term goals, and track organizational
progress. Strategic planning is especially important in the non-profit sector,
where broadly defined missions, limited human and financial resources, and a
growing need for services can limit progress and effectiveness. An overview of
the elements associated with strategic planning will help to elucidate the
importance of this vital practice.
The Jossey-Bass Handbook of Nonprofit Leadership identifies the steps involved in
assembling a strategic plan: first, individuals tasked with creating a
strategic plan must agree on a process, including the key decision makers
inside and outside of the organization who can help identify the organization’s
mandate, mission and values. These initial steps, which clarify the
organization’s identity and purpose, act as a backdrop throughout the remainder
of the process. Next, it is important for organizations to assess its internal
attributes and external environment, including organizational strengths and
weaknesses, and environmental threats and opportunities. Once organizations
have clarified their own identity, accounted for their resources, and evaluated
threats and opportunities, they can identify ‘strategic issues’. Strategic
issues are defined as “fundamental policy questions or critical challenges
affecting the organization’s mandates, mission, and values; product...;
clients…; costs…or management” (Renz, p. 241).
Once
these issues are identified, the process advances to the development of a plan
of action. How should our organization respond to a given strategic issue? Do
we have the resources to respond effectively? What is the opportunity cost of
acting in a certain way – are we diverting resources away from programs which
align more directly with the organization’s mandate and mission? Planners will refer
to the decisions about organizational identity and priorities established in
the early stages of the planning process as they develop a plan of action. Ultimately,
organizations benefit from strategic planning because they have engaged in a
purposeful process which produces a sense of direction - and the organization’s
stakeholders are more confident that their daily work is putting the
organization on the right path.
To
underscore the importance of strategic planning, it may be useful to examine
cases where organizations improved their effectiveness by adopting a systematic
planning process. Habitat for Humanity International was a very successful
organization by 1990, when it hired Jeff Snider to serve as chief operating
officer, enjoying large increases in revenue and the delivery of its primary
product, affordable housing. This success forced important questions about
organizational growth to the forefront: the lack of structure in Habitat meant
that it’s “affiliate system was growing at a spiraling rate” (Slavitt, p. 13),
and affiliates were often addressing a wide variety of issues in different
ways. Snider knew that the organization could capitalize on “the array of interesting
and important opportunities” (Slavitt, p. 1), but that strategic changes in
structure and its affiliate model were needed. He first identified different ‘strategic
options’ to expand the organization’s scope, such as ‘Be Opportunity Driven (Respond
to Hurricanes or Environmental Disasters’, or ‘Expand Into Urban Homelessness’.
These options were then assessed along several criterion, including questions
like, ‘Are We Good At It?’ Consistency with Our Past?’ What is the Cost? What
is the Cost of Not Doing It?’ (Slavitt, Exhibit 6). The answers to these questions would define
Habitat’s future direction – indeed, in 2017, Habitat for Humanity’s scope
includes disaster response, financial education, neighborhood revitalization
and other issues related to their initial core mission. Strategic planning was
essential for Habitat for Humanity’s evolution into the successful organization
it is today.
References:
Renz, David O. The
Jossey-Bass Handbook of Nonprofit Leadership and Management. San
Francisco: Jossey Bass,
2010.
Slavitt, Andrew; Habitat for Humanity International. Boston, MA: Publishing Division,
Harvard Business School.
