Strategic Planning: Failures and Alternatives
Jan Masaoka
March, 2011
Here is Part 1 of a two-article series on strategic planning and alternatives to strategic planning.
Strategic planning swept into the nonprofit sector in the mid 1980s. Nonprofits were becoming seriously interested in management techniques, and strategic planning -- along with meeting facilitation and fundraising training -- was a focal point for that interest. Twenty years later, today no organization would dare say it doesn't have a strategic plan.
As the recession deepens, many nonprofits now have strategic plans that they can't move forward on. Those plans aren't helping them figure out what to do instead.
And even before the economic crisis, there has been widespread grumbling about strategic planning. Too often dozens of meetings fail to produce new insights. Nonprofit staff are often frustrated that "the strategic plan is never used," while many board members feel the strategic plan is simply a validation of what the staff is already doing or has decided. Executive directors often get going on new ideas long before the strategic plan is adopted, and by the time the document is finished, it can feel like old news.
Organizations often undertake strategic planning "to get board members engaged" or "to get everyone on the same page," objectives which could be reached in much more efficient, productive ways. Meanwhile, consultants make money (one nonprofit consulting firm charges $200,000 for a strategic plan), and foundations -- for whom the plans are mostly written -- read the plans with eyes glazing over.
This is not to say that strategic planning hasn't been a useful and effective tool for many organizations. Staff and boards are often enthusiastic about strategic planning discussions, and celebrate what they see as clearer goals, a document to give funders, and a sense of good work having been done. Good things that often come out of strategic planning include:
- In the process of establishing goals, issues around values and priorities -- which don't seem to come up in regular board or staff meetings -- are often raised and discussed.
- A long process gives the executive director and the management team the time to think things out as they listen to evolving conversations.
- Although it's often the wrong tool, the strategic planning process is usually flexible enough that the real problems emerge, whether a problem executive director, financial
mismanagement, conflicts between the board and the executive, racial tension, etc. Unfortunately, addressing the issue through the strategic planning framework often confuses the issue and makes it more difficult to resolve.
- Board members like planning: it's creative, allows them to come up with new ideas (seldom encouraged at a regular board meeting), discusses the environment (again, seldom discussed at a regular board meeting), and gives them a sense that the board has a real function.
- Strategic planning can be a vehicle for leadership to raise new ideas and ambitions. Too often executives can't figure out how to initiate change within their own organizations in any way other than the one they know, which is strategic planning.
This is to say that different approaches are needed and are often better choices than traditional strategic planning.
Problems with strategic planning
Aside from bad practices in strategic planning, there are two levels of problems with strategic planning. Let's look at some of the unsaid realities about nonprofit strategic planning as it actually takes place:
- Strategic planning is often driven by funders, which means that from the nonprofit's point of view, a key goal of the strategic plan is to produce a document that will result in continued funding from that institution. (We know one funder that found that 80% of its capacity-building grants were for strategic planning consultants.)
- Strategic planning is frequently used to deflect criticism or unrest, or used to delay decisions. Strategic planning is also used to justify putting decisions on hold, or to avoid taking a stand or making a decision. "We can't get into staffing issues/go into merger talks, etc., until we're finished with strategic planning." And sometimes the delay itself results in problems deepening, and options narrowing.
- In many cases strategic planning has become a ritualized process with elements of an improvisational play starring a high-paid consultant. Funders assign (or signal) their favorite consultants to grantees, resulting in consultants who must be praised to the funders and plans that the funders will like. Discussions are held in thoughtful tones while most participants secretly suspect that nothing will really be decided or changed. But like people at a restaurant with dreadful food, no one wants to say anything in case everyone else is happy.
But even when these issues aren't at play, there are some deeper problems with strategic planning as it's practiced in the nonprofit sector.
First and perhaps most importantly, most strategic plans do not take financial sustainability seriously. As recent evidence, a 2009 book on strategic planning from a well-known nonprofit publisher not once mentioned money, sources of income, revenue strategies, or financial viability. And many of us are all too familiar with the plaintive comment, "We've finished our strategic plan, but now how do we get the money to carry it out?"
In fact, financial sustainability needs to be at the core of planning and the establishment of goals. But neither should a strategic plan simply be about following the money. Strong executives steer planning discussions along the lines of financial viability, but discussing revenue strategies and opportunities should be an essential, explicit part of strategy.
This shocking neglect of financial viability is part of a second, larger problem with strategic planning these days: it focuses on goals, but seldom touches on HOW to achieve those goals. For instance, a plan might be to restore 800 acres of wetlands, but fail to identify the strategy to achieve that restoration (volunteer efforts? corporate funding? legislation?). The goal might be to increase individual donations by 300%, but how will we do that (through individual donations, direct mail, special events?)? It's easy to say, "That will be worked out in the operational plan," sidestepping the real strategic issues of choosing among those vehicles.
Third, strategic planning often fails to build analytic capacity or relationships for the organization; instead, these are often benefits to sole-practice consultants or other for-profit firms. There is obviously a value in having an outsider interview some key community players, but is it better than the relationships and nuanced content that would result from having the organization's leaders -- staff and board -- hold those discussions?
A fourth, common, large flaw in strategic planning is that the big questions can still be unanswered and vague at the end of the process. For instance, after a long process and a 20-page document, board members are still wondering to themselves, "So are we going to close our branch office in Springfield or not?"
Finally, too often confusion, disagreement and financial problems are mistakenly attributed to the lack of a strategic plan. If we know more about alternative frameworks and processes, it's possible for us to identify issues more sharply, and to make the continuous strategic decisions that must be made.
Next: Alternatives to Strategic Planning
Jan Masaoka is editor of Blue Avocado and co-author of Nonprofit Sustainability: Making Strategic Decisions for Financial Viability (Jossey-Bass, 2010). Thanks to Mike Allison and Steve Zimmerman for assistance with this article. Visit www.blueavocado.org.
