Strategic planning – most of us do it. Boards know it’s an important part of their direction-setting role. But how do we ensure we create the “best made plans”?

Organizational direction needs to be informed by ongoing strategic thinking and environmental scanning. Organizations operate in an environment characterized by VUCA: volatility, uncertainty, complexity and ambiguity (Bennett and Lemoine, 2014). In such an environment, more practitioners and academics question the value of formal strategic plans that are the most common expression of an organization’s ‘intended’ or ‘deliberate’ strategy (Mintzberg and Waters, 1985).

Although it is impossible to predict the future in a VUCA environment, being intentional in articulating the change an organization wants to make in society remains important, particularly when that change may be a long time coming. Planning timeframes have shifted over the years from 10-year plans, to 3 or 5-year plans. More recently, the pendulum seems to be swinging back with organizations examining what’s on the horizon 10-20 years out. Shorter-term plans identify the milestones en route to the more distant horizon.

Regardless of a plan’s timeframe, most boards recognize that checking in on progress (i.e. on the ‘deliberate’ strategies) and on shifts in the broader environment annually or semi-annually is key to identifying any ‘emergent’ strategies. An organization’s ‘realized’ strategy consists of a combination of the deliberate and emergent strategies that were ultimately implemented (Mintzberg, Ahlstrand and Lampel, 1998).

Visualization of strategies deliberate and emergent (ibid p. 12)

Developing Strategy

Intended and deliberate strategy is generally crafted in one of two ways – driven by the bold vision of a charismatic leader with a dream (think L’Arche Canada’s founder, Jean Vanier), or by an analytic approach, informed by the organization’s vision, data and evidence (e.g. socio-demographic shifts in the population). With an analytic approach the board might play a more active role analyzing relevant data to shape the vision and corresponding strategies. In both cases, ensuring goals and activities are aligned with the overarching vision and mission of the organization is crucial, along with ensuring human and financial resources are available to do the work.

The right people and relevant information are key inputs to strategy development. Jim Collins (2001), emphasizes the importance of “getting the right people on the bus”… or in this case, engaging the right people in strategy development. Even a highly skilled, diverse board cannot develop strategy alone – strategy must be informed by the experiences and perspectives of other organizational stakeholders such as staff, clients, partners and funders. Representative stakeholders are often consulted as part of an environmental scanning process, and are sometimes invited to co-design strategy with the board. Engaging organizational stakeholders in strategy development can build buy-in and support for implementation of strategic directions.

Tools to inform, craft and adapt strategy 

Quality information is a critical starting point for strategy development. Gathering relevant information about the internal and external environment helps establish a common platform from which board and management can consider pathways to the future. Information gathering often focuses on internal data and sector-related reports along with stakeholder consultation processes. Information gathered may be synthesized in the form of SWOT (strengths, weaknesses, opportunities and threats), SOAR (strengths, opportunities, aspirations and results) or PESTEL (political, economic, socio-demographic, technological, environmental and legal) analyses.

These kinds of analyses help an organization uncover key issues, as well as opportunities and challenges. Organizations usually aim for 3-5 strategic priorities and directions to acheive their mission and respond to major issues and opportunities. Any more than that and organizational energy will be diffused. Regardless of the number, all strategies must be aligned with an organization’s vision and mission. Organizations need to ensure their strategies address a balance of internal and external opportunities and challenges.

Questions

What critical conversations and questions will help boards craft, communicate and monitor organizational strategy? The sample questions below relate to organizations at various points in the strategy development process. Many boards have a strategic plan in place and are focused on monitoring and adapting that strategy, while others are developing a new or updated strategic plan.

Fiduciary (oversight)	Strategic (insight)	Generative (foresight)
When were our Vision, Mission and Values last reviewed and updated? Do they need to be revised? Alignment – are our strategies leading us to the achievement of our vision? How will we resource our strategy – e.g. different revenue streams, re-allocation of existing resources?	Do our current priorities remain relevant in the changing environment? Why or why not? How might we do things differently to achieve greater impact? E.g. if we stopped doing X, what might we be able to do instead? What strategies are emerging within the work we’re doing now?	What assumptions do we hold about the way we do our work… does anything suggest that these assumptions are no longer true? What patterns are we seeing in the sector… and how might those patterns affect how we work and/or those we serve? What ‘strange bedfellows’ could bring new ideas to our thinking and work?

Strategic Thinking as a Practice

Strategic thinking feeds strategy development. Effective boards not only have the skills and capacity to think strategically, but make it a regular practice to do so. Critical conversations are one way to embed the practice into board meetings.

In the book Strategy Safari, Mintzberg, Ahlstrand and Lampel (1998, p. 128) frame strategic thinking as ‘seeing’:

• Ahead: looking for what is emerging
• Behind: understanding the historical context
• Above: taking the ‘balcony’ or ‘10,000 foot’ view
• Below: seeking what’s sprouting on the ground
• Beside: removing blinders masking the broader system
• Beyond: speculating about what’s on the distant horizon
• Through: taking action on what you’ve seen and thought

When developing strategy, seeing in all these directions generates new insights, surfaces new opportunities and helps boards anticipate and mitigate risks of their best made plans.

Sandi Trillo and Ruth Armstrong

Recommended resources and references

“20 questions directors of not-for-profit organizations should ask about strategy and planning”. Hugh Lindsay, Canadian Institute of Chartered Accountants, 2008

Good to Great: Why Some Companies Make the Leap… And Others Don’t. Jim Collins, Harper Business, 2001

“Lofty missions, down to earth plans”, V. Kasturi Rangan, Harvard Business Review, March 2004

Moments of Impact: How to Design Strategic Conversations That Accelerate Change. Chris Ertel and Lisa Kay Solomon, Simon & Schuster, 2014

“Of strategies, deliberate and emergent”. Henry Mintzberg and James A. Waters, Strategic Management Journal, Vol. 6, 1985, pp. 257-272

“Off the shelf – How to ensure that your strategic plan becomes a valued tool”. Michael Burns, Brody, Weiser, Burns, Undated

Playing to Win: How Strategy Really Works. A.G. Lafly and Roger L. Martin, Harvard Business Review Press, 2013

Strategy Safari. Henry Mintzberg, Bruce Ahlstrand and Joseph Lampel, The Free Press, 1998.

“Strategic planning that makes a difference and that’s worth the time”. Susan Gross, Management Assistance Group, 2007

The Nonprofit Strategy Revolution: Real-Time Strategic Planning in a Rapid-Response World. David La Piana, Fieldstone Alliance, 2008

The Rise and Fall of Strategic Planning. Henry Mintzberg, The Free Press, 1994

“What VUCA really means for you”. Nathan Bennett and G. James Lemoine, Harvard Business Review, January-February 2014