4 ways NFPs learn from the perils of bad strategy and lack of clarity

Management professor Richard Rumelt asserts that bad strategy abounds in organizations. Former CEO John Bell asserts clarity via strategic plans captured in one page. Not much to disagree with on both counts. They both focus on strategy for shareholder-driven business.

How does strategy apply to multi-stakeholder organizations, e.g., NFPs like hospitals, public service, fund-raising charities, and so on?

The principles of strategy apply equally to these organizations, however the practices have to fit the situation.

The critical strategy issue in large parts of the not-for-profit (NFP) sector is that many organizations are programme and budget driven. This makes them, at best, inefficient. They act incrementally – a new programme and a percent increase in budget have been the norm, and their funders have supported this. Whatever strategy does exist in NFPs can be either somewhat abstract or not outcome- focused. The plan induces status quo and fails to measure and improve the quality of what’s needed in the market or community as they may call it.

The following suggests ways to practice the strategy issues raised by Richard and John in the context of the public / NFP sector.

1. Take a leadership position.

The NFP sector does not enjoy the hierarchical structure that drives decision- making in for-profit organizations. NFPs often look to tools like policy to guide them when the policy is too complex, no policy exists, or the structure is out of date. As someone said, ‘In the absence of a clear plan, leadership matters.’ Better NFP strategy, i.e., outcomes-driven, will come from leadership by the board and executive staff.

2. Engage key stakeholders closely when planning.

In NFPs, it’s not often obvious who the customer is. Strategic planning requires engagement with key stakeholders. The purpose is not to get their wish-list, but to establish their perspective on what’s needed in order for the organization’s leadership to be decisive about the plan. Merge your fact-based data with what stakeholders are telling you – you’ll need their collaboration to make the plan happen!

3. Manage problem diagnosis and decide what needs to be different.

NFPs often tackle complex social or sectoral issues, few of which will be solved, or materialize opportunities easily. Strategists delve into extensive problem diagnosis. This makes it harder for the multi-stakeholder organization to know which of the many problems should be tackled. Strategies built on problems prevent the creativity that’s necessary to be focused and successful. Instead, clarify the problem by prioritizing and explore improved outcome opportunities. And. don’t overlook the NFP’s existing strengths and resources (of which there are always many more than perceived). The strengths/resources are the platform for the future strategy,.

4. Be clear on the difference between goals and strategy (and tactics).

NFP goals must be measurable in terms of outcomes, not just program delivery. Measure in a way that improves (not proves) quality. And, remember the line, be careful what you measure. It’s that simple!

What are your comments on we help NFPs (and for-profit’s) move in the direction John and Richard assert?

Want some ideas on how to develop the plan using solution focus?

Published by

Alan Kay

Alan Kay. Speeding up Change - Strategy. Customer & Stakeholder Co-creation. Solution Focus. Author & Speaker. Book: Fry the Monkeys - Create a Solution.