Is strategic planning an unaffordable luxury right now?

My response is NO. When we are overwhelmed by change, we have a couple of options. One is to “accept our fate” and continue to do what we have been doing – even though it may be significantly less likely to be effective. A more powerful option is to regroup and consider new priorities or programs that build on core strengths. This is the value of strategic planning.

Should we create a strategic plan now?

Recently I got a call from Sarah, the Executive Director of a human services nonprofit, the Immigrant Services Center (not the real names). Sarah is trying to determine whether the Immigrant Services Center should begin the strategic planning process now. At the beginning of 2020, the Center had been about to engage in the process. The organization had been through change in the past few years and the previous strategic plan was no longer applicable. When the pandemic hit, these plans were put on hold. The organization moved their staff to serving remotely, shifted their service delivery model, and devoted significant time to applying for emergency relief grants.

My recent work has sharpened my appreciation for strategic planning. The strongest, most effective, and most sustainable organizations have a clarified mission. This clarity about the change towards which they are working, how chosen strategies contribute to that change, how their financial model and resource development support the work, and how the efforts of each person on the staff and board contribute to the efforts—all of this is part of strategic planning and thinking. On the other hand, organizations that lack this clarity of a compelling vision coupled with financial management that reflects and supports this vision are more likely to flounder: Rather than everyone rowing in the same direction, different people inside the organization are rowing in their own direction, creating a chaotic and distracted organization, making it much harder to move the organization forward.

But if we believe that strategic planning is important, how do we know whether now is the time? That was the question Sarah was asking. As I considered her situation, I thought about how Sarah might figure it out, based on my experience with many different organizations in similar circumstances.

Should we doing strategic planning now?

Step #1:  Before creating a strategic plan, assess your organizational capacity.

The past year, a lot of additional work was added to nonprofit leaders’ plates. A 2020 survey indicated that California nonprofits were “under tremendous pressure.” Whether you hire a consultant for or internally manage the strategic planning process, it adds a large, time-intensive, thought-intensive project to the mix. Does your organization have the capacity to do this work? How important is it in relation to the many other projects?

I recently did some assessment work with an organization that received a large grant during the pandemic and had increased their staff by 50%. Given the changes they had experienced, this organization needs to undergo the process of strategic planning. However, in experiencing growing pains, the most urgent need is to get new employees up to speed and ensure that operations are working smoothly.

Step #2: Before creating a strategic plan, consider financial stability and program stability.

If you’ve determined that your organization may have the capacity to embark on the strategic planning process, the next areas to consider are financial stability and program stability. Take a look at this table to review the four different possibilities:

The left side of the table includes organizations whose “Program Stability” is low right now: these are organizations that have decreased their program offerings significantly due to the pandemic. An example might be museums or arts institutions that may be closed during the pandemic or delivering their services in a significantly scaled back way.

The right side of the table includes organizations that have encountered relatively less disruption to their services over the past year. These are health, human services, justice, and environmental organizations whose services are in high demand.

The lower half of the table includes organizations that, due to the current circumstances, have seen significant declines in revenue. Their particular model might be effectively contingent upon ticket sales or museum admissions.

The upper half of the table may be those who are better suited for the times or have quickly found ways to reconfigure their services to continue serving clients or even expand.

In the lower left square, the brown square represents organizations that are experiencing low financial stability and low program stability at this time. So much is unknown that these organizations should hold off on longer-term planning. These are the organizations that feel like they’re drinking from a firehose – no matter how much hard work they put in, they can’t seem to get on top of it. The economic uncertainty compounds problems.

When is the best time to create a strategic plan?

That doesn’t mean these organizations can’t think strategically. Even in times of significant constraint, it is always valuable to reflect on opportunities. To give a concrete example: When the shutdown started last March, one local youth arts organization that had offered theater classes immediately released a line-up of online or socially distant courses to serve local youth. At the same time, a similar nonprofit went completely silent for several months, as if they were unable to come up with any ideas for how to teach youth without meeting in person. The first organization was able to be flexible because they quickly reflected on the value they were delivering to their students and alternative ways to deliver this value.

In the top left orange square are organizations who have experienced program instability but find themselves in a relatively stronger place financially—possibly due to reserves or shifting their financial model. Contrarily, the lower right orange square might represent organizations whose programs are still running, but they’re facing financial insecurity.

Regardless, these organizations may want to consider some shorter-term strategic or scenario planning, reflecting on priorities and possible paths over the next year or two to make necessary adjustments. Any and all of these planning processes should include reflecting on shifting financial models, to work towards providing services through the rest of the pandemic.

Some of these organizations are strategically planning now. Given the uncertainty we’ve been through (and are still in!), this process may involve a shorter timeframe—maybe a three-year strategic plan rather than a five-year strategic plan.

As the table indicates, decision making about creating a strategic plan is often guided by financial stability. Given the time and financial costs of strategic planning, these organizations need to reflect on whether they can make the investment. Even the organizations that are facing both program and financial stability are not often afforded the luxury of strategic planning. For those in the bottom right orange square, this may be less clear. For those in the top right green square, there are clearer benefits to alignment. 

What our strategic planning client decided

And what about Sarah? Sarah’s organization is on the right side of the table; after the pandemic started, they reconfigured their program to continue to serve clients who need their support. Their financial stability is medium to high. You may be able to tell through the context of this entry that I think it is important to go through the process when possible. Now, Sarah’s organization is moving forward to start strategic planning. She confessed that it feels “funny” to do this process at this moment – but it’s also energizing!

What about your organization? How are you thinking about strategic planning right now?

A version of this post appeared in Nonprofit Pro.

This is the first part of a five-part series on Strategic Planning.

Part 2: Why values matter more than ever

Part 3: How vision lights the way to a better future

Part 4: How one organization went from identity crisis to focus

Part 5: How to take the important last step of strategic planning