What Is Strategic Planning?
From my various career roles as either a practitioner, consultant or advisor, I continually see confusion around the term and implementation of the concept of strategic planning. In one case as a consultant, I was brought in to assist after the organization had spent thousands on a firm that was mediocre at best. The operating leaders of the organization received a poorly created strategic plan.
It was so bad no one knew how to implement it. The leaders of the organization received suggestions to a process of recruitment to secure the firm with a sound track record of performance. Have you ever heard of the term GIGO (garbage in, garbage out)? I have not only heard of the term; I have seen it repeated many times over.
The Corporate Finance Institute interprets strategic planning as creating, implementing and evaluating business strategies against organizational goals. The term strategic planning is synonymous with strategic management. The strategic planning process requires planning by the organization’s upper management. This planning process consists of strategy formulation, strategy implementation and strategy evaluation. It also involves upper management, middle management and operational levels.
The strategic planning process can help an organization establish sound strategies, improve communication and empower individuals within the organization. A correct strategic plan provides a proper goal for organizational short- and long term success.
The Balanced Scorecard Institute notes that strategic planning is an organizational management activity that sets priorities and focuses energy and resources. It guides the organization on what it is, who it serves, what it does and why it does it. It evaluates actions taken and monitors success based upon a road map for success. A strategic planning process, if done correctly, can provide a strategy map that shows a cause-and-effect connection between strategic objectives.
This map provides a visual overview of the steps and agreement needed by all parties on what they are trying to accomplish. The goal of a strategic plan is ownership by all parties and understanding how employees can personally contribute to collective goals.
Small Business Chronicle emphasizes that strategic planning is a process in which an organization understands what it wants to accomplish in the future. The strategic planning process for a nonprofit helps the organization increase cash flow, determine operational focus and seek ways to increase the number of people served by the organization. Donors want to be assured that nonprofits have a strategic plan. They want to determine if the management group and team are working toward mutual goals and priorities.
Strategic planning must include the organizational CEO, senior staff and board of directors. Other members involved in this process must include everyone that has a stake in the organization’s progress. The organization needs to evaluate the current environment for opportunities in the next three to five years. Goals need to be established and action strategies developed to meet these goals.
It is important that a financial forecast be part of a nonprofits strategic plan to prepare for unexpected market changes. Performance metrics that are quantitative and qualitative must be generated based upon annual objectives.
The Balance shares seven basic elements of a strategic plan:
- Vision statement
- Mission statement
- Core values
- SWOT analysis
- Long-term goals
- Yearly objectives
- Action plans
According to the Business Benefit Group, employers, employees and stakeholders in a company all play a pivotal role in the strategic planning process. Most organizations look several years into the future. The process should involve identification of your strategic position, gather people and information, complete a detailed SWOT analysis, formulate a strategic plan, execute your strategic plan and constantly monitor performance. Successful organizations have a strategic plan in place. They know the direction the organization is heading in the future.
If you are interested in proper organizational strategic planning, you must hire a consultant with the nonprofit experience to lead this process. Make sure you check references and talk to the CEO of other organizations for advice. Key operational stakeholders and leadership must be an important part of this endeavor. If the eventual road map is sound, you will have pride in the finished product. You will annually evaluate your performance and see if all alignments are in place.
A strategic plan must be active and not passive. Always be prepared for the day a potential donor asks you for the strategic plan, explanation of the plan and how this plan relates to the priority for which you are asking for a significant gift. Too much time and energy will be wasted if your strategic plan misses its mark. There is too much at stake for failure. The future success of your organization depends upon your strategic roadmap. Maximize this process with the correct ingredients to ensure the proper roadmap for the future. Make sure all of your key players are engaged in this process and at the end of the day, own this plan!
Duke Haddad, Ed.D., CFRE, is currently associate director of development, director of capital campaigns and director of corporate development for The Salvation Army Indiana Division in Indianapolis. He also serves as president of Duke Haddad and Associates LLC and is a freelance instructor for Nonprofit Web Advisor.
He has been a contributing author to NonProfit PRO since 2008.
He received his doctorate degree from West Virginia University with an emphasis on education administration plus a dissertation on donor characteristics. He received a master’s degree from Marshall University with an emphasis on public administration plus a thesis on annual fund analysis. He secured a bachelor’s degree (cum laude) with an emphasis on marketing/management. He has done post graduate work at the University of Louisville.
Duke has received the Fundraising Executive of the Year Award, from the Association of Fundraising Professionals Indiana Chapter. He also was given the Outstanding West Virginian Award, Kentucky Colonel Award and Sagamore of the Wabash Award from the governors of West Virginia, Kentucky and Indiana, respectively, for his many career contributions in the field of philanthropy. He has maintained a Certified Fund Raising Executive (CFRE) designation for three decades.