Strategic Planning: Essential Questions Before You Start by John W. Durel, PhD and Anita Nowery Durel, CFRE No single approach to strategic planning works for every organization. You have choices, and by making good choices you can help to ensure the plan's success. Before undertaking a planning process, you should spend time answering these questions. Do you really need a strategic plan? The usual approach to strategic planning is to ask questions about what the organization hopes to become or achieve at some point in the future, and then to develop a set of strategies and actions to get there. Jim Collins, in his insightful study Good to Great (2001), found that successful business executives ask different questions: not where are we going, but what are we passionate about, what can we be best in the world at, and what drives our economic engine? For them the process is not one of planning and implementation, but an ongoing, iterative process of asking questions, debating, deciding to try something, assessing the results, and asking more questions. Each iteration brings greater clarity and eventually the company discovers a formula that makes it successful. Such different ways of thinking about organizational advancement have important implications for planning. Are the right leaders in place to produce an effective plan? Wrong leaders, poor plan! The leadership as a whole must represent a range of important perspectives, be able to argue constructively, be both innovative and disciplined, and see both the big picture and the details. What type of plan does your organization need? An entrepreneurial organization needs a plan that will bring focus and discipline to the work without sacrificing the energy and fresh ideas that come naturally. A founder-led business needs a way to broaden the base of support and control without losing the founder's commitment and energy. A stable organization needs to be challenged to try new things and take risks, even if it means dropping things that have worked successfully until now. An aging organization needs to be pushed to action, which may require drastic measures since old ways are entrenched. Here is the rub: each organization will resist creating the type of plan it actually needs. A REX Lifecycle Assessment can help to determine the kind of plan an organization needs. How will you balance the need to get multiple perspectives and include stakeholders in the process, with the need to make decisions and move the planning process forward? In some circumstances it may be valuable to bring a broad group of people into the planning process. This has the advantage of having multiple perspectives on issues and opportunities. It also gives ownership of the plan to many people, which may make implementation easier. However, this approach takes time. In other cases it is more important to narrow the discussion and get things done quickly. What methods will you use for achieving the right balance? What are the necessary components of your strategic plan? Don't waste time working on things that are unnecessary for your success. Stay focused on what your organization needs. Consider these possible components to the planning process. Take time to understand them and decide whether you need them. Mission—this statement usually describes what an organization does. Some statements also include whom the organization serves. Your current mission statement may not need to change. Core Purpose—this statement goes deeper than the mission statement, addressing why the work is important. The best statements clearly show how the organization benefits others and addresses important needs or aspirations. Vision—this statement should be a vivid description of what the organization will be and do at some point in the future. It must inspire and focus. Core Values—these are the beliefs or values that guide the work; they often are meaningless unless they are regularly manifested in daily behavior. Goals and Objectives—these are the goal posts of what the organization plans to achieve over the course of the plan. If the plan includes a Vision statement, the goals and objectives should be aligned, so that the vision may be many years out, the goals are to be attained in say five years, and the objectives are annual benchmarks. Key Indicators—these state the goals and objectives in measurable terms so that progress can be tracked. Strategies—these identify the ways in which the organization will advance toward its goals or vision; specifically, the strategies should show how the organization will provide sustained, unique value in its customers' eyes. Internal Analysis—this provides insight that can enable the organization to build on its strengths and use the planning process to address its weaknesses. This analysis should look at personnel, finances, organizational systems, sanctions, structure and culture. External Trends Analysis—an analysis of external forces that may impact an organization's success, such as the economy, technology, population change, politics and life style. This provides data and insight that can be used to identify strategic opportunities or barriers that may inhibit your progress. Market Research—this can help the organization focus its work where it will do the most good and receive the greatest support. Business Plan—this is the strategic plan stated in financial terms: how much will it cost to implement, and what revenue will it generate? Action Initiatives—these describe the actions that will be taken immediately so that the plan does not sit on a shelf. How will you align the organization behind the plan? If an organization has a clear set of strategic goals, the next step is to ensure that its resources—talent, knowledge, money, time, facilities—are marshalled to ensure progress toward the goals. The plan should shape: The annual budget Work plans and performance review Meeting agendas and committee structure Program plans Collections plans (for museums) How will strategic planning build the capacity of your organization in terms of its people? The planning process itself, and the plan that follows, provide an opportunity for you to strengthen your board and staff in terms of their ability to think and act strategically. The process should be designed to yield not only a written plan but also a set of goals and actions for developing people. How will you ensure that the plan strengthens your organization financially? Too many plans result in facilities and programs that are expensive to maintain. All decisions should go through a rigorous mission vs.margin assessment to ensure that the results will contribute positively to the mission and to financial strength. How will you keep from doing things that divert you from your strategic goals? The ability to say no and to focus on those actions that drive you toward your goals is the heart of being strategic. The organization needs the discipline to (1) say no to new ideas that don't fit, and (2) to stop doing old activities that no longer fit. How will your organization remain nimble so that it can respond to unforeseen opportunities? The strategic plan should not be a straightjacket. Rather, it should provide guidance to enable you, the board and the staff to determine whether a new opportunity is a good one, in light of your goals and objectives. How will you know if the plan is working? To track your progress you will need a straightforward system of measurement. If the process is cumbersome it will be unreliable and time consuming. You must decide what is most important to measure, how it will be done, how often and by whom. Note that if your operating budget and work plans are aligned with the strategic plan (#6 above) then monitoring the plan becomes part of regular management and board meetings. How will you keep the plan fresh? The plan needs to change as new challenges or opportunities arise. A plan is valid only as long as the initial information and assumptions remain valid. Periodically you will need to assess the continued validity of a plan and make adjustments. Annually at least you should consider if it is time to scrap the plan and develop a new one. Before you start strategic planning, contact REX to discuss these questions and the planning process that would be best for your organization.