The Strategic Planning Process

1. The Strategic Planning Process Creating an Organizational Roadmap April 2013

2. PurposeStrategic Management Series • To clarify the nature and purpose of strategy • To explain what it means to think strategically • To equip with tools and techniques can use to develop and implement effective strategic plans

3. Strategic Management Series Courses • Business and Strategic Thinking • Overview of Strategic Management • Strategic Planning • Strategy Implementation and Learning

4. Ultimate Goal of Series At the conclusion of the four part series, nonprofit leaders will know how to create, implement and monitor a strategic management system that will position them for organizational success

5. Today’s Objectives Increase your understanding of strategic planning as a tool for strategic management Provide you with a strategic planning process you can use in your organization

6. Agenda Day One • 9:00 – 9:30 – Introductions, Discussion of Previous Sessions • 9:30 – 10:30 – Strategic Planning – how define, why important, process, example • 10:30 – 10:45 – BREAK • 10:45 – 12:00 – Mission, Values, Services, Customers • 12:00 – 1:00 – LUNCH • 1:00 – 2:00 – Critical Issues • 2:00 – 3:00 – Vision, Goals

7. Agenda Day Two • 9:00 – 9:30 – Welcome, Questions • 9:30 – 10:30 – Performance Measures • 10:30 – 10:45 – BREAK • 10:45 – 12:00 – Objectives, Initiatives • 12:00 – 1:00 – LUNCH • 1:00 – 3:00 – Resource Plan, Annual Plan, Line of Sight Plan, Questions

8. Introductions • Name • Organization and Position • What do you hope to learn in today’s and next week’s sessions?

9. Brief Discussion of Previous Sessions • What have you learned thus far in this series that has been helpful? • What questions do you still have?

10. How would you define strategic planning?

11. Strategic Planning Set of concepts, procedures, and tools designed to assist leaders and managers with strategic management Helps clarify desired future state and how might achieve it “A disciplined effort to produce fundamental decisions and actions that shape and guide what an organization is, what it does and why it does it” (John Bryson, 2004)

12. Why is strategic planning important?

13. Important Because… Engages Board, staff, customers and stakeholders in thinking strategically about the future Sets organizational direction and enhances focus Assists with decision making Assists with resource allocation – should make annual budget process easier

14. Important because… Improves accountability and ability to improve through creation and monitoring of performance measures Provides guidance to employees on what to do and what not to do in their daily work Highlights areas for management and process improvements Helps decide what to do…AND what not to do

15. Creates Organizational Strategy “A good strategy has an essential logic structure that I call the kernel. The kernel of strategy contains three elements: a diagnosis, a guiding policy and coherent action.” Richard Rumelt, Good Strategy, Bad Strategy: The Difference and Why It Matters

16. Emphasizes Strategic Thinking, Acting and learning • Strategic Thinking: The ability to envision potential futures different from the present • Strategic Acting: The ability to execute plans in a methodical, analytical way • Strategic Learning: The ability to analyze and evaluate the results of strategic actions and make changes as needed

17. Emphasizes Strategic Management • Thinking/Planning • Conducting organizational analysis and developing plans (strategic planning) • Allocating resources to support the plan (budgeting) • Doing • Executing the plan (implementation) • Learning • Measuring and evaluating overall performance and progress (performance measurement)

18. Results in Shared Vision

19. Results in alignment

20. Assumption • Your organization has gone thru steps Wally described in his class to determine if your organization is in need and ready for a strategic planning effort • Answer was YES – and team is committed to process

21. Strategic planning Where are we now? (diagnosis) Where do we want to go? (guiding policy) How will we get there? (coherent action) Process Handout Example Plans

22. Activity as learn strategic planning process • You are going to develop a draft strategic plan for your nonprofit • Process: • Group - Review definition and examples for each component of strategic plan • Group - Review means of evaluation • You – Draft each component of Plan • You - Flip Chart your ideas • Some of you - Report out to group

23. Step 1 - Mission Mission Statement: Statement of purpose; fundamental reason for an organization’s existence Examples: • To increase access to dental care for Virginians • To provide affordable housing for elderly, low income persons • To increase market access for local and regional food producers • To bring happiness to millions

24. Means for Evaluating Step 1 Mission: • Does it succinctly describe the fundamental reason for your organization’s existence? • Is it easy to remember; can you repeat it without looking? • Is it easy to understand? • Will employees be able to make the connection between what they do and the accomplishment of the mission? • Does it clearly state the benefit your customers receive from you?

25. Step 2 – Core Values Customer Focused: Solicits and listens intently to customer requirements and expectations; delivers what is promised to customers Core Values: Principles that govern our behavior and the way we do business Examples: • Customer focused • Respect • Accountability • Teamwork • Innovation

26. Means for Evaluating Step 2 Core Values • Do these values convey how you want people in the organization to act when no one is looking? • Will the staff understand the meaning of the values? • Are the values easy to remember? • Will they hold true for the future?

27. Steps 3 & 4 A STEP 3 Products and Services STEP 4 Key Customers • Products & Services: Deliverables that the customer receives • Customers: Any person, group or • organization receiving your product(s) and/or service(s)

28. Examples A STEP 3 Products and Services STEP 4 Key Customers • Case Management • Counseling • Housing • Vocational Training • Job Placement • Tutoring • Women • Children • Men • Neighborhood residents • Low income families

29. Means for Evaluating Step 3 Products / Services • Have you addressed all functional areas in your organization? • Are your products and services the things that your customers receive as opposed to the things you do? • Are there any products or services you should consider adding or deleting based upon customer feedback?

30. Means for Evaluating Step 4 Customers • Are any key customer groups missing? • Is there any way to make the list more concise? • Will your list be easily understood by others? • Will your customer base change in the foreseeable future? If so, please note how it might change

31. Means for Evaluating Customers • Are these the key customers to whom the organization provides services? • Is there any way to make the list more concise? • Will your list be easily understood by others? • Are there any other customers that should be added?

32. Steps 3 & 4 Your Nonprofit

33. Step 5 – Identify Critical Issues Strategic Analysis that includes: • Assessment of Current Situation • Scanning the Future Critical issues serve as the guide for development of your goals Example Critical Issue: How will XX increase funding from individual donors?

34. Tools for Identification of Critical Issues • Assessment of Current Situation • Needs Assessment • Sustainability Analysis • Assessment of Capacity Builders • SWOT – Strengths/Weaknesses • Scanning the Future • SWOT – Opportunities/Threats • Environmental Scan

35. Needs Assessment • Service needs of your customers • Services your organization provides • Services provided by other service providers in the community • Gaps in service

36. Sustainability Analysis Impact  High Mission Impact Low Profitability High Mission Impact High Profitability Profitability  Low Mission Impact Low Profitability Low Mission Impact High Profitability

37. Determining Impact • Alignment with mission • Excellence in execution • Scale or Volume • Depth • Filling an important gap • Community building • Leverage

38. Determining Profitability • Direct expenses • Allocation of common costs • Allocation of administrative costs

39. Strategic Imperatives KEEP , CONTAIN COSTS INVEST AND GROW Impact  High Mission Impact Low Profitability High Mission Impact High Profitability Profitability  WATER AND HARVEST, INCREASE IMPACT CLOSE, GIVE AWAY Low Mission Impact Low Profitability Low Mission Impact High Profitability

40. Assessment of Capacity Builders • Programs • Governance • Management • Financial Resources • Administrative Systems

41. Programs Administrative Systems Financial Resources Governance Management

42. SWOT Analysis SWOT: Develops a clear sense of reality

43. SWOT Analysis Organizational data STEP 5 SWOT Board and Staff Customers Stakeholders

44. SWOT Analysis Internal Strengths:Resources or capabilities that can be used for accomplishing the mission and vision Internal Weaknesses:Deficiencies in resources or capabilities that hinder your ability to be successful STRENGTHS • Visionary leaders • Good facilities • Available learning opportunities WEAKNESSES • High turnover rate • Outdated policies and procedures • Outdated technology • Employee morale

45. SWOT Analysis External Opportunities:Factors or situations that exist beyond your organization that may have a favorably effect on it External Threats:Factors or situations that exist beyond your organization that can negatively affect it OPPORTUNITIES • Untapped financial resources • Increase in access to technology • Destination point • Public / private partnerships THREATS • Increasing crime • Unfunded mandates • Base closing • Increasing customer expectations for services

46. Environmental Scan • What political, economic, social, technological, environmental and legal (PESTEL) trends might effect us? • Who are our competitors? What are they doing? What is our niche? • How are we working with government, other nonprofits, businesses and individuals in the community? • Will be discussed further by Sam on Day Two….

47. Means for Evaluating Step 5 Identification of Critical Issues • Have you determined what your community needs? • Have you determined the impact and profitability of your programs? • Have you identified your internal strengths and weaknesses? • Have you identified your external opportunities and threats? • Have you considered all sources of information?

48. Step 6 - Vision B Vision Statement: • A word picture of the future • A shared image of future success • A big hairy audacious goal (BHAG)

49. Good examples - Vision To be the greatest show on earth To land a man on the moon and return him safely to earth To reduce illiteracy rate to 10% or less by 2015

50. Good examples - Vision • To make my little Newport store the best, most profitable variety store in Arkansas within 5 years; To become a $1 billion company in 4 years • Win the Malcolm Baldridge Quality Award • To improve high school graduation rate to more than 75% by year 2015