Tips to develop strategic and business plans for your non-profit

When Franca Gucciardi accepted her first CEO position at the Loran Scholars Foundation she quickly realized the immensity of the task ahead of her and contacted her mentor, Alan Broadbent. What followed was a series of conversations, and a process of learning to ask (and then answer!) the right questions. You’re It! is mentorship in book form, the collected wisdom of two experienced CEOs — a practical and accessible guide to leading an organization. It’s everything you wanted to know about being a CEO but were afraid to ask.

The following is an excerpt from Chapter Four “Making plans.” To purchase a copy of You’re It!, click here.

Making plans

Once you have a comprehensive understanding of the key drivers of the organization, you are ready to develop strategic and business plans. Good plans are used to galvanize your team to reach agreed-upon and measurable goals. Plans outline future growth and development by prioritizing an organization’s work for the next three to five years.

This article is focused less on the nuts and bolts of plan-making than it is with the process of preparing a good plan and, in particular, the way to ensure that your plans get the necessary buy- in throughout your organization.

There is a three-level hierarchy of plans that every organization needs.

1. The Strategic Plan identifies key corporate priorities and sets broad organizational
2. The Operating/Business Plan defines the tactics that the organization will pursue in attempting to meet the key objectives set out in the strategic
3. The Sub-Operating/Sectional Plans provide the specifics on how the work will be done. This last level is the one that lets team leaders (or, in a smaller office, individual employees) know what they should be doing, and what they will be held accountable

Part A. The strategic plan

A strategic plan is, in essence, a collection of a few key statements about what the organization is going to prioritize for the next few years. Some organizations redo their plans every couple of years, sometimes spending months and months undertaking elaborate consultation processes that culminate in weekend-long board retreats. While consulting with your stakeholders is often useful, good strategy isn’t episodic. The process of scanning the environment and making necessary adjustments to goals is something you should be doing on a regular basis. All organizations should have built-in feedback loops so that top management is aware at all times of where its donors, clients, staff, and stakeholders stand. When this is the case, there is no need to engage in a formal consultation process to determine what improvements and changes you need to make; you see them as they emerge and adjust accordingly.

A strategic planning process can be more helpful in determining priorities among goals rather than in setting them. Linking the strategic plan with sub-operating or sectional plan is also helpful in identifying how you will measure success, allocate the resources, and set the schedules for achieving goals.

Some people may argue that the principles of good governance dictate that the board develops the strategic plan and then the CEO implements it. In reality, as CEO, you need to take full charge of drafting a strategic plan to be approved by the board. The board is ultimately responsible for ensuring it is the right plan for the organization and for overseeing its implementation, but as the day-to-day manager of the organization, you need to be providing the options and possibilities for the strategic direction.

Boards of directors are usually diverse collections of individuals with different personal strengths and interests. The primary job of boards is to hire the right CEO and ensure that the organization maintains realistic standards of performance. It is also their job to ensure that the organization has a strategic plan that is doable, desirable, and measurable. It is not their job to come up with the plan in the first place.

As a CEO, you are the full-time employee whose responsibility it is to provide the strategic direction for the organization. Board and staff members should not be asked to spend large amounts of time on this process; their talents are needed elsewhere. Remember that no one likes surprises; as CEO, you need to be constantly taking the pulse of your board, staff, and stakeholders and assessing how they see the world evolving. One of your main jobs is to make sure everyone stays focused on getting things done and accomplishing the mission. One way to do this is to assume the responsibility of setting the strategic direction yourself.

FRANCA: Before I use a board member’s time, I assess whether this is the best use of the talent they have to offer. Often I would rather they make five phone calls to potential donors or send five letters of introduction to potential new friends, rather than spend the same amount of time sitting through another committee meeting. I only get so much of someone’s time. I want to make sure it is used to advance our mission.

Your strategic plan should be obvious and within reach. You don’t want to get caught up in overly lofty goals that aren’t going to translate to practical plans.

A good place to start any planning process is simply to have informal chats with a few of the key directors and staff members. Let them know that you are developing a strategic plan, and provide them with some broad strokes of your own thinking. This will give you an opportunity to gauge initial reactions to your ideas.

Ask if there is anything you should be thinking about in particular, any big concerns that people have regarding the next three to five years. These informal chats will provide you with insight into their ideas about the direction of the organization, give you a number of solid ideas, and clarify who will be supportive and who will need to be brought along.

It is a good idea at this stage to avoid formal strategic planning meetings so as not to commit to including anything specific in the plan before you have had a chance to think thoroughly and holistically about it. All you need at this point in the process is some input.

Once you complete this initial phase, you should get down to writing the first draft of the plan and identify the three or four key goals in broad terms. You want to go back to the key decision-makers and show them this draft. Then you can start dealing with any fundamental disagreements.

Remember that keeping the board informed is your responsibility. You do not want to surprise them with any major change of direction or new program. You want to test ideas with board members and have an opportunity to discuss your ideas one-on-one with both your directors and your key staff members.

Boards don’t like surprises, but many a CEO has been bewildered when she has triumphantly tabled a fully formed plan only to have a number of board members rebel. Eventually the plan may be adopted with few changes, but surprised and disgruntled board members can delay approval and cause more work. “No surprises” is a good thing to keep in mind.

By the time you take the draft plan to the board, it should be quite familiar to people around the table. Make sure that the plan is discussed as part of a regular meeting of the board. Don’t fetishize strategy by making it the subject of a retreat or a special meeting; discussing a strategic plan should simply be considered regular board business. You should plan to have a good discussion on these initial broad strokes, and you should expect to make some revisions based on the group discussion. At the next board meeting, the strategic plan should be brought back for final approval, alongside the business plan.

Part B. The business plan

Once you have a first draft of the strategic plan, you will want to develop the business plan that identifies the tactics on how you will accomplish the goals outlined. Essentially, you will need to take the strategic plan, break it down, and then build it back up. For this you need to involve your staff and, together, identify the specific tasks, the timing, and the resources needed, as well the feedback loops that will measure how you are doing. If the strategic plan is about what you are going to do (for example, diversify and increase revenue), the business plan is about how you are going to do it (for example, launch a major gift campaign that will add 20% to the revenue).

There are various ways you can go about meeting the target, but the most likely road to success is one rooted in the strengths and opportunities of your organization. As a result, you will set the course by identifying what you will and will not do: for example, launching an annual major gift fundraising campaign instead of running an event; or running a grassroots direct-mail campaign versus a large-scope endowment drive; building an entrepreneurial venture rather than a capital campaign. All of these might be viable options, but determining which to choose is dependent on the organization’s mission, resources available, and other factors.

The business plan is the place to look to determine if an organization is committed to achieving its strategic objectives. If, for example, a strategic goal is to increase public awareness of an issue or problem, you’d want to see that staff and resources are allocated to communications. If the goal is to engage volunteers in mentoring youth or artists, then there should be a well-supported plan for the recruitment, training, scheduling, and monitoring of the mentors. You want to test if the funds are appropriately allocated. If something doesn’t appear in the budget, it means it isn’t important to the organization.

Part C. Sub-operating/sectional plans

The sub-operating plans will provide you with the nuts and bolts of what tasks are in each part of the operation, when they will be rolled out and completed, how much each will cost, who will be in charge and involved, and how it will be evaluated along the way. The CEO needs to approve these plans, but much of this needs to be delegated.

Your staff must provide you with detailed sectional plans for their areas, such as fundraising or communications. At this stage you may be able to see if you have overextended your commitments. If so, this is the time to make some choices between competing priorities.

Both the business plan and sub-operating plans should include budgets outlining the short- and long-term financial implications of each tactic. You will need to look not just at the numbers for the next twelve months, but also at the projections for the next four years.

This will provide an understanding of where you are heading based on the assumptions embedded in the plans. A new idea might not result in a substantial increase in the first year, but by the time it is rolled out, the idea may cost more than revenue projections can handle.

When you are facing uncertainty, develop scenarios. You may decide that you want to grow the revenue by 20%, but what will happen if you don’t? What would the impact on the organization be if you grew 10% or 30%? It will help to have a few scenarios and contingency plans so that you can be bold in your ambition without putting the organization at high risk. Knowing what alternative scenarios look like will make mid-course adjustments easier.

The business plan should be flexible enough to adapt to changes in the marketplace. If you are launching a pilot program that turns out not to show the expected results, you want to be able to adapt and change course. If the market crashes or a key donor decides to stop funding you, you will probably have to change your priorities.

The plans should be concise and written in everyday language, without acronyms or archaic language. You want to be able to tell people what your plans are for the organization within a few minutes; if you need a ten-page PowerPoint presentation to explain it, you need to go back to the drawing board.

ALAN: The Tamarack Institute for Community Engagement started in 2002 to help communities across Canada build effective collaborations across sectors to deal with key issues, as defined by the communities themselves. Its main project, Vibrant Communities, was a wide range of anti-poverty initiatives, working with upwards of thirty Canadian communities. For years the work was intense and very active. A part of Tamarack’s plan was always to harvest the knowledge being created by the work: how do we build collaborations, what works, where does funding come from, what are community levers for change? Now, because the plan to harvest knowledge works, Tamarack has a new way of operating, primarily as a distributor of knowledge through training and conferences. It facilitates conversations between activists to keep generating new knowledge that is included in the knowledge transfer. Without the original strategy to harvest knowledge, without an operating plan to record and store it, and without each part of Vibrant Communities and Tamarack implementing the operation plan for each locale, the current robust knowledge exchange would not exist.

Summary

At the end of your planning process, there will be stated expectations for your staff about what they are being asked to do, as well as agreed-upon targets that your board will help you achieve. These plans make up the road map for you, as CEO. They provide clarity for stakeholders and staff, and will provide you with the focus and discipline you need to ensure you are steering the organization to the agreed-upon and desired destination.

Tips and resources

1. James Appleyard’s “Strategic Planning” chapter in Five Good Ideas: Practical Strategies for Non-Profit Success (Coach House, 2011) provides practical, sound advice on how to most effectively use the strategic planning process.
2. If you think your board might be unclear in its role, consider giving it the article “Planning to Prevail: A Practical Guide to the Board’s Role in Strategic Planning and Performance Measurement” by David A.H. Brown and Debra L. Brown (Conference Board of Canada, 2000). It outlines how an integrated approach to strategic planning can set the course for a highly successful organization.
3. “Delivering on the Promise of Nonprofits” by Jeffrey Bradach, Thomas J. Tierney, and Nan Stone (Harvard Business Review, 2008) highlights the unique challenges faced by non-profit leaders and the ways these challenges can be overcome by confronting questions related to strategy, capital, and talent.

Related:

• Chapter 1: Making a move
• Chapter 2: Getting the job and getting started
• Chapter 3: Crafting the vision