Strategic planning, a management technique long ago rejected by for profit businesses, thrives in the charity industry mostly because funders insist on it. And the exercise has drifted from both strategy and planning to emphasize consensus-building instead.
A blog posting by the excellent Nonprofiteer offered advice to charities and nonprofits on how to expedite the production of a strategic plan to satisfy funder requirements. She offered a seven-step solution that a board could see through with just three (long) meetings.
What struck me about the solution was how little actual strategic thinking or even planning was involved. The process seemed to heavily favor brainstorming sessions, with small groups airing issues that are then evaluated and sifted to generate a final report that picks out the single most important task relating to each of three or four main issues facing the organization, then lists goals and objectives for the next one to three years.
The emphasis on reaching a consensus is so central that Nonprofiteer suggested that the organization pay up to $10,000 to find an outside facilitator—not someone knowledgeable about social services or arts management, or finance or marketing, just someone to manage the process.
It wasn't always this way. Strategic planning was the business management buzzword of the 1960s, championed by Fortune 500 companies like General Electric. But corporations had rejected strategic planning by the 1990s. The Rise and Fall of Strategic Planning (1994), written by Henry Mintzberg, a former president of the Strategic Management Society, exposed its weaknesses as it had been practiced in corporations: it was too formal, it relied on forecasting tools that couldn't deal with unexpected changes, it encouraged politics, and it made companies less adaptable.
In a Harvard Business Review article based on the book, Mr. Mintzberg noted that most strategic plans were actually program plans: filling in the operational details of strategies that already exist. It seems to me that this is the process that carried over into the charity industry. What Nonprofiteer describes is a process for program planning, not strategic planning.
Yet there is a desperate need for genuine strategic planning in the charity industry today. The stagnation of funding in the social services sector and the retiring of vast numbers of baby-boomer charity chiefs are two issues that radically change the environment in which charities operate. The future will be quite different from the past, so what is needed is leadership that is able to operate through synthesis rather than analysis.
The organizations that will survive will be the handful that are creative and lucky enough to see a path through the difficult decade to come. My own view is that the primary means of strategic survival for most small scale organizations will be through alignment with a larger scale organization in a way that preserves some autonomy and responsiveness to the local community. But this is not a result that will be achieved by consensus—it will require leadership.
Tierney says that larger scale organizations would have access to other resources, which I suspect means that they pay for consulting services from Bain at the going rate. Bridgespan's Form 990 reports that the company operates with consultants borrowed from Bain & Company, which continues to pay their salaries while on loan.
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