Transcript Robert M. Sheehan, Jr., Ph.D., CFRE

Strategies for Organizational Success II - June 27, 2012
BREAKTHROUGH
STRATEGY
Robert M. Sheehan, Jr., Ph.D.
Principal
Sheehan Nonprofit Consulting
@SheehanImpact
[email protected]
301.523.1864
www.SheehanNonprofitConsulting.com
© Robert M. Sheehan, Jr., Ph.D., 2012
1
Strategies for Organizational Success
Series
Sponsors:
Additional Support:
Hudson Family Fund
2
ABOUT
ROB SHEEHAN
*Robert H. Smith School of
Business, University of
Maryland
 Academic Director, Executive MBA
Program
*Sheehan Nonprofit Consulting
 Strategy, Leadership, Teamwork
3
ABOUT
ROB SHEEHAN
 Ph.D., The Ohio State University
 College of Business
 School of Public Policy &
Management
 Organization Development,
Leadership, Organization
Effectiveness
 Published Researcher
4
ABOUT
ROB SHEEHAN
 CEO, 18 years, Two National
Nonprofits
 AΣΦ Educational Foundation,
1981-1990
 LeaderShape, Inc., 1992-2001
 CFRE (Certified Fund Raising
Executive), 1986-2004
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6
DESIGN
FOR THE DAY
 To provide you with a working
knowledge of the Breakthrough
Strategy approach by creating a
completed “draft” strategy for your
organization
 To demonstrate the steps you can
go through with a Strategy
Development Group to develop
your “official” strategy
7
THE IMPORTANCE
OF LEADERSHIP
 Nothing we discuss today can be
successfully utilized within an
organization without effective
quality leadership.
 Ethical, Inclusive, Authentic,
Empowering
 Contributes toward building a
more just, equitable and thriving
society
8
QUICK
SURVEY
How many of you think that
most people in the nonprofit
world work very hard?
9
QUICK
SURVEY
How many of you think that
most people in the nonprofit
world are smart?
10
LEAP OF
REASON
“Incremental Change is Not
Enough”
-Mario Morino
Leap of Reason
11
BREAKTHROUGH
STRATEGY
The intention of the Breakthrough
Strategy approach is to drive
higher levels of innovation and
creativity throughout an
organization to it increases its
Mission Impact.
12
NEW PATTERNS
OF THOUGHT
“The problems we face cannot be
solved using the same patterns of
thought that were used to create
them.”
- Albert Einstein
13
BEING
UNREASONABLE
“The reasonable man adapts himself
to the world; the unreasonable one
persists in attempting to adapt the
world to himself. Therefore, all
progress depends on the
unreasonable man.”
- George Bernard Shaw
14
“I thought I would drop you a note to
tell you how much I enjoyed your
workshop on strategic planning at
the NeighborWorks conference. It
has fundamentally changed the
way I think about this
issue. Many thanks for making
the time to share this information
with agencies like ours.”
- Denise Matyka
Executive Director
Project Home, Madison, WI
15
WHAT IS
STRATEGY?
 Strategy is more than strategic planning
 Strategy is not just a collection of goals
and budget forecasts
 Most organizations have plenty of
plans, but very little strategy
 Strategy is an integrated and coherent
cause & effect performance story which
has a beginning, middle, and end.
16
WHAT IS
STRATEGY?
Strategy is an integrated and coherent
explanation of how an organization is
going to guide its performance in the
future
17
WHAT IS
EFFECTIVE
PERFORMANCE?
 For Profits:
 $$$$$$$$$$
 Non Profits:
 Mission Accomplishment
18
WHAT IS
NONPROFIT STRATEGY?
Nonprofit strategy is an integrated and
coherent explanation of how a nonprofit
organization is going to accomplish its
mission of making a difference for
society in the future
19
NONPROFIT
STRATEGY
 The purpose of having a strategy is
to guide the organization toward its
desired future.
 Crafting strategy is a creative act, not
an analytical function. It is a process
of creating the organization’s desired
future, considering its current
situation, and designing a set of
actions which will catapult it forward.
20
NONPROFIT
STRATEGY
The “cause & effect performance story”
tells how you will get from “here to
there” while . . .
. . . Leveraging your Strengths,
Fortifying your Weaknesses, Seizing
your Opportunities, and Blocking
your Threats.
21
PRODUCING HIGH
PERFORMANCE
• A “systems” approach – focuses on
the “whole” of the system and asks:
What are the “essential elements”
that make the system effective?
• The essential elements of
organization performance:
• Financing
• Staffing
• Programs/Services
22
PERFORMANCE SYSTEM
QUESTIONS
• What programs/services do we want
to provide to make a mission impact?
• How will we staff the
programs/services?
• How will we fund the operation?
23
CYCLE OF
SUSTAINABLE
PERFORMANCE
•
•
•
•
•
Positive reinforcing cycle
Sustains all the parts
Parts feed & sustain one another
All parts are interdependent
There is a cause & effect logic to
how they interact
• Strategy is the “story” that guides this
sustainable performance
24
STRATEGY PROCESS
DESIGN ISSUES
 Meaningful Involvement of
Stakeholders
 Consider Board Assessment if not
completed in prior two years
 Select Strategy Development
Group with credibility and
legitimacy
 Not too long, not too short
25
SELECTING YOUR
STRATEGY
DEVELOPMENT GROUP
 Representative of key stakeholder
groups
 Legitimacy and Credibility
 Assure formal approval by Board
of Directors
 Limit group to 15 – 20 people
26
STRATEGY
DEVELOPMENT PROCESS
 Establish Mission Gap
 Adopt Aspirational Mindset for
Creating Vision
 Adopt Aspirational Mindset for
Setting Strategic Stretch Goals
 Discern SWOTs
 Create Strategy Narrative
27
THE BREAKTHROUGH
STRATEGY WORKBOOK
 A guide for strategy development that
follows the Mission Impact process.
 Multiple copies may be downloaded at
no cost from web site:
www.SheehanNonprofitConsulting.com
Other Sheehan articles may also be
downloaded at no cost (see pp. 30-31).
 An example of the final output from a
strategy development process is
included on pp. 22 – 28.
28
STRATEGY
DEVELOPMENT MAP
29
Your
Mission Impact
30
MISSION
In your own words, please write what you
say is the mission of your organization.
One way to think of a “mission” is that it
is a stated intention to make a
“difference” in a person, place, or
thing.” Make sure to specify the
“person, place, or thing” and the
“difference” the organization intends to
make.
31
MISSION
STATEMENTS
Typical:
“To provide services to the Homeless
in Charles County.”
Instead of:
“To provide services to the Homeless
in Charles County which enhance
their economic self-sufficiency.”
32
MISSION AIM
AND IMPACT
 AIM: Specify exactly what “persons,
places, or things” the organization
aims to impact:
 IMPACT: Specify the difference
your organization intends to make in
the condition of those your
organization is aiming for:
33
INSPIRATIONAL
MISSION
“Does our mission express the result of
greatest intrinsic significance to us?”
“What further impact/result are we
making?”
“What result do we most care about?
34
MISSION
ACCOMPLISHMENT
“Explain how you determine whether
your organization is or is not
accomplishing the mission. Please
list any results, outcomes, and
specific evidence you look at to
make this determination?”
35
Reliable Measures
A “reliable measure” collects evidence
which could be confirmed by an
objective observer.
Reliable Impact Measures
A “reliable impact measure” is a reliable
measure which represents an
impact—difference made—on the
condition of a person, place, or thing
outside the organization.
36
MISSION ACCOMPLISHMENT
MEASURES
Reliable impact measures which
relate directly to the
accomplishment of an
organization mission can be
called “Mission Accomplishment
Measures”
37
WE’RE LOST
BUT MAKING GOOD TIME
“Here’s the problem in a nutshell: We
don’t manage to outcomes, thus
greatly diminishing our collective
impact.”
-Mario Morino, Leap of Reason
MISSION ACCOMPLISHMENT
MEASURES
 Help coordinate action so end
result is understood
 Help judge whether program is
working – should be expanded,
cut, eliminated
 Learn from mistakes
 Inform resource allocation
 Connect to CEO Evaluation
 Show results to Funders!!!
39
CHARLES COUNTY
HOMELESS SERVICES
Mission
To end homelessness in Charles
County
Mission Accomplishment Measure
Number of homeless people in Charles
County, as reported by county
officials.
40
THOMPSON
ACADEMY
Mission
To prepare young people for excellence
in post-secondary education
Mission Accomplishment Measures
Percentage of graduates enrolled in
college after graduation
Satisfaction of preparation survey scores
of graduates two years following
graduation
41
FRANKLIN COUNTY
CHILDREN’S SERVICES
Mission*
Elimination of maltreatment of
children
Mission Accomplishment Measure*
Number of reported and substantiated
cases of child maltreatment
*1992 Version
42
MOTHERS AGAINST
DRUNK DRIVING
Mission
To stop drunk driving and to support
victims of this violent crime
Mission Accomplishment Measure
Number of deaths from drunk driving
crashes
43
MERRILL COUNTY
LITERACY COUNCIL
Mission
To assure that all adults age 16 or
older in Merrill County are literate.
Mission Accomplishment Measure
The literacy rate in Merrill County, as
reported by county officials.
44
“MISSION
GAP”
 Describe the current condition of the
“persons, places, or things” for
whom/which the organization intends
to make a difference.
 What would their condition be like,
ideally?
45
NORTH TEXAS
FOOD BANK
46
MERRILL COUNTY
LITERACY COUNCIL
Mission Gap
With 100,000 adults, age 16 and older,
living in Merrill County, the Mission
Gap is 20,000 adults.
47
YOUR
MISSION GAP
Do you need a
Breakthrough
Strategy?
48
STRATEGY
DEVELOPMENT PROCESS
 ✔ Establish Mission Gap
 Adopt Aspirational Mindset for
Creating Vision
 Adopt Aspirational Mindset for
Setting Strategic Stretch Goals
 Discern SWOTs
 Create Strategy Narrative
49
The Power
of
Vision
50
ANALYTICAL
VISIONING
 Analyze Internal Capabilities &
Predictable Changes
 Analyze External Environment &
Predictable Changes
 Forecast (Extrapolate) Reasonable
Future
 Establish “Vision” as “Best Case
Scenario”
51
ASPIRATIONAL
VISIONING
 Dream with no constraints
 Create an Ideal “Future Picture” based
on what is Inspirational and Drives
Passion
 Create New Internal Capabilities
 Search Environment for Opportunity
52
DREAM
“Some men see things as they are and
say ‘why,’ I dream things that never
were and say ‘why not.’”
- George Bernard Shaw
53
CHANGING
THE WORLD
“Because the people who are crazy
enough to think they can change the
world are the ones who do.”
-Steve Jobs
54
DIVINE
MADNESS
“Let us build such a church that those who
come after us will think we were madmen’,
said the old canon of Seville . . . Perhaps
through every mind passes some such
thought, when it entertains the design of a
great and seemingly impossible action . . .
This divine madness enters more or less
into all our noblest undertakings.”
-Longfellow
55
STRATEGIC
INTENT
Companies that have risen to global
leadership over the past 20 years
invariably began with ambitions that were
all out of proportion to their resources and
capabilities. But they created an
obsession with winning at all levels of the
organization . . . We call this obsession
“strategic intent.”
- Hamel & Prahalad
56
IDEALIZED
DESIGN
“In this process the designers assume the
organization being planned for was
completely destroyed last night, but its
environment remains exactly as it was.
Then they try to design that organization
with which they would replace the existing
organization right now, if they were free to
replace it with any organization they
wanted . . .”
-Russell L. Ackoff
57
IDEALIZED
DESIGN
“The power of Idealized Design is that
when you say that the system was
destroyed last night, you not only
destroy the system, you destroy all of
the constraints with it. That is
freedom and that is what leads to
transformation.”
-J. Gerald Suárez
58
CREATIVE
TENSION
“the gap between vision and current
reality is also a source of energy . . .
the gap is the source of creative
energy. We call this gap creative
tension.”
- Peter Senge
59
VISION
With your current environment in mind –
including your “mission gap” – think
about how you could make “quantum
leap” progress on your “mission gap” if
your organization existed in an “ideal
state.” Answer the question:
“If you could have it any way you wanted
it, what would your organization be
like?” Describe it in detail.
60
Why dream a vision that
can never come true?
61
VISION
 Visions give us something to aspire to.
 Visions can inspire others to help make
dreams come true.
 Visions provide meaning to the “day to
day.”
62
How should leaders
establish vision?
63
POSITIONAL
LEADERSHIP
Leadership by “lamination”
vs.
Leadership as a catalyst
64
TRANSFORMATIONAL
LEADERSHIP MODEL
LEADERS
PARTICIPANTS
65
WHAT
FOLLOWERS WANT
“Constituents want visions of the future
that reflect their own aspirations.
They want to hear how their dreams
will come true and their hopes will be
fulfilled . . . The only visions that take
hold are shared visions . . . And you
will create them only when you listen
very, very closely to others,
appreciate their hopes, and attend to
their needs.”
-Kouzes & Posner, 2009
66
MERRILL COUNTY
LITERACY COUNCIL
Vision Highlights
*Staff of 24 with competitive comp &
professional development plans
*Increase in volunteers by 3,000%
*Fully engaged Board with strong
community connections
*Endowment of $15 million
67
STRATEGY
DEVELOPMENT PROCESS
 ✔ Establish Mission Gap
 ✔ Adopt Aspirational Mindset for
Creating Vision
 Adopt Aspirational Mindset for
Setting Strategic Stretch Goals
 Discern SWOTs
 Create Strategy Narrative
68
The Importance
Of Goals
69
VISION TO ACTION:
GOALS
 Direct attention to relevant activities
 Affect intensity of effort
 Affect persistence
 Strategic Stretch Goals: OutcomeBased & SMART
70
OUTCOME VS.
ACTIVITY GOALS
“To mail 11,000 personalized
fund-raising letters to our
organization’s previous donors
by October 1, 2012.”
71
OUTCOME VS.
ACTIVITY GOALS
“To receive $300,000 in contributions
from our organization’s previous
donors by December 1, 2012.”
72
MANAGE FOR
OUTCOMES
“While it may appear to be an
overstatement, it is nonetheless true:
the biggest single mistake managers
make is that they manage activities
instead of managing results. The
cause is usually very simple: they
cannot easily see the difference
between activities and results.”
-Drs. Jeffrey & Laurie Ford
Hotwired Management
73
SMART
GOALS*





Specific
Measurable
Attainable
Relevant
Time-bound
*Traditional version
74
ATTAINABLE
GOALS
 Set with at least 80% chance of
success
 Sounds reasonable – failure can be
followed by negative consequences
 Good for generating “quick wins”
 Good for Learning Goals in new
domains
 Good for a team that needs to build
confidence
75
ATTAINABLE
GOALS
 What might be the downside of
setting goals that are reasonably
“Attainable?”
76
ATTAINABLE
GOALS
 What might be the downside of
setting goals that are reasonably
“Attainable?”
 Goal research:
 The more difficult the goal, the higher
the level of performance.
77
SMART
GOALS*





Specific
Measurable
Aggressive, yet Achievable
Relevant
Time-bound
*Doug Smith version
78
AGGRESSIVE
YET ACHIEVABLE
 Allows you to maximize
performance, but with a higher
chance of failure
 If you are a boss & you want to use
Aggressive goals, check your
rewards system. If you punish
failure, people will not want to be
aggressive. Reward “performance”
vs. goal accomplishment
79
SMART
COMPARISONS
ATTAINABLE
vs.
AGGRESSIVE &
ACHIEVABLE
Which SMART formula is best?
80
SMART
COMPARISONS
ATTAINABLE
Best when the priority is to accurately
predict performance of the current
system
AGGRESSIVE & ACHIEVABLE
Best when the priority is to maximize
the performance of the current
system
81
SMART
GOALS
Write out a goal that you are
currently working on and write
it so it fits the “SMART”
guidelines.
82
A NEW ‘A’
FOR SMART*
 Specific
 Measurable
 *Almost Impossible
 Relevant
 Time-bound
*Rob Sheehan version
83
GREAT
LEADERS
Great Leaders Have a
Healthy Disregard for the
Impossible
84
IMPOSSIBLE . . .
“Space travel is utter bilge.”
- Sir Richard Van Der Riet Wooley, The Astronomer
Royal, 1956
85
IMPOSSIBLE . . .
“While theoretically and technically
television may be feasible,
commercially and financially I
consider it an impossibility.”
- Lee Deforest, American Inventor (1873-1961)
86
IMPOSSIBLE . . .
“Well informed people know it is
impossible to transmit the voice
over wires and that were it
possible to do so, the thing
would be of no practical value.”
- The Boston Post, Editorial, 1865
87
IMPOSSIBLE . . .
“We must not be misled to our
own detriment to assume that
the untried machine can displace
the proved and tried horse.”
- Maj. Gen. John Kerr, U.S. Army (1878-1955)
88
IMPOSSIBLE . . .
“Rail travel at high speeds is not
possible because passengers,
unable to breathe, would die of
asphyxia.”
- Dionysius Lardner, English Scientist
(1793-1859)
89
TRADITIONAL ANALYTICAL
GOALS
“This is a forecast of the result we should be
able to produce if we work hard at it.”
ASPIRATIONAL STRETCH
GOALS
“This is the very best result we can
imagine possible (1% chance) and we
have no idea how to make it happen.”
90
STRETCH
GOALS
You can’t think outside of
the box, when you are
standing in it!
91
STRETCH
GOALS
 You use stretch goals, they don’t use
you. They do not exist to dominate
you and stress you out. They exist
to give you something to shoot for, to
have fun trying to see if you can
make it.
92
STRETCH
GOALS
 Fully achieving a stretch goal is not
the main focus of your attention.
You are interested in being creative,
progress, and learning.
93
STRETCH
GOALS
 You need to create a “safe-fail”
situation with a stretch goal. You
can’t treat failure as an issue. You
have to play.
94
SAFE - FAIL
ENVIRONMENT
 “‘The fastest way to succeed, IBM’s
Thomas Watson, Sr., once said, ‘is to
double your failure rate.’ In recent years,
more executives have embraced this point
of view, coming to understand that failure
is a prerequisite to invention. A business
cannot develop a breakthrough product or
process if it is not willing to encourage
risk-taking and learn from subsequent
mistakes.”
The Failure Tolerant Leader
Harvard Business Review, 2002 95
STRETCH
GOALS
 You have to set your own boundaries
on resources you will use to achieve
the goal—including the amount of
time you spend on it. Make this all
part of the “game.” Otherwise, you
stress out and/or turn your 70 hour
weeks into 90 hour weeks.
96
Pessimists & Optimists
Unite
Use “Flexible
Optimism”
97
STRETCH
GOALS
 Since the prospects of failing at the
stretch goal are high and failure at
some goals can have real life
implications—when you set a stretch
goal, ask yourself “Am I willing to live
with the worst probable outcome?”
If not, don’t set it that high.
98
STRATEGIC
INTENT
“Creating stretch, a misfit between
resources and aspirations, is the
single most important task senior
management faces.”
-Gary Hamel & C.K. Prahalad
99
THE WALL
STREET JOURNAL
“Stretch is a concept that would have
produced smirks, if not laughter, in
the GE of three or four years ago,
because it essentially means using
dreams to set business targets – with
no real idea of how to get there . . . .
If you do know how to get there then
it is not a stretch target.”
-Jack Welch, March 8, 1994
100
START WITH
THE END IN MIND
*When brainstorming new ways to
go about accomplishing a goal,
“start with the end in mind.”
Imagine you have already
accomplished the goal and
discern what new ideas you
must have used to do that.
101
STRATEGIC STRETCH
GOALS
 Set five Strategic Stretch Goals for
the next five years which:
 Inspire you!!!
 Would catapult your organization
toward your vision and help close your
Mission Gap most effectively
 Meet the Almost Impossible SMART
criteria
102
CHALLENGES WITH
STRETCH GOALS
 Everyone else operates on the
forecasting mindset so you have to
be careful about with whom you
share your stretch goals.
103
CHALLENGES WITH
STRETCH GOALS
 You may fall back into the old
mindset and get stressed or feel bad
if you fail. Watch for that.
104
CHALLENGES WITH
STRETCH GOALS
 The stretch goal approach does not
guarantee you good creativity. It will
unleash creativity, but some creative
ideas will sound good and not work.
You need to decide when to try it again
or differently or try something else.
105
CHALLENGES WITH
STRETCH GOALS
 You should not try to “force” others to
be inspired and more creative about
a Stretch Goal, just because it
inspires you . . . . .
. . . . . unless you are Dilbert’s boss.
106
107
The biggest challenge is
setting Strategic Stretch
Goals is overcoming the Fear
of Failure that has been bred
within us.
108
YOU FAILURE!!!
“I am as worthless as the slugs
who creep in the crevices of
the deepest, darkest parts of
the ocean!”
109
Accomplishment:
Any result of positive Magnitude
Success:
Any accomplishment which meets or
exceeds its intended result
Failure:
To fall short of an intended result
110
OHIO STATE
FUNDRAISING PROJECT
Goal
Result
1988
$40,000
$48,000
1989
$25,000
$24,000
1990
$25,000
$17,000
1991
$50,000
$62,000
1992
$150,000
$143,000
111
LEADERSHAPE
PARTICIPANTS
2500
2000
1500
1000
500
0
1992 1993 1994 1995 1996 1997 1998 1999 2000 2001
112
FAILURE WITH
TRADITIONAL GOALS
“We messed up.”
113
FAILURE WITH
STRETCH GOALS
 “Look at our results!”
 “What could we have done
differently?”
 “I’m glad we went for it, but I wish
we had accomplished it 100%”
114
FAILURE AND
CREATIVE TENSION
“Mastery of creative tension transforms the
way one views ‘failure.’ Failure is, simply,
a shortfall, evidence of the gap between
vision and current reality. Failure is an
opportunity for learning . . . Failures are
not about our unworthiness or
powerlessness.”
- Peter Senge, The Fifth Discipline
115
FAILURE AND
INNOVATION
“Failure is just a part of the culture
of innovation. Accept it and grow
stronger.”
- Albert Yu, SVP, Intel Corp
116
GETTING
SMARTER FASTER
“ . . . there’s no substitute for getting
smarter faster. And the way you get
smarter is to screw around
vigorously. Try stuff. See what
works. See what fails miserably.
Learn. Rinse. Repeat.”
- Tom Peters, Fast Company, December 2001
117
GOALS RECAP
 Attainable Goals: 80% attainable;
good if the priority is high
predictability
 Aggressive Goals: 35% attainable;
good for improving performance
 Almost Impossible: 1% attainable;
good for innovation and
breakthrough performance
118
What kind of future do
you want?
119
MERRILL COUNTY
LITERACY COUNCIL
 Unrestricted grants from all sources
will increase by 300 percent to $2
million by June 30, 2015.
 The number of certified literacy
teaching volunteers will increase by
500+% to 100 by June 30, 2015.
 Financial reserves will be increased
by $400,000 by June 30, 2015.
120
MERRILL COUNTY
LITERACY COUNCIL
 An endowment fundraising campaign
for $5 million will be initiated and a
lead gift of $500,000 will be pledged
by June 30, 2015.
 The literacy rate in Merrill County, as
reported by county officials, will be
85 percent by June 30, 2015.
121
STRATEGY
DEVELOPMENT PROCESS
 ✔ Establish Mission Gap
 ✔ Adopt Aspirational Mindset for
Creating Vision
 ✔ Adopt Aspirational Mindset for
Setting Strategic Stretch Goals
 Discern SWOTs
 Create Strategy Narrative
122
Clarity on Your
Current Reality
123
VENTURE PHILANTHROPY PARTNERS
CAPACITY FRAMEWORK
ELEMENTS
 Aspirations
 Strategy
 Organizational
Skills
 Human
Resources
 Systems and
Infrastructure
 Organizational
Structure
 Culture
124
VENTURE PHILANTHROPY PARTNERS
CAPACITY FRAMEWORK
ELEMENTS
 Aspirations: An organization’s
mission, vision, and overarching
goals, which collectively
articulate its common sense of
purpose and direction
125
VENTURE PHILANTHROPY PARTNERS
CAPACITY FRAMEWORK
ELEMENTS
 Strategy: The coherent set of
actions and programs aimed at
fulfilling the organizations’
overarching goals
126
VENTURE PHILANTHROPY PARTNERS
CAPACITY FRAMEWORK
ELEMENTS
 Organizational Skills: The sum of
the organization’s capabilities,
including such things (among
others) as performance
measurement, planning, resource
management, and external
relationship building
127
VENTURE PHILANTHROPY PARTNERS
CAPACITY FRAMEWORK
ELEMENTS
 Human Resources: The collective
capabilities, experiences, potential
and commitment of the
organization’s board, management
team, staff, and volunteers
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VENTURE PHILANTHROPY PARTNERS
CAPACITY FRAMEWORK
ELEMENTS
 Systems and Infrastructure: The
organization’s planning, decisionmaking, knowledge management,
and administrative systems, as
well as the physical and
technological assets that support
the organization
129
VENTURE PHILANTHROPY PARTNERS
CAPACITY FRAMEWORK
ELEMENTS
 Organizational Structure: The
combination of governance,
organizational design,
interfunctional coordination, and
individual job descriptions that
shapes the organization’s legal
and management structure
130
VENTURE PHILANTHROPY PARTNERS
CAPACITY FRAMEWORK
ELEMENTS
 Culture: The connective tissue
that binds together the
organization, including shared
values and practices, behavior
norms, and most important, the
organization’s orientation towards
performance
131
VPP
FRAMEWORK
132
SYSTEMS THINKING
APPROACH
 Evaluate the interactions of essential
operations of the organization as a
“system”: Funding, Staffing,
Programs/Services
 It is the System, the Whole, which allows
for Mission Impact
 An over-emphasis on any one part or
ignoring the impact one part may have on
another can lower the performance of the
System
133
YOUR
SWOTs
 Given your vision and commitment to
achieve the strategic stretch goals,
what are the key strengths of your
organization?
 Weaknesses?
 Opportunities?
 External threats?
134
SWOT
INTERACTIONS
 Identify possible interactions between
each SWOT which may be of positive
or negative consequence
 For example, the interaction of a
Weakness & Threat may demonstrate
a need for “damage control”
 The interaction of a Strength &
Opportunity may demonstrate a
“leverage point”
135
STRATEGY
DEVELOPMENT PROCESS
 ✔ Establish Mission Gap
 ✔ Adopt Aspirational Mindset for
Creating Vision
 ✔ Adopt Aspirational Mindset for
Setting Strategic Stretch Goals
 ✔ Discern SWOTs
 Create Strategy Narrative
136
The Role of
Strategy
137
WHAT IS
STRATEGY?
 Strategy is more than strategic
planning
 Strategy is not just a collection of
goals and budget forecasts
 Most organizations have plenty of
plans, but very little strategy
 Strategy is an integrated and coherent
cause & effect performance story which
has a beginning, middle, and end.
138
WHAT IS
STRATEGY?
Strategy is an integrated and coherent
explanation of how an organization is
going to guide its performance in the
future.
139
WHAT IS
EFFECTIVE
PERFORMANCE?
 For Profits:
 $$$$$$$$$$
 Non Profits:
 Mission Accomplishment
140
WHAT IS
NONPROFIT STRATEGY?
Nonprofit strategy is an integrated and
coherent explanation of how a nonprofit
organization is going to accomplish its
mission of making a difference for
society in the future.
141
NONPROFIT
STRATEGY
 The purpose of having a strategy is
to guide the organization toward its
desired future.
 Crafting strategy is a creative act, not
an analytical function. It is a process
of creating the organization’s desired
future, considering its current
situation, and designing a set of
actions which will catapult it forward.
142
NONPROFIT
STRATEGY
The “cause & effect performance story”
tells how you will get from “here to
there” while . . .
. . . Leveraging your Strengths,
Fortifying your Weaknesses, Seizing
your Opportunities, and Blocking
your Threats.
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PRODUCING HIGH
PERFORMANCE
• A “systems” approach – focuses on
the “whole” of the system and asks:
What are the “essential elements”
that make the system effective?
• The essential elements of
organization performance:
• Financing
• Staffing
• Programs/Services
144
PERFORMANCE SYSTEM
QUESTIONS
• What programs/services do we want
to provide to make a mission impact?
• How will we staff the
programs/services?
• How will we fund the operation?
145
CYCLE OF
SUSTAINABLE
PERFORMANCE
•
•
•
•
•
Positive reinforcing cycle
Sustains all the parts
Parts feed & sustain one another
All parts are interdependent
There is a cause & effect logic to
how they interact
• Strategy is the “story” that guides this
sustainable performance
146
WHAT IS YOUR
STRATEGY?
Can you say what your strategy is?
Can you “name that tune?”
147
WHAT IS YOUR
STRATEGY “TUNE?”
 A strategy does not tell you what
actions to take in the fourth week of
the second quarter of the third year
of the strategy any more than a jazz
tune tells musicians what exact notes
to play three-quarters through the
song. They know the tune to follow.
 Everyone in the organization should
know the strategy as well as they
148
can recognize a popular tune.
STRATEGY
NARRATIVE
 A Strategy Narrative is a three – four
paragraph summary explanation of
the organization’s strategy.
 Most organizations – in all sectors
cannot articulate their strategy with a
simple coherent statement.
 As you design strategy, remember to
think of the organization as a
“system” of funding, staff, programs.
149
STRATEGY
NARRATIVE
“Leaders of firms are mystified when what
they thought was a beautifully crafted
strategy is never implemented. . . .
They fail to appreciate the necessity of
having a simple, clear, succinct
strategy statement that everyone can
internalize and use as a guiding light for
making difficult choices.”
- D. J. Collins & M. G. Rutland
Harvard Business Review, 2008
150
How does an
organization go about
creating its Strategy &
Strategy Narrative?
151
STRATEGY
DEVELOPMENT
 Review each of your SWOTs and
explain what its role will be in
pursuing your vision & goals.
 Leverage your Strengths, Fortify your
Weaknesses, Seize your
Opportunities, and Block your
Threats.
 These build the “themes” of your
Strategy Narrative
152
EXAMINE EACH
SWOT
 What strategic action(s) should we
take with respect to this SWOT?
 A Strategic Action is one which will
help catapult the organization toward
the accomplish of the goals, vision,
and mission.
 Remember that you want to
Leverage Strengths, Fortify
Weaknesses, Seize Opportunities,
153
Block Threats.
STRATEGY
DEVELOPMENT
 Evaluate Weaknesses & Threats
 Look for Leverage & Opportunity
154
EVALUATE WEAKNESSES
AND THREATS
 Look at interactions of Weaknesses
and Threats for necessary “damage
control”
 Evaluate all Weaknesses and Threats
 Look at interactions of Weaknesses
and Threats with Strengths for possible
solutions
 Fortify Weaknesses as necessary and
Block relevant Threats
155
LOOK FOR
LEVERAGE &
OPPORTUNITY
 Focus on the Strategic Stretch Goals
 What can you use from the current
reality and SWOTs to catapult
forward?
 Look at interactions of Strengths and
Opportunities and other Strengths
and Opportunities for ideas
156
STRATEGY
NARRATIVE
 A cause & effect performance story
with a beginning, middle, and end
 The General speaks:
“First, we are going to…then
some of you will…which will
then allow others of us
to…and that will give us the
opening to…which will lead
us on to victory.”
157
STRATEGY
NARRATIVE
 Make sure Weaknesses and Threats
are addressed first so organization is
stable enough to move forward
 Be sure to have strong levers
 Integrate and balance actions in
funding, staffing, programs/services
158
STRATEGY
EVALUATION
 Assess Organization Stability &
Derailers (W/T)
 Are Strong Levers Engaged?
 Is there Sequencing of Cause &
Effect?
 Are Interactions Balanced &
Integrated – especially among
funding, staffing, programs/services?
 Evaluate Assumptions
159
MERRILL COUNTY
LITERACY COUNCIL
We will maintain a conservative,
balanced budget and not increase
expenses until surpluses are available.
We will leverage our CEO’s talent,
along with our program effectiveness,
to recruit new board members who are
well-connected within the county. We
will secure agreements from them to be
actively involved in fundraising and
building community awareness of
literacy issues.
160
MERRILL COUNTY
LITERACY COUNCIL
With initial increases in the annual
fund, we will make improvements to
staff compensation. As the annual
fund continues to increase, we will
retain a consultant to develop an
integrated marketing and fundraising
plan. The annual giving plan will be
upgraded and fundraising training
will be given to staff and board.
161
MERRILL COUNTY
LITERACY COUNCIL
The marketing plan will raise awareness
of literacy issues and help recruit more
volunteers, as well as support
fundraising initiatives. We will continue
to expand the board with wellconnected community members who
are committed to giving and raising
funds. We will seek significant United
Way funding increases.
162
MERRILL COUNTY
LITERACY COUNCIL
We will phase in these plans to balance
increased costs with increased funding.
As net revenues from fund-raising
successes are available they will be
divided among staff compensation
increases, hiring new staff to manage
increased numbers of volunteers, and
building reserves. We will closely monitor
program quality as we increase program
offerings. More and more people in Merrill
County will become literate.
163
MERRILL COUNTY
LITERACY COUNCIL
As we recruit new board members and
annual fund donors, we will seek to
identify potential major donors for an
endowment campaign for $5 million,
which will be launched in five years
with a $500,000 lead gift. This will be
a springboard to the future which will
continue to increase the literacy
rates in Merrill County.
164
MERRILL COUNTY
LITERACY COUNCIL
Getting into the Fundraising
Business Strategy
165
MERRILL COUNTY
LITERACY COUNCIL
Key Assumptions
 Our CEO can recruit new board
members who are well connected
within the county.
 We can effectively learn how to raise
money.
 We can find a $500,000 lead donor.
166
STRATEGY
EVALUATION
 Assess Organization Stability &
Derailers (W/T)
 Are Strong Levers Engaged?
 Is there Sequencing of Cause &
Effect?
 Are Interactions Balanced &
Integrated – especially among
funding, staffing, programs/services?
 Evaluate Assumptions
167
YOUTH SERVICES
ORGANIZATION
Use reserves to hire highly qualified and
talented CEO to generate revenue for
expansion of highly regarded program
services. Maintain competitive salaries
for top-notch program staff. Stabilize
budget and repay reserves as revenues
increase. Expand services further with
additional revenue. Quality of services
and staff remain high throughout
expansion.
168
YOUTH SERVICES
ORGANIZATION
Hire a “Hot Shot” Strategy
169
EDUCATIONAL
ASSOCIATION
Hire staff and mobilize volunteers to
create endowment and significantly
increase annual fund. Cut services and
program staffing to balance budget.
Increase fees for service and add
services back as fees, annual fund
dollars, and endowment investment
income is available. Continue to
increase level and quality of services as
revenue is available—as well as
upgrade staff quality.
170
EDUCATIONAL
ASSOCIATION
Pruning & Hail Mary Strategy
171
SOCIAL SERVICES
AGENCY
Maintain staff level of good people who
work here because they care for the
mission—even though we can’t pay
much. Provide as many services and
programs as possible that make a
difference, with funding from fees,
United Way, and government
subsidies. Maintain balanced budget.
Limited staff will do the best they can
with an overload of cases until things
get better.
172
SOCIAL SERVICES
AGENCY
HOPE & Hope is not a
Strategy
173
FOOD
BANK
Reorganize staff to allow CEO, who has
extensive fundraising experience, to
devote majority time to planning and
running major fundraising campaign.
Also add new Director of Development
position. Recruit more influential
Board members who will actively
participate in campaign. Use reserves
to run short term deficits if necessary
to maintain quality operations until
new funds are raised.
174
FOOD
BANK
Staff Realignment Strategy
175
HOUSING SERVICES
ORGANIZATION
Replace retiring CEO with someone who
has fundraising experience. As Board
members retire, add new Board
members with commitment to
fundraising. Expand services as new
funds are raised. Use status in
community to initiate collaborative
regional summit on affordable housing
issues among key stakeholders as a call
to action for all.
176
HOUSING SERVICES
ORGANIZATION
External Shift in Focus
Strategy
177
CORE STRATEGY
vs. STRATEGY REPORTS
 The Breakthrough Strategy process
produces the core elements of your
strategy
 The ways in which you communicate
your strategy to different audiences
will vary
 Some audiences will need more
specifics and/or background than
others
178
STRATEGY
DEVELOPMENT PROCESS
 ✔ Establish Mission Gap
 ✔ Adopt Aspirational Mindset for
Creating Vision
 ✔ Adopt Aspirational Mindset for
Setting Strategic Stretch Goals
 ✔ Discern SWOTs
 ✔ Create Strategy Narrative
179
STRATEGY
IMPLEMENTATION
 Creating the right strategy is
exceptionally important before the
implementation begins:
“The righter we do the wrong thing, the
wronger we become.”
-Russell L. Ackoff
180
STRATEGY
IMPLEMENTATION
 Align organization and culture to new
strategy as per VPP Model
 Annual Outcome-Based Stretch
Goals are set that relate to the FiveYear Strategic Stretch Goals
 Teams assigned to generate creative
annual plans for each Stretch Goal
 Budget designed to support plans,
goals, strategy
181
VPP
FRAMEWORK
182
THE SEVEN DEADLY SINS OF
NONPROFIT STRATEGY
#1: “It’s Just Sitting on the Shelf.” The
rest of the sins are not necessarily in
order of severity, but this is clearly #1
because it is so pervasive and
represents a huge waste of money and
time – from staff and volunteers. This
sin can be deadly, indeed, when board
members realize the hours they have
wasted – making strategic plans that are
never implemented. And for the
attorneys on your Board, those are
183
billable hours.
THE SEVEN DEADLY SINS OF
NONPROFIT STRATEGY
#2: Insular Mountaintop Planning. It
can be good for a strategy planning
group to go to the “mountains” to get
away from distractions to do work
together. But, before you go, gather
input regarding the organization’s future
from stakeholders – and check in with
them when you get back for more input
before you publish and laminate the
plan (Peter Block calls this error
“leadership by lamination”).
184
THE SEVEN DEADLY SINS OF
NONPROFIT STRATEGY
#3: Over-Emphasis on Fund-Raising.
“What?!?” “Impossible!” I can just hear
my fund-raising colleagues’ reaction. Of
course we frequently find new fundraising initiatives as a part of a new
strategy. The problem is that as these
efforts are highlighted, other important
aspects of a strategy are underemphasized – such as program
innovation, leadership succession,
strategic partnerships, and more.
185
THE SEVEN DEADLY SINS OF
NONPROFIT STRATEGY
#4: Too Rushed. Rather than rushing
(e.g., “We are doing our strategic plan at
an all day retreat two weeks from
Friday, are you available?”), it is wiser to
take the time to thoughtfully design and
implement a strategy development
process. Of course, it should not take
forever either. Taking the time can lead
to inspiring visions, innovative
strategies, and empowered
stakeholders – which produce higher
186
performance.
THE SEVEN DEADLY SINS OF
NONPROFIT STRATEGY
#5: Lots of Plans, No Strategy.
Strategic planning documents can
contain volumes of plans, activities, and
environmental analysis – but many don’t
include a real “strategy.” A true strategy
articulates the dynamic levers which will
catapult an organization toward its
desired future, as well as how its key
operational areas will interact to create a
cycle of higher performance.
187
THE SEVEN DEADLY SINS OF
NONPROFIT STRATEGY
#6: No Annual Review. No one can see
into the future when developing a
strategic plan! So, we make certain
measured assumptions about the future
– including changes in our internal and
external environments. An annual
review of assumptions and results is
important to keep the plan relevant.
You may not change your mission or
vision, but you may need to change
plans and activities.
188
THE SEVEN DEADLY SINS OF
NONPROFIT STRATEGY
#7: Not Ambitious Enough. A strategy
and its associated goals and plans
should be focused on a vision that is
big, bold, and inspiring. Many strategic
plans are based simply on an analytical
forecast of the way things are currently
headed. How dull. It was Goethe who
said “Dream no small dreams for they
have no power to move the hearts of
men” and Mandela who stated “Your
playing small does not serve the world.”
189
“SO WHAT”
MINUTE
 What three things will you do during
the next week to apply some of the
ideas we have discussed today?
190
“SO WHAT”
MINUTE
 Create a Mission Metrics task force
to identify impact measures
 Design a new strategic planning
process
 Use the next staff meeting to
brainstorm a vision for your
organization “if you could have it any
way you wanted it.”
191
“SO WHAT”
MINUTE
 Review all of your goals and make
sure they are SMART.
 Distribute the VPP Organization
Capacity Assessment Tool to
everyone on staff to identify capacity
building opportunities.
 Share your key learnings with others
at your next staff or Board meeting
192
“SO WHAT”
MINUTE
 Tell everyone you know (Tweet,
Facebook, Blog, Email) to read
Mission Impact and use the ideas to
create breakthroughs in the quality of
life in our world.
193
THANK YOU
VERY MUCH!!!
 For your leadership!
 For your commitment!!
 For the difference you make!!!
194
FOR MORE
INFORMATION
Robert M. Sheehan, Jr., Ph.D.
Principal
Sheehan Nonprofit Consulting
301.523.1864
[email protected]
www.SheehanNonprofitConsulting.com
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