Strategic Plans and Strategic Compasses: Navigating Options

What's the difference between a strategic plan and compass? Are strategic compasses the wave of the future?

Transcript

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Welcome to Navigating Nonprofits with Lifeboat Accounting. My name is Amity, and I'll be your captain today as we discuss hot topics around accounting for nonprofits. Lifeboat Accounting is an accounting firm that works exclusively with helping nonprofits stay afloat. We cover everything from accounting to tech stacks, to strategic planning, 990s, grants, board development, and staff training. When I speak at conferences or board meetings, folks have always suggested to me that I needed my own podcast to tell all my stories and share my experience. So I'm excited to dive right in and to get to some of my favorite topics and share some special guests with you. Welcome to Navigating Nonprofits with Lightboat Accounting. My name is Amity and I'll be your captain today as we discuss hot topics around accounting for nonprofits. Today we'll be discussing strategic plans and strategic compasses. For decades, organizations have generally focused on a long-term, multi-year strategic plan that entailed a lot of planning, surveys, and execution. But in today's chaotic environment, a lot of organizations are deciding to pause larger strategic planning to deal with more immediate challenges. In rough waters, a shorter strategic compass for the next 12 to 24 months may make more sense. Both strategic plans and strategic compasses can lead to an organizational roadmap for any specific time period. Your plan or your compass is like the blueprint for building a house. And the roadmap is the construction schedule and task list. The goal of setting strategic initiatives is to set a plan to close the gap between the current state and the desired state of an organization. Organizations set the criteria and take inventory of current initiatives. The organization can then brainstorm, evaluate, and prioritize which initiatives are the most important. Who should participate in the strategic strategic plan uh strategic? Who should participate in your strategic process? We recommend inviting a cross-sectional team of participants. That would include your staff, your board members, stakeholders, recipients of the services that you provide, local community members and leaders, and whoever you would want to solicit feedback from your organization for the immediate future. I encourage this process in multiple steps over multiple days so folks have time to kind of think about their feedback and kind of gather more information along the way. Some organizations do this over a year, some organizations do this over a month, some organizations do it in a day. And so it really just depends on the way that your organization works and what works best for you. But just to kind of highlight, um, what is a strategic plan? The strategic plan defines the why and what of the organization's long-term goals and priorities. So you can kind of think of it as a big picture of where the organization wants to go and why. Generally, these tend to be, you know, three to five-year-old plans, they tend to be detailed. Um, they include the mission, the vision, core values, strategic goals and objectives, key performance indicators. Everyone loves a good SWOT analysis and a SWOT analysis. If you've never had the opportunity to be included in one, generally lays out the strengths, weaknesses, opportunities, and threats to a specific organization. Strategic compass is tends to be a little bit more of a shorter strategic plan or a more condensed version. It tends to be like one to two years kind of outlook instead of you know three to five years, and it tends to be relatively brief. Um, I like one to two page strategic compasses personally, and it kind of highlights the larger strategic buckets for implementation. Now, a roadmap involves translating that high-level kind of strategy into desirable action steps. And you to do this, you really need a series of kind of focused questions that uncover goals, priorities, resources, risks, and timelines. And it kind of defines how and when. So to me, this is more the operational plan. And it's really interesting to me as a consultant that organizations will spend a lot of money or time creating the strategic plan, but they won't work as much on the actual roadmap. Uh, one example that I have is an organization shared me, I'm not even kidding, a hundred-page strategic plan where it had this whole layout of this future of the organization with new facilities and additional staff, and they really, really dreamed big, which there's absolutely nothing wrong with that. However, the organization had less than 30 days worth of cash and was struggling to keep their doors open. So it's always wonderful to dream big and have that grand scheme picture. You know, if a donor randomly shows up at your door and says, Hey, here's a $10 million gift, um, it's wonderful to be played, uh, prepared. But if you're trying to make sure that the staff are engaged and the executive director feels empowered, you either need a strong roadmap to get there. Otherwise, your strategic plan is more of a strategic dream. That specific organization, um, we ended up mapping it out because there was a disconnect between the staff and the board on the timeline and how that could be achieved. The board was not a fundraising board, and the staff were the main fundraisers. Um and so what we did was we figured out the cost of a new facility, what it would look like, um, what staffing they would need for that new facility, and then figure out the loans and the mortgages on the new building, what they could get for the old building, um, and also figured out the time frame. It was what is a realistic fundraising goal for each of those years, in addition to what they were already doing, which was struggling, um, to show and kind of communicate to the board that that was a really big dream. And the reality was it was gonna take them about $15 million in 10 years to get there. So the strategic plan or the roadmap or the compass, whichever way you want to go, does have to be a little bit of uh does have to be reasonable and obtainable. Otherwise, your staff are not gonna feel motivated or engaged in the process. Um, I think we all wish that all organizations had a you know five million dollar investment portfolio available to them immediately so that they can do a lot of the things they want to, but reality is is you just need a roadmap to get there. It's not a no, it's just we have to lay it out. Um how do we gather this information? So some of the top things that I like to do in gathering uh strategic information one is the traditional SWOT analysis. Again, people love it or hate it, but that's laying out your strengths, your weaknesses, opportunities, and threats for the organization. And some people do this like on a post-it notes and just lay them all up on the on the wall. Some folks have a written documentation and gather all the information and summarize it for the or whatever group is coming together to kind of set up the strategic plan. But um just in just in a nutshell, your strengths would be the question is what would you say that the organization's strengths are? What attributes and benefits does the organization have that makes it successful in fulfilling its mission and vision? For weaknesses, what are some of the limitations, areas for improvement, constraints that the organization may have today that can create challenges for the organization? Now, weaknesses tend to be internal items, not necessarily external. For opportunities, the question is what could the organization add, remove, change, or explore that would create more opportunities for the organization? And then the second question to that, if you want to go a little bit deeper, what external factors could be leveraged? And for threats, what are some of the risks or challenges coming from external items that could affect the organization? What trends or changes in the community economy or policy or political landscape that could impact the organization? And then with those questions in mind, I tend to make a summary and gather all the information from all of the stakeholders because the board's gonna have a different opinion than the staff versus the folks that receive services from the organization. Everyone's gonna have a little bit of a different take. And then I'll gather that and I'll generally have like a conversation around it and come up with the top three for each one. Another thing that I do often with gathering uh strategic information is core values. And core values are to me, it's kind of a fun conversation, especially for those with the marketing communication background. Is if you ask everyone to kind of list out the core values of the organization, it kind of helps identify and define their values and provide examples of how value is demonstrated. And it also explains how it aligns with the organization's mission. So usually I start with a list, or I'll start with a bulletin board with a bunch of markers and say, you know, what are the core values that come to mind and what does that value mean to the organization, and then provide examples that demonstrate that specific core value. And then just kind of compare if those values all align with the organization's mission or if there's any mission creep, or if maybe folks are kind of adding additional information that's outside of the scope of the organ of the mission itself. And then again, same process. I will take that information and gather it and summarize it as a group and discuss. And then I sometimes I have fun questions too. So I'll share you with my fun questions, but you can come up with your own as well. But I have I have nerdy accounting ones coming from the accountant perspective who does strategic planning. Um, if the organization received $5 million unrestricted general operating support tomorrow that they could spend any way that they want to, what items or additional staffing or programming would the organization invest in first? And this is always a great one to open up with, especially for staff and the board. And then the next question I usually ask is which programs or services do you feel are the most effective and impactful for your organization? And the next one, how does the organization measure and communicate our impact? Followed by who are our stakeholders? Are they the beneficiaries of our services? Are they the donors, the partners, the volunteers? Can we easily define who our stakeholders are at this moment in time? And then a few more that you can add for extra credit if you'd like. What are the biggest community needs, expectations, or perceptions of our work? Followed by where do you see the organization in a year, in three years, and in five years. And some folks use a balanced scorecard. You can Google that, and there's tons of templates out there for free. You do not have to recreate the wheel. But what type of financial key performance indicators, what program key performance indicators, what type of data would be helpful for you to know that definition of success and how to measure that your strategy is working or may not be working so that you can adjust it. And from there, a lot of organizations do use the balance score card or a formal strategic compass visualization of some sort so that you can kind of put it all together. Um, I like to use strategic compasses that are only like a page or two long that include like the mission, the vision at the top, a couple core values, maybe up to five, and then have a list of strategic goals and then key strategies around those. And from there, I like to add visuals and then add a roadmap on how you're going to get there because that's the most important piece, right? You can have a wonderful strategic plan, you could spend $30,000 on a process. Um, but if you don't know how to get from A to B with that roadmap, then it's probably just going to sit in someone's desk and get dusty until someone else asks for a new strategic plan. So I hope this is helpful. Um, I know it can be an overwhelming process. I highly recommend breaking it down into tiny pieces and um doing one exercise at a time. Whether you choose one of these exercises or if you choose multiple exercises, it's totally up to the organization and how deep that they want to go. Um, I do highly encourage organizations to also put together a fundraising strategy plan, too, which I'll cover in another podcast so that that you'll have that information as well. But the biggest thing is having something. You know, even if you just start small, you can always do the big strategic plan another year. It's a really tough time for a lot of not-for-profits to be able to plan and adjust, especially when funding's changing. Um, I really do like strategic compasses for the short term, they're not as overwhelming as the whole strategic planning process. Hopefully, this is helpful. Um, I wish you all the best in your strategic planning and feel free to reach out with any questions at any time. On our website, we also have a handbook. It's just a short strategic compass handbook that also has all of these exercises that's available for sale as well for pretty low cost, if that's helpful for you and your organization in this process.