Most of us rarely take the time to sit back and think about our organization and in which direction we want to take it. We have enough on our plate so we leave the concept of thinking about the future of our organization to the Board and strategic planning process. In this article, the first of two, I’d like to discuss a few ways of thinking about your organization during the strategic planning process. In the second article, I’ll talk about different processes for developing your strategy.
Various approaches to strategy development
Not-for-profit organizations view of strategic planning is dominated by one view ð the mission-based approach. This however, is not the only way to view the organization during the strategy development process. Thinking about the organization in different ways may uncover issues or opportunities that may not otherwise have been considered. The different approaches include:
- Mission-based strategy
- Vision-based strategy
- Environment-based strategy
- Resource-based strategy
- Capability-based strategy
Mission-based approach to strategy development
Many not-for-profit organizations justified their start-up and continued existence through their mission statement. In fact, many funding agencies ask for the organization’s mission statement as part of the grant application. With such importance attributed to the mission statement why wouldn’t you have a mission-based approach to strategy development?
First of all I’d like to distinguish between a mission-based strategy and a mission statement. Most organizations, regardless of the approach they use to think about their organization’s strategy will still have a mission statement. So, having a mission statement and using a mission-based approach to strategy development are not necessarily synonymous.
A mission-based approach to strategy development is basically undertaken by organizations that immediately take the mission statement for granted, believe that it is what it is and should remain so. In these organizations the purpose of the strategy development process is to develop objectives in order to measure the organization’s progress towards its mission and act as a method of allocating resources.
Vision-based approach to strategy development
This could be interpreted as the antithesis of the mission-based approach. A vision-based approach to strategy development is when an organization takes nothing for granted, describes a clear, compelling and exciting picture of the ideal organization of the future and seeks ways to make that vision a reality.
Organizations that take a vision-based approach to strategy development may at the end of the process determine that their mission statement is inappropriate and change it to be consistent with the organization’s new vision. Having said that, a vision-based approach does not require an organization to change its mission statement.
A vision-based approach to strategy development is not the same as having a vision statement. Many organizations regardless of the way they develop their strategy will have a vision statement.
Environment-based approach to strategy development
The environment is defined as the various forces outside the organization that can affect its ability to be successful. Such forces could include, regulatory changes, economic conditions, social changes, demographics, technology, etc.
Organizations using an environment-based approach generally believe that fundamental changes in the external environment (such as one of the forces mentioned above) would have a significant positive or negative effect upon the organization’s success. As such, these organizations would spend considerable time and effort understanding the potential impacts of these forces and developing strategies to address them. For example, an organization may develop an advocacy strategy in response to potential regulatory changes or re-position the marketing message because of demographic changes.
You could think of the environmental-based approach as focusing on managing the organization’s reaction to current and potential external opportunities and threats.
Resource-based approach to strategy development
The resource-based approach to strategy development is based upon the assumption that it’s the effective use of the organization’s resources that should drive its strategy development.
Organizations using this approach are primarily concerned with the assets the organization has and how to best use these to its advantage and generally believe that they have a unique bundle of resources that if used effectively will be the key factor in determining their future success. As such, these organizations spend more time during their strategy development process understanding the assets they have and the potential applications and opportunities to leverage these assets.
Capability-based approach to strategy development
The capability-based approach to strategy development is probably the most insightful and yet remains the least used approach within the not-for-profit sector. Having said that, it is also one of the most difficult approaches to use effectively.
The capability-based approach is the belief that each organization has a specific and unique set of capabilities and it’s the enhancement and leverage of those capabilities that will drive the organization’s future success.
Organizations using this approach spend time identifying those 3 or 4 organizational capabilities that transcend specific individual or departmental strengths and make a meaningful, sustainable and positive improvement to those the organization serves. Once the organization has determined its key capabilities it develops strategies to leverage and invest in them.
For example, the key capabilities in a specific hospital foundation might be: relationship management, transaction processing and board-stakeholder relations. In this example the organization would develop strategies to leverage those capabilities and ensure activities that retain and build upon these capabilities. As such, the criteria and recruitment process for Board members would be adjusted (if necessary) to ensure that it builds and supports the board-stakeholder relation capability.
A capability-based approach is especially useful when an organization has a difficult strategic decision to make. For example, if an organization was trying to determine if they should remain within a specific area of activity or whether it should outsource the work.
Ron Robinson is the president of ABARIS Consulting Inc. He can be reached at (519) 472-9788 or rrobinson@abarisconsulting.com. This article is provided free of charge, for information purposes only and is not intended, represented or to be inferred as providing advice. ABARIS Consulting Inc. makes no warranty, express or implied, or assumes any legal liability for accuracy, completeness, or usefulness of any information provided in whole or in part within this article.
