Introduction
Throughout our work at ABARIS Consulting Inc. in helping organizations develop, implement and manage their strategy, we have made a few observations that are worthwhile sharing. When it come to strategic planning in the nonprofit sector we’ve noticed two weaknesses in many organizations’ processes (which we have also found in the for-profit sector). These weaknesses lie first in the data gathering and analysis that is done to support the decision-making, and second, in the implementation of those decisions. The purpose of this article is to provide a few basic tools to assist your organization in data gathering and analysis before you reach the decision-making stage.
The strategic process
As mentioned in previous articles there are almost as many systems for conducting strategic planning as there are consultants – that’s a lot of systems! Regardless of what any consultant may try to sell, all of these strategic planning systems have both drawbacks and benefits. Regardless of the specific system used, most – but certainly not all – follow the same basic process model that to a greater or lesser extent includes:
- Data gathering and analysis
- Decision-making
- Implementation
- Monitoring
The purpose of this article is to provide you with a few common tools that can be used in the data gathering and analysis stage of this process. The hope is that with better data and analysis will come better decisions, leading to better choices in the allocation of your organization’s scarce resources.
Data gathering & analysis
You may be surprised (or then again, maybe not) as to how many management and board members use the terms SWOT and strategic planning interchangeably, as though strategic planning means you must do SWOT or that doing SWOT means you must be doing strategic planning. This is not so. SWOT is one tool – a widely used one – but still only one of many tools that can be used in the data gathering and analysis stage of your planning process.
The purpose of this stage in the strategic planning process is to ensure that you have the information you need to make strategic decisions for your organization.
Common tools
The following tools represent only a small number of the tools you can use in the data gathering and analysis stage of your strategic planning process. Although obvious, it is worthwhile to remember that the quality of the outcome, regardless of which tool or tools you use, is dependent on the quality of the data. Although each tool has inherent benefits and limitations, and may require differing levels of skill to use effectively, they all represent the opportunity for you to gain valuable insight and information that can improve the quality of your organization’s strategic decision-making.
STEP analysis
This acronym stands for social, technological, environmental and political. The model provides a framework for reviewing the external environment. The purpose of this tool is to develop a better understanding of the impact of external forces upon the organization.
Trend analysis
Trend analysis looks at a specific variable or multiple variables at different points in time. Trend analysis is easiest done from a retrospective point of view, (i.e. looking at a point in the past and the changes from that point up to today). Future trends look at the current point and project changes into the future and are often developed by first looking at past trends. The caveat, just like the disclaimer on mutual fund prospectus, is that past performance (i.e. trends) is not necessarily an indication of future performance. Trend analysis is often conducted in conjunction with other tools and can be used for either external (to the organization) or internal analysis.
Core competencies
Core competencies are defined as “a bundle of skills, resources and processes that make a significant contribution to those you serve, are difficult for others to imitate, and provide the opportunity to access a wide variety of other markets.” Core competencies are an alternative tool for understanding the strengths of a your organization and basically require a more rigorous analysis than the listing of strengths that usually goes into a SWOT analysis. Unlike the other tools mentioned in this article, the effective use of core competencies in developing your strategy can be difficult.
SWOT analysis
SWOT stands for strengths, weaknesses, opportunities and threats. A SWOT analysis is designed to help your organization understand how it relates to its external environment. In other words, to act as a way of seeing if and how the organization is aligned with the world around it. Strengths and weaknesses represent the internal analysis and opportunities and threats represent the external analysis.
Key or critical success factors (KSFs)
Key or, as they are also called, critical success factors are the few, usually about three or four, that the organization must do well in order to be successful. This tool can be useful in helping your organization understand what it should focus its scare resources on in order to be successful, (i.e. as you described in your vision). Related to this tool is the concept of “tablestakes”. Tablestakes are those factors that are required just to be a participant in the arena you choose to service. For example, to deliver a specific program may require that you have a minimum of $40,000 per year for the next three years. Having these funds doesn’t ensure the success of your program; that’s dependent on other factors, (e.g. the critical success factors), but to offer the program this level of funding represents a minimum requirement.
Scenario planning
Scenario planning is designed to allow your organization to develop internally consistent descriptions of what the future may look like by making changes to the key assumptions underlying your organization’s strategy. Scenario planning is often linked to other tools such as STEP, SWOT, KSFs and trend analysis.
Final thoughts
As mentioned at the start of the article, these tools represent only a small portion of the tools that you can use to help with your analysis during your strategic planning process. Regardless of which tool or tools you use, they are no substitute for knowledge of your business or objective critical thinking.
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.
ABARIS Consulting Inc. is credited as the source on all copies, reproductions and distributions, and CharityVillage.com is credited as the original publisher.
