In Part 1 I outlined five approaches to strategy development:

• Mission-based strategy.
• Vision-based strategy.
• Environment-based strategy.
• Resource-based strategy.
• Capability-based strategy.

While these are useful in understanding the various ways of looking at strategy development, for many organizations there is a need to include several of these approaches in a single strategic planning session. In this article I’ll outline two different processes for developing your strategic plan; the “conventional process”, and the “opportunity based process”.

The Conventional Process

This is the process that most organizations use to develop their strategic plan. This process generally involves the Board (or some component) and senior staff working with a facilitator through a templated process. To improve success it is important to take the time to plan the process. While all organizations are different there are several questions that can be used by any organization to help plan the process.

Is this going to be a staff or Board led process?

Not all strategic plans are Board led activities. In larger organizations, the senior management team leads the strategic planning process with input from the organization’s key stakeholders. The Board of course still holds the authority to approve the plan. For most not-for-profit organizations the process is Board led and staff supported.

Whom should we seek input from as part of the process?

Many smaller organizations make the mistake of including only the Board members and senior staff person in the development of their strategic plan and don’t obtain input from other stakeholders. The argument for this has generally been that the Board is representative of the organization’s stakeholders or that obtaining information from other stakeholders is too costly.

Input from other stakeholders can challenge the Board’s own paradigms and increase the stakeholders support for the plan. To reduce the cost of gathering stakeholder input, you can ask members of your Board to make a phone call and interview one stakeholder. Staff would provide the name, contact information and questions and each Board member would make a 15-minute call and collect the information. This information can then be compiled by a staff member or volunteer and distributed as input to the strategic planning process.

How many people should attend the actual strategic planning sessions?

When deciding on the size of the group that should attend the planning sessions the tendency is to try and include everyone so that they all feel that they are part of the process and in turn support the strategic plan. While support is important, making the group to large can make it difficult for decisions to be reached. The strategic planning sessions are to analyze information and make decisions, not as the primary method of gaining support. The process of obtaining support should be achieved by:

• Obtaining input from the stakeholders in a variety of other forms such as interviews, questionnaires, focus groups, town hall meetings, etc.
• Providing draft copies of the strategic plan for input and comment.

The actual planning sessions should include a committee of the Board and senior staff. This group would ideally be between 7 and 9 people. While research has shown that a group of 7 is the most effective size for decision-making, having 9 on the committee allows for those that may be unable to attend a specific meeting.

What resources do we have to spend on the process?

When thinking about resources to do a strategic plan we often think about the dollar cost and the amount of Board and staff time it will consume. Another cost that is often not considered, mainly because it more difficult to measure is the cost of a poorly developed strategy. There are always more demands than there are resources and it can be easy to cut back on the efforts put into the development of your strategic plan. However, the impacts of your strategic plan are often long term and fundamental to your organization. A poorly developed strategy can have a significant detrimental impact on your organization for a prolonged period of time. Be frugal with your resources but as the saying goes, “don’t be penny wise and pound foolish”.

Are we expecting a significant change in our strategy?

The reason for asking about “significant change” is that it helps you determine the planning period. The planning period is the time horizon your strategic plan covers; i.e. 3 years, 5 years, 10 years, etc. As the senior staff person in the organization, (especially if you’re been there a few years), you have a deep understanding of the organization’s issues and potential for the future. That gut feeling can be useful in setting the planning period. If you are expecting a significant change in strategy you should expect to lengthen the planning period and include more interim objectives and measures of performance. The longer planning period is needed to make the change in the organization. Any significant change in strategy requires a change management process to make the transition and a new organizational structure to help implement and sustain the strategy.

Do we currently have processes in place to implement and manage the outcomes from the strategic planning process?

Some organizations have very detailed and defined processes for developing their annual operating plans that include budgets, human resources, objective setting, performance measurement, etc. Organizations that have this type of process in place find it a lot easier to implement their strategy. Note: this assumes that the strategic plan precedes the development of the operational plan. If you don’t have an operating plan then you need to ensure that as part of your strategic plan you develop very specific, time-limited, measurable objectives and use a Gantt chart to outline who is responsible for the delivery of each objective.

Are there any other significant issues currently outstanding?

It is often difficult to take time away from the day-to-day operations of your organization and develop a strategic plan. This is especially so when there is a critical issue that needs to be addressed. There is no doubt that some issues need to be addressed immediately; however, if you find that you are constantly fighting fires and seem to keep putting off your strategic plan you may want to step back and look for the common thread. That common thread is probably more strategic and in turn fundamental to the performance of your organization. Once identified you need to take the time out and address the issue as part of your organization’s strategy. I appreciate that it is difficult to do, but only by having this discipline will you be able to stop being a fire fighter and get back to being a manager and leader.

While many of you will be able to identify with the conventional process for strategy development it does have its limitations. One of those limitations is in the application of to new organizations. Let’s look at another process called the Opportunity Based Process.

The Opportunity Based Process

The development of strategy within new organizations is unlike the process used in established ones. In established organizations, the key capabilities, basis of operation, governance structure, staff roles & responsibilities, etc. are already formed. The focus of strategic planning in established organizations is on the development and effective allocation of resources towards chosen priorities.

New organizations are different. In fact, many new organizations are, as part of their development, trying to ascertain in which areas they can make the most meaningful and sustainable difference. Consequently, the strategy development process in many new organizations is one of seeking and capitalizing on opportunities. As opportunities are pursued, the strategy is not revealed until later when one looks back and discovers the common threads.

Having said that, the governance structure of not-for-profit organizations does not generally support the opportunity based process of strategy development. This is because it doesn’t appear to provide either the level of control or accountability that is often required, especially by funding agencies. However, placing too tight a focus on the organization too early in the process may result in key opportunities being missed. The reconciliation of control and opportunity is through the development a framework that helps guide the organization yet allows for sufficient room to pursue promising opportunities.

As a new organization you are constantly looking for appropriate opportunities to pursue within a highly changing environment. These opportunities, the changes within the organization and the changes within your various stakeholders will have a significant impact upon the organization during its early years. It is the impacts of these changes that require you to view our strategic plan not just as method of allocating resources to a specific direction and measuring progress but also as a guide to aid in making meaningful strategic decisions. Your ability to make decisions will both be aided by your strategic plan and in turn affect your plan. As such, your organization’s development is a process of guided learning that requires that your strategy reflect and benefit from that learning. This results in your strategic plan not remaining static, but changing, growing and adapting, just as your organization. This process of guided learning has a tendency to change your strategy more frequently and significantly than in established organizations.

Developing a framework within which to use an opportunity based process is very similar to the conventional process; the key difference is in the setting of strategic priorities and objectives. To support an opportunity based process, the strategic priorities need to be set wider than you might otherwise be comfortable with. The objectives should be based on developing and growing the resources, capabilities and skills of the organization. Focusing your objectives on building the resources, capabilities and skills of the organization provides greater flexibility in being able to pursue a wider range of opportunities. To accommodate this degree of change, the planning period is often reduced to 18 to 24 months. As your organization grows and you develop subsequent strategic plans, your priorities will become more focused.

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.