What Is Strategic Planning?

Strategic planning is making choices. It is a process designed to support leaders in being intentional about their goals and methods. Simply stated, strategic planning is a management tool, and like any management tool, it is used for one purpose only—to help an organization do a better job. Strategic planning can help an organization focus its vision and priorities in response to a changing environment and ensure that members of the organization are working toward the same goals. In short we define strategic planning as follows: Strategic planning is a systematic process through which an organization agrees on—and builds commitment among key stakeholders to—priorities that are essential to its mission and are responsive to the environment. Strategic planning guides the acquisition and allocation of resources to achieve these priorities. Several key concepts in this definition are worth expanding on to better articulate the authors’ approach to planning and our values and beliefs regarding a successful planning process:

The process is strategic because it involves choosing how best to respond to the circumstances of a dynamic and sometimes hostile environment. All living plants respond to their environment, but as far as we know, they do not choose how to respond. Nonprofit organizations have many choices in the face of changing client or customer needs, funding availability, competition, and other factors. Being strategic requires recognizing these choices and committing to one set of responses instead of another.

Strategic planning is systematic in that it calls for following a process that is both structured and data based.The process raises a sequence of questions

Introduction to Strategic Planning
that helps planners examine past experiences, test old assumptions, gather and incorporate new information about the present, and anticipate the environment in which the organization will be working in the future. The process also guides planners in continually looking at how the component programs and strategies fit with the vision and vice versa.

Strategic planning involves choosing specific priorities. The collection of data should (1) surface a variety of choices about what the organization will and will not do, (2) analyze the implications of those choices, and (3) result in making choices, some of which have significant tradeoffs. Hard choices are often not overly complex, but are those that require making agonizing or unpopular decisions. Planners must strive for consensus on priorities at many levels, from the philosophical to the operational.

The process is about building commitment. Systematically engaging key stakeholders, including clients and the community, in the process of identifying priorities allows disagreements to be engaged constructively and supports better communication and coordination. An inclusive process allows a broad consensus to be built, resulting in enhanced accountability throughout the organization.This commitment ensures that a strategic plan will actively be used for guidance and inspiration.

Finally, strategic planning guides the acquisition and allocation of resources. Too often, decisions are made quickly about new funding opportunities or spending for program and administrative needs in response to situations as they arise without a thorough assessment of the implications. An approved strategic plan helps leaders make proactive and realistic choices between competing funding strategies and between spending for various program and administration needs. Balancing the resource acquisition and spending plans is the essence of the business side of strategic planning.

Why Plan?
Why should an organization embark on a strategic planning effort? After all, planning consumes resources of time and money—precious commodities for any nonprofit—and defining the direction and activities of an organization, in an ever-changing environment, is daunting and can almost seem futile. The answer is that strategic planning helps organizations do a better job by helping leaders to be intentional about priorities and proactive in motivating others to achieve them. Leadership guru Warren Bennis writes in his book, On Becoming a Leader: “Managers are people who do things right, and leaders are people who do the right thing.”1 Strategic planning is both a leadership tool and a management tool. As a leadership tool, a successful planning process encourages the organization to look at the question: “Are we doing the right thing?”As a management tool, an effective planning process focuses on whether the organization is “doing things right.” Planning alone does not produce results; it is a means, not an end. The plans have to be implemented to produce results. However,well developed plans increase the chances that the day-to-day activities of the organization will lead to desired results. Planning does this in two ways: It helps the members of an organization bring into focus its priorities, and it improves the process of people working together as they pursue these priorities. Successful strategic planning improves the focus of an organization in that it generates:

An explicit understanding of the organization’s mission and organizational values among staff, board, and external constituencies

A blueprint for action based on current information

Broad milestones with which to monitor achievements and assess results

Information that can be used to market the organization to the public and to potential funders Successful strategic planning improves the process of people working together in that it

Creates a forum for discussing why the organization exists and the shared values that should inf luence decisions

Fosters successful communication and teamwork among the board of directors and staff

Lays the groundwork for meaningful change by stimulating strategic thinking and focusing on what’s really important to the organization’s long-term success

Brings everyone’s attention back to what is most important: seeking opportunities to better accomplish your mission

What Strategic Planning Is Not
Everything said previously to describe what strategic planning is informs an understanding of what it is not.

Strategic planning does not predict the future. Although strategic planning involves making assumptions about the future environment, the decisions are made in the present. “Planning deals with the futurity of current decisions. Forward planning requires that choices be made among possible events in the future, but decisions made in their light can be made only in the present.” Over time, an organization must monitor changes in its environment and assess whether its assumptions remain essentially valid. If an unexpected shift occurs, major strategic decisions may have to be revisited sooner than they would in a typical three- to five-year planning cycle.

Strategic planning is not a substitute for the judgment of leadership. Strategic planning is a tool; it is not a substitute for the exercise of judgment by leadership. Ultimately, the leaders of any enterprise need to ask themselves:“What are the most important issues to respond to?” and “How shall we respond?” Just as a tool such as a hammer doesn’t create a bookshelf, so the data analysis and decision-making tools of strategic planning do not make the decisions. There is no right answer. Strategic planning merely supports the intuition, reasoning skills, and judgment that people bring to the work of their organization.

Strategic planning is rarely a smooth, predictable, linear process. Strategic planning, although structured in many respects, typically does not flow smoothly from one phase to the next. It is a creative process, requiring flexibility. The fresh insight arrived at today might very well alter the decisions made yesterday. Inevitably, the process moves forward and backward several times before the group arrives at the final set of decisions. No one should be surprised if the process feels less like a comfortable trip on a commuter train and more like a ride on a roller coaster, but remember that even roller coaster cars arrive at their destination, as long as they stay on track! Keys to Effective Strategic Planning The elements highlighted previously in our definition and approach speak to the characteristics of strategic planning that we believe are most necessary for success. In addition, a few other thoughts about our approach are suggested here as advice to prospective planners:

Focus on the most important issues during your strategic planning process. It may take a while to become clear, but inevitably there are only a few critical choices that the planning process must answer. (If you don’t have any really important choices to make about your organization’s future, you don’t need strategic planning.) Resist the temptation to pursue all of the interesting questions. You simply won’t have the time, energy, or resources to do it all.

Be willing to question both the status quo and sacred cows. In order to understand what is most important in the current atmosphere and in the expected future, old assumptions about what is important must be challenged. It is possible to honor the past and still make new decisions. Don’t allow new ideas to be characterized as inherent criticisms of the past.

Produce a document. Whether an organization engages in an abbreviated process or an extensive strategic planning process, a planning document should be created. A useful strategic plan can be only a few pages long. The document is a symbol of accomplishment, a guide for internal operations, and a marketing tool for current and future supporters.

Make sure the strategic plan is translated into an annual operating plan for at least the first year. A critical test of a good strategic plan is that the operational implications are clear.Without a practical operating plan that articulates short-term priorities—and clearly identifies who is responsible for implementation—a strategic plan will rarely be implemented. Writing the first year’s annual operating plan and supporting budget with the strategic plan in mind makes sure your strategic plan passes this test. We like the following cartoon about strategic planning because it pokes gentle fun at the too-common tendency for strategic plans to be filed but not used. Summary of Key Concepts Strategic planning:

Is strategic. Intentionally responds to the current environment, including competition

Is systematic and data based. Gathers new information to make decisions

Sets priorities. Makes decisions about direction and goals

Builds commitment. Engages appropriate stakeholders

Guides resource acquisition and allocation. Takes into account the business of nonprofits Strategic planning is not:

A prediction of the future. Instead, it is a plan based on current information.

A substitute for judgment. Instead, it is a vehicle for informed decision making.

A smooth, linear process. Instead, it is iterative; insights at one stage may change earlier conclusions. Keys for effective planning:

Focus on the most important issues.

Be willing to question the status quo and sacred cows.

Produce a document.

Make sure the strategic plan is translated into annual operating plans.

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