Distinguishing Strategy

I was having coffee the other day with friend at the Humani-T Cafe on South Park Street in Halifax. In the course of a wide-ranging conversation about non-profits, she related a story about a organization she knew of whose board said they could not do strategic planning because they did not have the resources.

I sense that there is a widely-held view that in order for a non-profit organization to operate strategically they need to spend money hiring a consultant who will help them create a ‘plan’. Formal strategic planning exercises, as valuable as they can be, have far too strong a grip on how how executive directors, boards and funders think about what it takes to operate in a more goal-oriented and intentional way.

Roger Martin of the Rotman School of Business at the University of Toronto believes that people make the crafting of organizational strategy harder than it needs to be. Writing in the Harvard Business Review Blog Network in May 26, 2010, he suggests that people “focus too much on the tools”, or think it is only about “big picture stuff.”

Five strategic questions

Martin outlines what he suggests are five interrelated and cascading (first to last) strategic questions facing any organization. Here they are in italics (with the bolded words in the original article retained) followed with some of my ideas on how these questions might be applied to non-profit organizations.

1. What are the broad aspirations for our organization & the concrete goals against which we can measure our progress?

There are really two questions here. The first one invites ideas around organizational mission. I like the word “aspirations” as it invites governing groups to broaden their language around organizational purpose. For non-profits I would hope there may be aspirations for the community as well as for the organization itself.

The second part of the question asks people to consider what might be the results or outcomes attached to these aspirations. This is a call to brainstorm some new or additional objectives, or reframe some existing ones, for possible consideration.

2. Across the potential field available to us, where will we choose to play and not play?

This question is about the organization’s sector. Non-profits typically operate in one or more areas (e.g. culture, heritage, sports, health, social services, economic development, education, etc) and within those most have staked out a particular territory. What is that territory?

The ‘not playing’ question is equally important.  It is about naming adjacent territories inhabited by other organizations in the community, perhaps in your sector, but not in your field. Sharing a field with others may be fine, uncertainty about one’s field makes strategic governance impossible.

3. In our chosen place to play, how will we choose to win against the competitors there?

For non-profits this question is about how does, or will, one’s organizations distinguish itself in the eyes of its main stakeholders including staff, clients, and funders? What is it you want said about your organization? This is not about people knowing what you do, it is about them knowing what sets your organization apart or, dare I say, even above, others in your field.

Distinguishing one’s organization involves comparing it to like organizations that inhabit the same territory.  What do you know about these “competitors” and their missions, approaches and reputations? Board members tend to know little about others working in their organization’s field. Having some understanding of even a couple of organizations like your own is an important strategic information. It helps cultivate perspective.

4. What capabilities are necessary to build and maintain to win in our chosen manner?

The answer to this question focuses attention on the organization’s front line programs and services and, in particular, the resources, knowledge, skills and expertise required in providing them. What is it that one’s organization need to be good at in order to realize its aspirations, meet its goals and distinguish itself? Are there capabilities that it is at risk of loosing and are there ones it needs to further develop or even add?

5. What management systems are necessary to operate to build and maintain the key capabilities?

For non-profits this question has two dimensions: management and governance. This is about ‘back office’ functions, infrastructure and leadership. On the management side the key systems are those of financial management, fundraising, human resource management and technology. On the governance side, board engagement, community and stakeholder relationships, and recruitment and succession practices are very important. Are one’s organizational systems and leadership practices as strong as they need to be given its aspirations, goals, desire to distinguish itself and maintain, change or grow its program capabilities?

Some back and forth is essential

What Martin recommends is, “that to create a strategy, you have to iterate — think a little bit about Aspirations & Goals, then a little bit about Where to Play and How to Win, then back to Aspirations & Goals to check and modify, then down to Capabilities and Management Systems to check whether it is really doable, then back up again to modify accordingly.”

Martin says “crafting your strategy in relatively small and concrete chunks and honing the answers to the five questions through iteration will get you a better strategy, with much less pain and wasted time.” 

Using these questions one could create a set of worksheets that your governing group could employ in facilitating a strategic discussion. Such an exercise would likely require some work by the executive director and a board member in advance, time for participants to reflect individually on each of the questions, and then at least couple of hours sharing the ideas in a “cascading” and back and forth approach just as Martin suggests. No consultants are necessary.

Martin’s suggestions about having a strategic discussion does not replace other approaches of crafting organizational strategy and, it is not a template for a formal strategic plan. However, I think it would be a valuable exercise, one that enables an organization’s leadership to pose some different kinds of questions and develop a shared sense of understanding of where they are and want to be. It represents an easy way to start developing a strategic consciousness that will surely find its way into the kind of choices made around the board table.

My version

I have created a set of strategic discussion worksheets using Martin’s questions along with a self-facilitation guide. If you are interest in receiving an electronic copy that you can customize please contact me; I will gladly send the document to you. There is a PDF version under Resources, Governance Guides.

Roger Martin and A.G. LaFley are the co-authors of a book Playing to Win: How Strategy Really Works, published by Harvard Business Review Press in 2013. It was new when I wrote this post,