Anchors provide foundation for nonprofit planning

By Lynn Sygiel, editor, Charitable Advisors

Ask any organization — for-profit or nonprofit — about strategic planning and most will tell you it’s an important part of their operation. After all, what can be wrong about planning for the future?

Nothing, says Fort Wayne-based consultant Mike Stone, as long as it’s done the right way.

Stone, the founder of Impact Strategies Inc., cautions that when it comes to strategic planning, nonprofits should have a different focus than for-profit companies.

There are things that for-profits can do that nonprofits cannot, and being constrained by their social mission is inherently limiting. Nonprofits not only have to find the consumers, but they have to find someone willing to pay for the service to clients.

“They are fundamentally chained there. I think it changes the nature of what strategy is. I think for a long time, it did a disservice because nonprofits tried to use a model that wasn’t appropriate,” said Stone, who has been an adviser to nonprofits for the past 11 years.

“Unfortunately, nonprofits have adopted the processes that weren’t always a good match. There are enough differences fundamentally between the for-profit and the nonprofit world that the wholesale importation of the for-profit model doesn’t work well,” he said.

“It was different when money was flowing in the ’80s. There were still government contracts and nonprofits were popping up to provide services. I think what’s changed is that now we’re moving in the opposite direction. Money’s become much more tight and people are having to return to their core. I’ve seen people start to jettison programs that they took on at the time they made sense. That’s just a luxury I just think we don’t have any more.”

What works, according to Stone, is treating an organization’s strategic direction much like an individual’s vocation, and creating a framework to make decisions.

“You have this notion of who you are as an organization, why you exist, what defines you. When you express that, you pursue a social mission. That’s the essence of what strategy does.”

He learned this lesson when he was working as a career counselor. Prior to Stone’s work advising nonprofits, he spent over a decade working in higher education and then as a program officer and executive director of a community foundation. Stone would tell students that it was crazy to think that a 22-year-old could predict a career path for five years or 20 years in the future, without spending time figuring out what is important. This is much like the advice he gives to nonprofits.

“It’s just as crazy for nonprofits today to anticipate what decisions they are going to make over the next three to five years,” he said.

For the nonprofits he works with, he has developed a unique approach to strategy development to address two key features of the nonprofit environment: uncertainty and unpredictability.

“You learn that sometimes you refine your self image, you say, ‘You know what, I’m better at this than I thought, but what I’m not as good at this as I thought,’ and you adapt. Individual vocation is akin to organizational strategy. “

His approach is to have an organization know what its anchors are and create a decision-making framework with those anchors firmly in mind.

Stone understands it’s hard work. Using his approach, organizations have to define internal anchors and have deep, serious reflective discussions about motivation and identity.

“Understand enough about what the organization really is and then move out from there to evaluate opportunities,” said Stone.

The balloon guy often placed at a car dealership is used to illustrate his point.

“If you think about balloon man, he’s anchored, and he never moves. He claims the spot. You don’t know which way the wind’s going to blow, but you’re going to have to respond, and have got to be anchored somewhere.”

Too often, he said, nonprofits are opportunists and grab the next shiny object or opportunity.

“Let’s start with, OK, who are we? Would that shiny object, if we pursue it, change who we are? Does it enhance who we are? Is it a distraction?”

Stone sees a strategic framework as a living document and separate from a plan. The framework helps define an organization’s limitations.

“Affirm that this is who you are, and this is the best expression of who you are. The external environment has changed, so what an organization needs to do is going to change. That’s the plan, but the framework is still legitimate. That’s why you separate the two,” Stone said.

All kinds of plans — from staff level plans, fundraising plans, board plans – can be attached. Stone said nonprofits are good at planning, that’s never been the problem, but too often have the detail without the vision or without the purpose.

“This goes back to bringing it over from the for-profit side. I think that’s where the confusion is. There’s a strategic direction that’s portrayed in the framework and there are all kinds of action plans that have to be in effect to start moving in that direction. Action plans are going to come and go and become obsolete.

“Your vision or your direction as portrayed in that document, should be pretty durable at any given time and context. The organization’s anchor points can mean something different in 2008 than they meant in 2000. But hopefully, they had integrity and didn’t shift. They just had to react differently because the wind was blowing differently.”

The modern paradox is when you lose strategic focus in an effort to save an organization’s bottom line, the nonprofit risks losing its soul.

“And to me that’s what strategy is. How do we balance the bottom line without losing our soul? It’s hard. It means tough choices.”

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