Strategic Thinking 101: Why Vision and Goals Aren’t Enough

In poverty alleviation, it is easy to get swept up in the “tyranny of the urgent.” We pay so much attention to immediate needs that we neglect to think much about the future. However, there are many important problems an organization must solve that will not yield to a simple flurry of activity. We need to solve complex problems like how to grow our organizations, maximize long-term impact on clients, change the character of deprived neighborhoods, or create effective joint efforts among multiple organizations in a community.

Even when we carve out time to think or meet about these hairy problems, the most common result of such a “strategic planning session” is either a broad vision of change or a list of ambitious goals.

“We envision a community in which all churches work together in unity to help people flourish.”

“We plan to grow our donor base by 20 percent next year.”

Of course, specific goals and broader mission and vision statements are all important, but they aren’t the same as a strategy.

A strategy is a plan of action designed to achieve your vision and goals. Strategies must change as situations change, even if the mission remains the same.

Without a deliberate strategy, you can justify any set of inconsistent, vision-oriented actions. Imagine you have an economic development vision for a small town and a $100,000 budget. You could conduct any number of initiatives, from building an affordable housing unit to painting a mural or providing a small business startup loan. It’s possible that each of these actions may align with your vision, but lack of a long-term strategic plan will likely result in poor outcomes.

A good strategy has at least three elements (adapted from the book Good Strategy, Bad Strategy, by Richard Rumelt):

• A clear diagnosis of the problem – an outline explaining the primary causes of the problem.
• A guiding policy – a focal point that describes what the organization will do in response to the problem.
• A mutually supportive set of actions – a coordinated set of specific plans which amplify each other.

A strategy containing these essential elements will allow you to achieve your ultimate mission and whatever mile-marker goals you have set along the way.

There are countless ways to respond to a community economic development problem—each dependent on the details of the situation. Here are two examples:

Strategy 1:

Problem: Living-wage jobs are available in our town, but much of the population doesn’t have the technical skills to take advantage of them.

Guiding Policy: Raise awareness of and access to the town’s medical supplies manufacturing jobs.

Action Plan: Build a bridge between the industry and the community to make residents aware of the opportunity through plant tours and local block parties with representatives and booths from the facilities. Build a training and internship program in coordination with the facilities and local community college to train talent in the small town.

Strategy 2:

Problem: Most people can find decent employment, but exorbitant housing costs make it difficult to get ahead.

Guiding Policy: Lower housing costs through increased supply.

Action Plan: Lobby the city council to pass an ordinance allowing additional dwelling units on existing property. Work with a developer to clear community support hurdles halting work on an in-progress housing development.

These are just two of the many different strategies that could be used to support community economic development. Of course, of all the possible strategies, some will yield extremely high returns, others marginal returns and others will have no impact.

Determining which plan will generate the most success is similar to the scientific method. A scientific hypothesis is an educated guess informed by deep expertise in the subject and then subjected to rigorous testing. We can apply the same process to strategic formation with the following approach:

1) Widen your options

There’s a good chance that you “already know” what strategy your organization needs to pursue. There’s also a good chance it was one of your initial ideas when you thought about the situation. When your mind generates a solution to a complex problem, it’s like being rescued from a choppy ocean by a life preserver. It’s natural to cling to that idea for the security it provides. However, the first “life-saving” idea you find is unlikely to be the best solution to the problem. Say a more secure lifeboat comes along later, representing a better solution to the problem – it’s going to require you to let go of your original idea and swim to it, which can be very difficult.

The best way to keep from getting stuck with a single poor strategy is to generate more than one option at the outset. Good ways to do this include getting independent ideas from people with different perspectives on the issue. For poverty-related issues, this could include people in poverty of various sorts, people who work with them regularly, True Charity Network members from other communities, and scientific research on the topic.

Another way to generate ideas is the “vanishing options test.” Imagine that it was impossible to implement your preferred strategy: what would you do instead? What if your second-choice option was impossible, and your third? This method forces you to identify multiple, unique ideas to diagnose the problem, create the guiding policy, and develop action plans.

2) Multi-track and fail fast

Once you have a range of possible solutions, you can reality-test your assumptions to eliminate some of them. For instance, two team members may disagree about the relative need for job skills vs. financial management skills for ministry clients. A little field work can identify which of these two issues is most pressing by asking a small sample of people to share their budgets, which can be analyzed to see whether lack of income or better financial management is the most pressing need.

However, many strategic questions can’t be resolved so easily, and you may be left with 2-3 promising possible strategies and split opinions about which to pursue. In this case, it may make sense to pilot small experiments with multiple strategies simultaneously while establishing clear benchmarks for relative performance and identified windows to reevaluate the projects. After a few months or a year of trial data, you should be ready to drop the strategies showing less promise and commit to those performing best.

A poor solution is to pursue multiple, non-mutually supportive strategies indefinitely. If businesses with 100,000+ employees generate higher profits when they pursue single strategies, then it seems sensible that resource-constrained nonprofits would need to be especially diligent about focus. 

Suppose you’re a visionary who gets bored by the idea of focusing effort on a few actions. While your visionary gift is likely a big asset to your organization, it can also tempt you to “chase two rabbits and catch neither.” Your best approach is to find advisors who are more pragmatic to help you catch one rabbit at a time. Determining when multiple actions are coherent and supportive vs. disjointed and inefficient is often a difficult judgment call for the wisest of leaders. When in doubt, default to doing less, better and you can always expand your efforts later.

3) Focus your solutions over time

The 80/20 rule observes that 80 percent of outcomes often come from 20 percent of efforts. For example, in a company’s sales department, 80 percent of sales often come from only 20 percent of customers. Similarly, you will often find that within a single strategy, some of your action steps yield much better results at a lower cost than others. 

If you run a youth gang prevention program, your in-school education efforts may not be definitively improving the situation, but your after-school clubs may very well be having a measurable impact. While both of these efforts are a part of the same strategy, it may be time to cut one of them. Alternatively, your afterschool program and your in-school education may be having similar effects, but the afterschool program may cost five times as much per student. In this case, it may be time to cut or reduce your effective afterschool program and redirect resources to expanding in-school education.

Just because you have two programs worth keeping doesn’t mean they should each consume half of the resources. If a retail store sells books and candy, the astute store owner will allocate the shelf space for each product until the profit per shelf space is equal, which will most likely be 95% books and 5% candy, not a 50-50 split. 

Similarly, a small amount of one program may generate beneficial outcomes that justify its resource cost, but scaling the program up won’t necessarily be worthwhile. You may do six community block parties annually to recruit applicants for your financial literacy programs. Upping this amount to 12 parties a year is likely a waste of effort, but cutting them back to four a year may give you the most efficient ratio of results to effort. 

You can use an objective measure like “hours of staff time setting up block parties per new program applicants from the block parties” to help optimize how many block parties you perform. You could learn through trial and measurement that a block party takes 40 hours of staff time to set up and at four parties per year, you get 16 applicants at a cost of 10 hours of staff time per applicant. With six parties a year, you get 20 applicants at the cost of 12 hours of staff time per applicant.

4) Factor in Sustainment

In business, a good strategy generates profit, which funds the enterprise. Sustainment is often separated from impact in nonprofit work. An organization with poor results can be well-funded if it presents itself well, and an organization with excellent results can go under if it doesn’t raise enough cash. It’s okay to acknowledge that certain approaches are more attractive to donors, volunteers, and grantors in your community and to lean towards strategies that are easier to fund. But you simply can’t let the resources pull you away from your mission or into strategies that are ineffective or counter-productive—doing so results in what is referred to as “mission drift”.

Also, don’t underestimate your power to re-educate supporters on what strategies you believe are best. If you have expertise and evidence, you can likely convince a major donor that it’s time to wind down an old program she has been funding for years and launch a different one.

You also need to deliberately invest in your own organizational infrastructure and avoid the pull toward the nonprofit starvation cycle.

A strategy is not a vision, a mission, or a set of goals. It is a plan that provides a clear diagnosis of a problem, a guiding policy to address it, and a coherent set of mutually supportive actions. A good strategy can be the difference between outsized success and decades of frustrating and fruitless effort. You can dig a ditch with spoons using fifty volunteers, or you can dig it with one using a tractor. Strategic thinking rarely feels urgent, but it is always important—make time to do it well.

For two great books which inspired some of the ideas in the article check out:

Decisive: How to Make Better Choices in Life and Work by Chip and Dan Heath

Good Strategy, Bad Strategy: The Difference and Why it Matters by Richard Rumelt

Strategic thinking requires you to identify and measure outcomes which will show progress towards your mission and help you assess the performance of your strategic plans. True Charity Network members have access to a detailed toolkit for Outcomes Measurement.