Step 1: Initiating and Agreeing on a Strategic Planning Process

The purpose of the first step is to negotiate agreement among key internal (and perhaps external) decision makers or opinion leaders about the overall strategic planning effort and the key planning steps. The support and commitment of key decision makers are vital if strategic planning in an organization is to succeed. Further, the involvement of key decision makers outside the organization usually is crucial to the success of nonprofit programs if implementation will involve multiple parties and organizations (Bryson, 2011; Light, 1998, 2002).

Obviously, some person or group must initiate the process. One of the initiators' first tasks is to identify exactly who the key decision makers are. The next task is to identify which persons, groups, units, or organizations should be involved in the effort. These two steps will require some preliminary stakeholder analysis, which is discussed in more detail below. The initial agreement will be negotiated with at least some of these decision makers, groups, units, or organizations. In practice, a series of agreements typically must be struck among various parties as support for the process builds and key stakeholders and decision makers sign on. Strategic planning for a nonprofit organization or collaboration is especially likely to work well if an effective policymaking body is in place to oversee the effort.

The agreement itself should cover

• The purpose of the effort
• Preferred steps in the process
• The form and timing of reports
• The role, functions, and membership of any group or committee empowered to oversee the effort, such as a strategic planning coordinating committee (SPCC)
• The role, functions, and membership of the strategic planning team
• The commitment of necessary resources to proceed with the effort
• Any important limitations or boundaries on the effort

As noted, at least some stakeholder analysis work will be needed in order to figure out whom to include in the series of initial agreements. A stakeholder is defined as any person, group, or organization that can place a claim on an organization's (or other entity's) attention, resources, or output or that is affected by that output. Examples of a nonprofit organization's stakeholders include clients or customers, third-party payers or funders, employees, the board of directors, members, volunteers, other nonprofit organizations providing complementary services or involved as co-venturers in projects, banks holding mortgages or notes, and suppliers.

Attention to stakeholder concerns is crucial: the key to success in nonprofit organizations and collaborations is the satisfaction of key stakeholders (Bryson, 2011; Light, 1998, 2002). A stakeholder analysis is a way for the organization's decision makers and planning team to immerse themselves in the networks and politics surrounding the organization. An understanding of the relationships—actual or potential—that help define the organization's context can provide invaluable clues to identifying strategic issues and developing effective strategies (Bryson, 2011; Patton, 2008). In this regard, note that the definition of stakeholder is deliberately quite broad for both practical and ethical reasons. Thinking broadly, at least initially, about who the stakeholders are is a way of opening people's eyes to the various webs of relationships within which the organization exists (Feldman and Khademian, 2002) and of assuring that the organization is alerted to its ethical and democratic accountability responsibilities, since they always involve clarifying who and what count (Lynn and Hill, 2008; Mitchell, Agle, and Wood, 1997).

For many nonprofit organizations, the label “customer” will be given to their key stakeholder. The customer label can be useful, particularly for organizations that need to improve their “customer service.” In other situations, the customer language actually can be problematic. One danger is that focusing on a single “customer” may lead these organizations inadvertently to ignore other important stakeholder groups. Another danger is that the customer label can undermine the values and virtues of active citizenship that many nonprofit organizations are trying to promote (Boyte, 2005; deLeon and Denhardt, 2000). In addition, many community-based nonprofit organizations and those relying on government funding also face very complex stakeholder environments (Stone and Sandfort, 2009).

The organizers of the planning effort should count on using several different techniques, including as a starting point what I call the Basic Stakeholder Analysis Technique (Bryson, 2004, 2011). This technique requires the strategic planning team to brainstorm a list of the organization's stakeholders, their criteria for judging the performance of the organization (that is, their “stake” in the organization or its output), and how well the organization performs against those criteria from the stakeholders' points of view. If there is time, additional steps (perhaps involving additional analysis techniques) should be considered, including understanding how the stakeholders influence the organization, identifying what the organization needs from its various stakeholders (money, staff, political support), and determining in general how important the various stakeholders are. Looking ahead, a stakeholder analysis will help clarify whether the organization needs to have different missions and perhaps different strategies for different stakeholders, whether it should seek to have its mandates changed, and in general what its strategic issues are. (A variety of other useful techniques will be found in Bryson [2004, 2011].)

Step 2: Identifying Organizational Mandates

The formal and informal mandates placed on the organization consist of the various “musts” it confronts, meaning the requirements, restrictions, and expectations it faces. Actually, it is surprising how few organizations know precisely what they are (and are not) formally mandated to do. Typically, few members of any organization have ever read, for example, the relevant legislation, policies, ordinances, charters, regulations, articles, and contracts that outline the organization's formal mandates. Many organizational members also do not understand the informal mandates—which are typically political in the broadest sense—that the organization faces. It may not be surprising, then, that most organizations make one or more of three fundamental mistakes. First, by not articulating or knowing what they must do, they are unlikely to do it. Second, they may believe they are more tightly constrained in their actions than they actually are. And third, they may assume that if they are not explicitly told to do something, they are not allowed to do it.

Step 3: Clarifying Organizational Mission and Values

An organization's mission, or purpose, in tandem with its mandates, provides the organization's raison d'être, the social justification for its existence. An organization's mission and mandates also point the way toward the ultimate organizational end of creating public value. For a nonprofit organization, this means there must be identifiable social or political demands or needs that the organization seeks to fill in a way that accords with its nonprofit status (Bryce, 2000). Viewed in this light, nonprofit organizations must always be seen as a means to an end, not as an end in and of themselves. For a collaboration, it means identifying the “collaborative advantage” to be gained by working together, that is, what can be gained together that creates public value that cannot be achieved alone (Huxham and Vangen, 2005).

Identifying the mission, however, does more than merely justify the organization's existence. Clarifying purpose can eliminate a great deal of unnecessary conflict in an organization and can help channel discussion and activity productively (Nutt, 2002; Thompson, 2001). Agreement on purpose also defines the arenas within which the organization will collaborate or compete and, at least in broad outline, charts the future course of the organization. Agreement on purpose thus serves as a kind of taken-for-granted framework that bounds the plausibility and acceptability of arguments (Bolman and Deal, 2013). Agreement on purpose can go even further and provide a kind of premise control that constrains thinking, learning, and acting (Perrow, 1986; Weick, 1995) and even legitimacy (Suchman, 1995). Moreover, an important and socially justifiable mission is a source of inspiration and guidance to key stakeholders, particularly employees (Kouzes and Posner, 2008). Indeed, it is doubtful whether any organization ever achieved greatness or excellence without a basic consensus among its key stakeholders on an inspiring mission (Collins and Porras, 1997; Light, 2002).

Some careful stakeholder analysis work should precede development or modification of an existing mission statement so that attention to purpose can be informed by thinking about purpose for whom. If the purposes of key stakeholders are not served, then the organization may be engaging in what historian Barbara Tuchman (1984) aptly calls folly. The mission statement itself might be very short, perhaps not more than a paragraph or a slogan. But development of the mission statement should grow out of lengthy dialogue about the organization's identity, its abiding purpose, desired responses to key stakeholders, its philosophy and core values, and its ethical standards. These discussions may also provide a basic outline for a description of the organization in the future, or its “vision of success,” described in Step 8. Considerable intermediate work is necessary, however, before a complete vision of success can be articulated.

Step 4: Assessing the Organization's External and Internal Environments

The planning team should explore the environment outside the organization to identify the opportunities and threats the organization faces (Step 4a). It should explore the environment inside the organization to identify strengths and weaknesses, and particularly existing or needed organizational competencies (Step 4b). Basically, “outside” factors are those not under the organization's control, while “inside” factors are those that are. Opportunities and threats usually (though not necessarily) are more about the future than the present, whereas strengths and weakness are about the present and not the future (Nutt and Backoff, 1992).

Monitoring a variety of forces and trends, including political, economic, social, educational, technological, and physical environmental ones, can help planners and decision makers discern opportunities and threats. Unfortunately, organizations all too often focus only on the negative or threatening aspects of these changes, and not on the opportunities they present, so care must be taken to assure a balanced view. In other words, attending to threats and weaknesses should be seen as an opportunity to build strengths and improve performance (Ackermann, Eden, and Brown, 2004; Weick and Sutcliffe, 2007).

Besides monitoring trends and events, the strategic planning team also should monitor various important external stakeholder groups, including especially those that affect resource flows (directly or indirectly). These groups would include customers, clients, payers or funders, dues-paying members, regulators, and relevant policy bodies. The team also should attend to competitors, competitive forces, and possible sources of competitive advantage, as well as to collaborators, collaborative forces, and potential sources of collaborative advantage.

The organization might construct various scenarios to explore alternative futures in the external environment, a practice typical of much strategic planning in large private-sector organizations. Scenarios are particularly good at demonstrating how various forces and trends are likely to interact, which are amenable to organizational influence, and which are not. Scenarios also offer an effective way of challenging the organization's “official future” when necessary. The “official future” is the presumed or taken-for-granted future that makes current strategies sensible (Schwartz, 1991). Organizations unwilling to challenge this future are the ones most likely to be blindsided by changes (Marcus, 2009).

Members of an organization's governing body (particularly if they are elected) may be better at identifying and assessing external threats and opportunities (particularly present ones) than are the organization's employees. This is partly due to a governing board's responsibility for relating an organization to its external environment and vice versa (Bryce, 2000; Carver, 2006). Unfortunately, neither governing boards nor employees usually do a systematic or effective job of external scanning. As a result, most organizations are like ships trying to navigate troubled or treacherous waters without benefit of human lookouts, global positioning systems, radar, or sonar. All too often the result is a very unwelcome surprise (Weick and Sutcliffe, 2007).

Because of this, both employees and governing board members should consider relying on a somewhat formal external assessment process to supplement their informal efforts. The technology of external assessment is fairly simple, and allows organizations to cheaply, pragmatically, and effectively keep tabs on what is happening in the larger world that is likely to have an effect on the organization and the pursuit of its mission. Clip services, Internet alerts, discussion groups and listservs, regular participation in professional conferences, and periodic retreats, for example, might be used in part to explore forces and trends and their potential impact. The key, however, is to avoid being captured by existing categories of classification and search, since they tend to formalize and routinize the past, rather than open one to the surprises of the future (Mintzberg, Alstrand, and Lampel, 2005; Weick and Sutcliffe, 2007).

Attention to opportunities and threats, along with a stakeholder analysis, can be used to identify the organization's “critical success factors” (Johnson, Scholes, and Whittington, 2008). These may overlap with mandates, in the sense that they are the things the organization must do, or criteria it must meet, in order for it to be successful in the eyes of its key stakeholders, especially those in the external environment. Ideally, the organization will excel in these areas, and must do so in order to outperform or stave off competitors.

To identify internal strengths and weaknesses, the organization might monitor resources (inputs), present strategy (process), and performance (outputs). Most nonprofit organizations, in my experience, have information on many of their inputs, such as salaries, supplies, physical plant, and full time equivalent (FTE) personnel. Unfortunately, too few organizations have a very clear idea of their philosophy, core values, distinctive competencies, and culture, a crucial set of inputs both for ensuring stability and managing change.

Organizations also tend to have an unclear idea of their present strategy, either overall, by subunit, or by function. Typically, they cannot say enough about their outputs, let alone the effects, or outcomes, those outputs create for clients, customers, or payers, although this, too, is changing. However, some nonprofit organizations have been able to pull their input, process, and outcome measures together in the form of a Balanced Scorecard (BSC) that shows, in effect, the organization's “theory of action” and allows it to monitor how it is doing in terms of the theory's predictions (Niven, 2008). BSCs attempt to show the linkages and achieve a “balance” among measures of customer or stakeholder satisfaction, financial performance, internal management or production process performance, and accomplishments in the areas of employee and organizational learning and growth. BSCs are likely to become far more widely used in the future by nonprofit organizations.

A lack of performance information presents problems both for the organization and its stakeholders. Stakeholders judge an organization according to the criteria they choose, which are not necessarily the same criteria the organization would choose. For external stakeholders in particular, these criteria typically relate to performance. If an organization cannot effectively meet its stakeholders' performance criteria at a reasonable cost, then regardless of its “inherent” worth, the stakeholders are likely to withdraw their support.

An absence of performance information may also create—or harden—major organizational conflicts. Without performance criteria and information, there is no way to reasonably and objectively evaluate the relative effectiveness of alternative strategies, resource allocations, organizational designs, and distributions of power. As a result, organizational conflicts are likely to occur more often than they should, serve narrow partisan interests, and be resolved in ways that don't further the organization's mission (Flyvbjerg, 1998; Gerzon, 2006). The difficulties of measuring performance are well known (Moynihan, 2008; Radin, 2006). But regardless of the difficulties, organizations are continually challenged to demonstrate effective performance to their stakeholders.

A consideration of the organization's strengths and weaknesses can also lead to an identification of its “distinctive competencies” (Selznick, 1957), or what have been referred to more generally as “core competencies” (Johnson, Scholes, and Whittington, 2008; Prahalad and Hamel, 1990) or “capabilities” (Stalk, Evans, and Shulman, 1992). These are the organization's most important abilities or practices on which it can draw routinely to perform well. What makes these abilities “distinctive” is the inability of others to replicate them easily, if at all, because of the way they are interlinked with one another (Ackermann and Eden, 2011). Nonprofit organizations should seriously consider taking the time to identify the existing and/or needed competencies and distinctive competencies necessary to achieve their aspirations (Bryson, Ackermann, and Eden, 2014). A clear statement that focuses solely on identifying and linking the existing or needed competencies and distinctive competencies to the nonprofit organization's mission and goals is sometimes referred to as its “livelihood scheme” and can provide the core logic of a strategic plan (Ackermann, Eden, and Brown, 2004). A livelihood scheme can also facilitate the identification of strategic issues (see next section).

Step 5: Identifying the Strategic Issues Facing an Organization

Together the first four elements of the process lead to the fifth, the identification of strategic issues. Strategic issues are fundamental policy questions or critical challenges affecting the organization's mandates, mission, and values; product or service level and mix; clients, users or payers; cost, financing, organization, or management. Finding the best way to frame these issues typically requires considerable wisdom, dialogue, and deep understanding of organizational purposes, operations, stakeholder interests, and external demands and possibilities. The first four steps of the process are designed deliberately to slow things down so that there is enough information and interaction for the needed wisdom to emerge. The process is designed, in other words, to “unfreeze” people's thinking (Dalton, 1970; Lewin, 1951) so that knowledge exploration, development, and learning might occur (Crossan, Lane, and White, 1999; March, 1991). This knowledge will be exploited in this and later phases.

Strategic planning focuses on achieving the best “fit” between an organization and its environment. Attention to mandates and the external environment, therefore, can be thought of as planning from the outside in. Attention to mission and organizational values and the internal environment can be considered planning from the inside out. Usually, it is vital that pressing strategic issues be dealt with expeditiously and effectively if the organization is to survive and prosper. An organization that does not respond to a strategic issue can expect undesirable results from a threat, a missed opportunity, or both.

The iterative nature of the strategic planning process often becomes apparent in this step when participants find that information created or discussed in earlier steps presents itself again as part of a strategic issue. For example, many strategic planning teams begin strategic planning with the belief that they know what their organization's mission is. They often find out in this step, however, that one of the key issues their organizations faces is the need to clarify exactly what its mission ought to be. In other words, the organization's present mission is found to be inappropriate, given the team members' new understanding of the situation the organization faces, and a new mission must be created.

Strategic issues, virtually by definition, involve conflicts of one sort or another. The conflicts may involve ends (what); means (how or how much); philosophy (why); location (where); timing (when); and who might be advantaged or disadvantaged by different ways of resolving the issue (who). In order for the issues to be raised and resolved effectively, the organization must be prepared to deal with the almost inevitable conflicts that will occur. Conflict, shifts in understanding, and shifts in preferences will all evoke participants' emotions (Gerzon, 2006; Heifetz, Grashow, and Linsky, 2009; Weick, 1995). It is therefore in this stage that the importance of emotion will become dramatically apparent, along with the concomitant need for emotional intelligence on the part of participants if the emotions are to be dealt with effectively (Goleman, 1995; Goleman, Boyatzis, and McKee, 2002; Heifitz, Grashow, and Linsky, 2009).

A statement of a strategic issue should contain three elements. First, the issue should be described succinctly, preferably in a single paragraph. The issue should be framed as a question that the organization can do something about. If the organization cannot do anything about it, it is best not to think of it as an issue for the organization; it is simply a condition. An organization's attention is limited enough without wasting it on issues it cannot address effectively. The question also should have more than one answer, as a way of broadening the search for viable strategies. Too often organizations “jump to solutions” without fully understanding what else might be possible, and without learning more about the issue by understanding more about the range of possible answers (Ackermann, Eden, and Brown, 2004; Burton, 2008; Nutt, 2002).

Second, the factors that make the issue a fundamental challenge should be listed. In particular, what is it about the organization's mandates, mission, values, or internal strengths and weaknesses, and external opportunities and threats that make this a strategic issue for the organization? Listing these factors will become useful in the next step, strategy development. Every effective strategy builds on strengths (and especially competencies and distinctive competencies) and takes advantage of opportunities, while minimizing or overcoming weaknesses and threats. The framing of strategic issues is therefore very important because it will provide much of the basis for the issues' resolution (Crosby and Bryson, 2005; Eden and Ackermann, 1998; Nutt, 2002).

Finally, the planning team should prepare a statement of the consequences of failure to address the issue. This will help organizational leaders decide just how strategic, or important, various issues are. If no consequences will ensue from failure to address a particular issue, then it is not a strategic issue. At the other extreme, if the organization will be destroyed or will miss a valuable opportunity by failing to address a particular issue, then the issue is clearly very strategic and is worth attending to immediately. Thus, the step of identifying strategic issues is aimed at focusing organizational attention on what is truly important for the survival, prosperity, and effectiveness of the organization.

Once statements of the issues are prepared, the organization will know what kinds of issues it faces and just how strategic they are. There are several kinds of strategic issues:

• Those that alter the organization and especially its “core business” and for which there is no real organizational precedent (or what might be called developmental issues), and those that do not (or what might be called nondevelopmental issues) (Nutt, 2001). Developmental issues involve a fundamental change in products or services, customers or clients, service or distribution channels, sources of revenue, identity or image, or some other aspect of the organization for which there is no real organizational precedent. Nondevelopmental issues involve less ambiguity because most of the aspects of the organization's overall strategy will not change. Nondevelopmental issues therefore may still be very important, but are more operational than strategic.
• Those that require an immediate response and therefore cannot be handled in a more routine way.
• Those that are coming up on the horizon and are likely to require some action in the future, and perhaps some action now. For the most part, these issues can be handled as part of the organization's regular strategic planning cycle.
• Those where no organizational action is required at present, but which must be continuously monitored.

Nine basic approaches to the identification of strategic issues will be discussed. The direct approach goes straight from a discussion of mandates, mission, and SWOTs (strengths, weaknesses, opportunities, and threats) to the identification of strategic issues.

The goals approach starts with goals (or performance indicators) and then identifies issues that must be addressed before the goals (or indicators) can be achieved. Sometimes a careful goals clarification exercise is necessary in order to be clear just what the goals-in-practice are (Patton, 2008, pp. 97–149). The vision of success approach starts with at least a sketch of a vision of success in order to identify issues that must be dealt with before the vision can be realized. This approach is probably necessary in situations involving developmental decisions, where fundamental change is needed but the organization lacks a precedent (Nutt, 2001).

The indirect approach begins with brainstorming about several different kinds of options before identifying issues. Each option is put on a separate card or self-adhesive label. The sets of options include actions the organization could take to meet stakeholders' performance expectations, build on strengths, take advantage of opportunities, and minimize or overcome weaknesses and threats, as well as incorporate any other important aspect of background studies or reports or present circumstances. These options are then merged into a single set of potential actions that are then clustered according to potential themes or issue categories.

The oval mapping approach involves using oval-shaped cards (but they can be other shapes as well) to create word-and-arrow diagrams in which statements about potential actions the organization might take, how they might be taken, and why, are linked by arrows indicating the cause-effect or influence relationships between them. In other words, the arrows indicate that action A may cause or influence B, which in turn may cause or influence C, and so on; if the organization does A, it can expect to produce outcome B, which in turn may be expected to produce outcome C. These maps can consist of dozens, and sometimes hundreds, of interconnected relationships, showing differing areas of interest and their relationships to one another. Important clusters of potential actions may comprise strategic issues. A strategy in response to the issue would consist of the specific choices regarding actions to undertake in the issue area, how to undertake them, and why (see following; also see Bryson, Ackermann, Eden, and Finn, 2004; and Eden and Ackermann, 1998).

The approach is particularly useful when participants are having trouble making sense of complex issue areas, time is short, the emphasis must be on action, and commitment on the part of those involved is particularly important. Participants simply brainstorm possible actions, cluster them according to similar themes, and then figure out what causes what and which statements count as actions, issues, strategies, and goals or mission. Beyond that, the idea of causal mapping—that is, of placing statements on a page, flipchart sheet, or wall and linking them with arrows to indicate cause-effect relationships—can be used in tandem with the other approaches to indicate whatever logic is being followed.

The livelihood scheme approach makes use of a causal map that focuses specifically on aspirations (for example mission, goals, critical success factors, important performance indicators) and links these to competencies and distinctive competencies (Bryson, Ackermann, and Eden, 2014). The issues then relate to what might be necessary to take advantage of existing or needed links between aspirations and competencies. In other words, if a livelihood scheme outlines the core logic of a strategic plan, it thereby helps clarify what issues might need to be addressed in order to bring that logic to life in practice. The approach can be paired with the goals approach.

The alignment approach focuses on clarifying the issues involved in aligning mission, goals, resource deployments, strategies, and operations. In its simplest form, it involves just asking the planning team and/or key stakeholders what issues of organizational or stakeholder alignment, or both, need to be addressed for the mission and goals to be better achieved and for existing strategies and operations to be more effective. The approach may also make use of a balanced scorecard strategy map to help outline possible areas of misalignment among stakeholder desires or expectations, financial measures, production processes, and organizational competencies and learning needs (Kaplan and Norton, 2006; Niven, 2008).

The tensions approach was developed by Nutt and Backoff (1992) and elaborated in Nutt, Backoff, and Hogan (2000). These authors argue that there are always four basic tensions around any strategic issue. These tensions involve human resources and, especially, equity concerns; innovation and change; maintenance of tradition; and productivity improvement; and their various combinations. The authors suggest critiquing how issues are framed by using these tensions separately and in combination in order to find the best way to frame the issue. The critiques may be used in tandem with any of the other approaches and may need to run through several cycles before the wisest way to frame the issue is found. Finally, systems analysis can be used to help discern the best way to frame issues when the system contains complex feedback effects and must be formally modeled in order to understand it (Senge, 1990; Sterman, 2000).

By stating that there are nine different approaches to the identification of strategic issues, I may raise the hackles of some planning theorists and practitioners who believe you should always start with either issues, goals, vision, or analysis. I argue that what will work best depends on the situation and that the wise planner should choose an approach accordingly.

Step 6: Formulating Strategies and Plans to Manage the Issues

A strategy is defined as a pattern of purposes, policies, programs, actions, decisions, or resource allocations that define what an organization is, what it does, and why it does it. Strategies can vary by level, function, and time frame. Strategies are developed to deal with the issues identified in the previous step.

This definition is purposely broad, in order to focus attention on the creation of consistency across rhetoric (what people say), choices (what people decide and are willing to pay for), actions (what people do), and the consequences of those actions. Effective strategy formulation and implementation processes link rhetoric, choices, actions, and consequences into reasonably coherent and consistent patterns across levels, functions, and time (Eden and Ackermann, 1998). The reasoning behind and argumentation for the links should be clear and practical (Garsten, 2006; Heinrichs, 2007). They also will be tailored to fit an organization's culture, even if the purpose of the strategy or strategies is to reconfigure that culture in some way (Johnson, Scholes, and Whittington, 2008). Draft strategies, and perhaps drafts of formal strategic plans, will be formulated in this step to articulate desired patterns. They may also be reviewed and adopted at the end of this step if the strategic planning processes is relatively simple, small-scale, and involves a single organization. (Such a process would merge this step and Step 7.)

Step 7: Reviewing and Adopting the Strategies and Plan

Once strategies have been formulated, the planning team may need to obtain an official decision to adopt them and proceed with their implementation. The same is true if a formal strategic plan has been prepared. This decision will help affirm the desired changes and move the organization toward “refreezing” in the new pattern (Dalton, 1970; Lewin, 1951), where the knowledge exploration of previous steps can be exploited (March, 1991). When strategies and plans are developed for a single organization, particularly a small one, this step actually may merge with Step 6. But a separate step will likely be necessary when strategic planning is undertaken for a large organization, network of organizations, or community. The SPCC will need to approve the resulting strategies or plan, relevant policymaking bodies; and other implementing groups and organizations are also likely to have to approve the strategies or plan, or at least parts of it, in order for implementation to proceed effectively.

In order to secure passage of any strategy or plan, it will be necessary to continue to pay attention to the goals, concerns, and interests of all key internal and external stakeholders (Borins, 2000). Finding or creating inducements that can be traded for support can also be useful. But there are numerous ways to defeat any proposal in formal decision-making arenas. So it is important for the plan to be sponsored and championed by actors whose knowledge of how to negotiate the intricacies of the relevant arenas can help assure passage (Crosby and Bryson, 2005).

Step 8: Establishing an Effective Organizational Vision

In this step, the organization develops a description of what it should look like once it has successfully implemented its strategies and achieved its full potential. This description is the organization's “vision of success.” Few organizations have such a description or vision, yet the importance of such descriptions has long been recognized by well-managed companies, organizational psychologists, and management theorists (Collins and Porras, 1997; Kouzes and Posner, 2008). Such descriptions can include the organization's mission, its values and philosophy, basic strategies, its performance criteria, some important decision rules, and the ethical standards expected of all employees.

The description, to the extent that it is widely circulated and discussed within the organization, allows organization members to know what is expected of them, without constant managerial oversight. Members are freed to act on their own initiative on the organization's behalf to an extent not otherwise possible. The result should be a mobilization of members' energy toward pursuing the organization's purposes, and a reduced need for direct supervision (Moynihan and Landuyt, 2009; Nutt, 2001).

Some might question why developing a vision of success comes at this point in the process rather than much earlier. There are two basic answers to this question. First, it does not have to come here for all organizations. Some organizations are able to develop a clearly articulated, agreed-upon vision of success much earlier in the process. And some organizations start with “visioning” exercises in order to develop enough of a consensus on purposes and values to guide issue identification and strategy formulation efforts. Figure 9.1 therefore indicates the many different points at which participants may find it useful to develop some sort of guiding vision. Some processes may start with a visionary statement. Others may use visions to help them figure out what the strategic issues are or to help them develop strategies. And still others may use visions to convince key decision makers to adopt strategies or plans, or to guide implementation efforts. The further along in the process a vision is found, the more likely it is to be more fully articulated.

Second, most organizations typically will not be able to develop a detailed vision of success until they have gone through several iterations of strategic planning—if they are able to develop a vision at all. A challenging yet achievable vision embodies the tension between what an organization wants and what it can have (Rughase, 2007; Senge, 1990). Often, several cycles of strategic planning are necessary before organizational members know what they want, what they can have, and what the difference is between the two. A vision that motivates people will be challenging enough to spur action, yet not so impossible to achieve that it demotivates and demoralizes people. Most organizations, in other words, will find that their visions of success are likely to serve more as a guide for strategy implementation than strategy formulation.

Further, for most organizations, development of a vision of success is not necessary in order to produce marked improvements in performance. In my experience, most organizations can demonstrate a substantial improvement in effectiveness if they simply identify and satisfactorily resolve a few strategic issues. Most organizations simply do not address often enough what is truly important; just gathering key decision makers to deal with a few important matters in a timely way can enhance organizational performance substantially. For these reasons the step is labeled optional in Figure 9.1.

Step 9: Developing an Effective Implementation Process

Just creating a strategic plan is not enough. The changes indicated by the adopted strategies must be incorporated throughout the system for them to be brought to life and for real value to be created for the organization and its stakeholders. Thinking strategically about implementation and developing an effective implementation plan are important tasks on the road to realizing the strategies developed in Step 6. For example, in some circumstances direct implementation at all sites will be the wisest strategic choice, whereas in other situations some form of staged implementation may be best (Crosby and Bryson, 2005, pp. 312–339).

Again, if strategies and an implementation plan have been developed for a single organization, particularly a small one, or if the planning is for a collaboration, this step may need to be incorporated into Step 7, strategy formulation. However, in many multi-organizational situations, a separate step will be required to assure that relevant groups and organizations do the action planning necessary for implementation success.

Action plans should detail the following:

• Implementation roles and responsibilities of oversight bodies, organizational teams or task forces, and individuals
• Expected results and specific objectives and milestones
• Specific action steps and relevant details
• Schedules
• Resource requirements and sources
• A communication process
• Review, monitoring, and midcourse correction procedures
• Accountability procedures

It is important to build into action plans enough sponsors, champions, and other personnel—along with enough time, money, attention, administrative and support services, and other resources—to assure successful implementation. You must “budget the plan” wisely to assure implementation goes well. In interorganizational situations, it is almost impossible to underestimate the requirements for communications, the nurturance of relationships, and attention to operational detail (Huxham and Vangen, 2005).

It is also important to work quickly to avoid unnecessary or undesirable competition with new priorities. Whenever important opportunities to implement strategies and achieve objectives arise, they should be taken. In other words, it is important to be opportunistic as well as deliberate. And it is important to remember that what actually happens in practice will always be some blend of what is intended with what emerges along the way (Mintzberg, Ahlstrand, and Lampel, 2005).

Successfully implemented and institutionalized strategies result in the establishment of a new “regime,” a “set of implicit or explicit principles, norms, rules, and decision-making procedures around which actors' expectations converge in a given area” (Krasner, 1983, p. 2; see also Crosby and Bryson, 2005; Crossan, Lane, and White, 1999). Regime building is necessary to preserve gains in the face of competing demands. Unfortunately, regimes can outlive their usefulness and must be changed, which involves the next step in the process.

Step 10: Reassessing Strategies and the Strategic Planning Process

Once the implementation process has been under way for some time, it is important to review the strategies and the strategic planning process as a prelude to a new round of strategic planning. Much of the work of this phase may occur as part of the ongoing implementation process. However, if the organization has not engaged in strategic planning for a while, this will be a separate phase. Attention should be focused on successful strategies and whether they should be maintained, replaced by other strategies, or terminated for one reason or another. Unsuccessful strategies should be replaced or terminated. The strategic planning process also should be examined, its strengths and weaknesses noted, and modifications suggested to improve the next round of strategic planning. Effectiveness in this step really does depend on effective organizational learning, which means taking a hard look at what is really happening and being open to new information, and designing forums within which knowledge can be developed and shared (Moynihan and Landuyt, 2009). As Weick and Sutcliffe (2007, p. 18) say, “The whole point of a learning organization is that it needs to get a better handle on the fact that it doesn't know what it doesn't know.” Viewing strategic planning as a kind of action research can help embed learning into the entire process and make sure the kind of information, feedback, and dialogue necessary for learning occur (Eden and Huxham, 1996).

Sequencing the Steps

Although the steps (or occasions for dialogue and decision) are laid out in a linear sequence, it must be emphasized that the Strategy Change Cycle, as its name suggests, is iterative in practice. Participants typically rethink what they have done several times before they reach final decisions. Moreover, the process does not always begin at the beginning. Organizations typically find themselves confronted with a new mandate (Step 2), a pressing strategic issue (Step 5), a failing strategy (Step 6 or Step 9), or the need to reassess what they have been doing (Step 10) and that leads them to engage in strategic planning. Once engaged, the organization is likely to go back and begin at the beginning, particularly with a reexamination of its mission. Indeed, it usually does not matter where you start, you always end up back at mission.

In addition, implementation usually begins before all of the planning is complete. As soon as useful actions are identified, they are taken, as long as they do not jeopardize future actions that might prove valuable. In other words, in a linear, sequential process, the first eight steps of the process would be followed by implementing the planned actions and evaluating the results. However, implementation typically does not, and should not, wait until the eight steps have been completed. For example, if the organization's mission needs to be redrafted, then it should be. If the SWOT analysis turns up weaknesses or threats that need to be addressed immediately, they should be. If aspects of a desirable strategy can be implemented without awaiting further developments, they should be. And so on. As noted earlier, strategic thinking and acting and learning are important, and all of the thinking does not have to occur before any actions are taken. Or as Mintzberg, Ahlstrand, and Lampel (2005, p. 71) note, “Effective strategy making connects acting to thinking, which in turn connects implementation to formulation. We think in order to act, to be sure, but we also act in order to think.” And learn, they might add. Strategic planning's iterative, flexible, action-oriented nature is precisely what often makes it so attractive to public and nonprofit leaders and managers.

Making Use of Vision, Goals, and Issues

In the discussion of Step 8, it was noted that different organizations or collaborations may wish to start their process with a vision statement. Such a statement may foster a consensus and provide important inspiration and guidance for the rest of the process, even though it is unlikely to be as detailed as a statement developed later in the process. As indicated in Figure 9.1, there are other points at which it might be possible to develop a vision statement (or statements). Vision thus may be used to prompt the identification of strategic issues, guide the search for and development of strategies, inspire the adoption of strategic plans, or guide implementation efforts. The Amherst H. Wilder Foundation of St. Paul, Minnesota, for example, has been guided for years by the following vision (with only minor word changes from time to time) (Amherst H. Wilder Foundation, 2016)

The greater Saint Paul area will be a vibrant community where all individuals, families and neighborhoods can prosper, with opportunities to work, to be engaged in their communities, to live in decent housing, to attend good schools and to receive support during times of need. It uses the vision to help identify issues to be addressed and to develop strategies to be used to realize the vision. The decision to develop a vision statement should hinge on whether one is needed to provide direction to subsequent efforts; whether people will be able to develop a vision that is meaningful enough, detailed enough, and broadly supported; and whether there will be enough energy left after the visioning effort to push ahead.

Similarly, as indicated in Figure 9.1, it is possible to develop goals in many different places in the process. Some strategic planning processes will begin with the goals of new boards of directors, executive directors, or other top-level decision makers. These goals embody a reform agenda for the organization or collaboration. Other strategic planning processes may start with goals that are part of mandates. For example, government agencies often require nonprofit organizations on which they rely for legislated policy implementation to develop plans that include results and outcome measures that will show how the intent of the legislation is to be achieved. A starting goal for these nonprofits, therefore, is to identify results and outcomes they want to be measured against that which are also in accord with legislative intent. The goal thus helps these organizations identify an important strategic issue—namely, what the results and outcomes should be. Subsequent strategic planning efforts are then likely to start with the desired outcomes the organization thinks are important.

Still other strategic planning processes will articulate goals to guide strategy formulation in response to specific issues or to guide implementation of specific strategies. Goals developed at these later stages of the process are likely to be more detailed and specific than those developed earlier in the process. Goals may be developed any time they would be useful to guide subsequent efforts in the process and when they will have sufficient support among key parties to produce desired action.

In my experience, however, strategic planning processes generally start neither with vision nor with goals. In part, this is because in my experience strategic planning rarely starts with Step 1. Instead, people sense something is not right about the current situation—they face strategic issues of one sort or another, or they are pursuing a strategy that is failing, or about to fail—and they want to know what to do (Ackermann, Eden, and Brown, 2004; Borins, 1998; Nutt, 2001). One of the crucial features of issue-driven planning (and political decision making in general) is that you do not have to agree on goals to agree on next steps (Crosby and Bryson, 2005; Huxham and Vangen, 2005). You simply need to agree on a strategy that will address the issue and further the interests of the organization or collaboration and its key stakeholders. Goals are likely to be developed once viable strategies have been developed to address the issues. The goals typically will be strategy-specific.

Articulating goals or describing a vision in this way may help provide a better feeling for where an agreed strategy or interconnected set of strategies should lead (Ackermann, Eden, and Brown, 2004; Nutt, 2001). Goals and vision are thus more likely to come toward the end of the process than the beginning. But there are clear exceptions and process designers should think carefully about why, when, and how—if at all—to bring goals and vision into the process.

Applying the Process Across Organizational Subunits, Levels, and Functions on an Ongoing Basis

Strategic thinking, acting, and learning depend upon getting key people together, getting them to focus wisely and creatively on what is really important, and getting them to do something about it. At its most basic, the technology of strategic planning thus involves deliberations, decisions, and actions. The steps in the Strategy Change Cycle help make the process reasonably orderly to increase the likelihood that what is important is actually recognized and addressed, and to allow more people to participate in the process. When the process is applied to an organization as a whole on an ongoing basis (rather than as a one-shot deal), or at least to significant parts of it, usually it is necessary to construct a strategic planning system. The system allows the various parts of the process to be integrated in appropriate ways, and engages the organization in strategic management, not just strategic planning (Poister and Streib, 1999). In the best circumstances, the system will include the actors and knowledge necessary to act wisely, foster systems thinking, and prompt quick and effective action, since inclusion, systems thinking, and speed are increasingly required of nonprofit organizations (Bryson, 2003; Moynihan, 2008).

The process might be applied across subunits, levels, and functions in an organization as outlined in Figure 9.2. The application is based on the “layered” or “stacked units of management” system used by many corporations. The system's first cycle consists of “bottom up” development of strategic plans within a framework established at the top, followed by reviews and reconciliations at each succeeding level. In the second cycle, operating plans are developed to implement the strategic plans. Depending on the situation, decisions at the top of the organizational hierarchy may or may not require policy board approval (which is why the line depicting the process flow diverges at the top). The system may be supported by a set of performance indicators and strategies embodied in a Balanced Score Card (BSC) (Niven, 2008).

Strategic planning systems for nonprofit organizations usually are not as formalized and integrated as the one outlined in Figure 9.2. More typical is a “strategic issues management” system, which attempts to manage specific strategic issues without seeking integration of the resultant strategies across all subunits, levels, and functions. Tight integration is not necessary because most issues do not affect all parts of the organization, are subject to different politics, and are on their own time frame. Other common public and nonprofit strategic planning systems include the “contract model,” in which there is a contract or agreement between a “center” and related units, such as between a headquarters organization and local affiliates; “goal model,” in which there are goals, but little else to assure implementation; and “portfolio model,” in which organizational subunits or programs are managed as part of an overall organizational portfolio.

If the organization is fairly large, then specific linkages will be necessary in order to join the strategic planning and implementation process to different functions and levels in the organization so that it can proceed in a reasonably orderly and integrated manner. One effective way to achieve such a linkage is to appoint the heads of all major units to the strategic planning team. All unit heads can then be sure that their units' information and interests are represented in strategy formulation, and can oversee strategy implementation in their unit.

Indeed, key decision makers might wish to form themselves into a permanent strategic planning committee or cabinet. I certainly would recommend this approach, if it appears workable for the organization, as it emphasizes the role of line managers as strategic planners and the role of strategic planners as facilitators of decision making by the line managers. Pragmatic and effective strategies and plans are likely to result. Temporary task forces, strategic planning committees, or a cabinet can work; but whatever the arrangement, there is no substitute for the direct involvement of key decision makers in the process.

Applying the Process to Collaborations

When applied to a collaboration, the process probably will need to be sponsored by a committee or task force of key decision makers, opinion leaders, “influentials,” or “notables” representing important stakeholder groups. Additional working groups or task forces probably will need to be organized at various times to deal with specific strategic issues or to oversee the implementation of specific strategies. Because so many more people and groups will need to be involved, and because implementation will have to rely more on consent than authority, the process is likely to be much more time consuming and iterative than strategic planning applied to an organization (Agranoff, 2007; Bardach, 1998; Huxham and Vangen, 2005).