Peter F. Drucker
The self-assessment process leads to a plan that is a concise summation of the organization's purpose and future direction. The plan encompasses mission, vision, goals, objectives, action steps, a budget, and appraisal. [See Figure 5.1] Now comes the point to affirm or change the mission and set long-range goals. Remember, every mission statement has to reflect three things: opportunities, competence, and commitment. It answers the questions, What is our purpose? Why do we do what we do? What, in the end, do we want to be remembered for? The mission transcends today but guides today, informs today. It provides the framework for setting goals and mobilizing the resources of the organization for getting the right things done.
The development and formal adoption of mission and goals are fundamental to effective governance of a nonprofit organization and are primary responsibilities of the board. Therefore, these strategic elements of the plan must be approved by the board.
To further the mission, there must be action today and specific aims for tomorrow. Yet planning is not masterminding the future. Any attempt to do so is foolish; the future is unpredictable. In the face of uncertainties, planning defines the particular place you want to be and how you intend to get there. Planning does not substitute facts for judgment, nor science for leadership. It recognizes the importance of analysis, courage, experience, intuition—even hunch. It is responsibility rather than technique.
The most difficult challenge is to agree on the institution's goals—the fundamental long-range direction. Goals are overarching and should be few in number. If you have more than five goals, you have none. You're simply spreading yourself too thin. Goals make it absolutely clear where you will concentrate resources for results—the mark of an organization serious about success. Goals flow from mission, aim the organization where it must go, build on strength, address opportunity, and taken together, outline your desired future.
An option for the plan is a vision statement picturing a future when the organization's goals are achieved and its mission accomplished. The Drucker Foundation's vision is A society that recognizes the social sector as the leading force in creating healthy communities and improving the quality of life. I have worked with groups who became intensely motivated by these often-idealistic and poetic statements, whereas others say, “Let's not get carried away.” If a vision statement—whether a sentence or a page—helps bring the plan to life, by all means include it.
Here is an example of the vision, mission, and goals for an art museum.
Building around mission and long-term goals is the only way to integrate shorter-term interests. Then management can always ask, “Is an objective leading us toward our basic long-range goal, or is it going to sidetrack us, divert us, make us lose sight of our aims?” St. Augustine said, “One prays for miracles but works for results.” Your plan leads you to work for results. It converts intentions into action.
Objectives are the specific and measurable levels of achievement that move the organization toward its goals. The chief executive officer is responsible for development of objectives and action steps and detailed budgets that follow. The board must not act at the level of tactical planning, or it interferes with management's vital ability to be flexible in how goals are achieved. When developing and implementing a plan, the board is accountable for mission, goals, and the allocation of resources to results, and for appraising progress and achievement. Management is accountable for objectives, for action steps, for the supporting budget, as well as for demonstrating effective performance.
The plan begins with a mission. It ends with action steps and a budget. Action steps establish accountability for objectives—who will do what by when—and the budget commits the resources necessary to implement the plan. To build understanding and ownership for the plan, action steps are developed by the people who will carry them out. Everyone with a role should have the opportunity to give input. This looks incredibly slow. But when the plan is completed, the next day everyone understands it. More people in the organization want the new, are committed to it, are ready to act.
The Assessment Team will prepare the final plan for review by the board. Following presentation and discussion, the board chairman will request approval of the mission, goals, and supporting budget. The chairman may request adoption of a vision statement, if one has been developed, as part of the plan. As soon as approval is given, implementation begins.
This is the last of the self-assessment questions, and your involvement as a participant soon draws to a close. Appraisal will be ongoing. The organization must monitor progress in achieving goals and meeting objectives, and above all, must measure results in changed lives. You must adjust the plan when conditions change, results are poor, there is a surprise success, or when the customer leads you to a place different from where you imagined.
True self-assessment is never finished. Leadership requires constant resharpening, refocusing, never really being satisfied. I encourage you especially to keep asking the question, What do we want to be remembered for? It is a question that induces you to renew yourself—and the organization—because it pushes you to see what you can become.1
Planning is the process of translating the organization's strategic or mission goals into a set of actionable programs and tracing the path of how they would meet the goals of the organization. According to Peter F. Drucker, the organization's mission is a key element in its plan, along with vision, goals, objectives, action steps, a budget, and appraisal. He goes on to say that when prepared correctly, the mission statement will answer three questions: What is our purpose? Why do we do what we do? What, in the end, do we want to be remembered for?
Although Drucker focuses on the organizational aspect of these three questions, it is my observation that these questions apply equally well to individual entrepreneurs—particularly young people who have a passionate desire to change the world they live in for the better.
As a professor of marketing, it's not uncommon for students to excitedly bring me their ideas for new products that they are convinced will have a positive effect on the lives of thousands, if not millions, of people—particularly the poor and disenfranchised. They are uniformly convinced that their ideas have so much merit that they will of their own accord gain the momentum they need to become successful.
While many of these ideas may indeed be good ones, almost every young entrepreneur who brings them to me shares the same fundamental problem: He or she has no concrete plan for turning the good idea into reality.
Consider the example of an enthusiastic entrepreneur who recently brought me her idea for a sanitary pad produced from locally available plant materials that were freely available at no cost. “It will be affordable and widely available,” she gushed, “enabling thousands of teenage girls to be at work or at school without having to miss any days in between.” To her credit, she had a precise production cost estimate, as well as a price target. But when pushed on the question, “Who is the customer—the teenage girl, her mother, or her father—and who will pay?” she took a step back and started to ponder.
In my experience, young people are not short of ideas—in fact, they are brimming with them. But without a plan, they are just ideas. And it takes more than ideas to identify the real barriers to end user adoption, to construct a supply chain, to raise money, to launch a new product or service, to gain distribution, and to bring closure to the strategic goals. When I talk with my students about creating a plan to make their ideas real, I usually ask them to think in great depth about the answers to four specific questions:
According to Peter F. Drucker, there are five elements of effective plans: abandonment, concentration, innovation, risk taking, and analysis. Although this may be the case, how do you know whether all the work you have put into the planning process has truly been effective?
In my experience, the best way for leaders to know they have done effective planning is to see their organizations stand the test of time. In 1976 I attended the organizing meeting for Mi Casa Resource Center for Women. I stayed 10 years—serving as president of the board, director of youth programs, and then executive director until 1986. Almost 40 years later, Mi Casa is Colorado's largest Hispanic-serving organization, and it is recognized nationally as a model for economic empowerment and self-sufficiency for Latinas.
What lessons about planning can be learned from a community-based nonprofit that survived and thrived the most tumultuous of economic and political times? How can Millennials who want to start entrepreneurial social ventures or their own businesses use these lessons to plan for and successfully sustain organizations today?
Mi Casa's organizing committee consisted of Head Start mothers and professional Hispanic women. Bringing together people whom by Mi Casa would serve and women with experience in organizations was crucial. The customer was at the organizing table. The professional women, like me, had grown up in similar circumstances and understood what was needed for Latinas to become successful. This made for an organization that was customer centered, a key element—and I believe a prerequisite—for successful long-term planning.
It is easy to know your customers when they are sitting at the table in leadership roles. Yet Drucker cautions, “The danger is in acting on what you believe satisfies the customer . . . go to the customer.” We designed a door-to-door survey to determine what low-income Hispanic women wanted. The results were not earthshaking: good jobs, high school completion, English proficiency, a supportive place to learn, and help for young Latinas with finishing school. These needs continue to be the core of Mi Casa's programs.
Success would also depend on garnering supporting customers—volunteers, funders, other organizations, and community leaders. Mi Casa built partnerships with corporations and foundations by focusing on numbers and results.
When I was director, a funder could be assured that by investing $1,800 in a program for a high-risk Latina youth to complete high school, Colorado would receive $200,000 in taxes over the young person's life. Eighty-five percent would complete high school, and more than half would go on to higher education. If funders were looking for a qualified workforce for the future, Mi Casa would deliver.
Today, Mi Casa carries on that tradition by incorporating programs into its planning process that meet the needs of today's employers: bilingual bank tellers, computer classes, health care, and customer service programs.
The most important driver for long-term planning is the mission. As Drucker notes, “The plan begins with a mission.”
Mi Casa did not just have a mission—it also had women who were on a mission. In 1976, forging a Hispanic women's nonprofit corporation was groundbreaking and inspiring. Moreover, Mi Casa's logo—a house with the women's symbol inside—signified that as Latinas advanced, so would their families and communities. The mission was broad enough to engender a new one in 2008: to advance the economic success of Latino families.
Even though Mi Casa focused on Hispanics, the organization welcomed others. It was both culturally centered and inclusive. This is particularly pertinent for Millennials today: How do you build organizations that are inclusive of four generations that work side by side? How do you plan to serve our ever-growing diversity?
Organizations that serve distinct populations must be responsive to the special needs of their customers. Mi Casa was a cultural oasis where Hispanic women could gain confidence and learn skills needed to be successful in the dominant culture.
The first house rented in the neighborhood had a sign on the door saying Bienvenido to Mi Casa, reflecting Latino values of generosity, sharing, and inclusiveness. The organization's success has rested on that open-door policy. Mi Casa was one of the first Hispanic organizations to diversify its board of directors. These community influencials became advocates for success. Inclusion takes careful planning, outreach, relationship building, and a welcoming spirit!
Drucker cautions organizations not to subordinate the mission for money. In the 1980s, foundations urged nonprofits to launch businesses to generate funds. After a careful analysis of market needs, of the skills our women had, and of finding start-up money and partners, Mi Casa launched A Woman's Touch—a cleaning service where participants could earn 30 percent more than they could from similar jobs in the marketplace. Within a year, women left to start their own cleaning services. Gone was the original plan to generate operating revenue from this venture. But we knew how to run a business.
Often mistakes are our biggest teachers. Latinas today are the fastest-growing small-business sector. In 1988, Mi Casa launched its business center to assist Latinas and other aspiring entrepreneurs in developing businesses. In 2013, 80 new businesses were launched, generating $7.5 million in revenues.
Although decades of planning, experience, and learning have spurred new programs, Mi Casa's core mission remains. We learned that effective planning for the long term requires the following key elements:
Historical note: The emerging Hispanic influence is a recent historical phenomenon buoyed by the civil rights movement in the 1960s and by the founding of many organizations in the 1970s and 1980s. Mi Casa's founding in 1976 therefore makes it one of the first Hispanic organizations to focus on serving women.
As a leader, the most important thing you can do is articulate a vision. Doing so convenes people smarter, more experienced, and better than you in every way—with gathering speed—to move your organization collectively toward that distant horizon. You cannot translate a vision without a clear plan, for that is the tangible matter that people can wrap their arms around once you have successfully inspired them to join forces with you. The clearer your plan, the lesser the loss factor between the people you inspire and those who decide to commit, and the lesser the loss factor between the people who decide to commit and the actions they perform in moving toward your shared goal. Keep that pipeline of vision translation leak-free—your most powerful sealant is your plan.
Significant data show that companies founded and driven by Millennials—and specifically, Millennial females, who index highest—have the highest chance of success. That isn't a coincidence. Millennials are willing to create tenacious plans as architectures for where they're going but then iterate and experiment within the confines of those plans to learn as they go. When you talk about a plan, you're talking about something that is alive and that changes when necessary—not a dead document that is just filed away. A plan becomes the shared basis for brain play, the sandbox in which you can experiment with the most brilliant minds in your organization and ensure you're visualizing the same end, as well as a thermometer that measures the heat of the sand.
When you interview Millennials, many of them say things such as, “I want to create something that changes the world,” “I want to affect the environment,” or “I want to affect the state of women in the world through education.” There is no dearth of problems in need of audacious solutions, many of which are set to a stubbornly ticking clock. We Millennials have been birthed in that fire and it requires moving fast. But moving fast doesn't mean moving without a direction. Quite the opposite—the faster you go, the more small deltas from the straight line you intended to follow create larger diversions, slowed impact, and cost accumulations. Having a plan and gathering the data that help you assess whether you need to make small iterations inside of that plan keep you focused.
In some cases, big iterations are needed. In others, a plan might take you to a point where you realize the hypothesis that it was built on no longer works moving forward. That's a successful plan. Think like a scientist: If you arrive at a point where your hypothesis is found to be wrong, good. You just saved time, and you've learned something valuable. You have to have experimental structure, boundaries, and edges that define success and failure, and those are what make up a plan.
Luck comes to those who are prepared, as the old adage goes, and that preparation is the only reliable tool you have in your arsenal as a visionary leader to potentially stack the deck in your favor. A plan measures the wins that you'll encounter and mitigates the losses by creating milestones that signal, “Wrong way! Turn around!” before doing so becomes too expensive. A well-crafted plan creates a common language around which people in an organization can all move together in that direction.