NPM

1. © 2014 SAGE Publications, Inc.
Chapter 7: Strategic Planning
and Strategic Management

2. © 2014 SAGE Publications, Inc.
Strategy
• Focused on the long term, not on the day-to-day
• May be articulated in a written plan or it may be
more intangible
• Does not require any particular process
• Does require creativity and a different way of seeing
reality
• Three approaches to formulating strategy for an
organization (Kevin Kearns, 2000)
• Visioning approach – begins with leader’s vision and
works backward
• Incremental approach – strategy evolves out of
experience, one decision at a time
• Analytical approach – logic and in-depth analysis to
improve strategic fit

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Strategic Planning and Strategic
Management
• Strategic planning -- a process that produces a strategic
plan, which puts meat on an organization's strategy and
points the way to implementing it
• Achieves clarity about the organization’s mission and
sets priorities (Bryson, 2004)
• Builds consensus about the organization's priorities
through the planning process (Allison and Kaye, 2005)
• Strategic planning is not the same as long-range
planning, a business plan, operational planning, or
strategy
• Strategic management -- an integrated approach to
managing the organization that is based on the strategic
plan (linking strategy and implementation)

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Strategic Planning Process
• Planning to plan
• Clarify the organization’s mission, values, and vision
• Assess the situation
• Identify the strategic issues or strategic questions
that need to be addressed
• Develop goals, strategies, and objectives
• Write and communicate the plan
• Develop operational/implementation plans
• Execute the plan
• Evaluate results

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Planning to Plan
• Need to spend time up front to build agreement about
key aspects of the strategic planning process
• Purpose
• Steps in the process
• Form and timing of reports
• Role, functions, and membership of oversight group
• Role, functions, and membership of strategic
planning team
• Availability and commitment of resources
• Any important limitations or boundaries
• Facilitate internally or hire an outside consultant
• On-site or off-site work or retreat

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Clarify the Organization’s
Mission, Values, and Vision
• Mission
• "Mission is the psychological and emotional logic that
drives an organization" (Phills, 2005, p. 22)
• Mission statement explains the reason the
organization exists and therefore must be the starting
point for strategic planning
• Values and vision
• Vision statement -- a description of an ideal future
• Values -- principles that the organization holds most
important
• Debate about when vision and values should be
articulated in the strategic planning process

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Assess the Situation
• SWOT analysis (Harvard policy model)
• Internal survey -- strengths (S) and weaknesses
(W)
• External survey -- opportunities (O) and
threats (T)

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Identify the Strategic Issues or
Strategic Questions
• Strategic issues -- areas in which the organization needs
to take action
• Four types of strategic issues (Bryson, 2004)
• Issues that go to the heart of the organization’s vision
and goals, which involve some fundamental change
• Issues that require no action at present but that must
be continuously monitored
• Issues that are on the horizon and likely to require
some action in the future and perhaps some action
now
• Issues that require an immediate response and
therefore cannot be handled in a routine way

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Develop Goals, Strategies, and Objectives
Goals -- directions that an organization will pursue
with respect to strategic issues
• Program/services
• Institutional concerns
• Financial goals
Strategies -- approaches the organization will take to
address strategic issues and to achieve goals
Objectives -- specific, quantified targets that represent
steps toward accomplishing the goals

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Write and Communicate the Plan
• Written strategic plan -- records the decisions reached
and the goals, strategies, and objectives to be pursued
• One or two people should do the actual writing
• Draft is often used to stimulate wider discussion
throughout the organization and its constituencies
• Governing board should eventually take formal action
to adopt the plan as the organization’s policy
• Can vary in length, format, use of year-to-year
objectives, and other ways
• Written strategic plan as a tool for communication and
consensus-building

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Develop Operational/ Implementation
Plans
• Strategic and operational plans
• Can combine into one document or create separate
documents
• Each plan requires separate processes
• Each plan usually requires different individuals to be
involved
• Operational plan -- plan for putting strategic plan into action
• Identifying specific tasks to be completed
• Establishing a timeline for their completion
• Assigning responsibility for each task
• Identifying the resources that will be needed
• Defining measures by which the completion or success will
be determined
• Other operational details

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Portfolio Analysis
• Portfolio analysis -- a technique used by business
firms to determine if their various programs,
products, and services are in line with their
strategies and goals
• Portfolio analysis for nonprofits
• Kearns (SWOT)
• Strengths and weaknesses
• Opportunities and threats
• MacMillan (Matrix)
• Competitive position
• Attractiveness
• Alternative coverage

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Criticism of Strategic Planning for
Nonprofit Organizations
• Strategic planning is not synonymous with and does not
inevitably produce strategy
• Strategic planning is not a substitute for leadership
• “Planning by wishful thinking” (Chait et al., 2005)
• Overconfidence in predictions about the future
• Failure of build broad consensus (e.g., only reflecting
consensus of the CEO and senior executives)
• Amount of time and effort required
• Failure to match up with the needs or situation specific
to every nonprofit organization