VA
Insights

“Strategy” and “strategy management” are no longer strange concepts to managers today in both commercial and social organizations. The term “strategy” derives from Greek word “stratēgos”, originally meaning the art of leading an army. Since the1960s, the term has been adopted into the field of business. Strategy management has two components: strategic planning and strategy implementation (see the charts below). Its effectiveness has a direct impact on the sustainability of an organization.

Traditional NGOs’ survival is reliant on external funding. But different donors have different requirements. If strategy is missing, projects are very likely to lack synergy and standard operating procedure. The whole organization will easily become project-oriented. Gradually, the organization’s mission becomes vague. The team lacks shared vision. Therefore, employees become discouraged, which eventually jeopardizes the survival of the organization.

Actually, a good strategic planning document can be a convincing fund-raising proposal and key to obtaining external support. From the strategic planning document, potential donors and partners will gain a good understanding of their added value, i.e. how their support is going to contribute to the NGO’s vision. Also, from the promotion perspective, an NGO needs a “story” to tell the public what social problem the organization aims to solve, why, and how. Apart from these external factors, NGOs have internal demands for strategic planning. Without a strategy, any success is merely by chance. To realize an organization’s vision, it entails measurable goals broken down by terms, specific action plans, and clear team structure as backbone support.

With more and more capacity building workshops, an increasing number of NGO leaders and managers begin to value strategic planning. In VA’s observation, however, some NGOs still have blind spots in strategic planning, and their effectiveness of strategy management needs to be improved.

Blind Spot 1: Vision = Objective

Many people have a misperception that an organization’s vision and its strategic objective are the same. As a matter of fact, vision is a general picture of what the future could look like. It is the ultimate goal that an organization is seeking, and the inner drive of progress and development. Normally an organization will not change its vision once it is settled.

Strategic objectives, however, are specific. They are milestones to mark stages of development during the long process of realizing the vision. Usually there are short-term, mid-term, and long-term objectives. Objectives at each stage can be further divided into various areas, such as beneficiary number, legal structure change, signature events, and amount of fund raised, etc.

Objectives should be measurable. Many NGOs have pretty vague objectives, for instance, increasing service and decreasing donations. This goal is neither time-bound nor specific enough as for how much increase/decrease the organization wants to strive for. In this case, it is hard to track progress. A more appropriate way to put the objective statement may be, service revenue will account for 60% of the total revenue by 2014, and have an increase of at least 5% annually afterwards.

Blind Spot 2: Setting an Objective Without Considering Market Potential

VA has conducted a program evaluation for a well-known NGO in the environment sector. That program provided education about nature to children in an outdoor environment. To ensure safety, a group of students is accompanied by 3-4 teachers. When the program initially started, everything went well. After a while, more and more parents got to know this program by word of mouth and showed interest in participation. At that moment, a problem occurred – the number of teachers was not growing consistently with that of kids.

Project Manager said, the program had a high demand of teachers’ science knowledge level, and it took long time from recruitment, training, to trial teaching and official employment. As a result, in a long period time, this problem has limited the development of the program.

The root cause of what happened to this program was that when the NGO set strategic objectives, they estimated the market only based on their current resources. The organization neglected the possibility of obtaining more resources thus was not prepared when demand increased. Ultimately, it impeded program scaling-up.

Blind Spot 3: Setting an Objective Without Considering Current Capacity

Some other NGOs are right on the contrary to the scenario described above. Their strategic objectives were far beyond what they are capable of.

For instance, VA was invited by a renowned international NGO to evaluate its China operations in the past 2 years. Compared to its project proposal, the majority of the goals were not met. The reason was that the organization lacked a concrete understanding of the project environment, therefore, overlooked the challenges facing its current organizational capacity.

Blind Spot 4: Strategic Planning = Objective Formulation

There are other NGOs, even though their objectives are SMART (specific, measurable, achievable, realistic, and time-bound), lack of an action plan as for how to achieve the objectives. The action plan needs to identify the organization’s strengths and gaps, necessary internal/external resources and how to obtain and allocate them, and how management can support the operations (such as organization structure and performance KPIs), etc.

How to Avoid Blind Spots

• External environment analysis to understand what the organization might do —— find a direction
• Customer needs assessment to understand what the organization should do —— find a goal
• Internal environment analysis to understand what the organization can do —— find a balance point between opportunity and resource
• Personal value analysis to understand what the organization must do
• In the action plan, there must be a pilot and feasibility study before a new project rolls out; also, a regular tracking and evaluation mechanism must be in place so that program effectiveness can be monitored and necessary program adjustment can be made promptly

In summary, the purpose of strategic planning is to turn an organization’s vision and mission into specific objectives and action plans. It ultimately answers the following questions:

• What is the social problem that the NGO is trying to solve? What are the organization’s core strengths and resources?
• What are the short-term, mid-term and long-term objectives in terms of beneficiary number, legal structure, signature activities, fund-raising, public image and trust, etc.?
• How to achieve the objectives in terms of project design, branding and marketing, team set-up, fund-raising plan, etc.?