The not-for-profit sector in Canada is increasingly faced with important challenges to justify its value proposition. Private and corporate donors, members and public granting agencies are demanding scrutiny and enhanced transparency of the strategic plans of non-for-profit organizations, their financial and management operations, and measurement of effectiveness and impact. Given this pressure, it behoves not-for-profit leaders to incorporate best practices in strategy design and development to ensure that the vision and mission is relevant and meaningful for the next generation and to warrant continued financial support.
Traditionally the best-practices drawn from the for-profit sector in the strategy design and operationalization literature has not been systematically applicable to the not-for-profit sector. Beyond the glaring “for-profit” versus the “not-for-profit” paradigm of business, additional issues impacting the not-for-profit approach to strategy design include governance, and the operational and resource realities of not-for-profit management, as well as limited historical emphasis upon establishing key performance indices. In addition, the authors of this paper hypothesized that the professional expertise and competencies needed for effective strategy design may be limited among individuals who opt for a career in the not-for-profit sector. Our premise considers that individuals drawn to work in the non-profit sector are generally driven to do so by “the cause”, and may not have the experience or expertise in organizational strategic development[1]. To explore these issues, the authors conducted a series of confidential in-depth interviews over several months with board members, executive leaders, and senior staff at medium to large (i.e. greater than 20 staff members) not-for-profit health groups, professional membership associations, conservation and eco-stewardships, and cultural and arts establishments across Canada.
The interviews were designed to assess the experience and perspectives of not-for-profit participants, who were selectively targeted because they been actively engaged not-for-profit’s strategic design process, launch, and implementation. Open-ended questions were asked of the participants regarding their:
- Perspectives of the expertise of the individuals’ engaged in the strategic design and implementation, the governance, and the resources available to design an optimal strategy;
- Experience of the strategy launch and communication including
- Transfer and translation to the staff, members, and external stakeholders
- Assignment and accountability for the tactics to support the strategy
- Understanding of the monitoring and evaluation of the impact of the strategy including
- Design of metrics to assess the strategy
- Internal and external communication of the impact of the strategy
Following synthesis and analyses of the insights and perspectives of the participants, the authors identified four (4) substantive shared barriers that participants reported as challenges optimal strategic design, operationalization, and evaluation at not-for-profits. Those themes are:
- Gap in Competencies for Strategy Development
Participants uniformly agreed that in addition to the expected challenges for resources (time, funding, staffing), they witnessed substantive gaps in the competencies necessary to design an optimal not-for-profit strategy. The not-for-profits have leadership and staff (whether paid or volunteer staff) who are very passionate and deeply committed to the underlying “cause”. However, these individuals rarely have the formal educational or professional background in organizational strategic plan design development.
“we operate at a critical threshold of people, but the bare minimum”
“many staff are resistant to structure, resistant to strategic design because they are ‘grassroots’ driven’
Participants also reported that attracting personnel experienced in strategic planning is challenging because the compensation offered is generally much lower than in the for-profit sectors.
- Inconsistent Engagement in Design
Participants reported inconsistent engagement of key stakeholders at the strategic design process. Participants reported that in some cases too many individuals were engaged in the strategy design, fostering a process that was chaotic and stressful and an outcome that was unnecessarily mired in discrepant, contradictory. Conversely, in other cases strategic design was conducted in isolation and only selected seniors participated:
“The Chairperson hired an external consultant and developed the entire strategy without the Executive Director(s), veteran staff members, and many of the Board members”
This inconsistent engagement approaches subsequently created a lack of? ownership and engagement of the strategy once it was launched to organizational staff, members, and funders.
- Confusion in Communication of Strategy and its Value
Participants reported that once the strategy was designed, it was generally ‘imposed” on the staff to execute in a manner that was unrealistic, did not take into account daily operations of an already stretched workforce, that little to no incentive was provided to the individuals charged with implementing the strategy, and thus was confusing as to its value and significance to them
“many don’t perceive strategy as necessary – it interferes with day-to-day impact”
- Limited to No Evaluation of Impact
Participants reported that there was little monitoring of the strategic and tactical implementation, nor was there development of and assessment of performance indices to evaluate the impact of the strategy. This in turn further diminished the accountability for the strategy among staff, and undermined its value to the organization, to members, and to external stakeholders including funders.
“measurement is an afterthought”
“use a relaxed approach (for evaluation) of ‘we are on track’ “
‘no time to self-assess’
Our findings should not be generalized to all not-for-profits, and requires validation with a larger more comprehensive sample. The findings do suggest however that prior to initiating strategic design at a not-for-profit, conducting an inventory of the personnel expertise and competencies as well as the resource and operational realities is an important step. This inventory would facilitate insights to any gaps for the leadership, in order to implement a relevant, context-applicable strategic design process. We explore cost-effective, applicable recommendations to guide the not-for-profit leadership in our follow-up supplement
[1] Carman, J. G., & Nesbit, R. (2013). Founding new non-profit organizations: syndrome or symptom? Non-profit and Voluntary Sector Quarterly, 42(3), 603-621.
Sean M. Hayes PsyD & Dominique Laverdiere CRHA
