The Strategic Planning Process
Step 2: Strategy Formulation
Combining external realities with internal capacity in the form of a strategic organizational assessment gives a powerful planning foundation. This involves exploring missions, programs, operations, and resources – all the inner components that enable impact. This frames your current strategy and performance, putting you in a better place to see your working reality more clearly.
Formulating a strategy requires intimate knowledge of your organization’s inner workings: an understanding of what makes you tick and how all the interlocking parts fit together to drive impact. That’s why we’re about to dive into seven key areas of business, starting with mission.
Mission: What’s Your Fundamental Purpose?
We touched on mission statements in this blog post, explaining how they’re supposed to capture why an organization exists. They’re the soul of what you do and why you do it, encoded into words.
A compelling mission statement rallies people around a shared purpose. It steers choices when navigating gray areas. It even inspires funding and partnership opportunities!
So take time to get this right. Gather stakeholders to discuss:
- The pressing societal needs that drive your work and how you help to solve them
- The principles and values that shape how you address needs
- The unique role you play in driving positive change.
While you’re at it, reflect deeply on why the company began. What original passions, frustrations, or visions of a better future led them to take action? Once you have those figured out, make sure to distill your answers into a short, stirring paragraph. It should capture your heart while explaining the meaningful difference you make.
Next up, run it by stakeholders to get their opinion, editing and refining your words until the larger statement feels just right. How many times you should go over it before you’re done varies. All I can say is that you’ll know when you have it down!
Remember that your mission may evolve over the decades, but its core should remain steady. It’s something you should want to revisit on milestone anniversaries to confirm that it still inspires and aligns efforts.
Values: What Are Your Guiding Principles?
With your purpose defined, let’s next identify the values guiding your work.
Your core values reflect the behaviors and mindsets valued in your culture. They steer decisions when the path isn’t clearly marked. So you’ll want to start by having everyone jot down words or short phrases they feel describes your organization’s cultural principles. We typically use sticky notes and ask each participant to write down just one or two words describing their thoughts.
Dig deep into values like integrity, community, inclusion, accountability, and compassion. Look for patterns by having participants post their sticky notes on a collective board, then narrow your collection down to the top 5-8 values that surface consistently.
But don’t stop there. Discuss why each one rises to the top. Share examples of them in action. Capture inspiring quotes.
Once you have, you’re still not quite done here. Do a mini survey to test if the values resonate across your organization, then refine based on your feedback. And don’t be shy about sharing them after they’re properly defined. Place them prominently, both internally and externally. Print posters. Add them to email signatures. Paint them on walls!
This is something you should be proud of displaying and talking about. Discuss them in meetings: how values apply to decisions and initiatives. And recognize employees who consistently embody them.
Take the time to periodically assess if your values remain culturally ingrained and practically applied. You put far too much thought and work into this process to do anything less than keep your values alive!
Vision: What Will Success Look Like in 5 Years?
Your strategic vision, meanwhile, outlines the ambitious organizational future you want to create. It’s often a dream of possibilities that feels just out of reach. But you can make it happen.
To get started here, describe aspirational future scenarios in areas such as:
- The societal impact you’d like to make and the lives you want to see changed
- Programs, offerings, and innovation you’d like to implement
- Finances, operations, and resources you want to cultivate
- Capabilities, talent, and culture you want to use to transform the status-quo
- Partnerships, influence, and community ownership you wish would come true.
Let your vision stretch beyond what seems easily achievable. Dream big and bold about your full potential!
You can then engage stakeholders in framing your vision using techniques like visualization, future scenarios, and storytelling. Be detailed, and refine your ideas until they resonate and align with your organization-wide efforts – while still challenging your current understanding of what you can and cannot do.
Plan to revisit them annually to ensure your “North Star” still points toward your optimal future. And adjust accordingly as the path forward comes into clearer focus.
Advantages: What Makes You Stand Out?
An ambitious vision gives permission to think big. But big thinking needs to be grounded in reality if it’s going to become big doing – and big “done.”
So, without curbing your enthusiasm, take an objective look at the strategic advantages you have over your peers. Ask yourself what unique capabilities and strengths give you an edge, and brainstorm areas where you excel, like:
- Programs, offerings, and services
- Technology, systems, and infrastructure
- Data, information, and intelligence
- Skills, expertise, and partnerships
- Reputation, trust, and community ties.
While you’re at it, consider your specific specializations or exclusivities; differentiated value propositions; cost structures and funding access; geographic proximity to key assets and populations; and scale, breadth, and market share – basically everything that sets you apart.
But don’t get caught up in your successes. Make sure to also identify gaps where others outperform you. Vulnerabilities threaten advantages if left unaddressed, so make sure to address them.
This clear-eyed assessment will provide the context you need to guide your strategy.
Strategies: How Will You Align to the Vision?
Next up, define broad strategies for structuring, resourcing, and managing your organization to achieve your established vision. This consideration is going to look short on paper and therefore maybe not as impressive. But it’s every bit as important that you assess strategic needs such as:
- Structures, roles, and responsibilities
- Budgets and resource allocations
- Core processes and operations
- Compensations, rewards, and cultures
- Partnerships and community integrations.
Outline any gaps between where you are now and where you want to be. And get creative in exploring bold ideas to optimize organizational alignment – always keeping in mind that it’s the perfect blend of vision and execution that enables success.
Objectives: What Are Your 3-5 Year Goals?
Now it’s time to transform your vision into clear objectives: measurable goals to make it happen. I suggest you tackle this task by breaking it down into SMART 3-5 year timelines that are:
- Specific and measurable with numerical outcomes
- Measurable and Achievable, being ambitious but not impossible
- Relevant and Timebound in that they support your priorities by specific dates.
Here’s where I’m going to encourage you to not go overboard. Put a 5-8 limit on these objectives in order to maintain focus on what matters most. Too many will distract you and thereby dilute your efforts.
And don’t take it for granted that they’re good as-is. Pressure-test each one with stakeholders, refining those that come under criticism. Then commit to revisiting them annually to rebase your objectives as you gain strategic insights.
Well-crafted objectives help you convert lofty vision into concrete results. They provide a roadmap and milestones for executing your strategy.
Forecast: What’s Your 3-5 Year Financial Outlook?
Money isn’t everything, but it is something – an asset that’s meant to help you grow. Without it, that growth becomes much more difficult. So it’s best to manage this resource carefully, developing projected financials across multiple scenarios to stress-test your strategic plans.
Model both best- and worst-case scenarios by mapping out expected:
- Revenue sources
- Payroll by staffing
- Donation income
- Non-payroll expenses
- Capital expenditures
- Reserve funds.
Does your organization have what it financially takes? Or will it in the future? These are the questions leadership must ask, adjusting their plans accordingly where problems arise.
Multi-year modeling sharpens foresight when making decisions. And, once again, regularly updating your projections provides flexibility to pivot amidst fluid conditions. Just make sure to maintain enough consistency along the way to realize your desired returns.
To summarize this larger process, dream big – then figure out how to turn that dream into reality. If you really want to make it happen, it will be well worth the work. Now that you have some foundational work out of the way, we will discuss strategy implementation. This will be how you activate your plan across the organization. We will cover all of this in our next post.