Plan for the future

A lack of strategic planning in charities can prevent boards from driving the organisation forward

Every board has a strategy, even where there is no written version of it – maintaining the status quo is as much of a strategy as radical innovation. A strategic plan should always include:

• Objective understanding of the current situation of the organisation and the environment in which it operates.
• Definition of the long-term aims and vision of the organisation, normally over three to five years.
• A clear set of milestones and processes that enable the organisation to realise its objectives.

Strategic planning in charities

A strategic plan that is produced purely for the purposes of seeking funding is unlikely to be ‘owned’ by the board and organisation, and will therefore be of very limited use. To be effective, it must be regularly referred to, periodically revised in response to changing circumstances and embody how the organisation intends to live its values.

External conditions can be subject to rapid change, and the assumption that a strategic plan will inevitably be prescriptive or unresponsive can often deter boards from developing one. A clear strategy however, will enable an organisation to take advantage of opportunities by combining detailed plans regarding internal organisation with open relationship building. This will ultimately position the organisation more successfully to respond to change.

Devising the strategy

Factors determining how a charity’s strategy is devised include:

• The degree to which the voices of funders and wider stakeholders are reflected in the organisation’s priorities.
• What areas staff, volunteers and service users are consulted in during the strategy development.
• The extent to which the board steers the process, or lets the chief executive develop the strategy unaided.
• Who writes and edits the strategy, and the scrutiny to which the drafts are subjected.

Developing a strategy is central to the contribution a board makes to its organisation and beneficiaries, and strengthening these skills are a core part of the development of each board member.

Structuring board engagement

The best strategic plans are co-produced by the board and the senior management team, who work together at the heart of a wider consultative process. This enables precise identification of the strategic issues that the organisation faces, a thorough appraisal of options available to them and the development of an action plan that stands a realistic chance of being achieved.

The thinking involved in the development is as important as the plan itself. It involves interventions by the board at the following key stages:

• Before the planning process starts so it is well designed and adequately resourced.
• Participating not only in the development of the vision, mission and values but also on defining the issues for the organisation that need to be addressed in the next period.
• Reviewing the plan in draft (often done at an awayday) to see whether it is sufficiently robust and fit for purpose.
• Setting out a process for monitoring and reviewing progress against the plan, including against key performance indicators.

Avoid common pitfalls

The board can help the organisation avoid the most common pitfalls of strategy making by:

• Tackling any tendency for the strategy to amount to little more than the aggregation of views from different silos within the organisation. The board can oversee a process of integration that ensures the participation of key staff and volunteers in different parts of the organisation.
• Probing to elicit what research, analysis and evidence base lies behind a proposed strategy. This helps to reveal any hastily compiled wishlists of new or extended services, activities and campaigns that staff, volunteers or other stakeholders would like the organisation to pursue.  
• Challenging the results of any strategic planning process based entirely on brainstorming. Research suggests that brainstorming plays to the most extrovert and it may therefore be weak in harnessing the contribution of the more reflective and introverted individuals within the organisation.
• Taking an interest in tools used in planning for the future. One of the most commonly misused tools is SWOT (evaluating the strengths, weaknesses, opportunities and threats) as it fails to distinguish between everyday operational details and the strategic issues facing the organisation. The SWOT analysis is often inserted into strategic and business plans, and presented as though it speaks for itself. If this process is to be used, an advanced SWOT exercise should review the outcomes of the brainstorm to get closer to the issues. This advanced exercise involves establishing how strengths will facilitate opportunities and address threats, how opportunity will overcome weaknesses and how to avoid weaknesses combining with threats.

A constructive relationship between the chairman and chief executive is central to ensuring that the board receives diverse input to the strategy and that it is addressed constructively and critically.

Many of the generic tools used to devise a strategy can be adapted for use by charities – for example, PESTLE, Five Forces, Ansoff matrix and the Boston Box. No one tool of analysis is adequate by itself, but a combination of approaches can help organisations to understand their current environments and trends for the future. Typically, a focused three-month process of conversations, research, analysis and examination of options produces a plan that powerfully informs the organisation’s direction for the next three years.

Formats that work

Effective strategic plans are written to fit the individual organisation. Some elements are common to all, including: a review of where the organisation is; a focused statement of ambitions and the capabilities to realise those, as well as a review of options for achieving them; and an action plan that encompasses the majority of what will be done, detailing which of its current activities it will largely or wholly maintain.

The best strategic plans are accessible, concise and may also have plain English summaries. Charts are useful where they can visually explain what is intended.

Many organisations choose to develop their strategic plans unaided. Although this may be an appropriate choice, it does carry dangers of failing to constructively challenge what the organisation is currently doing, its impact and where it adds value. Some organisations choose external facilitation of strategy away days, which help to ensure that diverse points of view are heard within the board. However, doing so can miss the early opportunity to address flaws in current processes. Some boards therefore choose to invest in external help to ensure a constructive critical eye throughout.

Trustees role

Most trustees volunteer because they are committed to the cause. Strategy making should be a major contribution to that cause, but it requires governance leadership, organisation and determination. Strategic planning should be energising and enable the board to focus on where it can make the greatest difference to the charity’s outcomes. Good boards are neither supine nor overly prescriptive in developing strategy and effectively steer the process in a way that benefits service users and beneficiaries.

Hilary Barnard and Ruth Lesirge are workshop speakers at the 2015 ICSA Charity Governance Summit on 30 April, held at Saffron House, London. For more information, or to book your place, visit icsa.org.uk/events

Hilary Barnard and Ruth Lesirge are founders of HBRL Consulting