February 25, 2015
In an article titled “Why Strategy Execution Fails—and What to Do About It,” in the March 2015 edition of the Harvard Business Review, authors Donald Sull, Rebecca Homkes and Charles Sull explore what happens when mission-advancing strategies collide with the realities of organizational life.
The authors cite several prevalent myths associated with strategy execution, including that strategy execution means sticking to the plan. They remind us that “…no Gantt chart survives contact with reality. No plan can anticipate every event that might help or hinder a company trying to achieve its strategic objectives.”
Strategic plans and the strategies they contain are too often treated like sacred cows. Once a plan has been adopted, the strategies and tactics become untouchable. In some organizations, untouchable is literal—the finished plan joins other long-forgotten reference materials on the leader’s bookshelf. In other public entities, untouchable simply means that no one is bold enough to question the strategies drafted by the entity’s dutiful board at its one day strategic planning workshop or retreat. An unfortunate consequence of the sacred status of strategic plans is that, according to Sull, Homkes and Sull, “executives view deviations as a lack of discipline that undercuts execution.”
As risk advisors to best-in-class-nonprofits, we have observed that the winds blowing strategy off course can be fierce and hard to forecast. Few entites are able to steer their missions across time and space without being blown about by circumstance. From economic realities to changes in donor or member preferences, the changing environment may threaten a public entity’s ambitious strategies, or provide clues that strategies should be updated to reflect new opportunities and realities. For example, a new Center client is facing increasingly stiff competition from a private business. The success of that business threatens the nonprofit’s dominance in planning events for its members. After years of delivering profitable events the leadership of the nonprofit is facing a gale force wind: private sector competition. The existing strategies for growing event revenue must be revisited or they are certain to fail.
Yet like our private sector counterparts, entities are continually adapting to changing circumstances. In “Why Strategy Unravels,” the authors note that many organizations “react so slowly that they can’t seize fleeting opportunities or mitigate emerging threats.” A corollary weakness is that some leaders “react quickly but lose sight of company strategy.”
Here’s where thoughtful risk management can rescue a strategic plan from becoming a narrative describing unfilled hopes and dreams. It’s not sufficient to consider “threats” as part of a SWOT analysis conducted during the strategic planning workshop. Risk management practice should 1) increase the odds that strategies will be executed effectively; and 2) enable thoughtful, timely, risk-sensitive adjustments to strategy. Below are several tips that can assist your nonprofit with making the most of strategic planning.
- Reference Key Strategies in Risk Reporting—When you are designing risk reports to share with leadership, make certain you’re linking critical risks to key strategies in the plan.
- Persevere to Ensure Understanding—Adopting the plan is a small step in the journey to its success. Increase the odds that the plan won’t grow stale and irrelevant by referencing it as often as possible. Engage internal stakeholders to evaluate whether changing circumstances and new opportunities warrant adjustments in strategies or tactics.
- Prohibit Sacred Status—The best strategic plans are resources that assist an entity in fulfilling its ultimate goals and making progress toward its mission. A sacred strategic plan exempt from scrutiny is of little value. Make certain that all staff understand their obligation to speak up and voice their perspectives and insights on anything that could impair the ability of the entity to achieve the core strategies. Encourage staff to step forward with their thoughts about ways to adapt the strategies to better suit changing needs and circumstances.
- Acknowledge that No Environment is Static—No matter how proud you are of your entity’s perfectly polished and clearly written strategic plan, things change. Sometimes even the most clearly stated and mission-aligned plan needs mid-course corrections. Understand at the outset that your plan cannot be a static document.
Despite the hesitation by many leaders to edit a completed strategic plan, this is exactly what you need to do! Approach your strategic plan as you would a petting zoo, not a big cat safari. Instead of making your strategic plan untouchable, make it an essential resource that is frequently reviewed, referenced and critiqued. Although there may still be things that are “sacred” in your entity or department, your strategic plan shouldn’t be one of them.
Melanie Lockwood Herman is Executive Director of the Nonprofit Risk Management Center. She welcomes comments and inquiries at Melanie@nonprofitrisk.org or 703.777.3504.