This post was written by one of the many nonprofit leaders who will be presenting at the 2020 BoardSource Leadership Forum May 7-8 in St. Louis. We hope to see you there!
Over my 40-plus years of leading and serving nonprofit boards, I have become frustrated with “plans.” I’ve seen executive directors or board chairs presenting a business plan but calling it a strategic plan, or an operations plan presented as a risk management plan. I have experienced everything from award-winning plans that collect dust on a shelf to a one-page things-to-do list titled “A plan.” When these things happen, an organization is not going to actually see the benefits that typically come with a well-thought-out plan.
Recently, I conducted research on strategic planning. Actually, it was more of a literature review than research. It’s been exhausting.
I was doing just fine and feeling pretty confident about my expertise until I found an article by Roger Martin in the Harvard Business Review — The Big Lie of Strategic Planning. I must say, I was a bit nervous about reading this article. For decades, I was the number-one fan and cheerleader for a rigorous strategic planning process. Strategic planning is a critical component to nonprofit governance, right?
But those nerves were calmed when I saw that Roger supported strategic planning as an important management tool. There was one sentence about predicting the future in planning that resonated with me, though: “As much as boards and regulators may want the world to be knowable and controllable, that’s simply not how it works.” When I thought back to all the long-range planning, and strategic planning processes I had been part of, the one factor that was missing was scenario planning where unknowns and worst-case scenarios are considered.
Oh yes, we performed SWOT analyses, benchmarking, and financial forecasts, but these were all based on predictable futures. Scenario planning is about mitigating risks and seizing opportunities. It is up to the senior leadership team and board leaders to ensure their organization is well positioned to pivot quickly in the face of unplanned change. To do so, instead of looking at the past to determine future strategies, scenario planning requires leaders to make assumptions about factors that may or may not be outside of their control. These factors may include deregulation, a public scandal, donor protests, new technologies or a growth opportunity. The challenge is to consider these futures and develop a plan for how the organization might respond.
Scenario planning is a critical part of the strategic planning process and helps organizations go one step further to consider changes that would otherwise be overlooked. It can unlock possibilities and challenge assumptions. It is an important management tool that provides benefits beyond measure.
Without looking at your notes, can you name three risks your organization faces today that, if not addressed, could result in a significant blow to your operations? Do you have the resources in place to mitigate these risks? Scenario planning can help get you there.
To learn more about scenario planning, you can attend my session at BLF2020, From Risk to Readiness: Scenario Planning as a Tool for Your Organization's Strategies. I hope to see you there!