As CEO of CompassPoint Nonprofit Services, which provides management advice to charities, I spend a large portion of every day thinking, in one form or another, about strategy.
Over the past three years, my thinking, like that of many of my colleagues, has changed radically.
First, strategy now seems to be as much about good decision making as good planning. Rather than thinking of myself as the expert architect of a process that will eventually yield strategy, I now work with executives to make good decisions in real time.
In arriving at those decisions, we draw on some of the tools in a typical strategic-planning process, but a decision-making orientation changes the consulting arrangement—for the better.
Second, formulating strategy is an explicitly financial exercise. Understanding the economics of any potential decision is critical. It doesn’t make sense to develop a strategy first and then consider the financial implications, even though that is still a standard planning approach. I now view financial literacy and rigor as job requirements for both nonprofit executives and strategy consultants.
Third, I have been deeply influenced by the communications experts in our field—Holly Minch of LightBox Collaborative and Kristen Grimm of Spitfire Strategies, to name two exceptional examples. From them, I have learned that strategy must always be tied to brand. All good decisions reinforce a nonprofit’s brand, while bad decisions ultimately tarnish it.
I like to start a strategy-formation process by asking executives: “What does the marketplace want you to be now?” Historically, too many consultants have worried that nonprofits that focus too much on that question are just chasing the money and straying from their missions.
But all nonprofits are selling a service of some kind—and often selling it to distinct users and payers—in a dynamic marketplace filled with other players. How a nonprofit plans to advance its brand is therefore a key part of any strategy decision.
As the recession and its aftershocks linger, the margin for error financially and strategically is razor thin for most nonprofits. As partners to nonprofit executives, strategy consultants who emphasize helping leaders make the best possible decisions on behalf of their organizations and causes—as quickly as possible—provide the greatest return on a nonprofit’s investment.
How has the downturn reshaped the way you approach your consulting work? Share your thoughts in the comments section below.