Frequently Asked Questions

Question

What are the key concepts and definitions in strategic planning?

Answer

Values That Support Successful Strategic Planning

The Support Centers of America has adopted the following guiding principles to support its consulting practice in strategic planning. These are self-explanatory and are offered as one way to approach this work.

Successful strategic planning:

• leads to action
• builds a shared vision that is values-based
• is an inclusive, participatory process in which board and staff take on a shared ownership
• accepts accountability to the community
• is externally focused and sensitive to the organization's environment
• is based on quality data
• requires an openness to questioning the status quo
• is a key part of effective management.

Key Concepts

What is the difference between strategic planning and long range planning?

The major difference between strategic planning and long range planning is in emphasis. Long range planning is generally considered to mean the development of a plan of action to accomplish a goal or set of goals over a period of several years. The major assumption in long range planning is that current knowledge about future conditions is sufficiently reliable to enable the development of these plans. For example, in the late fifties and early sixties, the American economy was relatively stable and therefore predictable. Long range planning was very much in fashion, and it was a useful exercise. Because the environment is assumed to be predictable, the emphasis is on the articulation of internally focused plans to accomplish agreed upon goals.

The major assumption in strategic planning, however, is that an organization must be responsive to a dynamic, changing environment. Some would argue that this was always the case. Nonetheless, in the nonprofit sector a wide agreement has emerged that the environment is indeed changing in dynamic, and often unpredictable ways. Thus, the emphasis in strategic planning is on understanding how the environment is changing and will change, and in developing organizational decisions which are responsive to these changes.

In planning lingo, what is the difference between purpose, mission, and vision?

There is a lot of confusion about these three words in the nonprofit planning literature. For the sake of clarity, the following definitions are used consistently throughout this series of response sheets.

A purpose is an end result, a goal which an organization is seeking to accomplish. Purpose is the answer to the question, "Why does this organization exist?" The answer is to achieve the purpose.

Mission is typically understood as a broader concept. Mission is synonymous with mission statement and includes three major concepts: the purpose (as above), the "business" an organization engages in to achieve this purpose, and a statement of values guiding the accomplishment of the mission.

Finally, vision is the most global concept. A vision is quite literally a mental image of the successful accomplishment of the mission, and thus the purpose of the organization.

What is strategic thinking?

Strategic thinking means asking, "Are we doing the right thing?" It requires three things:

• purpose or end--a strategic thinker is trying to do something
• understanding the environment, particularly of the opponent, or opposing forces, affecting and/or blocking achievement of these ends
• creativity in developing effective responses to the opponent or opposing forces.

What is strategic management?

As you might guess, strategic management is the application of strategic thinking to the job of leading an organization.

Dr. Jagdish Sheth, an expert on marketing and strategic planning suggests that strategic management means continually asking the question, "Are we doing the right thing?" Strategic management is focused on the future within a context of a changing, but relatively predictable environment. Strategic management consists of the following three activities and decisions:

• formulation of the future mission of the organization in light of changing external factors such as regulation, competition, technology and customers;
• development of a competitive strategy to achieve the mission; and
• creation of an organization structure which will deploy resources to successfully carry out its competitive strategy.

It requires attention to the "big picture" and a willingness to adapt to changing circumstances.

Dr. Sheth distinguishes strategic management from two other approaches to management, a tradition-driven approach and an operations-driven approach. A tradition-driven approach is characterized by the saying "if it ain't broke, don't fix it," and is focused on past practices. The tradition-driven approach works best in a non-changing environment. An operations-driven approach asks, "Did we do things right?" It is focused on current practices and works best in a highly volatile environment.

Key Definitions

Strategic

In the dictionary, the word strategy has to do with war and deception of an enemy. In nonprofit management, strategy has to do with responding to a dynamic and often hostile environment in pursuit of a public service mission. Thinking strategically thus means being informed and consciously responsive to this dynamic environment.

Planning

Strategic planning is planning because it involves intentionally setting goals (choosing a desired future) and developing an approach to achieving those goals.

Fundamental

Because it is impossible to do everything, strategic planning implies that some decisions and actions are more important than others. The most important decisions have to do with what an organization is and why it exists; the most important actions have to do with what it does. On the other hand, strategic thinking is deciding on and carrying out the fundamental, or most important actions.

Disciplined

Discipline highlights the relationship between the different steps in strategic planning. Mission depends on environment; which actions are most important are determined by assessing strengths and weaknesses, opportunities and threats. Strategic planning is also disciplined in that there is a sequence of questions typically raised to examine experience and test assumptions, gather and make use of information about the present, and try to anticipate the future environment the organization will be working in.

Decision Making

Strategic planning is based on decision making because in order to answer the questions raised in the structured planning process, choices must be made. The plan ultimately is no more, and no less, than a set of decisions about what to do, how to do it and why to do it.

Long Range Plan

Long range is the longest time period for which it makes sense to make plans. The time period varies from organization to organization: the Social Security Administration must plan for the retirement of today's babies sixty five years from now; high tech computer companies are putting out new products every six months. For most nonprofit organizations, a 3-5 year timeframe is appropriate for meaningful long range planning. Three year plans work well for most nonprofits, taking into consideration the fast pace of change (technology, political and economic environment, internal realities, and community conditions). Five year plans may be more appropriate for those organizations with extensive physical plant or very large service constituencies, such as schools, colleges, universities and hospitals.

Operating Plan

Operating plans are the detailed action plans to accomplish the strategic goals laid out in the strategic plan. An organization should have operating plans for each major organizational unit and correspond to its fiscal year. In addition, an organization may need operating plans which correspond to grant cycles or longer, or cycles that differ from the fiscal year. Each is important.

Strategic Management

The concept of strategic planning implies managing, day to day and month to month, in a way that focuses on the most important decisions and actions. This requires the kind of longer term perspective and priorities which result from a strategic plan. This concept also incorporates the assumption that the environment is always changing: thus, strategic management requires ongoing reassessment of current plans in light of long term priorities.

Inclusive Process

An inclusive process means that people who have a stake in the work of your organization participate in the planning process in an appropriate way. This does not mean that every client, funder, volunteer and staff member must come to a joint consensus about what to do. It does mean that these interested individuals have a chance to be heard by the decision makers.

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