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Frequently Asked Questions

Question

What is a situation assessment?

Answer

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Gathering Perceptions About the Organization
Evaluation of Programs

Strategic planning must include an assessment of the organization's environment because no organization operates in a vacuum. The very definition of strategic planning stresses the importance of focusing on the future within the context of an ever-changing environment - the myriad of political, economic, social, technological, demographic, and legal forces that change our world daily. Skill at assessing the environment and then being proactive in responding to that environment (i.e., strategic planning, thinking, and management) determines who is effective in using their resources and, ultimately, who survives.

The situation assessment outlines the process of gathering and analyzing the information needed to make an explicit evaluation of an organization in its environment. The situation assessment includes the following activities:

collecting internal and external stakeholders' perceptions about the organization
evaluating programs' impact on clients
evaluating programs through cost/benefit analysis
analyzing programs through competitive analysis
defining previous implied strategies

At the conclusion of a situation analysis, a strategic planner will have a database of quality information that can be used to make decisions and a list of critical issues which demand a response from the organization -- the most important issues the organization needs to deal with in the strategic planning process.

Gathering Perceptions about the Organization

Part of getting a clear view of the environment and dynamics of an organization is to look at it through others' eyes; both internal and external stakeholders' perceptions of the organization will add valuable information to the situation assessment. The SWOT technique, a simple and effective vehicle for collecting this information, helps focus the process by breaking it down into four broad categories:

S - What are the organization's internal Strengths?

W - What are the organization's internal Weaknesses?

O - What external Opportunities might move the organization forward?

T - What external Threats might hold the organization back?

Evaluating an organization's general strengths and weaknesses, as well as the strengths and weaknesses specific to each of its programs, typically includes assessments of:

staff and board capabilities
quality of programs
reputation of both the organization and individual programs
management information and financial systems
office facilities and equipment, etc.

Successful organizations exploit strengths rather than just focus on weaknesses. In other words, this process isn't just about fixing the things that are wrong, but also nurturing what is right.

The same kind of thinking should apply to how an organization approaches its opportunities and threats -- the external trends that influence the organization. These are usually categorized into political, economic, social, technological, demographic and legal (PESTDL) forces. These external forces include such circumstances as changing client needs, increased competition, changing regulations, and so on. They can either help an organization move forward (opportunities) or hold an organization back (threats) -- but opportunities that are ignored can become threats, and threats that are dealt with appropriately can be turned into opportunities.

Gathering Board and Staff Perceptions of the Organization

Since SWOT analysis is a primary means of receiving input from a broad and representative constituency, it is important to include as many staff and board (your internal stakeholders) as possible in this process. Their ideas and opinions might be collected through questionnaires, telephone or in-person interviews, facilitated organization-wide or small-group meetings, or a combination of these methods. Some organizations have board and staff meet together to discuss their ideas and opinions, while others have them meet separately. A common and useful approach used during meetings is to brainstorm ideas onto flipcharts.

After the lists of strengths, weaknesses, opportunities, and threats have been recorded, the listed ideas can be grouped into logical topic or issue groups (e.g., all the ideas related to staffing or program development should be grouped together) to make the data easier to present and analyze.

Gathering External Stakeholders' Perceptions

Just as the above SWOT assessment allows an organization to collect a wide variety of perceptions from internal stakeholders, a SWOT assessment of those outside the organization can also add a great deal to the situation analysis. External stakeholders (such as clients, funders, community leaders, and potential collaborators) can give the planning committee insight into community opinions of what the organization does well, where it can improve, unmet community needs it might address, and other potential opportunities or threats. Again, this information might be gathered through telephone or in-person interviews (preferably), questionnaires, or focus groups. In addition to their general perceptions of the organization's strengths, weaknesses, opportunities, and threats, external stakeholders might also be asked some questions specific to their outsider perspective. For example:

What are the organization's strengths and weaknesses? What opportunities and threats does the organization face?
What does the stakeholder need or expect (criteria for performance) from the organization?
How well does the organization perform against those criteria (excellent, good, fair, or poor) and why?
How well does the organization perform relative to its competitors?

Evaluation of Programs

A key component of an organization's situation assessment is the evaluation of its programs' effectiveness and efficiency. This evaluation will provide data about whether to continue or discontinue each program, maintain it at its existing level, expand or change its direction, market it aggressively, and so on. Most program evaluations focus on both outcome, or results, and process, or methods. Outcome evaluation looks at whether a project achieved its planned results. Process evaluation looks at internal project management, both staff performance and the extent to which the project is successfully implemented.

The program evaluations can be based on quantitative and/or qualitative data. Quantitative data consists of fact-based information such as records review, descriptive statistics, inferential statistics, examinations results, and the like. It is more easily collected and less easily disputed because it translates experience into quantifiable data that can be counted, compared, measured, and manipulated statistically. Qualitative data consists of what people "say" about the programs, based on interviews, focus groups or other meetings, direct or field observation, reviews of written materials, informal feedback, satisfaction surveys, and questionnaires.

Program Outcome Studies

In addition to examining the resources required to operate a program, an organization can also more generally assess the program's impact on clients, using the following considerations:

inputs - the resources that are required to operate the program;
throughputs - how the program is operated
outputs - the immediate, observable results of the program
outcomes - how the program affects the client's life or society
impact - the program's benefit to the client or society

The key measures of effectiveness, outcomes, and impact are the most difficult to measure but are important to keep in mind.

Cost/Benefit Analysis of Program Services

One approach to evaluating organization programs is a cost/benefit analysis. As the name indicates, this entails comparing the costs of providing a service or product with the benefit to be gained. The analysis begins by answering a series of important questions:

What are the projected costs (direct and indirect) of the program?
What are the revenue benefits to be gained?
What are the direct service benefits?
What would it cost to purchase the benefits on the open market?
What intangible benefits are gained by either the organization or the client?
What assumptions, risks, organizational capabilities, alternative methods, foreseeable changes, and other considerations need to be taken into account?

Unfortunately, doing a cost/benefit analysis on a particular service often proves difficult for nonprofits. Unlike the for-profit sector which uses the measurement of profit gained for owners and stakeholders as its primary benchmarks for benefits, nonprofits do not usually have an explicit indicator of benefits. Moreover, there may not be comparable services or products with clearly defined prices available on the open market. Finally, some benefits may be difficult to quantify because they are intangible, or literally unmeasurable. How, for example, could an organization measure the benefit gained by providing one woman and her child shelter and support for two weeks? Yes, the cost of comparable services or products could be calculated, if they were available, but that would not begin to measure the intangible value.

If an organization offers a service for which no comparable alternative exists, or if the organization cannot define what the cost would be to society if the service were not provided, a cost/benefit analysis will be difficult to do. If, however, competing products exist whose benefits can be readily measured, then an organization should be able to calculate and compare its costs and benefits to those of the competing product. In any case, cost/benefit analysis should not be used as the sole criteria for accepting or rejecting a project or even measuring success, but it can prove a helpful tool when it comes time to make difficult choices about how to use scarce resources.