The shiftN Papers

Supporting non-profit organisations in their strategy review: lessons learned

A self-assessment in conversation with our clients

Photo by Maksim Goncharenok from Pexels

This piece was written in 2017 by shiftN colleague Kris Ooms, with feedback and editorial support from myself. It reviews a series of strategy assignments in which both of us were involved in the 2012–2016 interval. Our approach to supporting strategic conversations in client organisations is constantly evolving. However, this piece still meaningfully captures the spirit of our work.

Over the years shiftN has coached several non-profit organizations in their strategy review process. During the coaching process we help our clients to work through questions of existential importance. At stake is their long-term viability. Eager to understand the longer-term impact of these interventions, we engaged in informal evaluations with representatives of organizations some time after our strategy projects with them had been concluded.

1 — Our non-profit clients

We contacted 5 organizations, with personnel in the range of 5 to 25, and revenues ranging from €100K to €4mln. The organizations are active in the health sector, the energy sector and sustainability sector. Some of them are partly subsidized by the government. Some are engaged in fundraising, while others charge membership fees, or do both. In addition, some of them generate revenue by selling services.

In each organization we interviewed a minimum of 2 people, separately. This was typically the CEO of the organization, and the president of the Board. In some cases additional people were interviewed, because of their specific role in the organization and/or project team.

The evaluation took place without the use of any formal evaluation tool. The objective was simply to capture top-of-mind feedback from the interviewees. The guiding question was: “What had been the significance of the project for your organization?”. We wanted to understand what the organization effectively did with the outcome of the project, after we left. We also wanted to know whether the customer had any view on how we could improve our approach. The information helped us to better understand the potential barriers and levers, which typically exist while we are developing and implementing strategies.

2 — Our approach

Given the diversity of organizations and environments which we work in, strategy projects do not fit into a single mould. However, very generally speaking we can divide projects into three phases:

• an initial phase of understanding the broader environment in which the organization is operating (a diagnostic phase), followed by
• a reflection on the organization’s mission and vision (a recalibration phase), and, finally,
• the development of an “intervention model” to bring that purpose to life (a design phase).

In most cases, a strategy review is triggered by a representative from the Board or by a senior executive. The Board reviews project proposals and gives the go-ahead.

Our process often starts with an intake. We set up interviews with employees, directors, Board members and, to the extent that the budget allows for it, with representatives from other stakeholders. These include beneficiaries or clients of the organization, partner organizations, regulators, experts, and other key stakeholders in the sector. The objective is to understand the internal and external challenges the organization is facing today and in the future, and how these are interconnected.

The resulting data are analyzed and synthesized in various ways. We typically use system maps or future scenarios to explore the interdependence of the many drivers playing out in the organization’s wider environment. In most cases, the strategic questions unfold against the background of fundamental transitions in their sector, and the wider society. We help our client to see the bigger picture. Additionally we focus on any organizational bottlenecks or foundational dilemmas that might be keeping the client system from moving ahead.

This first phase, the diagnostic phase, is subsequently the foundation for developing a strategic framework. We always try to run this process in a genuinely co-creative way, involving all levels and functions in the client organization. The culture and size of the organization, and the resources available for the strategy review, are key parameters in designing the actual process of engagement.

A review of the strategic framework typically unfolds in a number of steps:

• We start by reviewing the organization’s mission or guiding purpose. Often it is just a matter of sharpening the mission, to make it more precise. Sometimes a more fundamental change is needed.
• In parallel we map out the organization’s vision. This provides context to the mission. It articulates how an organization sees the world, the salient aspects of its environment, and how it thinks about change.
• Then the focus shifts to the intervention model (or “theory of change”). This is equivalent to a business model for a profit-driven organization. For an organization with a broader social goal, the focus is on the creation of value for the stakeholders. The intervention model articulates how this can be realized.
• The intervention model is further translated into a coherent set of activities required to support the mission (an “activity model”).
• This provides a solid basis for a gap analysis. We may find there are gaps, inefficiencies, or unhelpful overlaps in the way an organization puts its activity model into practice. Usually we drill down to understand who is involved, and what kinds of supports are used to fulfill these key activities. The main objective is to identify areas for improvement, facilitating the realization of the mission.
• Subsequently we may spell out the organizational implications of the analysis: roles and responsibilities, protocols for information exchange, required skills and resources.
• Finally, the organization may be coached in setting medium-term objectives, and an associated annual plan and budget.

In this way we pragmatically work from a deep appreciation of the organization’s guiding purpose to more operational and organizational aspects.

3 — The review

Overall there was a high willingness from the representatives to participate in the evaluation. They were happy to share their experience and thoughts in an open and transparent manner, providing us the necessary input for a pertinent evaluation.

Photo by Maksim Goncharenok from Pexels

As mentioned before, we approached the evaluation in an open and informal manner. We simply invited (two) representatives of our client organizations to share their insights in a face-to-face conversation. Topics discussed varied depending on our interlocutor’s history in the organization, their current role, the issues encountered during the process, and, last but not least, their personal temperament and stage of professional development.

We only interviewed the CEO or team leaders. It would have been interesting to get direct input from other employees to understand how they experience it. Had there been a change in their to-day-to day work? And to what extent did they consider this to be the result of the strategy review? Did they feel they had they been sufficiently involved in the process?

Regardless, we found these evaluations to be richly informative, providing us an opportunity to review our approach to supporting strategy review process in non-profit organizations.

4 — Insights from our review

• There is a consensus that running a strategy review process itself is valuable. Strategic questions are often buried under operational priorities. A review process led by an external party invites the organization and the Board to sit down, to take time and reflect. That is seen as a good thing. Our clients appreciate that they are genuinely challenged by the process.
• Our clients see the value of a participatory approach. A priori we try to involve all layers of the organization and external stakeholders as well. Our clients appreciate the richness and “objectiveness” that comes with broad participation. One interviewee considered the involvement of representatives of their whole member base to be necessary. But this is not always possible, given available time and resources. And it may not always be desirable given the delicacy of some strategic issues. Another factor is the leadership competence of the CEO. Those with a more Pluralistic-Green worldview seek bottom-up involvement and consensus. Where as those with an Achievement-Orange worldview strive for structure and order. Clearly, there is not a one-size-fits-all approach in setting up an organization for a strategic conversation.
• Also needing to be taken into account is the fact that involving external parties in reviews is triggering expectations beyond the client organization. This is clearly felt to raise the stakes. Some external parties may even take a more assertive role and start shaping the strategic context. For some of our clients this created a point of no return. Sometimes this may be desirable, sometimes less so. Message: it is clearly very important to deliberate carefully about whom to involve in a strategic review.
• Clients appreciate the clarity of the results from the diagnostic analysis, offering them a coherent picture of the external challenges and the internal bottlenecks they are facing, and how they are all interconnected. Obviously, the resulting picture can be quite confrontational, particularly when it zooms in on the role of particular people. While we always try to handle these issues with delicacy, some of our interlocutors commented on the stresses that accompanied these conversations. Also, we need to make sure that the analysis, even when it includes very technical and abstract elements, remains accessible to all members of the organization.
• The strategic framework is considered to be a very important piece of work to build on. It provides a solid basis to work with; it helps to clearly position the organization. The framework is used for communicating to members and/or stakeholders, and relied on to further develop operational plans.
• The operationalization of the strategic framework was for some organizations an obvious next step. shiftN’s role varies from arm’s length coaching to intense, on-the-ground support. Either way, clients experience it as a challenging part of the strategy process that requires a sensitive approach.
• Translating an updated intervention model puts extra stress on co-workers. They need to time to breath it in, and find ways to reflect it in their everyday activities. Obviously, the more intensely involved employees are during the process, the easier this will be. But it is recommended to sensitize front-line workers from early on that the eventual outcome of the strategic reflection may have implications for the way in which they perform their tasks. Management and Board need to understand that the investment goes beyond the consultancy contract, and may involve significant internal resources on top.
• Occasionally a strategy review is accompanied by a change in executive leadership. In some cases there is a direct causal relationship between the two. Much depends on the perspective of the new director. For one CEO, who joined the organization after the framework was finalized, the result of the strategy process was a “gift from God”. In another case, a “not invented here” attitude prevailed and there was resistance to take the update strategy framework on board.
• Here the role of the Board of Directors is key. They are responsible for the strategic long view. In many cases the functioning of the Board constitutes an important strategic issue in itself. Boards may be poorly managed, may miss an appropriate mix of skills, and may have an unhelpful understanding of their own role in the organization. Often they have the tendency to meddle with executive and operational decisions. We don’t shirk from pointing out these issues, although it is sometime delicate, given that the Board is our direct client. Our interlocutors in the evaluation find it helpful when we rely on tools and frameworks that objectify bottlenecks in Board governance, such as self-evaluation forms.
• However just because a process of operationalisation does not materialize as expected (in a linear manner following the development), this does not mean it won’t happen organically happen over time, via a very different route. In many cases the implications of a strategy review unfold over a longer period of time. As a rule it is a highly non-linear process. It may go dormant and be rekindled after a long break.

5 — Some reflections

The conversations have underlined the complexity and delicacy of a strategy review. The overall logic behind our strategy process is seen as valuable by clients. They appreciate the rigour and candidness we bring to the process, and our willingness to develop a customized approach. The diagnosis and strategic framework are valuable for organizations. It creates clarity in a complex environment and helps them to plot a steady course through that complexity. Organizations with a broader social goal realise the reflection is an especially crucial building block to realize the impact they are aiming for.

From the evaluation it is clear that developing a strategic framework can also be a trigger for tackling specific human or structural bottlenecks in the organization. In other words, it is thanks to the strategy coaching that fickle issues get resolved, even though this can take some time.

Nevertheless, achieving real long-term impact in an organization is not straightforward. Several aspects play an important role, and are interconnected. These are a combination of human elements (competence and attitude of the Board members, the president of the Board, the CEO and the employees) and more structural elements (internal governance and external dynamics in the wider environment). Ideally these can be picked up in a pre-offer discussion with the client. Possibly the client will raise the issue or issues themself. However, this is not always the case.

This evaluation round underlines the need to include a readiness assessment early on in the strategy process to get a clear view of the situation — whether we picked up any issues, or were informed of it by the client before offering. This will allow us to adapt our approach even better to the needs of the client.

There might be cases where the client is not interested in a readiness assessment because they are under pressure to move ahead. If issues do exist, they are likely to pop-up in the diagnostic phase. This provides a window of opportunity to sit down with the client and discuss the desired next steps. Will the proposed approach be adapted or not, and if so how?

In addition we have adopted a simple framework to assess which people it would be preferable to have participating, and in what role, in the strategic conversation.

In sum: we experienced this self-assessment round as a rewarding exercise and will continue to reflect with clients how we can help them better to realize their ambitions.