Tuesday, November 29, 2011

Developing Clarity of Strategy through Identifying Intended Impact

This week's articles were all about developing strategy, and recently I have been reading a lot on The Bridgespan Group, a nonprofit adviser and resource for mission-driven leaders and organizations. Specifically they "work with social sector leaders to help scale impact, build leadership, advance philanthropic effectiveness and accelerate learning". Perfect for this class, their website houses a Learning Center, and one of the areas within this is "How Do I: Develop a Strategy?" On this page The Bridgespan Group offers a range of articles, case studies, data points and podcasts which I encourage everyone to check out; for the sake of brevity in this blog post however, I am going to focus on one particular article.

In "Zeroing in on Impact", Colby, Stone and Carttar discuss the challenge of mapping limited resources against seemingly unlimited needs. When your mission is to "eliminate poverty housing and homelessness from the world, and to make decent shelter a matter of conscience and action" or “improve the lives of poor children in America’s most devastated communities" how do you allocating resources to the activities that will have the greatest impact? In other words, how do you develop strategy? This is particularly important in the midst of the current economic situation and the squeezing of nonprofit budgets that is resulting.

Interestingly, Colby, Stone and Carttar posit that instead of narrowing the organization’s mission (one way to achieve clarity and make the tough choices around focus and tradeoffs that all of the authors in this week's readings point to), nonprofits can develop clarity by focusing on what they call “intended impact” and “theory of change". This point about not narrowing an organization's mission is important for giving the organization the room to innovate in response to evolving target population needs. Intended impact and theory of change keep the broad and motivating vision that Collins and Porras wrote about, and provide a bridge between the vision and the nonprofit's programmatic activities. As defined by
Colby et al, intended impact is "a statement or series of statements about what the organization is trying to achieve and will hold itself accountable for within some manageable period of time. It identifies both the benefits the organization seeks to provide and the beneficiaries." Theory of change outlines "how the organization’s intended impact will actually happen, the cause-and-effect logic by which organizational and financial resources will be converted into the desired social results."

The article also provides questions that organizations can ask themselves to clarify their intended impact and theory of change (Who are our beneficiaries? What benefits do our programs create? Where are the gaps or leaps of faith in that logic chain? Are there other ways in which we could achieve the desired outcomes?) By clarifying what "success" looks like, the organization is set to make tradeoffs that are truly strategic.

A case study provided in the article makes clear how this all plays out. I will leave the meat of the case study in the concise words of the authors:
Larkin Street Youth Services is a $9 million San Francisco-based nonprofit founded in 1984 that works with homeless youth. Larkin’s mission is “to create a continuum of services that inspires youth to move beyond the streets.” "Guided by Larkin’s theory of change, which emphasizes not only meeting youth where they are on the streets, but keeping them engaged until they are able to leave the streets, the management team decided to develop an innovative new residential facility for youth with both mental health and substance abuse problems. But the question remained: Should the facility serve youth with the most extreme disorders or should it concentrate on those with less severe troubles, who have a better shot at leaving the streets? Both options had strong support within the organization, but each population required a different sort of program and Larkin didn’t have the resources to support both. To resolve the issue, Larkin’s management turned to its newly clarified intended impact statement: The facility would serve less-troubled youth, because they had a better chance of ultimately transitioning to independent living."

This approach to strategy certainly fits into Rumelt's criteria that strategy face the problem, not simply be goals, have a few clear, pivotal objectives, choose between competing focuses, and be based in a process rather than follow a template. Once a nonprofit has clarified its intended impact and theory of change, it will have to identify coherent actions to complete its strategy development. The nonprofit would also do well to "stress-test" its strategy by asking Simon's seven questions; the approach presented by Colby, Stone and Carttar in "Zeroing in on Impact" will start a nonprofit off in the right direction to develop its strategy, but it must be mindful to complete the process with coherent actions, metrics and monitoring. Which brings me to my question: How are nonprofits supposed to keep track of all of these components laid out by various authors? Is there some sort of checklist that nonprofits can use to make sure they have not left anything out in their strategy development process?


References:

The Bridgespan Group Learning Center: www.bridgespan.org/LearningCenter/Default.aspx?id=384&taxid=106

"Zeroing in on Impact", by Susan J. Colby, Nan Stone, Paul Carttar. Stanford Social Innovation Review. Online at www.bridgespan.org/LearningCenter/ResourceDetail.aspx?id=858

"Building Your Company's Vision", by James Collins and Jerry Porras. Harvard Business Review, Sept-Oct 1996.

"The Perils of Bad Strategy", by Richard Rumelt. McKinsey Quarterly, June 2011.

"Stress-Test Your Strategy: The 7 Questions to Ask", by Robert Simons. Harvard Business Review, Nov 2010.

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