Wednesday, November 4, 2015

A New Strategy Approach for Nonprofits

Many nonprofits struggle with balancing their limited resources (time, money, staff) with effecting and influencing social change. Many managers and staff members within the nonprofit community argue that the issue of limited resources causes many nonprofits to struggle with effecting the amount of social change that is desirable. I saw this very argument in the last nonprofit I worked for. They chased money, because with increased revenue they would be able to increase their resources, and effect and influence a greater amount of change. However, I am not so sure an organization with limited resources must resign itself to having little impact on large social issues. I would argue that impact doesn't lie in unlimited resources, but in the ability to formulate a strategy planning process that correctly matches your environment. 

In their article, “Your Strategy Needs A Strategy” Martin Reeves, Claire Love, and Phillip Tillmanns designate the formation of four distinctive strategies based on a matrix of the environment’s predictability and malleability (see image below).
The authors state that in their research they have found that while managers know that they “should be planning, developing, and deploying their strategy in markedly different ways” based on their competitive environment, many do not. In fact, it is just the opposite. The majority of strategic plans (80%) are based on a classical model of “articulation [of] a goal and then analyzing how best to get there.” This, I would argue, is the same dilemma nonprofits have.

During my time working in homelessness, almost every nonprofit I came in contact with strategized in this very same manner. However, nonprofits vary rarely lie in a highly predictable environment. Instead, as many in the nonprofit world would agree, the majority of nonprofit organizations function in an environment with both low malleability and predictability. It is easy to see that the moment an organization is given a very limited supply of resources, the environment in which they are functioning in is extremely unpredictable.

This type of unmovable and ever-changing environment demands, not a classical planning process, but an adaptive approach. The authors describe this strategy as one that allows the organization to “constantly refine goals and tactics and shift, acquire, or divest resources smoothly and promptly.” Furthermore, this environment mandates that organizations not relay on “specified blueprints, but [on] rough hypotheses based on the best available data.” It is therefore imperative, that nonprofits stop forming their strategy around one idea of a solution, but constantly revise their strategic approach based on the resources and information they have at that moment in time. If nonprofits would take this approach in their strategic planning, limited resources wouldn’t dictate their impact on social change, but instead allow them to better attack the internal and social problems that limited resources cause. 

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