Herb Kelleher, former CEO of the highly successful Southwest Airlines, is famous for glibly announcing, “We have a strategic plan, it’s called doing things.” Many people think strategic planning is a waste of time leading to nothing more than a fancy report collecting dust on the CEO’s bookshelf. Some organizations feel frustrated or confused with the idea of creating a strategic plan, unsure about what it should look like or accomplish. Others have tried to create a plan but failed because they did not include key stakeholders in the process. When this happens the plan does not succeed because those who are charged with the plan’s implementation do not feel a sense of ownership.

The most successful nonprofits realize that sound strategic planning is at the heart of great leadership. They understand that a well conceived strategic plan has the potential to transform an organization by providing a roadmap for future success.

A few years ago, I met the kind of individual nonprofits dream of having on their board. Brian Knowles has a long history of leading strategic planning and market studies in the technology arena. Now retired and living in Santa Barbara, he generously offers his valuable skills to help some nonprofits increase sustainability through good planning. I think you will enjoy the following interview with Knowles about the importance of strategic planning for nonprofits.

Strategic Planning is Critical to the Sustainability of a Nonprofit

Many nonprofits don’t appreciate the need for strategic planning. They focus very well on the idea of a mission but many don’t decide on the longer term goals and objectives necessary to accomplish their mission. All successful businesses have a strategic plan—nonprofits would do well to adopt this example. First, they should look at the outside environment to see how things may change and identify the impact those changes will have on the organization. The organization should then discuss and decide what it wants to look like at the end of the plan period and then set goals and strategies for how to get there.

A strategic plan is different from a business plan. Business plans are usually numbers driven; whereas strategic plans are driven by actions, ideas and strategy. A business plan usually looks out one to two years; whereas a strategic plan focuses on the coming three-five years. It’s best to have both a business plan and a strategic plan.

Look to Front Line Staff for Critical Information

Strategic plans should come from within the organization. Sometimes planners forget about front- line staff, but that is where the knowledge lies regarding the organization’s capability, challenges, and opportunities. When all parts of the organization are involved in the planning process, the strategic plan becomes something everyone can unite behind so it has a better chance of being successful. It’s not easy to involve so many people in the process, but it’s important for a positive outcome.

Going outside the organization to solicit input from stakeholders is also very useful because you get a different perspective and it communicates to the larger community that you are serious about planning for the future. The result will be a plan that people believe in and want to execute.

In addition to goals, the strategic plan should have milestones for each goal so people know when they are making progress toward the goals.

Use Strategic Planning for Successful Fundraising

One of the most important uses of strategic plan is in fundraising. By nature the plan will be inspirational; thus funders will be inspired to invest in the organization’s mission. A well articulated strategic plan enhances the relationship with donors.

When planning the organization’s first strategic plan, it can be useful to use an outside facilitator. A well-chosen facilitator brings experience with the process of strategic planning, a sanity check, and a more objective view. Also there is a lot of work involved with a strategic plan in terms of collecting and distilling data, producing drafts, and then the final document. Once the organization has a solid strategic plan they should be able to revise it each year without the help of an outside facilitator.

Collecting and Using Market Data is Key to Nonprofit Success

The concept of market size and characteristics should not be alien to nonprofits. Organizations should understand who the beneficiaries of services are. They should know how big their market is and how it is segmented. Segmentation is different for each kind of market. For example, a health center’s market (the patients) is segmented by geography, age, medical conditions, insurance coverage, income level, and ethnicity.

Remember that the market changes over time so analyze which segments are growing and which are shrinking. For most markets there is more than one supplier for the services so determine what percentage of the market you serve and what percentage others serve. This way you are building a picture of your market and understanding more about those who serve that market. Understanding what is happening in the market is fundamental to any strategic plan. Staying current with how the market is changing in segmentation and growth, who the competition is, and what share of market they have is critical work for all nonprofits to engage in.

The Board’s Culture Can Affect its Effectiveness

Culture is a shared way of approaching problems and represents a hierarchy within the organization. But most boards don’t have a shared culture because typically they come from all walks of life and have different ideas of how things should be done. Boards are like an all-star football team, made up of players from many local teams. They are not used to working as a cohesive unit.

Therefore, senior people on the board need to take more initiative than sometimes we see. They need to prepare agendas and stick to them. They need to keep people on track especially during the board meetings. Sharing ideas and opinions by board members is okay as long as it moves the agenda forward rather than taking the discussion off track.

Although the boards’ primary role is oversight, there are other areas where board members can make big contributions to an organization. These include fundraising, advocacy and outreach to community leaders, marketing and public relations, strategic planning, and advice and coaching on operational issues. Board members should be willing to get involved in one or more of these areas, and contribute their time regularly and not just at board meetings. Each board member should have an identified area of focus and specific goals for the year.

Biographical Information for Brian Knowles

Brian Knowles spent more than 30 years working in the electronics and computer industry, mostly in Silicon Valley.  Starting as an engineer, his career also included marketing, strategy and business management assignments.  He worked for Intel Corp, Sun Microsystems, and several start-ups.

He moved to Santa Barbara in 2000, and retired in 2008.  Since then, he has been active as a community volunteer, and is currently a board member with Santa Barbara Neighborhood Clinics.  He serves on the Executive Committee and is the Board secretary.

He has a B.Sc. in Electrical and Electronic Engineering from University of Birmingham (in the U.K.).

He and his wife, Kat, are enthusiastic cyclists, and also enjoy travelling.

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