Fail to Plan - Plan to Fail
Recently I heard the following confession of an executive team leader of an organization generating in excess of $6M in annual revenue: “We have no plan other than to get through the year!” The comment was made in the context of a meeting where the individual was considering whether to bring in an external consultant to provide strategic help to the organization. When the consultant presented the proposal, which amounted to less than 1% of annual gross revenue, the response was, “I can’t afford to spend that kind of money!”
I wonder, what is it costing that organization to have no plan other than to get through the year? What’s it costing in terms of wasted productivity and efficiencies? Wasted staff resources, energy and passion? Wasted reactive initiatives motivated by the latest crisis? A conservative estimate would suggest that it’s probably costing that organization 10% of annual revenue, far more than it would have cost to bring in an external consultant! But they couldn’t “afford” to spend the money.
Whether it’s a nonprofit or for profit context, the reality is the same. Where there is no plan, there can be no proactive, growth oriented metrics. At best any metrics will be reactive metrics. “Whew, we made it through another day!” Hardly the kind of metrics that will propel the organization forward in a way that maximizes the benefit for its customers, clients, or beneficiaries. But here’s another sad reality. If there is no plan and there are no metrics, how can anybody in the organization be held accountable? And held accountable for what?
This scenario plays itself out in countless nonprofit organizations. They don’t have a clearly articulated long term plan. They haven’t clearly identified the non-negotiable core values which shape the way in which they behave. They haven’t articulated the grander vision of the organization that captures the imagination, passion and hearts of it’s key employees, volunteers and donors!
When they realize that some form of intentional planning might benefit the organization, the all too typical response is, “We can’t afford to spend that kind of money!”
Many nonprofits struggle to fully engage a proactive planning process that could serve to bring alignment, focus energies, and shape the long term strategic direction of the organization. Because of the struggle, most nonprofit executive leaders and boards, do their best to “make it through another day” pursuing the grander vision of “making it through the year!” Atrophy slowly sets in, undermining and eventually overruling the well-meaning efforts of the executive leadership team and board.
Here’s an irony. Let’s assume that the organization owns a building that is in need of maintenance and repair. Let’s further assume that the cost of that work is equal to 30% of the annual budget. If I were a betting person, I would bet they’d find the money to get the necessary work completed. How ironic that bricks and mortar trump long term vision, alignment, and strategic direction of the organization!
In my work with executive leadership teams and board of nonprofit organizations, it’s refreshing to facilitate the planning process for an organization that really understands the importance of such a process. Especially one which understands it not just at a theoretical level but at a practical, operational level. They recognize that the financial investment in such a process pays huge dividends in terms of organizational efficiency, staff resources, energy and passion, and benefit to the people the organization serves in the pursuit of its mandate! These kinds of organizations tend to be in the minority.
Verne Harnish developed the Mastering the Rockefeller Habits Four DecisionsTM Planning Model for mid-growth companies. Hundreds of companies around the world have experienced the benefit of utilizing this planning tool facilitated by a certified Gazelles coach. That planning model has also been adapted to benefit organizations within the social sector and nonprofit world. As a coach who has utilized the planning model in that context, I can tell you that the results are incredible! I’ve seen executive leadership teams wrestle with hard realities within their organization. I’ve seen the excitement on their faces as they articulated their core values, identified their core purpose, and painted the picture representing the long term destination that beckons them forward. And then, more importantly, they set out clear, specific, measurable, and assigned goals and tasks that served as the guideposts along the way, helping them more accurately determine their progress toward that long term destination.
Was there an initial financial investment? Absolutely! But what was the return on that investment? I know that’s not a phrase we like to use when referring to nonprofits but it is appropriate to measure return on investment in the context of a nonprofit. Here are a few of the tangible return on investment these kinds of organizations realize.
Strategic deployment of financial, volunteer, and staff resources.
Alignment throughout the organization - everybody pulling in the same direction!
Clear metrics and an accountability framework that is proactive rather than reactive.
A compelling and inspiring story to share with existing and prospective partners, donors, and funding agencies that results in increased loyalty and financial support
But here’s the biggest return on investment - the people the organization serves! They’re the ones who win most! That’s the bottom line that motivates most employees, board members and volunteers in a nonprofit organization. They’re involved because they care about the cause, they care about the people they serve!
So why wouldn’t every nonprofit executive leadership team and board want to make the investment in a planning process that could yield those kind of results? More importantly, is your nonprofit executive leadership team and board making that kind of investment to see those results? If not, why not!