Month July 2017

Month July 2017

Question Ten: How Will You Tell Your Story?

John Bauer July 31, 2017 blog, News No comments
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The strategic plan you have just completed tells a story. It provides a setting with historical background, location, conflict, challenges and exciting opportunities. There is definitely a plot line with plenty of foreshadowing and suspense. There are characters who play critical roles in the story. Most of all, your story can evoke strong feelings of loyalty and support. Those who encounter your story should be moved emotionally, should connect with the characters and their cause, and should be inspired enough to share the story with others.

If you think I am exaggerating with this attempt to analogize between a strategic plan and a story, I would suggest that you are ignoring the power of narrative in influencing the affective psyches of the people who are connected to your organization. Believe me when I tell you that your strategic plan has the potential to influence the attitudes of funders, enhance employee loyalty, evoke satisfaction among your clients, inspire respect in the minds of competitors, and build support from your board of directors.

A good strategic plan sends a powerful message to constituents that you have a compelling mission, that you understand your environment, that you are visionary and forward thinking, that your organization has the capacity to change and move into the future, and that you know where you are going. Telling that story in the right way to the right audience for the right reason is the final step in this ten-part approach to coherent strategic planning.

You may ask, “How can a strategic plan, complete with charts and tables and lists and goals and all manner of other technical information, be told like a story?” The answer is that the form and substance of the story depends on the audience.

For the board of directors and the executive leadership team, the strategic plan as a whole is the story. It has to be assumed that individuals in these two leadership areas require the story in its entirety in order to properly execute their responsibilities. Therefore, printing the entire document (please, not in four-color glossy brochure format!) for use by leadership is necessary if you intend to use it on a regular basis to guide discussion, frame decisions, evaluate progress, and celebrate accomplishments. I would argue, in fact, that the strategic plan should be printed and included in each quarter’s board briefing book and that agenda items for board discussion be drawn from the strategic plan. To avoid having the plan die a dusty death on somebody’s shelf, it must become the operating manual that guides all activity.

Because typical strategic plans can get rather lengthy and detailed, how can the story be told to employees, donors, volunteers, clients and others in a way that accomplishes the purposes I’ve listed above? I’d like to offer a few suggestions for your consideration. Not all of these may be appropriate for your organization, but I hope you will be able to gain some ideas on how to tell your story. Just keep uppermost in your mind the needs of the audience you are seeking to communicate with and the form of the story will take its own shape appropriately.

  • Print the organization’s mission, vision and core value statement in poster-sized format and post them throughout the facilities. A little money spent to have this done professionally will communicate to those who see them that the organization places a lot of value in these statements as guides for action and descriptors of the corporate ethos.
  • Print the Position and Goal statements in a similar poster-sized format and post them alongside the mission, vision and core values posters. It may be sufficient to just publish the position statements. However much detail is provided, they must be easily readable and must communicate the big picture direction the organization is taking.
  • Publish a “precis” of the strategic plan, i.e., a two or three pages executive summary that can be printed in small booklet form to use with donors, volunteers and others. In such an abbreviated form of the plan, marketing and communications staff will want to reframe the strategic plan into a readable narrative that engages the reader and leads to some type of conversion, be it a donation, greater commitment, volunteering, or other types of engagement.
  • Depending on the audience, such a brochures or marketing materials may or may not be supported by colored graphics and a professional layout. The question driving those decisions should be: “Will this document in this format significantly support the purpose for which it is intended with the intended audience?” Some would argue that slick four-color expensive brochures can turn off committed donors who might question spending money on an expensive marketing piece. Others will argue, however, that doing it right communicates serious commitment to the vision and is essential for attracting new donors.
  • My mentor once described the role of CEO as “chief story-teller.” If the organization has the capacity to post videos (e.g., through YouTube, vimeo, or other formats) to employees and others, the CEO might consider a short five-minute video in which he/she talks about the strategic plan and what it means.
  • In addition to mission, vision and core value statements, one organization I worked with posted each year’s initiatives, their tactical annual action plans, throughout the organization to help employees understand better why certain decisions were made and why actions were taking place.
  • Organizations which are centrally located and hold annual “town hall” meetings – either for staff or clients – should consider devoting one such meeting to the strategic plan and what it means for them. Such high-level presentations are great for soliciting feedback and for better understanding of issues that might impede progress.
  • The strategic plan should be prominently exhibited on the organization’s website. However, I would recommend against posting annual initiatives, key performance indicators, and other data that might be either too technical, confidential, or subject to interpretation. The organization’s media, marketing and communications staff should work with leadership to post a narrative version of the strategic plan that is user readable and attractive. The heart of the strategic plan is comprised of the position and goal statements and these should be most prominent in any online presentation. How much of the back story and analysis should be included is a judgment call, but in my view, should be kept to a minimum.
  • For tech-savvy organizations, many opportunities exist for mounting social media campaigns around the strategic plan, posting various positions and goals, and inviting comments and support. Those with active intranet systems, discussion boards using programs such as SharePoint can serve to further embed the strategic plan goals into the life of the organization. Similarly, board book platforms can promote discussion in and around board meetings, giving opportunities for directors to engage in generative discussions related to strategic issues.
  • Organizations which are dispersed could consider holding focus group sessions in remote locations to explain the plan and its implications for the company in its various locations. Ideally, such focus groups should be held before the final plan is rolled out to promote ownership of dispersed stakeholder groups. I used this tactic to great effect when I was facilitating a strategic plan process in the context of a merger. Stakeholders in the acquired company gained access to the CEO and became insiders and participants in the planning process, making sure that their regional concerns were heard.

Organizations engage in comprehensive strategic planning in order to identify and achieve their preferred future. The strategic plan, told as a story, is intended to generate support and commitment to that future. Whether that is in the form of money, time, ability, loyalty, or respect – the story is told with a deliverable in mind. Suffice it to say, the story of the strategic plan, artfully shared, can go a long way toward helping the organization achieve its preferred future.

I would love to hear about your experiences in how you communicated your strategic plan to your constituents. Feel free to leave comments and reactions.

If you would like to explore further ideas on how to tell your story, please call or email me. I would welcome the opportunity to discuss (with no obligation on your part) any aspect of this article or those that preceded it.

And of course, I am always available to discuss how I might be of service to you in achieving your preferred future.

Question Nine: How Will You Support Continuous Learning, Thinking and Acting?

John Bauer July 25, 2017 blog, News No comments
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If you have followed the approach I have outlined, you have created a comprehensive, coherent strategic plan that not only describes your preferred future in high level position statements, operationalizes it through measurable goals, but also has in place a set of strategy tools to deal with unanticipated events. It all looks great on paper, but the question now is how to embed the strategic plan into the regular thinking of executive leadership and the board? Since the primary audience for these articles consists of chief executive officers, we might ask it in a little different way: “How can CEOs make sure that their organization’s strategic plan is and remains a living and dynamic document which directs the actions of the organization forward toward its preferred future?” Let me offer up a few ideas.

  1. First and foremost, the strategic plan has to guide the daily activities of senior leaders. In larger organizations, this might be accomplished by devoting one monthly executive staff meeting to evaluating progress toward achieving strategic goals. Such a meeting could include report-outs by those assigned to specific strategic goals or initiatives and should include metrics of progress. In smaller, less formal organizations, discussions by senior leaders should focus on the high-level priorities called out in the strategic plan, even if such discussions are around the water cooler. This focus should be modeled by the chief executive in both formal and informal conversations. There is, after all, nothing more important for executive leadership than execution of the strategic plan. So it would seem to make sense that its achievement would be the dominant topic of conversations. If it isn’t, then I would argue that the strategic plan is inadequate for its intended purpose.
  2. Formalizing the various levels of the process into policies and procedures ensures that certain planning and review processes occur at appointed times each year. Included in the strategic planning document should be an articulation of the organization’s planning philosophy and a broad annual schedule of planning activities. I have included a diagram which integrates the key elements that I developed for an organization that has four board meetings each year.
  3. Board engagement in supporting the plan can be achieved by structuring regular board meetings around the major themes of the strategic plan. Envision a board meeting in which the majority of time is spent evaluating the progress of the organization toward achieving its goals. Gone are boring operations reports. Financial reports are related to the plan, complete with scenarios and forecasts. I used this approach to good effect, not to keep the board unware of other operational matters (we published a board briefing book between board meetings which shared such information), but to help them fulfill their primary strategic, legal and fiduciary responsibilities. Boards can help their CEOs remain focused on strategy by explicitly demanding more board meeting time on strategic trends and issues. I’d even go so far as to assert that the agenda for board meetings IS the strategic plan.
  4. Explicit decision-making processes should be developed and utilized as an execution tool to actually drive forward the goals articulated in the strategic plan, while allowing for shifts in thinking that naturally come about in dynamic and changing environments. The CEO has to model this kind of continuous strategic decision-making and expect it of all other executives in his organization. The filters or screens for making value judgments about strategic issues that arise can flow directly from the environment scan, business model analysis, and capacity assessment that should be part of the strategic planning process.
  5. Let me interject a word here about consultants. It should be an expected part of every consultant contract for strategic planning facilitation to include the development and implementation of decision-making processes that support execution, implementation, learning, and adaptation. It may be necessary to utilize additional periodic consulting to advise the board and the CEO on how well its plans are being executed and to offer additional coaching and guidance. No organization should be satisfied with a “one and done” approach from a consultant. The ideal deliverable is an embedded process of strategic thinking, planning and decision-making that extends way beyond the publication of a slick planning document.
  6. A few articles back I wrote about the importance of data in order to measure progress toward achieving the preferred future. Whether these are called dashboard indicators, key performance indicators, operational metrics, strategic intelligence, goal statistics, or something else, they comprise what we now refer to as “business intelligence,” in other words, all the data which informs leadership about how well the organization is performing with respect to its strategic goals and objectives. For these to be of any value, however, they must be monitored regularly in order to preemptively detect any changes or developing trends. Having in place such monitoring and reporting systems ensures that leaders know if they are on track or not.
  7. Developing strategies to move toward a preferred future is not an end in itself. Implementing the strategies, monitoring their execution, learning from their impact, and being able to develop additional or alternative strategies to address conclusions from such learning – these are the critical activities needed to make the strategic plan a living and dynamic document.
  8. And finally, let the entire organization know where it is headed. Through newsletters, video messages to employees and stakeholders, posters and other media, the CEO is not just the visionary who sees the future, he/she must also be the story-teller-in-chief. Dreams are shared through story. The strategic plan is a dream, albeit one that may change over time, as do all dreams. But the dream will stay locked in the corner office if the story isn’t told. And, just like a television series, if you tell the story to people, they are going to want to see the next episode! If you tell the story, and it holds out an expectation, then you become accountable for making the story come true! I’ll write in more detail on this last subject in my article next week.

Regular review of the business model, evaluating the environment to support market awareness and competitive advantage, thinking about the values and criteria that are needed to make strategic decisions as issues emerge, developing additional or alternative strategies when data suggests the need for divergence from the plan, implementation and evaluation of strategies – these are the essential ingredients of active and dynamic strategic thinking, learning and acting. And in this, as in just about every other aspect of organizational effectiveness, it comes down to leadership as to whether they are successfully utilized to move the organization toward its preferred future.

Please contact me if you’d like to talk about this article or any other aspect of strategic planning.



Question Eight: How Will You Deal With the Unexpected?

John Bauer July 17, 2017 blog, News No comments
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Robert Burns, in his poem To a Mouse, said, “The best laid schemes o’ mice an’ men / Gang aft a-gley.” Most often this is translated as “The best laid plans of mice and men often go awry.” How often hasn’t this been true of long-range strategic plans? After all, who can honestly guarantee what is going to happen over the next few years?

Does the possibility of unexpected challenges and opportunities mean that strategic planning is a waste of time? Would it make more sense to focus on responsive strategies to emerging issues instead and on how to execute them for maximum benefit? The case for such thinking has been argued and was the subject of an article I wrote a few months ago. In fact, it is a debate which continues – unnecessarily, in my mind.

Without rehashing the points I tried to make in that article, let me tell you two stories, both dealing with the same organization at different points in time. I happened to be involved with the organization as the chairman of the board during the first event, and later I was its President and CEO during the second event.

In the early 2000’s our board decided to engage outside counsel to guide us through a strategic planning process. The organization had not undertaken such an effort previously, and it followed a fairly traditional process involving staff research into strengths, weaknesses, opportunities and threats. It conducted focus groups around the Midwest to ascertain perceptions of mission and quality. It looked at data trends, revenue sources, and it came up with the usual assumptions about the economy, market share, employees and other variables. In short, it essentially crafted a strategic plan which projected the organization’s current status into a fairly stable future. It all looked good on paper.

But a phone call in the summer of 2004 changed everything. A similar agency on the west coast was in  trouble and asked for some assistance. Its CEO left under a cloud. Development revenue was way down. Debt load was too high. Its religious mission was being eroded. From 2004 to 2006, negotiations took place which eventually culminated in an affiliation that would ultimately result in a merger. The transfer of assets and membership took place in the summer of 2006 and overnight, the organization whose board I chaired doubled in size. Did we anticipate that opportunity when we did our strategic planning? No. And that is not surprising. Predicting such events is very difficult. But that unexpected opportunity still marked the single biggest milestone in the organization’s 105 year history, the impact of which is still being felt a decade later.

Most important for this discussion is the fact that we did not have a process in place for evaluating the opportunity from the perspective of the long-range vision and goals of the organization. We did not, for example, weigh the costs of such an acquisition against the other strategic priorities that we had set. We did not evaluate the labor issues or the impact of the merger on non-operating revenue. While it was argued at the time that the decision to merge was an ethical one (i.e., we just wouldn’t consider allowing the acquired company to go under), tools for evaluating the ultimate impact were not utilized. I’m not sure the outcome would have been different, but we certainly would have been better prepared for the longer-term challenges the merger brought about.

The second event occurred in 2008 and I have written about it before. Once the above-mentioned merger was imminent, I was asked to come to work at my agency as the merger integration project manager. In other words, I was to bring the two companies together into a cohesive whole. In the process, I was to facilitate a new strategic planning process which would lay out the preferred future for this new merged organization. Ten years ago I was already utilizing the approach that I have been advocating in steps one through seven of this planning process. In my opinion, we did everything right as far as articulating a coherent future for our organization. The board of directors ratified the new strategic plan at its February 2008 board meeting, the same meeting at which I was named to be the next CEO. The strategic plan was a work of art, a thing of beauty – at least as far as strategic plans went, and at least in my humble opinion.

And then August came and the financial markets started to tank. Within four months we had lost 35% of the value of our endowment. States were already beginning to either hold or reduce Medicaid reimbursements. Our country was in a full-blown recession. And my beautiful strategic plan went up in smoke. All its assumptions were voided. All the goals and objectives around growth crashed into a heap. We were in survival mode and the new reality we had to face had very little to do with that preferred future we had so eloquently described in our strategic plan. The next six months were spent identifying and implementing survival strategies. Restructuring and right-sizing management was implemented and we ceased operations in areas where funding could not meet expenses. We put on hold plans to develop our campus and expand various programs. In short, we abandoned our lofty aspirations and hunkered down to weather the financial storm.

I tell these two stories to reinforce the truism that things happen that are beyond our control. A strategic plan, by its very nature, is a tool to control people, places and things in order to achieve a desired state of existence at some point in the future. Not everything can be controlled. Therefore, it seems prudent to consider ways to mitigate the risk to the organization without abandoning the overall strategic vision described in a strategic plan. In other words, how can decisions be made to deal with either catastrophe on the one hand or windfall opportunity on the other?

There are two ways to approach this question. The first is to have in place a rigorous process for managing and mitigating risk. That will be the subject of another article. The second is to develop decision-making criteria for addressing such unexpected events WITHIN THE CONTEXT OF THE STRATEGIC PLAN! If you have followed the first seven steps, you will have a detailed picture of your preferred future. The plan is high-level. It is visionary. It also has measurable goals and it is annually reviewable. It also is the vehicle through which annual initiatives can be developed. But most important, it articulates a set of beliefs and values about the future which can be translated into decision-making criteria. Such a process has been developed by David LaPiana and was described in greater detail in the afore-mentioned article. Developing four or five such criteria affords the organization a rational basis for evaluating events and making judgments about possible responses that are in alignment with overarching strategic goals.

Let me illustrate with an example. Let’s say that the organization decides that the following criteria are of greatest importance when it comes to building responsive strategies:

  • the strategy must support or advance the mission,
  • the strategy must contribute to competitive advantage,
  • the strategy must enhance the bottom line financially,
  • and the strategy must improve the organization’s image with respect to quality of service.

Hindsight, of course, is always 20/20, but let’s apply these criteria to both of the events I described earlier. Would we have proceeded with the merger had we employed this screening device? The affiliation certainly allowed us to advance our mission. Giving us a national scale of operations afforded us a competitive advantage over smaller, more regional organizations. The affiliation certainly gained attention from funders and trade associations. And because we built into the merger integration process commitments to a philosophy of quality service delivery, the merger definitely helped us enhance our image for providing exceptional service.

But did we fully understand the implications of the decision for the larger goals of the organization? The impact on the organization’s finances was something else. Hoped-for expansion of the donor data-base did not materialize. Fund-raising could not keep up with a growing loss from operations. Promises to bring wages and benefits into alignment with the parent company only increased the cash-flow problem. I won’t say that the criterion related to financial impact would have been a deal-killer, but I do think it may have conditioned our negotiations in a way that would have lessened the negative impact. All-in-all, I believe the merger was the right thing to happen, but having such a screening mechanism in place would have influenced how we structured the deal.

And then there was the recession. Protecting the mission in the face of calamitous financial times was paramount and we worked hard to not compromise the quality of the services we provided. In fact, we were adamant that no strategy would negatively affect direct support. Strategies we did employ, therefore, we aimed a “right-sizing” to make sure that nothing interfered with mission and quality. Even when we had to announce closure of programs in a state which just would not reimburse at a break-even rate, messaging to the media was based on our uncompromising commitment to quality.  So, even though we didn’t have a realistic strategic plan, we did develop, out of necessity, a set of decision guides that allowed us to remain true to who we were and to respond to the deepening financial crisis quickly and effectively.

The fear of having to face unanticipated challenges and opportunities and not having rational tools to aid decision-making is the most pressing concern of most CEOs I have the opportunity to work with. In fact, they tell me often that they can’t wait to get through the larger tasks of strategic planning so they can develop screening criteria to deal with such events. But I tell them, as I am telling you now, that building the overall strategic framework FIRST is the necessary prerequisite to creating screening criteria. Making decisions in the face of the unexpected twists and turns of life requires a meta-vision, an overarching direction, a high-level position toward which the organization is moving. The strategic plan is the vehicle for articulating that vision. Strategy screens are the tools for making immediate decisions about unanticipated events within the context of the overall plan.

Here’s an image that may help you visualize what I’ve been talking about. Think of the strategic plan as driving on an eight-lane freeway. You have calculated the ending point, how long it should take, and what your destination looks like. Annual iterations of the rolling strategic plan may suggest decisions such as taking a different route to save time or stopping for gas or coffee.  Strategy decisions which are required to deal with unanticipated events can be thought of as being similar to making a lane change, deciding to speed up or slow down, or pulling over to fix a flat tire. You can see the relationship of each level of decision-making to the others.

When I have finished writing this ten-part series, I am going to share a schematic which visually depicts this ten-step process. You’ll want to stay tuned!

I am also planning to turn this model into a five-part video course which you and your board can use to work through a coherent approach to strategic planning.

In the meantime, your reactions and comments are always welcomed.

Question Seven: How Will You Know If You Get There?

John Bauer July 10, 2017 blog, News 1 comment
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You have described your preferred future and you have broken down your dream into high level strategic goals. You have determined that you have the capacity to achieve your goals and you are ready to develop tactical objectives to move your organization into action. But how will you know if you actually get to your preferred future position?

Let’s say, for example, that you have decided that within five years you will become the “employer of choice” for your industry in your area. You have further defined what that means by stating that you will have the lowest employee turnover rate, the highest employee satisfaction scores, and the best wage and benefit packages among all your competitors. Before you start drafting tactical plans to accomplish these goals, it is necessary to quantify performance so you can set concrete targets and also monitor progress. In this obvious example, two things are required. First, you need to identify metrics that are commonly used in your field so you can compare yourself with others. Second, you have to set target goals and develop monitoring and reporting systems to track your performance over time and your progress toward actually achieving those goals. Every time you develop a new tactic or strategy to “bend the curve” or “move the needle” so to speak, you should be able to measure its impact on attaining the goal in question.

Take another example from higher education. You have decided that you are going to be the highest rated regional private college in your geographic region. To determine what that would look like, you have decided that you will use the U.S. News and World Report rankings of colleges and universities. These rankings are determined from a dozen different indicators including things like entering Freshman ACT scores, alumni giving, number of students graduating in four years, student to faculty ratios, and numerous others. You can craft a strategic goal statement with an associated metric which establishes a concrete target for any or all of those indicators. Initiatives or tactical plans can be measured for their effectiveness by monitoring the impact such actions have on the performance indicator. If you are successful at improving these metrics through careful planning and execution of strategies, there should be no reason why your institution can’t rise to the top of the charts.

Now, I should pause here to say that what I am suggesting is considerably different than routine measurement of efficiency. You should see, for example, that measures of efficiency (e.g., faculty/student ratios) might run counter to a strategic goal. It saves money to increase faculty/student ratios but improved quality and higher learning outcomes might be enhanced by lowering the ratio. While there are certainly other factors that contribute to learning, it has been generally accepted that smaller teacher/student ratios improve learning. Hence, U.S. News and World Report’s years-long use of this metric. This distinction is very important as boards may question certain resource allocations, especially when they are aimed at improving quality indicators that may be difficult to measure.

While setting quantified target goals is important, let me also emphasize how essential it is to have systems in place to monitor on-going progress. Such systems are different than the routine monitoring of key performance indicators such as net budget variance and other descriptive statistics like people served, number of employees, etc. Business intelligence requires another level of observation and analysis. It requires tracking performance over time along with the capacity to project possible statistical scenarios into the future. This sounds complicated, but it is really quite simple. Take one of the statistics I mentioned above such as the rate of employee turnover. Looking back over 20 or 30 quarters to get a clear picture of past performance will give you an idea of the ups and downs of the rate over time. Identifying events or environmental conditions such as the recession beginning in the third quarter of 2008 will help you to flag events which directly influenced your organization’s performance. Your environment scan in which you did your best to identify trends for the future, as well as your current status, should give you a sense of the kinds of events that might affect your ability to achieve your goals. Furthermore, the thorough capacity assessment you conducted will give you a good sense of the extent to which you can “bend the curve.”

So, considering where you would like the organization to be in three to five years, it is possible to map several possible scenarios that meet or exceed that goal. As data gets updated each quarter, it is possible to refine the path to success by evaluating those actions, conditions, or strategies that have an impact on performance, and to enhance, alter, or cease those actions as needed.

It is also possible to contemplate conditions or possible events that might lead you to fall short of your goal. While not a desired scenario, recognizing the factors that might bring it about is helpful in developing strategies to avoid failure. Such possibilities should be part of an overall risk management system and is a subject for another time. Predicting performance based on past performance, understanding current realities and future trends, and tracking real-time data to identify trends allows you to be nimble and responsive to changes in your environment.

But then, that’s the subject of next week’s article, “How will you address challenges and opportunities along the way?” Stay tuned.

As always, your thoughts and reactions are most welcome.