One of the most important responsibilities of a nonprofit board of directors, besides hiring the CEO, is adopting a strategic plan. I make this assertion based upon my belief in what a properly developed and executed strategic plan should look like, how it should be used, and how it can help move an organization toward is preferred future. Rather than discuss the content, process and mechanics of strategic planning, I intend to explore in this article how a nonprofit CEO can use the strategic planning process to lead the board in fulfilling its various duties. Those who are interested in knowing more about effective strategic planning can read my recently published book on the subject, Your Preferred Future. Achieved.¹,in which I describe how to conduct strategic planning using ten critical questions – all of which, I argue, must be answered in some fashion for the plan to be of maximum usefulness. In this article, I am going to describe how the CEO and his/her staff should drive this effort in all its aspects while respecting the unique role and responsibility of the board to set the mission and vision and ensure that plans and resources are organized to turn the vision into a future reality.

Assuming the board has committed itself philosophically and tangibly to conducting strategic planning, I intend to identify numerous ways the CEO can support the process. I don’t take such commitment as a given, however. I have encountered boards that do not see the value of having a strategic plan, opting for less burdensome or expensive courses of action. These may include the belief that a weekend board visioning retreat is sufficient to direct the organization’s future. Or, the board may conclude that the focus should be on strategy development and execution, rather than on setting long range goals. Or still another scenario I’ve seen is that in which boards of small and underfunded organizations think they can’t afford to spend money on planning for the future when they can hardly keep the doors open in the present.

I also don’t take it for granted that CEOs themselves believe in the value of strategic planning, regardless of what their boards may think. I’ve met nonprofit leaders who consider strategic planning a waste of time and resources, preferring to spend their time and energy focused on managing the delivery of key services or responding to issues as they arise. Such a limited mission-fulfillment attitude, while short-sighted, is understandable given the pressures that exist every day to keep their organizations operating smoothly. Others have been burned by planning consultants who extracted a lot of money in exchange for a boiler-plate plan that quickly gathered dust because of its lack of depth, relevance or adaptability. Still other CEOs don’t have the necessary knowledge or experience to understand the essential value and utility a good strategic plan can bring. In my experience, these are often individuals who grew up in the operations area of the organization, are passionate about the mission, but lack leadership experience and knowledge of best practices in strategic planning.

I am convinced, however, that by engaging in a theoretically sound and pragmatically grounded strategic planning process, CEOs and their boards can shape an aspirational, yet achievable, vision for the future. As I argue in my book, such an approach to strategic planning should be based on the best available research about what the future environment is likely to look like. It should be grounded in an understanding of current operating realities and an assessment of the sustainability of the current business model. And before launching into goal setting and action plans, a sound comprehensive strategic planning process should include an analysis of the capacity of the organization to actually move into its preferred future while responding to changing conditions along the way. Strategic thinking, planning, learning, adapting, developing, executing – these all must be considered.

So, how should the board be engaged in this process and what leadership roles should the CEO play in supporting the board in this regard? Before diving into the various ways in which the CEO can lead the board in strategic planning, it is first of all essential that the CEO have a deep, working knowledge of what constitutes effective nonprofit strategic planning. This may be the old college professor speaking, but most often nonprofit CEOs will have to “go to school” to get the knowledge that is required if they are going to lead the board toward and through the best approach to planning for the organization. Unless you have an individual on your board who does this kind of thing for a living, CEOs are going to have to lead the board to adopt an approach that is of most value and relevance to their organization. However, it should not be assumed that, just because you have someone on the board who has done business planning or strategic planning in the public or private sectors, they understand the nuances of best-practice strategic planning for nonprofit charitable organizations. Nor should it be assumed that CEOs can read a book or two and effectively facilitate this complex and multi-dimensional process. 

Board Duty

Let’s first establish the fact that nonprofit boards of directors cannot NOT engage in strategic planning. It is an inherent duty that is closely tied to their fiduciary responsibility. In the process of ensuring that sufficient resources are obtained and effectively managed, planning for the future is required in order to align budgets and fund-raising efforts with future needs and conditions. CEOs should never assume that boards understand these duties and continuous efforts to educate and train board members in nonprofit governance should be an essential component of a board development plan.

In addition, effective boards are those which spend a considerable amount of time engaged in strategic thinking in their meetings. As argued by Richard Chait, et. al.², engagement in strategic thinking, planning and decision-making is one of the most essential forms of leadership through board governance. This vital mode of intellectual discourse requires board members to understand and commit to the long-range vision and to provide continuous high-level direction and support to ensure that the organization can in fact achieve its preferred future. And when performance data, unexpected incidents, changes in the environment, or major disruptive forces throw up challenges to achieving the goals of the plan, boards must be able to respond strategically. Such thinking and acting must come from a basis of knowledge that is grounded in reliable data and which uses decision-making processes that align with the overarching framework of the strategic plan. 

All too often, boards and their CEOs are faced with a crisis and respond on the basis of emotion, limited data, anecdotal impressions, or the gut response of a few key leaders. Strategic leadership and governance require dispassionate objectivity which can be gained and maintained when the board’s method for working through challenges is guided by a coherent and dynamic strategic plan that frames their discussions and guides their decision-making. 

While the board chairman is ultimately responsible for guiding such strategic thinking in the course of the meeting, the CEO must support his or her leadership by developing meeting agendas that align with the strategic plan. The CEO should be providing updates, progress reports, key performance data, focused reports on one or more aspects of the plan, and recommendations for changes to the plan, and should be willing to share successes and failures regarding the goals and objectives articulated in the plan. Such support and leadership actions by the CEO will be fleshed out in the paragraphs which follow. Suffice it to say, the CEO can and should help the board meet its duties and support its strategic leadership role.

Choosing the Right Approach

There are many different models of strategic planning that have been used over the years. Most of these consist of adaptations from business planning models, modified to suit the needs of nonprofit organizations. Such traditional approaches to strategic planning consisted of techniques such as vision-casting, SWOT analysis, quantifiable objectives, and tactical action plans. Borne out of military strategizing, such approaches defined the ultimate goal or objective, and then developed linearly arranged steps to achieve it. Numerous variations have emerged over the last 50 years or so, all with accompanying flow charts and diagrams and decision trees to map the process. 

More recently, strategic planning as a discipline has been challenged and considerable debate has swirled around the concepts of strategy, strategic programming, strategic thinking and strategic planning. Critics of strategic planning argue that it is static and forces decision-making into categorical modes of thinking that inhibit creativity and responsiveness.³Organizations should focus instead on strategic thought processes that operate without prior constraint or structural restrictions. The value of such an approach comes from recognizing the need for nimble responsiveness in rapidly changing environments. The downside is that a larger “story arc” is missing which describes the vision of the organization in the long term.

I believe that the evolution of strategic planning in the nonprofit world is moving into the realm of strategic thinking and deciding WITHIN the framework of a larger and longer view of strategy.⁴Such a dialectical view finds a middle ground which values the complex dynamics of a living organization/organism. If one can analogize strategic planning to human growth and development, it would be something like existentially choosing a daily course of action within the context of one’s larger life goals. Having the freedom to choose an action today is both built upon previous experiences and is also free to modify a life trajectory. Consequently, daily decisions can both move toward a life goal or can alter the life goal. Such a dynamic and interrelated view of life is supported by quantum science which states that everything is related to everything else; an action in one arena effects behaviors in other parts of the universe. Similarly, with strategic decision-making, acting tactically today affects strategies tomorrow which alter our vision of reality in the long term. And yet, actions today are also aimed at some higher purpose or end and consequently, are not totally free, but are conditioned by the expectations of that end. Nonprofit organizations, therefore, should plan their futures mindful of the dynamics of change.

The CEO’s Leadership Role

Moving beyond this cosmological blathering, the fact is that the CEO must be conversant in the theory and practice of strategic planning to the extent that he or she can recommend an approach that is best suited to the needs of the organization. The board should be educated as much as is necessary in this field so an appropriate decision can be made to select, approve, support and participate in the recommended approach. Preferably, this choice is mindful of the need for both nimble strategy development AND long-range strategic thinking. In order to assist the board in the selection process, the CEO and his or her staff must do the necessary research and study, and provide sufficient resources to the board so they can affirm the recommendation of the CEO about the best approach. My view was always that, since I and my staff were going to be heavily invested in making this process work, we needed to steer the selection process through the board to make sure we were going to be following the methodology we believed was the most appropriate fit.

Leading the Process

Once a strategic planning method has been determined, I believe it is the CEO’s responsibility to drive the process forward. This can be done in several ways. In most cases, some kind of planning task force will be assembled, comprised of key board members, staff, and perhaps other stakeholders. Selection of participants on such a task force should not be left to the discretion of the board chair or, even worse, to a call for interested volunteers. Great care should be exercised in choosing task force members with an emphasis on skills, experience and knowledge. 

If a consultant is used – something I strongly recommend and about which I’ll speak later – the CEO should do the investigation and vetting of consulting firms with experience and expertise in working with nonprofit organizations. The CEO should prepare a request for proposal (RFP) which defines the intended outcomes, the nature of the organization and its context, the preferable process it wishes to utilize, timelines and budget parameters. Once proposals are received, the CEO and selected task force members should interview the top two or three respondents and recommend their selection to the board. Because this will require a financial commitment, and because the board must ultimately approve the strategic plan, the board should be asked to formally adopt the CEO’s consultant recommendation.

To emphasize the importance of having the CEO provide leadership, I was once hired to facilitate a comprehensive strategic planning process for a large nonprofit organization over the objections of the CEO. While the project was ultimately successful, navigating the initial political dynamics between the CEO and the Board’s Strategic Planning Committee was very delicate. In the end, the CEO became a champion of the process and continues to use the model today. But forcing him to accept a consultant and support a particular planning process prolonged the effort and exposed some unhealthy power dynamics that had to be resolved.

Once a consultant is hired, the methodology is agreed upon, the task force is established, and staff assignments are made, the CEO plays a critical role in driving the effort forward. Holding staff members accountable for meeting deadlines and completing work assignments may require the CEO’s oversight and motivation. Holding the consultant accountable for achieving key deliverables by established deadlines is critically important. This is especially important if consultants are being paid on an hourly, rather than a project, basis.

Finally, the CEO is the one individual in the organization who can articulate to staff, donors, board members and other key stakeholders the value of strategic planning, the role it will play in moving the organization into the future, and how the quality of services and its service reach will be affected. The CEO as “chief story teller” can begin to tell the tale before the process begins, while it is underway, and most important, when it is completed. Strategic planning should never be an end in itself. It is only a tool to help move the organization into the future. How that future is described and what actions are required to achieve that future are the elements in a story of the organization’s past, present and future.

Who Owns the Plan?

A nonprofit’s board of directors is responsible for approving a strategic plan which describes the organization’s intended or, as I like to say, preferred future. Because the strategic plan informs the board’s fiduciary duty, maps the course for fulfilling its mission and achieving its vision, and provides the basis for continuously evaluating the organization’s performance, the board of directors must “own” the strategic plan. In my experience, the result of the initial comprehensive planning process should be formally adopted by the board. If the board asks to have annual updates or iterations of the strategic with extended horizons (something I strongly recommend), then the annual presentation of the updated plan should also be adopted by the board.

What the strategic plan looks like when it is submitted to the board for approval should be carefully determined. I recommend that boards be given a plan which at least contains the following essential elements. Failure to include any of these potentially sets the organization up for failure to achieve the desired outcomes.

1. A review of the mission and vision statements
2. An assessment of the sustainability and impact of the current business model
3. Research into what the future operating environment will look like
4. An internal environment scan, focusing on strengths and opportunities
5. A capacity assessment to determine if the organization can move forward
6. An articulation of high-level strategic positions and associated measurable goals
7. Key performance indicators to track progress

Boards of directors should NOT, however, be in the business of approving every strategy, tactic or action plan developed to move the organization toward achieving its articulated positions and associated goals. It is my belief that the CEO and his or her staff are responsible for developing annual action plans that direct the work of the staff toward achieving the measurable goals. Involving the Board in such granular planning crosses the line, in my opinion, between governance and management. 

The process of developing annual initiatives or action plans is a great way for the CEO to accomplish two things. First, the strategic plan becomes a dynamic and living document that focuses staff on priorities and high-impact activities. Engaging staff in the development of annual action plans also affords the opportunity to communicate to the entire organization where it is headed and everyone’s role in getting there. One organization I worked with published the annual initiatives and posted them throughout the organization’s facilities, alongside the mission, vision and strategic position statements. Such transparency made everyone accountable for achieving the desired future.

Budgets and Annual Planning

When an organization adopts an annual planning cycle which follows approval of a comprehensive strategic plan, several very good things ensue. First, if annual review of the strategic plan precedes the budgeting process, then the goals and initiatives drive the budget and are not post hocvictims of the budget. Second, an annual cycle formalizes planning activities into the framework of the calendar of board and staff activities. For example, if the organization is on a July to June fiscal year and budgeting begins in March of each year with board approval in May, then the strategic plan review should occur in the fall with the board being asked to adopt the revised strategic positions and goals in early spring so the staff can develop initiatives as part of the budget process.

A third benefit of using an annual planning cycle is that the board then has a clear basis for evaluating the performance of the CEO with respect to his or her ability to move the organization toward the fulfillment of the strategic goals. I would argue, in fact, that the basis of the CEO’s performance evaluation should bethe strategic plan, rather than looking only at tasks, responsibilities, style or relationships. These are only means, not ends. 

Integrating the Strategic Plan into Board Meetings

Strategic planning, thinking and acting must be incorporated into the work of the board of directors at every meeting. In fact, I would argue that the strategic plan, its implementation and adaptation should be THE agenda for every board meeting. How can this be accomplished and what is the CEO’s role in making sure the strategic plan receives primacy in board meetings?

First, it should be common practice that the board meeting agenda is jointly constructed by the CEO and the board chairperson. In my experience, allowing one or the other to solely take responsibility for this task ignores the important governance partnership that should exist between the chair and the CEO. As reflected in other articles in this series, the CEO is an active executive participant in what I call “reciprocal governance” and is the key player in determining “Who’s the Boss?”

To make sure that sufficient time is allocated for the board to discuss the organization’s position with respect to its strategic plan, several things have to occur. These are suggestions I offer from my own experience as a CEO in trying to keep my board focused on the larger strategic issues and away from the routine managerial aspects of operations. 

1. To make sure sufficient time is allocated to discussing strategic issues, I believe strongly in a timed agenda. My old mentor used to frequently intone, “Work expands to fill the time allotted to it.” If your agenda is open-ended with respect to time, you can expect to run out of time to discuss bigger and more important issues. 
2. I dumped just about every managerial approval item into a consent agenda. This works especially well if recommendations are published in advance. I even gained approval for a million-dollar capital construction item through the consent agenda because the board had ample time and orientation to the request ahead of time. Any board member can take any item out of the consent agenda for consideration, but generally, this tactic freed up a lot of time in the meeting for strategic discussions. 
3. Other than a very brief presentation of the current finances, no program reports should be given in the board meeting. These reports were all distributed ahead of time in the form of a board briefing book which was sent out mid-way between board meetings. This also helped keep the lines between governance and management very clear.
4. Supporting strategic discussion requires adequate information ahead of time. In our board books, published a couple of weeks in advance of each board meeting, key staff members who were responsible for an aspect of the strategic plan, reported out in narrative and with measurable performance indicators, their progress toward achieving strategic objectives. The expectation, of course, was that board members came to the meeting prepared to discuss the big issues. 
5. The agenda could be structured around each of the key strategic goal or positions statements with guiding questions such as: “How are we doing?” “What can we be doing differently?” “What have we learned?” “What new opportunities exist?” etc.
6. The focus of such an agenda should be on producing a deliverable of some kind and not just the absorption of information from reports. Strategic thinking is by its nature creative, open-ended and hypothetical. Each board meeting should be considered as an opportunity to correct the trajectory, change direction, consider new solutions. 

By thinking in these terms, the strategic plan as the overarching roadmap can become dynamic and flexible and can serve as an engaging basis for exciting conversation. I like to use my phone’s GPS-based navigation app as an analogy. If the strategic plan describes the beginning and ending points, then when accidents or traffic jams occur, or when road construction is going to create a delay, alternative routes are offered up by the app which save time. The board’s strategic discussions should be thought of in the same way. A plan is only a plan. It is the actions that are taken as the plan unfolds that comprises the real strategy.

Feeding the Board

For the board to exercise its duty to plan, it needs a lot of feeding. In this regard, the CEO is the person best positioned to provide the knowledge they require to make good decisions. This “feeding” should be in terms of both process and content. As I discussed earlier, there are many different approaches for strategic planning and the CEO should provide leadership for the board in recommending an approach and, if necessary, a consultant to facilitate its use. Ultimately, just about any approach to planning can work, provided the process has board engagement and support and strong leadership from the chief executive. However, the approach I developed over years has broad application in just about any nonprofit setting. In organizations I worked with that had strong executive leadership, the model provided the organization with a sustainable process that continues to support strategic thinking and planning to this day. In a couple of instances in which senior leadership was less than enthusiastic or committed, their plans languished from misuse or nonuse. As in just about every case, a nonprofit organization’s success is dependent upon effective leadership and strategic planning is no different.

Once an approach to strategic planning has been adopted, the initial process has been successfully completed, and the organization has embedded strategic thinking and learning into its governance and management systems, continuous input of information is needed to sustain the content of the planning process. You might have the most beautifully designed and engineered lawn mower engine, but if you don’t put gas in the tank, it is of no use. In the same way, strategic planning, thinking and acting require the input of data relative to the goals and objectives articulated in the plan. Such data might be called “key performance indicators” or a “balanced score card” or “business intelligence” or “benchmark data.” Regardless of the terminology, someone has to be continually answering the question, “How are we doing?” It is not sufficient to provide anecdotes or generalizations to the board. Especially in larger organizations, data which tracks performance over time for key variables is essential if the board is to understand the viability of plan goals and objectives. Good information is needed if alternative strategies need to be developed to adjust the strategic direction described in the plan. 

The bottom line for all this is that the chief executive officer is the individual who must feed the board what it needs to understand the organization’s performance to date, to consider alternative futures based on relevant data, and to make strategic decisions to try a different path. This executive role of the CEO over against the board’s duty to plan cannot be overstated.

To get a consultant or not?

So, why should you NOT do this on your own? Why should you at least consider using a consultant to facilitate this process? Here are five reasons you should consider when deciding whether or not to obtain outside counsel.

1. Using someone else to facilitate the process allows you to maintain a measure of objectivity and ensures a high degree of integrity. Of course, you are the final arbiter of what advances to the board for approval but having someone else manage the process helps to insulate you from the kinds of bias that can creep into strategic planning. If you are too integrally involved in managing the process, then you run the risk of unwittingly imposing your own prejudices into the outcomes as opposed to letting data and research inform the story and direct the outcomes.
   
   
2. Comprehensive strategic planning is a challenging task. You and your staff will be engaged in extra work no matter who manages the process. It is much easier for a third party to hold your team members accountable for meeting assignments and deadlines without the additional ties to everyday working relationships within the organization. Your team is accountable to you for enough already without adding an extra set of expectations. And if one of your team is failing to meet assignment deadlines, a consultant can bring that to your attention, so you don’t have to be responsible for one more thing.
   
   
3. You don’t have an adequate amount of time to devote to the process. Regardless of the size of your organization, and regardless of your capacity for work, you were hired to provide executive leadership. I know from my years as a CEO what that entails, and you will protect your own health, well-being and effectiveness by delegating the management of this process to someone else. In other words, don’t let a process like this compromise your ability to provide the kind of leadership your organization deserves on a day to day basis.
   
   
4. It is unwise to delegate this process to a subordinate. Unless you are so large that you already have a vice president of strategy, it sends the message that you aren’t sensitive to the amount of work and the priorities of your top executives. If your organization is anything like mine was, every one of my senior administrators was already overworked. To add a project of this magnitude to their plate sends conflicting messages:  either I can delegate more work to you and I don’t care, or I don’t think you have enough to do.
   
   
5. Finally, it isn’t helpful for you to be perceived by your board as expert in everything. There is considerable value in being seen as the manager of the expert instead of beingthe manager of the process. It says to the board that strategic planning is so important to the future of the organization that is it worth investing in expertise to make sure it is done right. Even if you are capable of leading and managing the project yourself, your board won’t view the outcome in the same light as if an expert guides the organization to the end.

~0~

A Concluding Thought (or two)

One of the most important duties of a nonprofit board of directors is to plan for the organization’s future. I have argued that this is an essential aspect of the board’s fiduciary responsibility. To assume, however, that every nonprofit board has the internal capacity to engage in strategic planning is naïve. It is almost always the case that the chief executive officer has to lead this effort with the board. Governance of this type is truly reciprocal in the sense that the board needs the CEO to provide knowledge and skill leadership with respect to planning, and the CEO needs the board’s buy in and active engagement in the process – especially when most of the CEO’s performance review is based upon attainment of goals and objectives described in the strategic plan.

Finally, reciprocal governance which uses the strategic planning process effectively is characterized by mutual accountability. The strategic plan and its continuous use as a tool for monitoring performance, adapting to change, and altering the organization’s vision of its preferred future requires a mutual commitment from both the CEO and the board. It is the CEO who must provide the structure and process to make that mutuality work. 

References and End Notes

1.              Bauer, John.  Your Preferred Future. Achieved.: Ten Critical Questions for Nonprofit Strategic Planning. John Bauer Consulting. 2019. https://www.amazon.com/Your-Preferred-Future-Achieved-Questions/dp/109181225X/ref=sr_1_2?keywords=your+preferred+future&qid=1556890523&s=books&sr=1-2-spell)

2.         Chait, Richard; Ryan, William; Taylor, Barbara. Governance as Leadership: Reframing the Work of Nonprofit Boards. John Wiley and Sons, Hoboken, NJ. 2005 (See especially Chapter IV – Type II Governance: Strategic.) This book has done more to shape my thinking about nonprofit governance than any other. Many of the suggestions about how to organize board meetings were developed after reading this book. 

3.         LaPiana, David. The Nonprofit Strategy Revolution: Real-Time Strategic Planning in a Rapid-Response World.Fieldstone Alliance, an imprint of Turner Publishing. New York, NY. (2008). I have used LaPiana’s model for strategy development as a way to keep the organization’s strategic plan alive and dynamic, especially as a way to fuel board meeting discussions. 

4.         Mintzburg, Henry. The Fall and Rise of Strategic Planning. Harvard Business Review. (January-February 1994). This article has been cited as a classic argument both for and against long-range strategic planning. Mintzburg’s measured opinion points out the factors that can undermine effective strategic planning, while also describing the intellectual framing that supports strategic thinking, planning, managing and acting.

5.         Martin, Roger L. et.al. The Big Lie of Strategic Planning: Webinar Summary. Harvard Business Review. January 18, 2018). I actually resonated with much of Martin’s argument and, in fact, have incorporated similar thoughts into my model of strategic planning. Many of the caveats and concerns he expresses are shared by me in my book, Your Preferred Future. Achieved.