April 23, 2018
 
The Long Term Will Be Here Sooner than You Think, So Plan Now

By Thomas A. McLaughlin

Thomas McLaughlin
One of the most valuable actions nonprofit executives can take is to look into the future and see patterns, trends, and developments that will affect their organization, and position the organization accordingly.

Think of it as putting on a pair of Strategy Glasses.

Strategy Glasses is a metaphor for the most productive way to approach strategy formulation. Think of "Strategy Glasses" as shorthand for the next three to five years in your organization.

Without question, strategic thinking is one of the most difficult things human beings can attempt. This is because strategy is about the long-term future, while the vast majority of the work managers carry out—operational planning and execution—occurs within the context of the next few days, or weeks, or perhaps a month or so.

Thinking for the Long Term

If Strategy Glasses were real, you might be able to more readily identify the positives and negatives of the next three to five years. Since they’re not, planners need to find ways to identify the themes that will be stronger before they actually get stronger. One way of doing this is to list the current problems that are mildly to moderately important and then project them into the future using your Strategy Glasses. Will they be easier to resolve then or more intractable?

Example: The aging of Baby Boomer CEOs is one of those inevitable, intractable dilemmas that nonprofits are currently facing and will have to continue doing so for many more years. This is because the candidate pool for nonprofit roles—along with other roles in the economy—has already been on a downward trajectory for several years, and is likely to get tougher before it gets better. There simply are far fewer Generation Xers than Baby Boomers. This will lead to other staff shortages.

Nonprofit leaders can't meet longer-term strategic challenges by working harder. Instead, they need to find alternative approaches and new ways of achieving unchanging goals.

Here is a suggested logical pathway toward resolution:

  • Be clear about the current dimensions of the problem. How did it come about, and what are the expected dimensions in three to five years?

  • What are the stakes, and what group or groups of stakeholders need to be supported?

  • How—and how much—will your organization get paid to serve these groups?

  • What are the practical dimensions of the solution, especially as it relates to adequate funding?

  • Will the need for services evolve? If so, how?

  • What are the implications of success? Failure?
When the above points have been covered carefully, the result should be at least a rough start on your “service model.” This is the basis on which you can make use of what you’ve learned when exploring the long-term future. The service model will often suggest innovations and reformulations that were not obvious at the beginning because planners’ thinking tends to evolve as they work through the future implications of a problem.

For example, hospital-based accountable care organizations (ACOs) have developed as a way to help lower administrative costs for their participating hospital systems. But the unacknowledged reality of ACOs is that the successful systems will almost certainly be incentivized to expand into social services. This creates new opportunities and impacts the ACO's service model. Various projections suggest this could begin happening somewhere around the year 2021, which essentially is around the corner.

The CEO

While strategy development can tap external resources, it can't be outsourced. A key asset that can and must be highly engaged in formulating strategy is the CEO. In large nonprofits, the CEO should be joined by other high-ranking executives. If there is a true visionary in the mix, it most likely will be the CEO. At smaller organizations, it might be a combination of the CEO and board chair.

There is no static formula to use when beginning to formulate long-term strategy, because in the early stages of creating solutions there is little that can be confirmed if the strategy is new to the organization, which makes it highly susceptible to change. Because there is usually no right or wrong answer early on, this fluidity will lead more readily to creative thinking and some level of experimentation.

Thomas A. McLaughlin is the founder of the consulting firm McLaughlin & Associates and the author of Streetsmart Financial Basics for Nonprofit Managers (4th edition), published by Wiley. Email him at tamclaughlin@comcast.net. An earlier version of this article was published in The NonProfit Times.

November 2017

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