Nonprofit Boards and Strategic Focus
This article is part two of a series on the elements required of a board that can effectively lead a nonprofit organization. This series of articles is a masterclass that draws from my experiences working with nonprofit boards both as a board member and as a consultant. If governance is the foundation of a high-performing board (see part one here), then the board’s strategic focus is the anchor bolt that secures the rest of the organizational structure.
Unfortunately, while many nonprofit leaders might agree that strategy is essential to board effectiveness, board meetings are too often simple “show and tell” information sessions with little or no reference to an organization’s strategic plan –that is if the nonprofit has a strategic plan. More than once, when I have been asked to conduct a board effectiveness audit, a review of a year or two of meeting minutes reveals that the word “strategy” never appears even once. Yet, behind governance, the ability to focus on strategy is the second most important competency of a board. So, what does focusing on strategy look like for a nonprofit board?
Strategic Planning: Pop quiz. When was the last time your board referenced the organization’s strategic plan? Unfortunately, if surveys are accurate, there is over a 50% chance that your nonprofit does not have a strategic plan or does not use it effectively. Elsewhere, I have discussed the need for organizational strategic planning (here) and excuses for why nonprofits don’t plan (here).
To be clear, it is the responsibility of the board of directors to lead a nonprofit in a strategic planning process. While a nonprofit’s management team, staff, and possibly community stakeholders may be involved in strategic planning, the ultimate responsibility for the organization’s direction belongs to the board. Ensuring that your nonprofit has a written strategic plan is the first dimension of a forward-thinking and focused board.
Strategic Review, and Use: Too often, nonprofit boards treat strategic planning as a three-year ritual that, once developed, goes into a file cabinet and is reviewed annually (at best). High-performing boards, conversely, benchmark their work to the organization’s strategic plan. Such boards use the strategic document to set senior staff performance expectations, reference progress milestones for strategy objectives, and evaluate outcome measures. Board meetings routinely include discussions of the strategic plan and its goals, and progress made. For strategy-focued boards, implementation of the strategic priorities is top-of-mind.
Strategy Adaptation: The nonprofit and government landscape changes rapidly, and, at times, the changes require boards to adapt, even the best of written plans. Directors who are focused on the future of their organization are tracking trends and thinking about strategy shifts that enable the organization to thrive. A couple of cornerstone articles on strategy adaptation come from the Boston Consulting Group (here) and, this 20-year-old classic from the Harvard Business Review (here).
Strategy Stress Test: A final aspect of responsibly managing the strategy of a nonprofit organization is for the board to identify and test the assumptions of the plan proactively. I have written more extensively about what a stress test looks like (here) and have a free download giving a more extensive treatment to the subject (here). Thinking in advance of potential changes in the landscape that can enhance or stymie an agency’s strategy, rather than merely reacting as changes unfold, is a sign of board leadership.
Governance and strategy are the two pillars of a valuable nonprofit board. When those two pillars are missing, then the leadership of a nonprofit is undermined. Without attention to governance and strategy, nonprofits are less dynamic, resilient, and fail to reach their potential. In the most extreme cases of governance and strategy neglect, nonprofits fail (for recent examples see here and here).
Conversely, nonprofit boards that develop, use, adapt and proactively test forward-thinking organizational strategies build capacity to thrive in a rapidly changing environment. In my experience, nonprofit leaders who anchor strategy in their board operations, outperform their peers and emerge as sector leaders. Investing in board strategy now pays dividends in the long term.
Your thoughts are always welcome.