Monday, July 27, 2009

Core Strategy #4 Forge partnerships, alliances and mergers to increase mission impact and sustainability

In a previous post, I listed 10 key strategies that need consideration in the strategic plans of nonprofit organizations. The first strategy described in that post is “Embed capacity building into the fabric of your nonprofit". The second strategy is to "Build an exceptional board". The third strategy discussed in my last post is to engage in accelerated strategic thinking and planning.

The fourth strategy is to forge partnerships, alliances and mergers to increase mission impact and sustainability. Even before the severe economic downturn, in recent years, there have been a number of sector trends encouraging increased partnership and alliance activity among nonprofits. The best guidance available to nonprofit leaders includes the following:

• Even though mergers are getting the most attention, there are a number of strategic restructuring options available: administrative consolidations, joint programming, management service organizations, joint venture corporations, parent-subsidiary structures and more.
• While there are a number of economic benefits touted, I think it's important to view strategic restructuring first and foremost as a strategy to increase mission impact. It's not about survival as an end in itself.
• It's all about relationship building and so it's important to prioritize trust building and communication. It takes time but getting to know each other is critical to long-term success.
• One of the most promising approaches has been articulated by Ben Gomes-Casseres, Professor at Brandeis University and co-author of Mastering Alliance Strategy. He encourages organizations to develop a diversified portfolio of partnerships and alliances. Lots of good resources can be found at his website. Go to:
• Finally, it's critical that nonprofits commit to increasing their internal capacity for building partnerships and alliances. Most of us don't know as much as we need to to do this work well.

The great news is that there are a number of excellent resources available to nonprofit leaders in the area of strategic restructuring. Here is my starter list:

• Strategic Restructuring: A Podcast (Time 10 minutes). Where do boards begin when considering restructuring options? Pat Wyzbinski of the Nonprofit Management Fund talks with Jean Butzen about questions a board can ask regarding the sustainability of the organization’s business model, changes in revenue sources, staff talent, quality of services, potential duplication of programs, and other critical factors. Jean Butzen is the president of Mission Plus Strategy Consulting, specializing in growing nonprofit social value through strategic restructuring. Go to:

• Jane Arsenault, Forging Nonprofit Alliances: A Comprehensive Guide to Enhancing Your Mission Through Joint Ventures & Partnerships, Management Service Organizations, Parent Corporations, and Mergers. San Francisco: Jossey Bass, 1998. 10 years since it first appeared and still one of the best resources on the subject. Click here to preview this book on

• Strategic Restructuring Website. Developed by Strategic Solutions, a project of LaPiana Associates. Go to:

• Partnership Matrix by David La Piana. Go to:

• Decision Tree: What Form of Strategic Restructuring Is Right For Us? Go to:

• Prepare Your Nonprofit Organization to Meet the Collaboration Challenge: Worksheets. Go to:

• Models of Collaboration: Nonprofit Organizations Working Together by the Lodestar Foundation. Go to: This is excellent!

• Nonprofit Mergers Workbook Part I: The Leaders Guide to Considering, Negotiating, and Executing a Merger by David La Piana. Based on experience with more than sixty mergers, this handbook is the perfect starting point for any nonprofit exploring a possible merger—and a basic resource for all nonprofit managers. Click to preview this book on

• The Nonprofit Mergers Workbook Part II: Unifying the Organization after a Merger by David La Piana. You've completed the merger agreement. Now, how do you make the merger work? Nonprofit Mergers Part II helps you create a comprehensive plan to achieve integration. Click to preview this book on

• Merging Nonprofit Organizations: The Art and Science of the Deal – Go to:

• Issue Brief: Investing In Nonprofit M&A – The Donor Perspective by Bruce Boyd and Reginald Jones, Arabella Advisors. Go to:

• Nonprofit Leadership and Administration Faculty at Western Michigan University. Merger Process Flow Chart, 1998. Go to:

• Nonprofit Mergers and Acquisitions: More Than a Tool for Tough Times. The Bridgespan Group. Go to:

• Karen Ray, The Nimble Collaboration, St. Paul: Fieldstone Alliance. 2002

• Shirley Sagawa, Creating “New Value” Partnerships with Business: Step by Step. Adapted for INDEPENDENT SECTOR by Shirley Sagawa from chapter 10 of Common Interest, Common Good: Creating Value through Business and Social Sector Partnerships, by Shirley Sagawa and Eli Segal (Harvard Business School Press, 2000). For a PDF version, go to:

Thursday, June 25, 2009

Core Strategy #3 Engage in accelerated strategic thinking and planning

In a previous post, I listed 10 key strategies here that need consideration in the strategic plans of nonprofit organizations. The first strategy described in that post is “Embed capacity building into the fabric of your nonprofit". The second strategy discussed in my last post is to "build an exceptional board".

The third strategy is to engage in accelerated strategic thinking and planning.

Sometimes strategic planning gets a bad rap -- and deservedly so -- when the process goes on for so long that leaders forget what the purpose and intended outcome was supposed to be in the first place. In today's changing environment, it has become even more important for nonprofits to respond to new opportunities fast -- really fast! There's really no choice. And this has helped to create the interest in accelerated strategic planning.

If organizations are going to effectively engage in accelerated strategic planning they need to increase their capacity to do so. Nonprofit leaders are looking for methods, approaches and processes that will speed up their strategic planning efforts. We can learn by doing. At the same time, several books and models have emerged offering guidance on how to speed things up:

• The well regarded new book by David La Piana, The Nonprofit Strategy Revolution.
The One Page Business Plan for Nonprofit Organizations by Jim Horan
Question-Based Planning by Derrick Van Mell. Also see
• and many others

In a recent workshop presentation I included a couple of tools for that can be used to design accelerated strategic planning sessions. Go to the presentation handout and take a look at pages 8 and 9. While you’re at it, review the Strategic Planning Resource Bibliography on page 10.

A couple of additional thoughts including a caveat:

Collaborative strategic planning. Today it's becoming increasingly common and more important for nonprofits to engage in collaborative strategic planning efforts in which the focus is on a shared customer/constituent base or pressing community issue rather than development of a strategic plan for one organization alone. I talked about this in an earlier post.

For some of the same reasons, such collaborative strategic planning efforts need to be accelerated as well.

Create opportunities for ongoing strategic thinking. Look for ways to incorporate strategic thinking activities in board and staff meetings now. Here's how: in board and staff meetings, make references to your nonprofit’s vision of future intended impact and strategic priorities as defined in your strategic plan. Use the vision and strategic priorities as a framework for board and staff deliberation and decision-making. Share trend and market information in meetings to provoke discussion and dialogue.

And one caveat. Accelerated strategic planning is a way to develop strategies and action plans in response to rapidly changing conditions and promising new opportunities for your nonprofit. It's not a substitute for the sometimes longer and more difficult work of defining the mission or fundamental purpose of an organization or crafting a new compelling vision of intended impact. And doing this work in a way that leads to excitement and commitment among board and staff leadership.

In thinking about accelerated strategic planning, a few of the laws of systems thinking may apply. First “Faster is slower”. Accelerated strategic planning makes great sense when we are clear about mission and vision and we are faced with an opportunity that clearly aligns with these governing ideas. But if, within your nonprofit, there are fundamental disagreements about organizational purpose and future direction, then an accelerated planning and decision-making process may make us feel like "take-charge leader of the year" but we run the great risk of taking the organization in the wrong direction. And we’ll pay for this later. It'll be back to the drawing board. Faster is slower. This is especially true if, in our haste, we didn't include enough key leadership in the process.

And this reminds me of one of the other laws of systems thinking -- "Today’s problems come from yesterday’s solutions".

Tuesday, June 09, 2009

Core Strategy #2 Build an Exceptional Board

In my last post, I listed 10 key strategies that need attention in the strategic plans of nonprofit organizations. The first strategy described in that post was “Embed capacity building into the fabric of your nonprofit".

The second strategy is to build an exceptional board.

There are a dizzying number of governance models that have emerged over the last several years and an equally dizzying number of valiant efforts to categorize and sort out the main models. At the same time there is broad emerging agreement about the core qualities of effective boards. Here is a quote from Mel Gill, president of Synergy Associates:

There is a growing convergence of expert opinion that the most effective boards, regardless of the size, complexity or mandate of their organizations, concentrate their attention on those matters that are crucial to success or survival; that they focus on measurable results within defined timetables; that they engage in regular monitoring of the manner in which business is conducted, the efficient use of resources and the achievement of objectives; that their decision-making is transparent, and that they provide proper accounting to key stakeholders.

Effective boards focus their attention on "the critical few, rather than the trivial many", regardless of whether these are operational, management, or governance (strategic or fiduciary) issues.

The most successful boards, within this framework, develop a collaborative partnership with senior management; seek agreement between key stakeholders on vision, values, goals and expectations (tempered by the reality of available resources); ensure clarity with respect to roles and responsibilities; establish constructive processes for resolution of conflicts and conflict of interest; and cultivate an organizational culture characterized by trust, teamwork, mutual respect, flexibility, adaptability, and responsiveness in the face of the ever-changing realities, resources and needs of consumers.

Gill also talks about "dynamic hybrids” -- increasingly boards are developing dynamic hybrids of several board types, adapting concepts and practices that best fit their particular circumstances.

In response to this "dizzying array" of models and approaches, I propose that we draw on the following three resources as we think about exceptional board governance. The three governance frameworks that stand out for me are:

First, the Dynamic Board Model developed by McKinsey & Co. The source document is The Dynamic Board: Lessons from High-Performing Nonprofits. This monograph summarizes the best practices identified through McKinsey’s interviews with the directors or board chairs of 32 highly-regarded nonprofits. The report also provides a valuable self-assessment tool for nonprofits available in 5, 15 and 30 minute completion time versions. (Free registration may be required to access this article) Go to: Scroll down to “The Dynamic Board” and Assessment Tool links.

Second, the 12 Governance Principles That Power Exceptional Boards from BoardSource. This framework describes twelve common traits and actions that distinguish “exceptional” boards from “responsible” boards. Taken together, they describe an empowered board that is a strategic asset to be leveraged. For a fuller description of the 12 principles go to:

And third, Governance as Leadership Framework from the book Governance as Leadership authored by Chait, Ryan and Taylor. They describe three types of governance: fiduciary, strategic and generative
• Fiduciary mode: key question -- "How are we doing?"
• Strategic mode: key questions -- "What are we doing?" "Where are we going?" and
• Generative mode: key questions -- "Why are we doing this?" "What are the possibilities?"

For an excellent description, go to: “Rethinking the Board’s Central Purposes.” A Review of Governance as Leadership

Monday, June 01, 2009

Sustaining A Mission Focused Nonprofit in Hard Times

The nonprofit sector in the Bay Area is one of the most vibrant in the country. And yet on May 29, 2009, the Wall Street Journal reported that one-third of San Francisco-area nonprofit groups are worried they may have to shut down in the next year, and 34 percent say they have no more than two months’ worth of operating funds in reserve, this according to a survey by the regional United Way. Another sign of hard times.

The many challenges that nonprofits were already facing have intensified in the last year owing to the severe economic downturn nationally and globally. And if we need to be reminded about how bad things have gotten, today, General Motors filed for bankruptcy.

What's a struggling nonprofit to do? I think there are at least 10 strategies that need to be considered. These strategies will have greatest impact if they are implemented in a coordinated fashion over time -- and they need to be incorporated into your strategic plan.

Here they are:

1. Embed capacity building into the fabric of your nonprofit
2. Build an exceptional board
3. Engage in accelerated strategic thinking and planning
4. Forge partnerships, alliances and mergers to increase mission impact and sustainability
5. Develop board and staff succession plans
6. Build capacity for effective public policy and advocacy
7. Master use of social media
8. Deploy targeted volunteer engagement strategies
9. Review and revise your theory of change
10. Adopt regional thinking and problem solving approaches

CORE STRATEGY #1 Embed Capacity Building into the Fabric of Your Nonprofit

Over the next few months I'll devote attention to each of these 10 strategies, starting with the first – “Embed capacity building into the fabric of your nonprofit.”

I want to begin with a quote from Paul Light:

“Capacity building well done in the nonprofit sector, I believe, is a critical answer to the extraordinary uncertainty we face and also to the tremendous political pressure under which most nonprofits are operating. Capacity building right now is arguably the most important investment the nonprofit sector can make.”

Strong leadership is one of the factors that ensure success in capacity building. Capacity building is a team sport that requires board and staff leadership. Organizations that are serious about building capacity are advised to convene a team consisting, at a minimum, of the Executive Director/CEO, other staff members selected by the ED and board members, at least some of whom are in key leadership positions. This team will have primary responsibility for leading the organization’s engagement in the core capacity building activities. Additional board members and staff can also be involved and this is highly recommended. There are several advantages to this group approach. By sharing multiple perspectives on some of the problems and issues needed to be addressed it is less likely that problems will be misdiagnosed or that key issues will be overlooked. Another advantage to the team is that more people will gain a deeper understanding of critical organization challenges that can be addressed through your capacity building efforts.

We've developed a capacity building toolkit that reflects best practices and lessons learned from the field. The toolkit consists of four tools:

• Tool #1 – Assessment and Benchmarking
• Tool #2 – Capacity Building Action Planning
• Tool #3 – Capacity Building Resource Inventory
• Tool #4 – Capacity Reassessment

Go to: to access the toolkit. There is a description of the four tools along with guidance on how to utilize each of them.

I'll be talking more about capacity building and the remaining nine strategies in future posts.

Thursday, February 19, 2009

The Networked Nonprofit: A New Mental Model of Organizational Growth

In a previous post, I talked about the impact of mental models on our work. Mental models are deeply ingrained assumptions, beliefs, generalizations, or images that influence how we see the world and how we take action in it.

I suggested that "if we proceed with strategic planning without examining our mental models, we run the great risk of creating a plan based on assumptions and beliefs that are, in whole or in part, obsolete. A plan based on faulty thinking is not going to lead to the kind of impact we desire."

I recently came across an excellent article that challenges some of the traditional mental models we have about growth in the nonprofit world.

The article is The Networked Nonprofit by Jane Wei-Skillern and Sonia Marciano. It appeared in the Spring 2008 issue of the Stanford Social Innovation Review. The authors suggest, with some compelling examples and arguments, that nonprofits that pursue their missions through networks of long-term, trust-based partnerships achieve more sustainable mission impact than would be possible through traditional approaches to organizational growth. Some quotes appear below, but please read the article. It carries an important message that should have an impact on your future strategic planning efforts.

"We have studied several organizations that exemplify this network approach. By mobilizing resources outside their immediate control, networked nonprofits achieve their missions far more efficiently, effectively, and sustainably than they could have by working alone. Many traditional nonprofits form short-term partnerships with superficially similar organizations to execute a single program, exchange a few resources, or attract funding. In contrast, networked nonprofits forge long-term partnerships with trusted peers to tackle their missions on multiple fronts. And unlike traditional nonprofit leaders who think of their organizations as hubs and their partners as spokes, networked nonprofit leaders think of their organizations as nodes within a broad constellation that revolves around shared missions and values.

Most social issues dwarf even the most well-resourced, well-managed nonprofit. And so it is wrongheaded for nonprofit leaders simply to build their organizations. Instead, they must build capacity outside of their organizations. This requires them to focus on their mission, not their organization; on trust, not control; and on being a node, not a hub.

According to our research, nonprofits that pursue their missions through networks of long-term, trust-based partnerships consistently achieve more sustainable mission impact with fewer resources than do monolithic organizations that try to do everything by themselves. Unfortunately, however, many practices in the nonprofit sector inhibit the creation of such networks.

Nonprofit leaders often view organizational growth and revenue increases – rather than impact – as their primary metrics of success. As in the corporate sector, the nonprofit sector considers growth of some form – whether scaling up existing programs, expanding to new locations, raising more money, or proliferating new programs – to be a sign of vitality and impact. Organizations whose budgets, staff, and programs are growing in direct response to an urgent need are often viewed as the most successful.

Networked nonprofits like HFHE, WWB, and GDBA (three “networked nonprofits” profiled by the authors) share a third trait: They see themselves as nodes within a constellation of equal, interconnected partners, rather than as hubs at the center of their nonprofit universes. Because of the unrestricted and frequent communication between their different nodes, networked nonprofits are better positioned to develop more holistic, coordinated, and realistic solutions to social issues than are traditional nonprofit hubs."

Monday, January 19, 2009

Examining Our Mental Models: A Key to Breakthrough Thinking

In his book "The Fifth Discipline: The Art and Practice of the Learning Organization", author Peter Senge describes five thinking tools or disciplines. One of these tools is the discipline of “Mental Models”. Mental models are deeply ingrained assumptions, beliefs, generalizations, or images that influence how we see the world and how we take action in it.

Very often we are not consciously aware of our mental models or the effects they have on our thinking and behavior, including how we go about strategic planning.

For example, if our mental model of a library is that of a building where the community keeps its books, we will spend much of our time thinking about adding shelf space and buying more books. On the other hand, if we view the library as the community’s gateway to an expanding world of information, we will think and act very differently. Mental models of what can and cannot be done in different management and community settings are no less deeply entrenched.

Here’s the point: if we proceed with strategic planning without examining our mental models, we run the great risk of creating a plan based on assumptions and beliefs that are, in whole or part, obsolete. A plan based on faulty thinking is not going to lead to the kind of impact we desire.

The discipline of working with mental models starts with turning the mirror inward: learning to unearth our internal pictures of the world and our work to bring them to the surface and hold them up to tough questioning. It also includes the ability to carry on "learningful" conversations in which people expose their own thinking and make that thinking open to the influence of others.

The discipline of mental models is a key to understanding how organizational learning takes place:

• We begin by unfreezing ourselves from currently held beliefs, knowledge, attitudes or mental models. We determine which mental models are still valid and provide true pictures of the world and which mental models no longer work.
• Next we absorb new or alternative attitudes, beliefs and behavior.
• Finally, we begin to make decisions and take actions based on the new state of mind.

Of course we will repeat this learning process from time to time as some of the new mental models become outdated themselves.

At a recent conference, nonprofit leaders were asked to identify some of the mental models, paradigms and assumptions that they operate from that influence how they act internally and externally. The list of mental models included the following:

For one nonprofit engaged in racial justice work, some of the mental models:

• Racism is so huge we can't possibly effect or impact or end it.
• The corporate world is resistant to racial justice work.
• Only people of color can do effective racial justice work.

Other nonprofits identified the following mental models:

• Our identity as an organization is our current building.
• More money will solve all of our problems (if we only had more funding . . .).
• People find fundraising inherently distasteful.
• We are a flat organization so we cannot provide internal opportunities for promotion and advancement.

These mental models represent ways of thinking that will limit our stratgeic thinking in significant ways.

During the conference workshop, participants then began to examine these mental models by applying the following questions:

• Does this mental model represent an accurate picture of the world? Is it still valid and what is the evidence that the mental model still works? (Are we sure?)
• Is this mental model obsolete in some way and if so, how? Again what is the evidence that the mental model no longer works?
• How will this mental model affect our strategic planning efforts?
• Can this mental model be improved?
• How can a new mental model increase the mission impact of our work in the future?

If you’re interesting in exploring the discipline of mental models further, here are two good resources:

Working with Mental Models by Roland Boettcher

Mental Models: The Second Discipline of Learning Organizations by Marty Jacobs

I’d like to end with a few quotes that help to make the point about the importance of understanding the impact of mental models on our work:

"You never change something by fighting the existing reality. To change something, build a new model that makes the existing model obsolete." -- Buckminster Fuller

“The world we have made as a result of the level of thinking we’ve done thus far creates problems that we cannot solve at the same level at which we created them.… We shall require a substantially new manner of thinking if humankind is to survive”. -- Albert Einstein

And on the eve of President Barack Obama’s Inauguration, the words of Abraham Lincoln:

“The dogmas of the quiet past are inadequate to the stormy present…. As our case is new, we must think anew and act anew.”

Wednesday, January 07, 2009

New Planning Resources for a New Year

Yes We Can!

As the New Year begins, I'd like to recommend a few excellent resources to support your strategic thinking and planning efforts.

First, another great article from the Harvard Business Review. Appearing in the December 2008 issue, there is an article entitled Delivering on the Promise of Nonprofits by Jeffrey L. Bradach, Thomas J. Tierney, and Nan Stone. The authors, associated with the Bridgespan Group, propose that nonprofits wanting to dramatically increase their mission impact need to address five interdependent questions: Which results will we hold ourselves accountable for? How will we achieve them? What will results really cost, and how can we fund them? How do we build the organization we need to deliver results? These questions provide a framework for change that combines elements of theory of change, outcomes measurement, strategic and business planning, and organizational development. Included in the article, are a number of case examples drawn from the work of the Bridgespan Group. If you don't subscribe to the Harvard Business Review, you can purchase an electronic or hard copy of the article at Order Reprint R0812G.

The second resource is the Severson Center Trend Website. The Severson Center, a division of the Alliance for Children and Families, has opened their trend website to the general public, allowing access to a library of information in a user-friendly format. No login is needed for the website, but some reports are password protected for access by members of the Alliance. Trends and their impacts are organized under the following categories: Business/Economy, Education, Nonprofits, Technology/Science, Demographics/Population, Health, Social Service Issues, and Work. No question about it: this is the only resource of its kind and an invaluable resource for nonprofit strategic planning efforts. Go to:

The third resource is Designing Your Future: Key Trends, Challenges and Choices Facing Associations and Nonprofit Leaders published in August 2008 by ASAE and the Center for Association Leadership. According to the authors, Designing Your Future “began with the analysis of several hundred trends. Association leaders and other experts and practitioners have winnowed the lengthy list of impacts to the most critical trends ranging from social to economic to political to environmental to technological impacts likely to affect associations.” Here are some of the chapter headings: Key Challenges: 10 Strategic Priorities Association Leaders Must Address, Key Choices: a Strategic Decision-Making Framework, 50 Key Trends, Scenario Analysis Workshop, Trend and Trend Analysis Workshop. Click here to preview this publication on

And don't forget to check out our listing of Key Trends included in our weekly feature Nonprofit Picks Of The Week.

Happy New Year!