Death to the 5-Year Strategic Plan

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Published: September 19, 2022

The gold standard for every nonprofit is the 5-year strategic plan. But this process is like asking someone, “Where do you see yourself in 5 years?” Most people answer in broad terms, (i.e. adopting a dog or having a job), and not specifics because people know plans change. I have personally always answered this question with “still alive.” It’s time to abandon this question, just like it’s time to abandon the 5-year strategic plan, and instead ask “What’s the impact you want to make in the world?”

Let’s say you received funding to start an elementary school after-school STEM program only to realize that you’re better positioned to help their parents get jobs in technology companies. Making this switch would result in improvements in the overall lives of those elementary school children that you set out to serve in the first place. But most funders wouldn’t let you change how your funding is spent, even if that change meant a better, more impactful use of those dollars. Conversely, in the startup industry if you began selling electric bicycles and realized that you could make more by selling electric golf carts at a better price with your technology system, your venture capitalist funders wouldn’t be mad when the profits started rolling in. Compared to VCs, funders in the nonprofit world are unique in that they give you money and expect you to deliver on a pretty close, if not exact, representation of what you proposed in your grant application. And what you’ve proposed is a direct reflection of your 5-year strategic plan. If you can convince a funder to let you change how you spend the money, they often won’t fund you the next grant cycle. This antiquated method crushes innovation and radical social change. The funding flexibility given to a for-profit is unlikely to be replicated for your nonprofit because your 5-year strategic plan has set you in a specific direction, and your funders have cemented your accountability based on what you told them. This cycle causes most nonprofits to be too scared to deviate from their original goals because long term, employees’ jobs and the organization as a whole are at risk if funders won’t make the shift with the nonprofit.

Over the past 5 years, I’ve seen Houston go through a catastrophic hurricane, an economic downturn after the energy market bust, and now economic and social turmoil from COVID-19. Our community changes faster than our 5-year plans can be created, let alone implemented. If your organization is currently working on the same strategic plan goals as you were in January, you’re likely doing something wrong. Even uniquely positioned nonprofits that are growing rapidly, like food banks and technology access organizations, have changed directions and methods of work to meet the demand for their services.

Every strategic plan has an element of trying to tell the future by looking at the past. But predicting the future is more often than not a futile task. Every colleague I know who has been responsible for a 5-year plan will tell you the same story: the real magic happened when they ditched the first plan with a course correction in a heroic organizational effort by staff and board members who were determined to succeed. Most organizations spend 12-24 months pulling together their strategic plan, and within 12 months it’s already outdated. Strategic plans also have a high organizational cost and unforeseen consequences that are hard to overcome. If you assume you won’t need to course correct at some point, you’re likely going to fail and discard the plan only to start the process over again. If your leadership changes while you’re designing your strategic plan, you’ll likely scrap the plan within 6 months of hiring the new Executive Director/CEO. And as the new leader, you’d be crazy to not do this since the goals and metrics of the original plan are unlikely part of your vision, but how your success will be measured.

There are better ways of driving your organization forward than this process. Primarily, stop trying to predict the future because it will only lead to obsolescence and low staff morale. Instead, build your capacity for change by adopting agile processes that work towards visionary goals that you believe in. Acknowledge that failure is possible and a steppingstone towards the end goal. Ask your board and funders to get behind change and innovation instead of doubling down on more of the same. Evaluate what your organization is uniquely positioned to do and how it can be scaled. Shift to a model of rapid prototyping. If you are going to fail, you want to do it quickly and move on. Create a path focused on impact not organizational growth.

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