2016-01-12 breakthrough strategy for nonprofits

Thrive. Grow. Achieve.

January 12, 2016

Dr. Rob Sheehan, Robert H. Smith School of Business at the University of Maryland

Breakthrough Strategy for Nonprofits

Robert M. Sheehan, Jr., Ph.D. Principal Sheehan Nonprofit Consulting @SheehanImpact [email protected] 301.523.1864 www.SheehanNonprofitConsulting.com © Robert M. Sheehan, Jr., Ph.D., 2016

BREAKTHROUGH STRATEGY

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ABOUT ROB SHEEHAN

*Robert H. Smith School of Business, University of Maryland Academic Director, Executive MBA

Program

*Center for Philanthropy & Nonprofit Leadership, UMD

*Sheehan Nonprofit Consulting Strategy, Leadership, Teamwork

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ABOUT ROB SHEEHAN

Ph.D., The Ohio State University College of Business School of Public Policy &

Management Organization Development,

Leadership, Organization Effectiveness Published Researcher

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ABOUT ROB SHEEHAN

CEO, 18 years, Two National Nonprofits AΣΦ Educational Foundation,

1981-1990 LeaderShape, Inc., 1992-2001 CFRE (Certified Fund Raising

Executive), 1986-2004 5

QUICK SURVEY

How many of you think that most people in the nonprofit

world work very hard?

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QUICK SURVEY

How many of you think that most people in the nonprofit

world are smart?

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LEAP OF REASON

“Incremental Change is Not Enough”

-Mario Morino Leap of Reason

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“INNOVATE OR DIE”

“We’re in an environment where its innovate or die.” -Amelia Franck Meyer CEO, Anu Family Services, Hudson, WI The Chronicle of Philanthropy

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BREAKTHROUGH STRATEGY

The intention of the Breakthrough Strategy approach is to drive higher levels of innovation and creativity throughout an organization to it increases its Mission Impact.

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DESIGN FOR TODAY

To provide you with a “taste” of the Breakthrough Strategy approach To demonstrate ideas on how you

can generate more innovation and creativity in your organization

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A NEW MINDSET

We need a new mindset.

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NEW PATTERNS OF THOUGHT

“The problems we face cannot be solved using the same patterns of thought that were used to create them.”

- Albert Einstein

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BEING UNREASONABLE

“The reasonable man adapts himself to the world; the unreasonable one persists in attempting to adapt the world to himself. Therefore, all progress depends on the unreasonable man.”

- George Bernard Shaw

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THE IMPORTANCE OF LEADERSHIP

Nothing we discuss today can be successfully utilized within an organization without effective quality leadership. Ethical, Inclusive, Authentic,

Empowering Contributes toward building a

more just, equitable and thriving society

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STRATEGY DEVELOPMENT PROCESS

Establish Mission Gap Adopt Aspirational Mindset for

Creating Vision Adopt Aspirational Mindset for

Setting Strategic Stretch Goals Discern SWOTs Create Strategy Narrative

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THE BREAKTHROUGH STRATEGY WORKBOOK

A guide for strategy development that follows the Mission Impact process.

Multiple copies may be downloaded at no cost from web site: www.SheehanNonprofitConsulting.com Other Sheehan articles may also be downloaded at no cost (see pp. 30-31).

An example of the final output from a strategy development process is included on pp. 22 – 28.

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STRATEGY DEVELOPMENT MAP

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Your Mission Impact

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“MISSION GAP”

Imagine what the world would look like if you were accomplishing your mission 100%. Compare that to the way the world

really looks like today. The difference between the two is

your “Mission Gap.”

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MERRILL COUNTY LITERACY COUNCIL

Mission To assure that all adults age 16 or older in Merrill County are literate.

Mission Accomplishment Measure The literacy rate in Merrill County, as

reported by county officials.

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MERRILL COUNTY LITERACY COUNCIL

Mission Gap

With 100,000 adults, age 16 and older, living in Merrill County, the Mission

Gap is 20,000 adults.

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NORTH TEXAS FOOD BANK

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YOUR MISSION GAP

Do you need a Breakthrough Strategy

that will drive Innovation in your

organization? 25


✔ Establish Mission Gap Adopt Aspirational Mindset for



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The Power of

Vision

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ANALYTICAL VISIONING

Analyze Internal Capabilities & Predictable Changes

Analyze External Environment & Predictable Changes

Forecast (Extrapolate) Reasonable Future

Establish “Vision” as “Best Case Scenario”

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ASPIRATIONAL VISIONING

Dream with no constraints Create an Ideal “Future Picture” based

on what is Inspirational and Drives Passion

Create New Internal Capabilities Search Environment for Opportunity

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DREAM

“Some men see things as they are and say ‘why,’ I dream things that never were and say ‘why not.’”

- George Bernard Shaw

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CHANGING THE WORLD

“Because the people who are crazy enough to think they can change the world are the ones who do.”

-Steve Jobs

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DIVINE MADNESS

“Let us build such a church that those who come after us will think we were madmen’, said the old canon of Seville . . . Perhaps through every mind passes some such thought, when it entertains the design of a great and seemingly impossible action . . . This divine madness enters more or less into all our noblest undertakings.”

-Longfellow

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STRATEGIC INTENT

Companies that have risen to global leadership over the past 20 years invariably began with ambitions that were all out of proportion to their resources and capabilities. But they created an obsession with winning at all levels of the organization . . . We call this obsession “strategic intent.”

- Hamel & Prahalad

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CREATIVE TENSION

“the gap between vision and current reality is also a source of energy . . . the gap is the source of creative energy. We call this gap creative tension.”

- Peter Senge

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VISION

With your current environment in mind – including your “mission gap” – think about how you could make “quantum leap” progress on your “mission gap” if your organization existed in an “ideal state.” Answer the question:

“If you could have it any way you wanted

it, what would your organization be like?” Describe it in detail.

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THE $100 BILLION CHALLENGE

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Why dream a vision that can never come true?

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VISION

Visions give us something to aspire to.

Visions can inspire others to help make dreams come true.

Visions provide meaning to the “day to day.”

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How should leaders establish vision?

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POSITIONAL LEADERSHIP

Leadership by “lamination”

vs.

Leadership as a catalyst

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TRANSFORMATIONAL LEADERSHIP MODEL

PARTICIPANTS LEADERS

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LEADING INNOVATION

“The role of a leader of innovation is not to set a vision and motivate others to follow it. It’s to create a community that is willing and able to innovate.” Collective Genius

Harvard Business Review, June, 2014

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WHAT FOLLOWERS WANT

“Constituents want visions of the future that reflect their own aspirations. They want to hear how their dreams will come true and their hopes will be fulfilled . . . The only visions that take hold are shared visions . . . And you will create them only when you listen very, very closely to others, appreciate their hopes, and attend to their needs.” -Kouzes & Posner, 2009

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✔ Establish Mission Gap ✔ Adopt Aspirational Mindset for



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The Importance Of Goals

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VISION TO ACTION: GOALS

Direct attention to relevant activities

Affect intensity of effort Affect persistence

Strategic Stretch Goals: Outcome-

Based & SMART

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OUTCOME VS. ACTIVITY GOALS

“To mail 11,000 personalized fund-raising letters to our organization’s previous donors by October 1, 2016.”

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OUTCOME VS. ACTIVITY GOALS

“To receive $300,000 in contributions from our organization’s previous donors by December 1, 2016.”

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SMART GOALS*

Specific Measurable Attainable Relevant Time-bound

*Traditional version

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ATTAINABLE GOALS

Set with at least 80% chance of success Sounds reasonable – failure can be

followed by negative consequences

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ATTAINABLE GOALS

What might be the downside of setting goals that are reasonably “Attainable?”

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ATTAINABLE GOALS

What might be the downside of setting goals that are reasonably “Attainable?” Goal research: The more difficult the goal, the higher

the level of performance.

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The Performance

Paradox

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SMART GOALS*

Specific Measurable Aggressive, yet Achievable Relevant Time-bound

*Doug Smith version

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AGGRESSIVE YET ACHIEVABLE

Allows you to maximize performance, but with a higher chance of failure If you are a boss & you want to use

Aggressive goals, check your rewards system. If you punish failure, people will not want to be aggressive. Reward “performance” vs. goal accomplishment 56

SMART COMPARISONS

ATTAINABLE

vs.

AGGRESSIVE

Which SMART formula is best?

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ATTAINABLE GOALS

Best when the priority is to accurately predict performance of the current system Good for generating “quick wins” Good for Learning Goals in new

domains Good for a team that needs to build

confidence

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AGGRESSIVE GOALS

Best when the priority is to maximize the performance of the current system Maximize intensity of effort Maximize persistence Performance vs Goal Attainment

must be rewarded

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SMART GOALS

Think of a goal that you are currently working on and write

it so it fits the “SMART” guidelines.

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A NEW ‘A’ FOR SMART*

Specific Measurable *Almost Impossible Relevant Time-bound

*Rob Sheehan version

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GREAT LEADERS

Great Leaders Have a Healthy Disregard for the Impossible

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IMPOSSIBLE . . .

“Space travel is utter bilge.” - Sir Richard Van Der Riet Wooley, The Astronomer

Royal, 1956

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IMPOSSIBLE . . .

“While theoretically and technically television may be feasible, commercially and financially I consider it an impossibility.”

- Lee Deforest, American Inventor (1873-1961)

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IMPOSSIBLE . . .

“Well informed people know it is impossible to transmit the voice over wires and that were it possible to do so, the thing would be of no practical value.”

- The Boston Post, Editorial, 1865

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IMPOSSIBLE . . .

“We must not be misled to our own detriment to assume that the untried machine can displace the proved and tried horse.”

- Maj. Gen. John Kerr, U.S. Army (1878-1955)

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IMPOSSIBLE . . .

“Rail travel at high speeds is not possible because passengers, unable to breathe, would die of asphyxia.”

- Dionysius Lardner, English Scientist

(1793-1859)

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BULLET TRAIN THINKING

It used to take more than six hours to travel by train from Tokyo to Osaka. If the Japanese executives had said to their engineers: “I want you to reduce the time to six hours,” the engineers would have instinctively thought in terms of small improvements, perhaps in the way they boarded passengers and unloaded baggage. But instead, the Japanese executives set out a challenge to reduce the time of the journey to three and a half hours. Faced with such an “impossible” goal, the engineers and designers were forced to reexamine the most fundamental assumptions governing rail travel in Japan. The result of this reexamination was the bullet train. (Jack Welch)

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TRADITIONAL ANALYTICAL GOALS

“This is a forecast of the result we should be able to produce if we work hard at it.”

ASPIRATIONAL STRETCH GOALS

“This is the very best result we can imagine possible (1% chance) and we have no idea how to make it happen.”

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STRETCH GOALS

You can’t think outside of the box, when you are

standing in it!

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STRETCH GOALS

You use stretch goals, they don’t use you. They do not exist to dominate you and stress you out. They exist to give you something to shoot for, to have fun trying to see if you can make it.

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STRETCH GOALS

“The most fun game is one you’ve never played and your inventing as you go along.” Jerry Seinfeld Fast Company, June 2014

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STRETCH GOALS

Fully achieving a stretch goal is not the main focus of your attention. You are interested in being creative, progress, and learning.

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THE MOON SHOT vs CANCER

1961: President Kennedy sets the goal to send a man to the moon and return him safely by the end of the decade. 1970: Congress passes a resolution

to cure cancer by 1976 as a fitting celebration for the bicentennial.

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STRETCH GOALS

You need to create a “safe-fail” situation with a stretch goal. You can’t treat failure as an issue. You have to play.

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SAFE - FAIL ENVIRONMENT

“‘The fastest way to succeed, IBM’s Thomas Watson, Sr., once said, ‘is to double your failure rate.’ In recent years, more executives have embraced this point of view, coming to understand that failure is a prerequisite to invention. A business cannot develop a breakthrough product or process if it is not willing to encourage risk-taking and learn from subsequent mistakes.”

The Failure Tolerant Leader Harvard Business Review, 2002 76

STRETCH GOALS

You have to set your own boundaries on resources you will use to achieve the goal—including the amount of time you spend on it. Make this all part of the “game.” Otherwise, you stress out and/or turn your 70 hour weeks into 90 hour weeks.

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Pessimists & Optimists Unite

Use “Flexible

Optimism” 79

STRETCH GOALS

Since the prospects of failing at the stretch goal are high and failure at some goals can have real life implications—when you set a stretch goal, ask yourself “Am I willing to live with the worst probable outcome?” If not, don’t set it that high.

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STRATEGIC INTENT

“Creating stretch, a misfit between resources and aspirations, is the single most important task senior management faces.”

-Gary Hamel & C.K. Prahalad

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THE WALL STREET JOURNAL

“Stretch is a concept that would have produced smirks, if not laughter, in the GE of three or four years ago, because it essentially means using dreams to set business targets – with no real idea of how to get there . . . . If you do know how to get there then it is not a stretch target.” -Jack Welch, March 8, 1994

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START WITH THE END IN MIND

*When brainstorming new ways to go about accomplishing a goal,

“start with the end in mind.” Imagine you have already accomplished the goal and discern what new ideas you must have used to do that.

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STRATEGIC STRETCH GOALS

Set five Strategic Stretch Goals for the next five years which: Inspire you!!! Would catapult your organization

toward your vision and help close your Mission Gap most effectively Meet the Almost Impossible SMART

criteria

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CHALLENGES WITH STRETCH GOALS

Everyone else operates on the forecasting mindset so you have to be careful about with whom you share your stretch goals.

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You may fall back into the old mindset and get stressed or feel bad if you fail. Watch for that.

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The stretch goal approach does not guarantee you good creativity. It will unleash creativity, but some creative ideas will sound good and not work. You need to decide when to try it again or differently or try something else.

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The biggest challenge is setting Strategic Stretch

Goals is overcoming the Fear of Failure that has been bred

within us.

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FAILURE

We need to transform our relationship with failure in order to leverage the aspirational mind-set and the power of Almost Impossible Goals. What is your relationship with

failure?

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YOU FAILURE!!!

“I am as worthless as the slugs who creep in the crevices of the deepest, darkest parts of the ocean!”

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TRANSFORM YOUR RELATIONSHIP WITH

FAILURE

“We Celebrate Noble Failure.”

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Result: Any accomplishment of positive

magnitude

Success: Any accomplishment which meets or

exceeds its intended result

Failure: To fall short of an intended result

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OHIO STATE FUNDRAISING PROJECT

Goal Result 1988 $40,000 $48,000 1989 $25,000 $24,000 1990 $25,000 $17,000

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Goal Result 1988 $40,000 $48,000 1989 $25,000 $24,000 1990 $25,000 $17,000 1991 $50,000

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Goal Result 1988 $40,000 $48,000 1989 $25,000 $24,000 1990 $25,000 $17,000 1991 $50,000 $62,000

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Goal Result 1988 $40,000 $48,000 1989 $25,000 $24,000 1990 $25,000 $17,000 1991 $50,000 $62,000 1992 $150,000

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Goal Result 1988 $40,000 $48,000 1989 $25,000 $24,000 1990 $25,000 $17,000 1991 $50,000 $62,000 1992 $150,000 $143,000

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LEADERSHAPE PARTICIPANTS

0

500

1000

1500

2000

2500

1992 1993 1994 1995 1996 1997 1998 1999 2000 2001

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10X THINKING

Larry Page lives by the gospel of 10x. Most companies would be happy to improve a product by 10 percent. Not the CEO and cofounder of Google. The way Page sees it, a 10 percent improvement means that you’re basically doing the same thing as everybody else. You probably won’t fail spectacularly, but you are guaranteed not to succeed wildly. That’s why Page expects his employees to create products and services that are 10 times better than the competition. Thousand-percent improvement requires rethinking problems entirely, exploring the edges of what’s technically possible, and having a lot more fun in the process. (http://www.wired.com/business/2013/01/ff-qa-larry-page/all/)

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FAILURE WITH TRADITIONAL GOALS

“We messed up.”

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FAILURE WITH STRETCH GOALS

“Look at our results!” “What could we have done differently?” “I’m glad we went for it, but I wish we had accomplished it 100%”

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FAILURE AND CREATIVE TENSION

“Mastery of creative tension transforms the way one views ‘failure.’ Failure is, simply, a shortfall, evidence of the gap between vision and current reality. Failure is an opportunity for learning . . . Failures are not about our unworthiness or powerlessness.”

- Peter Senge, The Fifth Discipline

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FAILURE AND INNOVATION

“Failure is just a part of the culture of innovation. Accept it and grow stronger.”

- Albert Yu, SVP, Intel Corp

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“The only real stumbling block is fear of failure. In cooking, you’ve

got to have a what-the-hell attitude.”

-Julia Child

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GETTING SMARTER FASTER

“ . . . there’s no substitute for getting smarter faster. And the way you get smarter is to screw around vigorously. Try stuff. See what works. See what fails miserably. Learn. Rinse. Repeat.”

- Tom Peters, Fast Company, December 2001

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THE POWER OF GOALS

*Free Article: The Power of Goals *Read & Share the Link with others:

www.sheehannonprofitconsulting.com/PowerOfGoals/

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http://www.sheehannonprofitconsulting.com/PowerOfGoals/





Creating Vision ✔ Adopt Aspirational Mindset for


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Clarity on Your Current Reality

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STRENGTHS & WEAKNESSES

Better to use systematic tools rather than just asking “what do you think are our strengths & weaknesses?” Use “systems thinking” as you

assess the organization.

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VENTURE PHILANTHROPY PARTNERS CAPACITY FRAMEWORK

ELEMENTS

Aspirations Strategy Organizational

Skills Human

Resources

Systems and Infrastructure

Organizational Structure

Culture

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VPP-MCKINSEY OCAT 2.0

Now available on line:

http://mckinseyonsociety.com/ocat

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http://www.mckinseyonsociety.com/ocat

YOUR SWOTs

Given your vision and commitment to achieve the strategic stretch goals, what are the key strengths of your organization? Weaknesses? Opportunities? External threats?

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Setting Strategic Stretch Goals ✔ Discern SWOTs Create Strategy Narrative

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The Role of Strategy

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WHAT IS STRATEGY?

Strategy is more than strategic planning Strategy is not just a collection of

goals and budget forecasts Most organizations have plenty of

plans, but very little strategy Strategy is an integrated and coherent

cause & effect performance story which has a beginning, middle, and end. 115

WHAT IS STRATEGY?

Strategy is an integrated and coherent explanation of how an organization is going to guide its performance in the future.

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NONPROFIT STRATEGY

The purpose of having a strategy is to guide the organization toward its desired future. Crafting strategy is a creative act, not

an analytical function. It is a process of creating the organization’s desired future, considering its current situation, and designing a set of actions which will catapult it forward. 117

NONPROFIT STRATEGY

The “cause & effect performance story” tells how you will get from “here to there” while . . .

. . . Leveraging your Strengths,

Fortifying your Weaknesses, Seizing your Opportunities, and Blocking your Threats.

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YOUR STRATEGY

Your Strategy is “like”

your theme song

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WHAT IS YOUR STRATEGY “TUNE?”

A strategy does not tell you what actions to take in the fourth week of the second quarter of the third year of the strategy any more than a jazz tune tells musicians what exact notes to play three-quarters through the song. They know the tune to follow. Everyone in the organization should

know the strategy as well as they can recognize a popular tune. 120

STRATEGY NARRATIVE

A Strategy Narrative is a three – four paragraph summary explanation of the organization’s strategy. Most organizations – in all sectors

cannot articulate their strategy with a simple coherent statement. As you design strategy, remember to

think of the organization as a “system” of funding, staff, programs.

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STRATEGY NARRATIVE

“Leaders of firms are mystified when what they thought was a beautifully crafted strategy is never implemented. . . . They fail to appreciate the necessity of having a simple, clear, succinct strategy statement that everyone can internalize and use as a guiding light for making difficult choices.”

- D. J. Collins & M. G. Rukstad Harvard Business Review, 2008

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How does an organization go about creating its Strategy &

Strategy Narrative?

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STRATEGY DEVELOPMENT

Review each of your SWOTs and explain what “Strategic Actions” you should take regarding it.

A Strategic Action is one which will help catapult the organization toward the accomplish of the goals, vision, and mission.

Leverage your Strengths, Fortify your Weaknesses, Seize your Opportunities, and Block your Threats.

These build the “themes” of your Strategy Narrative

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STRATEGY DEVELOPMENT

Evaluate Weaknesses & Threats Look for Leverage & Opportunity

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EVALUATE WEAKNESSES AND THREATS

Look at interactions of Weaknesses

and Threats for necessary “damage control”

Evaluate all Weaknesses and Threats Look at interactions of Weaknesses

and Threats with Strengths for possible solutions

Fortify Weaknesses as necessary and Block relevant Threats

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LOOK FOR LEVERAGE &

OPPORTUNITY Focus on the Strategic Stretch Goals What can you use from the current

reality and SWOTs to catapult forward? Look at interactions of Strengths and

Opportunities and other Strengths and Opportunities for ideas

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STRATEGY NARRATIVE

A cause & effect performance story with a beginning, middle, and end The General speaks:

“First, we are going to…then some of you will…which will then allow others of us to…and that will give us the opening to…which will lead us on to victory.”

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STRATEGY: MAKING CONNECTIONS

NAPOLEON

Greatest Military Strategist Ever?

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YOUR BATTLEFIELD

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STRATEGY NARRATIVE

Make sure Weaknesses and Threats are addressed first so organization is stable enough to move forward Be sure to have strong levers Integrate and balance actions in

funding, staffing, programs/services

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Setting Strategic Stretch Goals ✔ Discern SWOTs ✔ Create Strategy Narrative

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“SO WHAT” MINUTE

What three things will you do during the next week to apply some of the ideas we have discussed today?

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Design a new strategic planning

process Use the next staff meeting to

brainstorm a vision for your organization “if you could have it any way you wanted it.”

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Review all of your goals and make sure they are SMART. Distribute the VPP Organization

Capacity Assessment Tool to everyone on staff to identify capacity building opportunities. Share your key learnings with others

at your next staff or Board meeting

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THE BLOG

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THANK YOU VERY MUCH!!!

For your leadership! For your commitment!! For the difference you make!!!

138

Robert M. Sheehan, Jr., Ph.D. Principal

Sheehan Nonprofit Consulting

301.523.1864 [email protected]

www.SheehanNonprofitConsulting.com @SheehanImpact

FOR MORE INFORMATION

139

http://www.sheehannonprofitconsulting.com/

THE SEVEN DEADLY SINS OF NONPROFIT STRATEGY

#1: “It’s Just Sitting on the Shelf.” The rest of the sins are not necessarily in order of severity, but this is clearly #1 because it is so pervasive and represents a huge waste of money and time – from staff and volunteers. This sin can be deadly, indeed, when board members realize the hours they have wasted – making strategic plans that are never implemented. And for the attorneys on your Board, those are billable hours. 140


#2: Insular Mountaintop Planning. It can be good for a strategy planning group to go to the “mountains” to get away from distractions to do work together. But, before you go, gather input regarding the organization’s future from stakeholders – and check in with them when you get back for more input before you publish and laminate the plan (Peter Block calls this error “leadership by lamination”).

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#3: Over-Emphasis on Fund-Raising. “What?!?” “Impossible!” I can just hear my fund-raising colleagues’ reaction. Of course we frequently find new fund-raising initiatives as a part of a new strategy. The problem is that as these efforts are highlighted, other important aspects of a strategy are under-emphasized – such as program innovation, leadership succession, strategic partnerships, and more.

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#4: Too Rushed. Rather than rushing (e.g., “We are doing our strategic plan at an all day retreat two weeks from Friday, are you available?”), it is wiser to take the time to thoughtfully design and implement a strategy development process. Of course, it should not take forever either. Taking the time can lead to inspiring visions, innovative strategies, and empowered stakeholders – which produce higher performance.

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#5: Lots of Plans, No Strategy. Strategic planning documents can contain volumes of plans, activities, and environmental analysis – but many don’t include a real “strategy.” A true strategy articulates the dynamic levers which will catapult an organization toward its desired future, as well as how its key operational areas will interact to create a cycle of higher performance.

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#6: No Annual Review. No one can see into the future when developing a strategic plan! So, we make certain measured assumptions about the future – including changes in our internal and external environments. An annual review of assumptions and results is important to keep the plan relevant. You may not change your mission or vision, but you may need to change plans and activities.

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#7: Not Ambitious Enough. A strategy and its associated goals and plans should be focused on a vision that is big, bold, and inspiring. Many strategic plans are based simply on an analytical forecast of the way things are currently headed. How dull. It was Goethe who said “Dream no small dreams for they have no power to move the hearts of men” and Mandela who stated “Your playing small does not serve the world.”

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