Thursday, September 12, 2013

What is Strategy? Part III

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

In Part III of "What is Strategy?" we consider your current reality.  Once you have identified the future to which you are headed (e.g., Vision, Goals) then the obvious question is “How are we going to get there?”  But don’t start brainstorming just yet.  Before doing this, you need to make sure that you have a clear and accurate understanding of your current reality.  Only in this way will you be able to create a strategy that fully leverages your resources.

SWOT analysis is the most traditional part of strategic planning – and the part most often done poorly.

First, I recommend doing SWOT analysis AFTER an organization has identified the future it wants to pursue.  This is opposite of how SWOTs are usually done.  By doing SWOTs toward the end of the process you allow yourself to follow your dreams and aspirations rather than to be constrained by your environment.  See my blog about how SWOT is “Better Backwards” at this link.

When you do SWOT analysis at this stage, you are asking yourselves “What are the most relevant Strengths, Weaknesses, Opportunities, and Threats that we need to keep in mind as we pursue our Vision and Strategic Goals?”

Next you have to actually identify the “correct” SWOTs that are most important in getting you to your Vision and Goals.  And that proves to be very challenging for organizations.

Let’s start with the analysis of internal Strengths & Weaknesses.  So often this is not done with much thought or very systematically.  I recommend using an organization assessment tool for this process, such as the VPP/McKinsey OCAT.  It is also important that you have a culture of actually telling the truth to one another about your Weaknesses.  If you don’t have that, then you are going to make strategy errors.

The same goes for an analysis of the external Opportunities & Threats that the organization needs to be aware of.  Organizations need to cast a wide net, collect data, involve stakeholders, and find out what possible Opportunities are out there and what Threats they need to be aware of.

Getting the SWOTs wrong – missing any of the SWOTs – can totally thwart an organization’s strategy development process.  If you do not understand the “hand you have been dealt” then you cannot “play it” effectively.  If you miss the Aces you are holding or, worse, confuse Deuces for Aces, then you are in trouble.  For example, if you think that you have a Strength with a “Board that cares” and you need to raise lots more money, then it may really be a Weakness if this Board does not have access to funds.

Get the SWOTs right and then we will move on to writing an integrated strategy narrative in the next installment.

For more ideas on how you can lead breakthroughs in your organization, follow this blog and check out my web site at   You will find free resources you can download, including a Breakthrough Strategy Workbook that you can download at no cost.  You can also check out my book, Mission Impact:  Breakthrough Strategies for Nonprofits, and buy it if you are interested.  And you can follow Sheehan Nonprofit Consulting on Facebook.

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