Consider the ScorecardTim Johnson | Georgia Nonprofit NOW, Winter 2015
As NOW reported back in 2014 (“Sharpen Your Strategic Advantage”), there are almost as many methods for strategic planning as there are consultants. In that piece, we outlined a model called Results-Based Planning. Another approach, which I’ve been implementing successfully in the corporate sector and with nonprofits for the last 22 years, is called the Balanced Scorecard Strategic Framework.
While it answers the same questions asked by other strategic planning frameworks —”Where do we want the organization to be in 3 to 5 years?”, “What are the projects or programs that will help us get there?”, and “How will we track our progress to ensure we’re on the right path?”— the Balanced Scorecard approach provides a way to categorize strategic priorities and objectives through the Strategic Map. This visual schematic can be referenced by those who support the organization, either externally or internally, to immediately understand what the organization is trying to achieve and how it will get there. It also ensures that the strategy identifies what must be accomplished across the “breadth” of the organization.
In the sample Strategy Map (below), you can see how on-hand resources, activities, and funding sources build to achieve mission impact at the top of the chart. Though there is a flow to the chart, in which each section builds on the one below it, each of the four sections is equally important to the execution of your work.
That’s the “balance” in the Balanced Scorecard approach: making sure the work to be done is considered from the perspective of all four areas. In that way, you plan your strategy with everyone and everything in mind: the staffers, volunteers, and equipment on-hand (Organizational Capital), the programs and behind-the-scenes work being done by them (Internal Processes), your fundraising and fund-allocating pros (Financial), from the highest goals of the organization—that is, the value you will bring to the community you serve (Mission).
Fundamentally, you’ll be asking these questions:
What must we accomplish for our beneficiaries and other stakeholders? Given our assumptions for the given time frame, what does success look like to us? (This will also serve to identify how your organization is differentiated in the community.)
What must we do well internally to be effective in the marketplace? How do we deliver our services, and how must that change?
What kind of people and technology do we need to enable our business processes? How do we care for and develop this capital?
How do we fund all this activity?
Answering these questions should reveal the strategic priorities or goals that will result in a successful future for the organization. It should also produce specific, measurable objectives that demonstrate movement from your current state to the achievement of your identified goals. Further discussion in teams and committees should flesh out those objectives to develop Key Performance Indicators (KPIs); targets for those KPIs; initiatives to achieve each objective; and a roadmap identifying the timing of each initiative based on its relative priority.
Because the Strategy Map you produce will encompass the perspective of each team member, anyone on your team should be able to look at the finalized Map and see his or her place in it.
One of the key benefits of this approach—considering each of the four perspectives—is to make the planning process all-inclusive. You’re meant to consider not just every resource and department, but every single person involved. Because the Strategy Map you produce will encompass the perspective of each team member, anyone on your team should be able to look at the finalized Map and see his or her place in it. When everyone knows where the organization is going and how they’re meant to help it get there, you get a team working in perfect alignment.
We’ve already taken several organizations through the process, including FOCUS and the Macon Arts Alliance, with impressive results in both organizational effectiveness and team-building.
If you’d like to learn more about developing a Balanced Scorecard plan for your own nonprofit, don’t hesitate to contact myself or GCN consultant Jeanne Drake Ward at [email protected].
Tim Johnson is GCN’s Vice President of Consulting and Professional Services.