The Balanced Scorecard Effect: What a comprehensive approach to strategic planning can doJeanne Drake Ward and Marc Schultz | Georgia Nonprofit NOW, Spring 2016
As nonprofits, the mission drives everything you do. But to reach your goals, you need more than drive. You need a map: a way to think about every facet of your nonprofit, the goals you’re moving toward, and how you’ll achieve them. With a document accounting for every asset, objective, and measurement up front, you can determine priorities and make it clear to anyone supporting the organization—internally or externally—how their role contributes to mission success.
To charter that map, GCN’s Nonprofit Consulting Group guides clients through a strategic planning process using a Balanced Scorecard framework.
“To ensure that the plan remains relevant, our approach to strategy is built on key assumptions about the future—how the world, and the issue at hand, will change in coming years,” says Consulting VP Tim Johnson. “At its foundation, a Balanced Scorecard is designed to account for everything an organization needs to consider. It is also built to be executable, with measures allowing leadership to manage all aspects.”
The “balance” comes from considering the organization through four perspectives: financial, organizational capital, internal processes, and mission. Each perspective builds on the one before it, ultimately supporting the nonprofit’s highest purpose— its mission.
The result is a roadmap that lays out not just what the organization is trying to achieve, but exactly how it will get there.
The “scorecard” is what you get when you’ve accounted for all activities in terms of the four perspectives. With all your people, processes, and resources cataloged, you can understand not only how all the pieces work together—including every stakeholder’s individual part—but also the gaps that keep you from achieving maximum impact.
The result, says Johnson, “is a roadmap that lays out not just what the organization is trying to achieve, but exactly how it will get there.”
A Balanced Scorecard allows you to assess the state of your nonprofit and plan for its future, but also brings clarity to everyday work and decision-making by linking the work of each staffer, board member, volunteer, and donor to on-the-ground impact. By unifying efforts across the breadth of the organization, a Balanced Scorecard allows you to fulfill the potential of your mission, workforce, and resources, and maximize your impact on the community.
Learn more about our GCN's Balanced Scorecard approach in "A Planning Reboot at Community Assistance Center" here.
HOW A SCORECARD STRATEGY TAKES SHAPE
Using a Balanced Scorecard framework for strategic planning, GCN’s Nonprofit Consulting Group aligns all organizational aspects with what must be accomplished for the community.
The steps we follow might seem familiar, but the focus and deliverables are unique to the approach. Here’s how it happens.
THE STEPS YOU’LL TAKE:
1) Conducting an environmental scan, including interviews, focus groups, and literature reviews. The SWOT analysis remains the standard to beat in an environmental scan. Our particular SWOT process is designed to cover all four Balanced Scorecard perspectives, and to involve all staff, board, and key stakeholders, including top-level volunteers and major donors.
2) Narrowing fact-based inferences about the future to a set of Key Assumptions. Using the data collected, we think through the future needs of each community served. Selecting the trends most relevant to the mission, we can decide on a set of “Key Assumptions” about the future, and what they will mean for the organization. (Emphasis on staff input to prioritize those assumptions—and, in the next step, goals— is another unusual aspect of the approach.)
3) Creating goals and measurable objectives. Using those Key Assumptions as guides, we establish goals for the future—thinking three to five years ahead— and measurable objectives to mark progress toward those goals.
4) Drafting the strategic plan. Considering our new goals and objectives through all four Balanced Scorecard perspectives, leaders draft a strategy that covers staff, volunteers, and infrastructure (organizational capital); programs and behind-the-scenes work (processes); fundraising and resource allocation (financial); and the impact the organization must make in the community, given its changing needs (mission).
5) Developing the Strategy Map. One of the unique outputs of the process is the Strategy Map, a one-page chart that makes it clear to anyone—staff, board, or volunteer—how the strategic plan works and the role each person plays in carrying the mission forward.
6) Creating initiatives and assigning responsibility. Also supplementing the strategy is a timeline and roadmap that lay out the plan chronologically, initiative by initiative. With each initiative clearly outlined and tied to long-term goals and objectives, it’s easy for staff to take ownership of its execution.
7) Completing implementation of work plans to execute the strategic plan. With staff and board together on the same page (by way of a finished strategy), changes can be put into action.
8) Continual monitoring and adjustment. Beyond execution, the process continues through regular assessment, and adjustment to practices or objectives as needed. This is how the executive team drives the execution of the strategy over months and years.
THE RESOURCES YOU’LL DEVELOP:
The Strategic Plan. A clear, succinct final document covering your findings, assumptions, goals, and objectives.
Strategy Map. A single page providing your objectives at a glance, arranged by perspective.
Timeline and roadmap. An easy-to-read spreadsheet tracking all initiatives across the next three to five years.
Jeanne Ward Drake is a senior consultant at GCN and Marc Schultz is contributing editor at GCN.