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| a strategic planning seminar UPAAA and UPAAAz sponsored |
Strategy is
a plan of action for achieving an overall aim. An obvious example is how a good
strategy is crucial to winning a war. So is winning in business. And it’s no
different from achieving an association’s goals to serve a specific sector.
All
organizations, non-profits, or business entities, require strategic planning. Their
approaches, however, often differ due to fundamental differences, as illustrated
below.
NonProfits Businesses
Primary
Goal societal good profits
Revenues donations sales
grants
fees
Stakeholders
donors shareholders
beneficiaries employees
volunteers customers
community suppliers
Metrics social outcomes financial performance
sustainability market share
customer satisfaction
The strategic
planning process is essentially the same between non-profits and businesses. Both
organizations conduct SWOT analyses to identify strengths, weaknesses,
opportunities, and threats.
The ability
to analyze each of these four factors in depth determines the success of the
planning process. I have participated in (and even led) some, and it has been
amazing to see the strategy emerge clearly when those analyses are thorough.
However, before
going through the SWOT analysis, we should consider the nuances in strategic
planning between non-profits and businesses. Precisely because of these
fundamental differences, there are factors to consider.
Primary
Considerations.
A non-profit
must prioritize its reputation for ethical conduct. If a nonprofit becomes
viewed as unethical, it will never survive as an organization working for some societal
good. In other words, the nonprofit must focus on building social equity and,
in doing so, further the sustainability of its mission.
A Board of
Directors is crucial to this consideration (please see the previous article on “Governance vs. Management”). If the Board of Directors is identified as one of
the weaknesses, strengthening the Board
is the primary step.
On the other
hand, a business that loses its competitive advantage will soon be wiped out
from the market. That is why some for-profit organizations do not emphasize building
social equity or working for sustainability. Some may even state its aim
of financial success only in the short term.
A business may
also aim for long-term survival. In such a case, social equity and
sustainability must also be primary considerations.
Mission,
Vision, Values, and Goals
Non-profits
emphasize goals that achieve societal or environmental good. In the UP Alumni Association
in Arizona, for example, we strive to provide scholarships to deserving but
disadvantaged UP students.
The other
goal is for the members to enjoy themselves in the process. Thus, events that
address both goals are prioritized. We have sponsored in-person Bingo and Other
Games Socials before the pandemic, virtual ones during the lockdowns, a hybrid Mini-Conference
on the Filipino, and in November this year, we organized a Fil-Am Gala Event.
Businesses
prioritize financial success. In MegaLink, for example, our goal was to
increase the transactions that go through the ATM switching facility we were
operating. Our revenues came solely from the fees we charged for those transactions.
Of course, we also had to control expenses.
Implementation
and Evaluation
Since there
are fundamental differences between both types of organizations, the metrics used
to measure success are also different.
For example,
the UP Alumni Association in America used to keep track of the number of
members and scholarships. After our strategic planning exercise, we identified
the creation of chapters as a key goal to find and serve more members, especially
in underserved areas.
Both
numbers, of members and chapters, will lead directly to more funds available for
scholarships. The strategy to organize more chapters will deliver larger
numbers faster.
Activities
that engage more members are keys to our success. The biennial Grand Reunion
and Convention is one major activity members always look forward to joining.
But enjoyable charter activities closer to members’ homes would probably reach
more members.
Businesses
are focused on financials. MegaLink earns from switch transaction fees. The
number of member banks, cardholders, and ATM locations was key to increasing that
activity. To ensure growth, we focused on all three metrics.
In addition,
to avoid attrition, employees and the representatives of the member banks had
to feel like they belonged to one big happy family. To this end, we designed active enjoyable committees,
sponsored frequent well-attended socials, and organized joint foreign trips for
technology advancement.
In
conclusion, while the strategic planning process is similar for non-profits and
businesses, the primary considerations, goals, and performance metrics differ. This
is due to their fundamental differences as organizations. Understanding these
differences will prove crucial for developing effective strategies.