Ideally, a good strategy should be accompanied by effective planning tools. There are several tools that could be involved while conducting strategic planning. The most commonly used tools are: Visioning, Metrics or charts, SWOT analysis, Pestle analysis, Affinity diagrams, Portfolio analysis and Interrelationship digraph. Each has its own importance and a specific way of incorporating it within the planning process. A perfect combination of all these tools finely integrates into the strategic planning model of an organization.
1. Visioning: To start with, the very first tool is to vision/to plan for future. It starts with brainstorming which gradually leads to the long-term visualization, as desired by the organization. Visioning answers basic questions such as what the organization wants to achieve in future, what it shall look like, what image it shall build in the minds of its prospects and who shall be the potential customers. Overall, visioning gives a futuristic revelation to the organization’s present image and standing.
- Importance of Visioning: Vision of an organization is the most important piece of foundation that guides all its further plans and prospects.
- Visioning helps in determining the strategic projects that are chosen by the organization heads. If an organization is a human body, vision is the head.
- Organizational leaders look back to the vision and design their statement accordingly in order to have a realistic approach for the organization.
- A proper vision also inspires them to proceed with good spirit and interest instead of moving back or remaining perplexed.
- How is Visioning done? Although it sounds simple, yet the process demands some skills and attributes to create a motivational statement for the organization and its employees. Remember that the vision statement should be expressive and well drafted so that it appeals to people and at the same time also gives direction to the NGO. It is best done by choosing a specific time-frame which is practical for the organization and asking the leaders to foresee the future of the NGO by asking themselves few questions such as:
- Where do you see the organization in 5 years time?
- Who are your target beneficiaries?
- How do you want others to see you?
- Why do you want to do/ address a particular thing?
- How will you achieve your goal?
Once the leaders have got the answers to these questions, each member jots their vision statements one by one. This process continues by rounds until all the responses of all the members have been recorded. After this, the board debates on the pros and cons of all the responses and finally come up with a vision statement. While drafting the vision statement keep the following points in mind:
- Use simple language that can be understood by people of all backgrounds.
- Should be appealing and inspiring to engage people.
- Should have a broad context.
- Should be written in present tense.
Examples of Vision:
Oxfam – Our vision is a just world without poverty.
Save the children International- A world in which every child attains the right to survival, protection, development and participation.
2. Metrics/Charts: Ideally, a strategic plan is incomplete without numbers, calculations and graphical representations. These are often ignored because people might not be confident with mathematics. However, in order to prove the visionary statement, it is important to have justifications through figures and metrics which will finally determine if the project will make a desirable impact, as it has been planned.
- Importance of Metrics and Charts: Strategic planning involves daily course of responsibilities. Since time, energy and organization resources are limited, therefore the leadership team needs to track the overall performance of the various projects and assess if they are meeting the set targets. By following the metrics, NGO leaders can know when to proceed, when to shift focus from one specific field to another or in worst circumstances to stop the entire project.
For instance, if your NGO plans to work in the education sector, your team leaders will have a look at the chart to see if donors and funding in the given sector is witnessing a steady growth. In case the graph does not show a steady response, leaders change their techniques and approach towards the specific strategy and would look at some other sector which appears more appealing. - How are Metrics and Charts made? Before creating a metric, organizations choose the best metric that is critical to their strategy. There are three different types of measures to evaluate organizational progress:
- Outcome measures: Outcome measures help in assessing the results of efforts
- Strategic measures: Strategic measures enable leaders to understanding if they are proceeding in the right direction
- Core process measures: Core process measures ensure if the systems are efficient in supporting the desirable growth.
Under changing circumstances and situations, either one or more than one of these metrics need to be used for better tracking and evaluation of results. After selecting the most appropriate metric, it’s time to create one.
Leaders ask certain questions: The name of the metric and what will it display about the organization, the kind of data that needs to be produced from the metric and the place where the data can be found, the type of chart that will best display the data and the ways of interpreting the measure. In order to answer the last question, they refer to the first. Once they have formed a complete chain of satisfactory answers that becomes the ideal metric to be selected for that specified time.
3. PESTEL Analysis: Is an important planning tool used for understanding the external macro- level external factors that impact the working of an organization. It is a useful strategic tool for understanding market growth or decline, business position, potential and direction for operations.
- Importance of PESTEL: Result of this analysis is used to identify threats and weaknesses while conducting a SWOT analysis.
- How to conduct a PESTEL? The first step while undertaking the PESTEL is to understand all the external factors that may impact the working of your organization. In the analysis the following factors are assessed:
- Political- These include the factors that are associated with the government policy, schemes, taxation, trade laws etc. with respect to your country. Political factors may to a great extent influence your working.
- Economical- These factors relate to the external economy factors like markets, funding availability, interest rates, exchange rates, inflation, incomes of the people etc.
- Social- These factors are related to the beliefs, customs, attitudes, traditions of a particular place and influence the organizational working to a large extent.
- Technological- Refers to the technological aspects and their impact.
- Environmental – These include all environmental factors that may affect your organization working. These include climatic conditions, rains, disasters etc. that have a huge potential to influence the working of your organization.
- Legal- Legal factors include norms, certifications, legal procedures related to health and safety, consumer rights and laws and product safety etc.
Once you have identified the various factors you need to gather data and conduct research to understand the impact of the factors on your organization.
4. SWOT analysis: SWOT analysis is another efficient planning tool, in which members suggest, list and assess the strengths, weaknesses, opportunities and threats of their organization. Conducting a SWOT analysis is a very effective tool to assess, analyze the current health of your organization and manage the organization successfully. SWOT stands for Strengths, Weaknesses, Opportunities and Threats.
- Importance of SWOT analysis: SWOT analysis helps the leaders in developing an overall picture of the current position of their organization so that they can devise their future plan of action, based on the present situation and in accordance to their common objective.
Through the analysis, leaders get worthwhile and credible information which is further used to grow internal projects in the view of facing challenges that prevent an organization from its complete efficiency. - How is SWOT analysis done? SWOT analysis involves deep focus on both the internal sphere and the external sphere of an organization. Strengths and weaknesses are within an organization whereas opportunities and threats revolve around the competitive environment of the organization.
In the internal environment, leadership team brainstorms the vital strengths of the organization and looks for ways to make it into a competitive advantage in the marketplace. They also highlight the key weaknesses and make an attempt to improve such sections. They can also turn a weakness into an advantage, only with the right blend of planning and skills.
In the external environment, leaders concentrate on all possible ways to make the business sustain and flourish in the competitive industry. They give suggestions and come up with a list emphasizing the most promising opportunities and the fatal threats to a company. The key opportunities and threats are then mapped out and projected in the overall strategic plan. SWOT basically is the analysis of the following:- Strengths: these are the positive factors within the organization that will help you achieving your objectives and targets.
- Weaknesses: these refer to the internal factors that will hinder the organization in achieving the desired outputs.
- Opportunities: these are the external factors that are beyond your control but are most likely support you in moving closer to the target. Analysis of such factors and integrating them in your plan will help you take advantages of the situation.
- Threats: Threats are the negative external factors which may jeopardize your ongoing activities. It is very essential to assess the risks while developing your plans, so that you can accordingly develop risk mitigation strategies right from the beginning.
5. An affinity diagram: An affinity diagram is useful for narrowing down large number of things into more organized and similar categories in order to make it easily manageable. The term “affinity” refers to inherent similarity or relationship. It is an efficient planning tool for grouping, categorizing and combining vast prospective projects and initiatives into a convenient number.
- Importance of affinity diagram: As a result of SWOT analysis, there are large numbers of internal and strategic projects that need to be undertaken. Affinity diagram helps in proper grouping and combining these projects by projecting the common features and characteristics. This helps in putting the projects into specialized categories and concentrating only on those niche areas. As a result, where SWOT analysis would lead to 50 projects, by means of this tool leaders can prioritize only on 10-15 of them.
- How is affinity diagram made? The entire leadership team gets together and begins by writing all the prospective initiatives or projects on a 3X3 sticky note and then arbitrarily placing the notes on a flip chart pad. The team then gathers around the flip chart and categorizes these notes under a larger category/theme in a logical manner. By means of this careful study, the process brings in more clarity and simplicity into a project. Once the entire team has resolved the possible connection between the sticky notes and the notes have stopped moving, the procedure comes to an end.
6. Interrelation digraph: Out of all the important projects, organizational leaders need to recognize only a few essential ones. An interrelation digraph helps in identifying those few projects from the most significant.
- Importance of interrelation digraph: The tool has been exclusively designed to compare all the problems and opportunities amongst projects and thereby identify the key projects that would help in creating maximum impact on others.
- How is interrelation digraph made? After the leadership team has categorized their potential projects or strategic initiatives with the help of affinity diagram, they proceed towards making the interrelation diagraph. For this, the team assembles all the remaining sticky notes after the affinity process and puts it into a square shape around the flip chart. Starting from one corner and working around the square, they compare each project with the others by questioning about the presence of strong relationship between any two initiatives and the initiatives which have a cause-and-effect relationship. When no relationship or a stronger relationship can be spotted, the team moves on.
- In order to identify cause-and-effect relationship, the team draws an arrow between the two projects (one, having an impact and the other which is being impacted) by pointing the arrowhead towards the project which is being impacted. When the leaders are done with all the comparisons, they count the number of arrows going out from each project. The projects which have maximum number of arrows are more likely yield productive results if chosen for the project plan. Therefore, the team considers these initiatives while devising strategic planning.
7. Portfolio analysis: Portfolio analysis refers to process of analyzing the ongoing, past and present projects/programs of a NGO and assesses the performance of each. Portfolio analysis is a systematic way to analyze the array of services that are conducted by a NGO.
- Importance of Portfolio analysis: It encourages the senior management to evaluate all the programs and projects individually and accordingly allocate resources for them.
- How to conduct a portfolio analysis? The first step in portfolio analysis is to identify the various sectors, projects and services that the NGO takes up. Once all the programs have been identified, you need to classify them into the following four categories:
- Star projects or Strong Projects- these refer to projects and activities that have been successful in the past and are also performing equally well in present day.
- Question marks or New Projects- these are the new projects and concepts which have not been tested now. You have developed the projects but are not sure if they will be successful or not.
- Foundation stones- These are the projects that are have a history of receiving funding and provide financial security and/or credibility to the NGO.
- Dead ducks- These Projects are exhaustive both in terms of time and resources but do not add any value to the NGO.
Based on the analysis and categorizing the projects and services you can know which projects require attention and which should be scraped from the list.
4.2 Principles of Planning
It is really important for you to understand the basic principles of strategic planning before you set out to initiate the process. Experts in the field of NGO management and government suggest a few basic principles for strategic planning which would not aid you in the process of planning but will also ensure that the planning leads to success in the future. To avoid your hard-work and time go futile integrate the following principles in the planning process.
- Leaders to lead it: Strategic planning is central to the leaders and the top management of your NGO. It is the responsibility and the duty of the senior management team to be fully participative and accountable in the process. As the final decision is to be taken by them, it is necessary that they are fully engaged in the planning process.
- Staff should own the plan: The strategic plan will be successful lonely when it is adopted by the staff, therefore keep the staff involved in the process. Your staff should respect the plan and help you in implementing it in full force. Unless your staff owns and abides by the strategic plan, your organization won’t reach the desired goal. Remember that leader and senior team members are responsible not just for the organization but also for the staff, and therefore your staff should be involved in the process of planning.
- Stakeholder analysis: It is important for you to understand what your stakeholders expect from you, and therefore you should engage them in the process. During the discussions with these stakeholders you can understand what as an organization you are expected to do. You can accordingly decide your future course of work through these discussions.
- Keep the plan simple: The planning process should be kept simple, do not unnecessarily complicate it by using technical tools, jargons etc. The purpose of the plan is to guide you and therefore, just focus on how you can develop a simple yet practical plan that helps the organization in reaching the desired objectives.
With the help of the above planning tools and planning principles, strategic thinkers of an organization can move ahead to the different stages of strategic planning process.