The Five Types of Strategies
3.03.2013
I’ve been busy developing a new workshop titled “Sharpening Organizational Strategy” that I’ll be presenting for the CLA conference May 1-3 in Anaheim, California. I’ve been pondering why organizational strategy is so challenging to certain nonprofits and often brings board members to exasperation.
As I was working on the PowerPoint deck last week, I came to a sudden realization: nonprofit organizations need a different kind of strategy depending where they are on the nonprofit lifecycle.
The nonprofit lifecycle is a normal curve that begins with birth, then growth, maturity, decline, and then finally closure. When you’re climbing the uphill side of the lifecycle you need a completely different strategy than when you’re riding the downhill side. Here the five types of strategies that I spotted.
Launch strategies. When you’re in the birth or startup phase of an organization, you need a strategy that deals with identifying potential funding sources, prototyping new ministry models, and learning from quick failures.
Growth strategies. When your ministry is experiencing a virtuous cycle of more donors bringing more ministry bringing more excitement bringing more donors, you need a growth strategy. Perhaps you are seeing a movement emerge. Growth strategies deal with capacity-building, increasing funding sources, increasing ministry sites, and developing new and better ways to minister to those you serve.
Next-level strategies. Growth tends to happen in spurts. When your organization has plateaued or is in a phase of maturity, growth tactics tend not to work as well. Organizations in this part of the lifecycle often want to know where the next level is and how to get there. These strategies deal with continuous improvement and refining operations combined with looking for new breakthroughs.
Turnaround strategies. When you’re riding the downhill side of the nonprofit lifecycle, trying harder tends not to work. You need a turnaround strategy when your donor base that is aging out, the ministry need has changed significantly, and your ministry model doesn’t work as well as it used to. These organizations need to accept that they are in decline and call for radical change. These strategies deal with cutting costs, looking for new opportunity, and going back to the foundations of why the ministry was started in the first place.
Merger and acquisition strategies. These strategies deal with shutdown of the organization. Sometimes a weaker ministry can merge with a larger one productively. Sometimes building land or other assets can be donated to a stronger ministry with a similar mission or serving the same target audience.
Consider an organization that is clearly in decline and they bring on some new hard-charging board members. The new board members want the organization to prospect for new donors, push to get more ministry happening, and set ambitious targets for growth. The board members become frustrated by the nonprofit leaders who don’t seem motivated to hit these targets. The nonprofit leaders become frustrated with board members who just don’t get it. Trying harder doesn’t overcome the problem of a ministry model that just doesn’t work anymore.
So before you embark on your next round of strategic planning, figure out where you are on the nonprofit lifecycle, then select the appropriate type of strategy to help you move forward.
