Saturday, November 30, 2013

7 Reasons Why Strategic Plans Fail

Over the years, I’ve collected seven reasons why strategic plans fail. Even with the best of intentions, and even committed prayer, the casualty rate for strategic plans is high.  Here’s why:

#1. Event Thinking
Strategic planning is viewed as an event or a task, instead of a transformational ongoing process.

#2. Top-Down Ego
Strategic planning is created top-down and characterized by ego and arrogance, instead of humility and listening.

#3. Interruption
Strategic planning is seen as an “add-on” interruption to my “real work,” instead of becoming absolutely core to my role.

#4. Extra Expense
Strategic planning is allocated as an extra expense (that is often cut) instead of a critical core investment.

#5. Binder Syndrome
Strategic planning conjures up complex and time-consuming exercises and
3-ring binders, instead of being the servant to a simple and elegant plan that is grounded in the alignment between the mission, BHAG, and S.M.A.R.T. goals.

#6. Sacred Cows
Strategic planning “economizes” by involving fewer and “safer” stakeholders who honor tradition, dead horses and sacred cows, versus out-of-the-box dangerous ideas!

#7. Pseudo Prayer
Strategic planning, for the Christ-follower, gives a wink and a prayer to holy input, versus an extraordinary process of assembling spiritually discerning people together to hear from God—who then joyfully follow His plan.

#8. Verbal Fuzz
Strategic planning festers in a “verbal draft” purgatory, versus becoming a disciplined process that is both written and implemented. (Why is a written plan so important?
In his book, Breakfast With Fred, Fred Smith Sr. confesses, “I learned to write to burn the fuzz off my thinking.")

Question: Proverb 16:3 says, “Commit your actions to the Lord, and your plans will succeed.” What might be the second reason your plans may not succeed?

Saturday, November 23, 2013

There Are No Irrational Customers

Here in the U.S., retailers mark the day after Thanksgiving as “Black Friday,” the day (supposedly) when a store’s accountants begin using black ink to note that the company is finally profitable on the year and “in the black.” (There are other definitions.)

So in the rush to open retail stores earlier and earlier on the Friday after Thanksgiving—and beat the fierce competition—some enterprises are planning to open on Thursday.

“It’s what our customer wants,” is the spin. 

Frankly, whether it’s spin or not, it’s an excellent response.  In Peter Drucker’s quick-read book, The Five Most Important Questions You Will Ever Ask About Your Organization, his third question asks, “What does the customer value?”  He writes:

“The question, What do customers value?—what satisfies their needs, wants, and aspirations—is so complicated that it can only be answered by the customers themselves.  And the first rule is that there are no irrational customers. Almost without exception, customers behave rationally in terms of their own realities and their own situation.  Leadership should not even try to guess the answers but should always go to the customers in a systematic quest for those answers.”

As a loved and admired graduate school professor, the father of modern management added, “I practice this. 
Each year I personally telephone
a random sample of 50 or 60 students
who graduated 10 years earlier.
I ask, ‘Looking back, what did we contribute in this school? What is still important to you? What should we do better? What should we stop doing?’ And believe me, the knowledge I gained has had a profound influence.”

Preach it, Peter! Several years ago, in preparation for a senior team/board strategic planning retreat, I asked the participants to read this short Drucker book and to conduct one-on-one interviews with at least two customers of the ministry.  Like Drucker, board members especially affirmed, “the knowledge I gained has had a profound influence.”

You might try that with your board. What could be more important in Christ-centered governance than the board being assured that the ministry knows--and responds to--what the customer values?

QUESTION: What does your customer value—and what is your systematic quest for those answers?


Wednesday, November 13, 2013

Cronies and Admirers Need Not Apply!

I serve on a board that aspires to be a life-long learning board—so our meetings always include a segment, “10 Minutes for Governance.” It’s a quick refresher course on a basic governance principle.  

We focus on one big idea, have a brief discussion, and remind ourselves not to rest on the laurels of last year’s governance insights. Board members volunteer in advance to pick a subject and lead the discussion.

So when I read a recent blog post, What Does a Board Do? by Fred Smith, president of The Gathering, my radar was up.  He answers that question with four “F’s” and he delivered the perfect content for our next 10-minute segment.

Here are Fred’s four F’s:

Friendship: The way I would define a friend as a board member is someone who can tell the truth in love. 
It is not a crony
or an admirer. 
I need a sense of partnership with the board that allows the freedom to tell the truth because we are dedicated to the accomplishment of the same mission.

Focus: What will we not do? I need a board that will keep us all focused on the opportunities that are distinctly ours. 
I believe our unique mission 
will be diluted unless we are ruthless 
in checking ourselves and 
not distracted by many interesting possibilities.

Fidelity: I mean this in two ways. First is financial. Our finances should be completely open and in order. Second, the board is entrusted with the vision. It is relatively easy now for us with The Gathering to stay true to the mission and not wander off, but success or expediency will tempt us to betray that trust. My prayer is that The Lord would dismantle The Gathering before it strays from the mission to serve and not be served.

Foresight: Part of our mission is expanding the vision of others, and the board must be constantly stretching the vision of The Gathering itself. The board must be composed of people who see things from a variety of perspectives and interact with a wide world and not just one culture. We need people who will bring their experience in other disciplines and help us see around the next curve.

Click here to read Fred Smith’s entire blog, What Does a Board Do? 

QUESTION: Of the four areas—Friendship, Focus, Fidelity, Foresight—what are you best at? Where is improvement needed—and what’s your next step?

Friday, November 8, 2013

3 Governance Missteps

The father of modern management, Peter Drucker, wrote a fascinating novel with a memorable title, The Temptation to Do Good.  It’s instructive for every nonprofit CEO and board member.

“The temptation to do good” is on my Top-3 list of governance missteps—those fatal stumbles that may derail even the most well-meaning board members. Here’s the list:

Governance Misstep #1. When launching a new nonprofit ministry, you write your bylaws and incorporate before you spiritually discern your philosophy of ministry and philosophy of governance. 

That’s backwards. You should plan, recruit and then incorporate. Seek counsel first from a strategic planning consultant or a savvy CEO who will walk you through a spiritual discernment and planning process. Next, cultivate and recruit board members whose governance philosophies align with your unique mission and ministry philosophy. (One size doesn’t fit all.) Then, and only then, invite your legal counsel to create incorporation documents that will also align with your God-blessed mission, vision and governance philosophy.

Governance Misstep #2. When recruiting board members to both new and established ministries, you rely on the old adage that board members can pick and choose how they'll be engaged: “Pick One: Wealth, or Wisdom or Work.” 

That’s bad theology and bad practice. You need full engagement from every board member. In the new book, Stewardship as a Lifestyle: Seeking to Live as a Steward and Disciple, John R. Frank points out: “Some may believe that if you give time as a volunteer then you do not need to be a financial donor to the organization.  While all gifts of time, leadership and volunteering are appreciated, there is no measurement system in scripture to allow a gift of one type to cancel the need to grow in one’s holistic stewardship.”

Jesus reminds us in Matthew 6:21 (NIV), “Where your treasure is, there your heart will be also.” Board members of every economic bracket can prioritize their giving so (as some boards require) your organization is one of every board members’ Top-3 giving priorities each year. (That's not in the Bible, but it's good policy.)

Governance Misstep #3.  When meeting human and spiritual needs, we say yes to every opportunity (“the temptation to do good”)—and we blame God if he doesn’t fund our ill-conceived efforts.

That’s irresponsible. Guided by good governance and a focused mission statement, a ministry must prioritize (and say no frequently) and be results-driven versus activity-driven, or tempted to meet every need.  Priorities are paramount.

Why? According to Michael E. Gerber, 40 percent of all small businesses fail in their first year.  Of those that survive one year, 80 percent fail in the next five years. Only 20 percent that make it past five years are around for 10 years. Yikes! (My guess: the nonprofit failure rate is even higher.)

If your CEO has not read the E-Myth literature (to learn how to grow sustainable organizations), check out my review of The E-Myth Revisited: Why Most Small Businesses Don't Work and What to Do About It

May God protect you from governance missteps!

QUESTION: What other governance missteps could be obstacles to accomplishing God’s plan for our ministry?