STRATEGY FOR IMPACT
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NPC’s practical approach to strategy development
for charities
Abigail Rotheroe and Iona Joy, November 2014
INTRODUCTION
At NPC, we have been helping organisations—first funders, then charities—to develop strategy since
2006.
We support organisations at various points throughout the strategy process, from full strategy reviews
through to work on theory of change and internal capabilities. From every assignment we learn more
about the characteristics of successful organisations and what drives good strategies.
We have now collated these lessons and experience into a process, which includes a strategy triangle
specially tailored for the charity sector.
Wholesale transportation of business models into the charity sector are rarely appropriate, but many
frameworks developed for the private sector can be applied to analyse charities and we use a variety of
these. We also uses tools specially designed for charities such as theory of change, our little blue book,
needs mapping and impact measurement frameworks.
We have prepared this guidance to share how NPC approaches strategy development and to provide
charities with a framework for thinking about the strategy process.
The focus of this guidance is the first two aspects of the strategy process: preparation and
development.
We have brought together a number of different models and frameworks in our strategy triangle which
we hope will be a useful tool for the sector.
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WHY STRATEGY?
‘A vision without a plan is just a dream. A plan without a vision is just drudgery.
But a vision with a plan can change the world.’
We firmly believe that without strategy, charities and social enterprises will struggle to create impact.
The strategy—and the process of developing it—results in clear purpose, effective decisions, better
implementation and ultimately greater impact.
An absence of strategy can lead to a failure to understand and meet the needs of those the charity is
seeking to help, poor services or products, failure to adapt, and a lack of common purpose among staff.
Regular review will ensure that strategy achieves genuine impact. We have learnt that the process of
developing the strategy is as important as the strategy itself, by engaging stakeholders, motivating staff,
and refreshing management thinking.
Finding the time and space to step back from reactive decision making to proactive strategy
development can be hard, especially in difficult times when management is under pressure and time is
short. But a good strategy can help to avoid firefighting scenarios.
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WHAT IS STRATEGY?
Strategy is not one-size-fits-all.
A heart-searching discovery of core purpose is needed where an organisation is uncertain of direction.
A process to plan ahead concretely may be needed where the charity is navigating complexity.
A charity at a crossroads will want to review options.
Loose strategies suit experimental situations. Tight parameters and planning are needed when delivery
of tasks and projects are demanding.
But whatever the situation, we see strategy as being live rather than done, dusted and filed.
It is a process and way of delivering mission as much as a product.
Strategic questions include:
•
What is it we are trying to achieve?
•
What is the external situation now and in future? Why has it come about? How can we address it?
•
Are we effective? How can we persuade others of this?
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THE STRATEGY PROCESS
Strategy development sits within a wider process
Leadership, governance and culture
focused on continuous learning
Plan
Leadership
Purpose
Stakeholders
Review
Pu
rp
Deliver
os
Strategy
e
Culture/
values
Preparation
Preparation
Resources
External
Development
Development
Assess
Implementation
Implementation
Strategy development is part of a wider, iterative process.
Preparation can’t be ignored—getting the right people involved,
and ensuring core leadership is able to implement the strategy and
learn from doing.
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FOCUSING ON STRATEGY DEVELOPMENT
Effective charities are flexible and adaptable. Think of strategy not as something set in stone, but rather a
framework you can use to work out how to respond to a rapidly changing external environment.
This introduction focuses on the first two
aspects of the strategy process:
preparation and development.
We will publish further guidance on the
implementation stage in early 2015.
Our approach is structured—but structure is
not necessarily the enemy of creativity.
Beethoven would have had a hard time
composing his symphonies without
structure.
Leadership, governance and culture
focused on continuous learning
Preparation
Development
Implementation
Within this structure, we believe that
strategy should emerge rather than be
imposed top down. An emergent approach
reflects the ethos of charities and works well
in the flexible and devolved organisations
common to our sector.
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PREPARATION: BEFORE YOU START
A new strategy may result in change—a new direction, cessation of activities, different
people. Considering these key factors at the start of your strategy process is vital:
•
Leadership team: Change requires a CEO, senior management team and board that
is up to the task. A strong team sets a clear direction, makes difficult decisions, takes tough action
and implements uncomfortable processes. So ideally the team will have the ambition/determination
to overcome obstacles, work well together and be committed to seeing things through. Board
support is vital. The strategy may affect the composition of the team.
Not all charity leadership meets this demanding criteria—a strategy is still helpful where leadership
needs strengthening and can help to determine the ultimate composition of the team.
•
Stakeholders: Consulting and engaging stakeholders will to lead to better decisions, provide
legitimacy to any change of direction, give confidence to the team if radical moves are mooted, and
spread ownership of the organisation’s purpose. Leadership needs a mandate to drive the process
and make decisions. Mapping stakeholders, their interests and roles will help when engaging them.
•
Culture/values: The organisation’s core values must be clear and agreed, so that at the start
everyone knows what they stand for. Core values will affect direction and how tasks are carried out
and should be consistent with the organisation’s culture. Culture must match ambition.
NPC has seen strategy processes derailed by disagreement on organisational values, weak culture,
poor stakeholder buy-in and leadership teams unwilling to bite the bullet.
We can facilitate workshops with stakeholders, discussions about values and provide informal support
to leaders during the strategy process.
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NPC’S STRATEGY TRIANGLE
Focus on what achieves impact
NPC’s strategy development work often starts with
our strategy triangle, which can be used at the
organisational or programme level.
The strategic questions will vary but the best
strategies address all three corners of the triangle—
although not necessarily all at the same time.
Core
purpose
For example:
•
•
•
A new Chair or Chief Executive may want to
understand the capabilities within an
organisation before embarking on a strategy
process.
Many charities need to refresh their core
purpose (vision, mission and values) before
embarking on a strategy process.
Strategy
Resources
and
capabilities
External
environment
A charity may want to understand a changing
external environment before shaping its
response.
The tools we use and the questions we ask are designed to help organisations maximize their impact.
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CORE PURPOSE
NPC’S STRATEGY TRIANGLE
A natural starting point is to look at your core purpose, and to agree this with key
stakeholders. Many charities get confused between different terms and how to frame
the core purpose. Your core purpose may comprise:
•
Vision: how you want the world to be. It is inspirational and specific, but not limiting.
•
Mission: purpose of your charity and the change you want to make. The change should
contribute to the vision—it doesn’t have to provide all the answers.
•
Goals: these are specific to a strategy or project and usually measurable in some way. Goals can
be high level/ambitious, complemented by lower level objectives contributing to the endgame.
Vision,
mission
and goals
Questions to ask:
Tools to use:
- What is your core purpose?
- What change do you want to make?
- What concrete things do you want to
achieve?
- What are your top priorities?
- What activities deliver these ?
- How can you add most value?
- Do stakeholders agree?
- Vision//mission/values
development or assessment
- Theory of change
- Strategy map
- Stakeholder research and
mapping
- Impact networks
A theory of change helps you to determine how to achieve your vision, mission and goals, and what
steps and activities are the best route to creating change. Some steps may be shared with others.
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RESOURCES AND CAPABILITIES
NPC’S STRATEGY TRIANGLE
Charities face a seemingly non-stop escalation in demand against a background of
funding cuts. They can work only so hard—understanding a charity’s resources and
capabilities, and linking these to ambition while recognising the risks, will lead to
smarter working.
NPC’s The little blue book provides a structure for this analysis, covering:
Activities
Is the charity doing right things in the right way? Could it do more?
Results
Is there evidence of impact? Does it use evidence to make decisions and learn lessons?
Leadership
Is the charity governed and managed well? Does it have a clear strategy?
People & resources
How well does the charity use staff, volunteers, buildings, brand, IP, relationships? Leverage?
Finances
Is the charity financially sound? Are finances well-managed and used efficiently?
Resources
and
capabilities
Questions to ask:
Tools to use:
-
-
What resources do you have?
How does your board contribute?
What are you good at?
What makes you distinctive?
What proof do you have of your impact
(overall and programme/project level)?
- Do you have the right skills and
experience to achieve your aims?
- Do you use your resources efficiently?
The little blue book (NPC)
SWOT analysis
Resource audit
Governance review and skills
audit
- Activity mapping
- Measurement and evaluation
audit
- Financial analysis
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THE EXTERNAL ENVIRONMENT
NPC’S STRATEGY TRIANGLE
A charity has to understand its external environment and how developments there
could impact its ambitions. We find that most charities feel confident in this area, but
can still benefit from a regular analysis of need, assessment of external research, plus
reviews of peers, partners and competitors.
•
Needs mapping can determine the areas of greatest need and how these might be changing in
response to services being delivered and policy change.
•
Market analysis can pick up new entrants into the sector, and highlight competitive threats as well
as opportunities for collaboration.
External
environment
Questions to ask:
Tools to use:
-
- Sector research
- Needs mapping
- Policy, social, technological,
legal, environment analysis
(PESTLE)
- Market analysis (Porter’s five
forces, market segmentation)
What needs are you addressing?
What is the evidence of what works?
What are the future trends in needs?
How is environment/society changing?
Eg, demographics/ageing, technology
- What is the policy environment/risk?
- What opportunities and threats exist?
- Who is doing what & where do you fit?
Porter’s five forces analysis is a useful framework for analysing the level of competition within a sector.
PESTLE helps to ensure the external context is fully covered.
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PUTTING IT TOGETHER: STRATEGIC CHOICES
NPC’S STRATEGY TRIANGLE
So once you have carried out your research, how does this translate into decisions
and a plan for action?
Strategic decisions require management to be able to make careful and dispassionate
analysis—the previous stages set this up. Framing available options in a way that enhances decision
making, such as setting criteria for decisions, using matrices for comparing different variables, and
looking at relative benefits, will help groups to engage with decisions and determine what is possible.
You may need to square your direction with stakeholders, including funders. Communicating decisions
to other stakeholders—members, volunteers, beneficiaries—is vital too.
Strategy
Questions to ask:
Tools to use:
- Is your leadership up to delivering
change and embedding a strategy?
- How do you develop your strategy?
- How do you decide between options?
- How do you make your strategy
happen?
- What has worked in the past?
- How will we communicate this?
- Leadership style/capacity
analysis
- Market attractiveness vs
business strengths analysis
- Relative impact analysis
- Risk analysis
- Internal information on results
Does a need for willingness to push boundaries, take risks and back innovation match your leadership
style? Does the leadership team itself need support to adapt and change?
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FROM DEVELOPMENT TO IMPLEMENTATION
The impact cycle
Strategy implementation should take place within
a feedback loop where results are continually
reviewed and improvements are made to
maximise impact.
Plan
for impact
Deliver
with impact
Review
for future impact
Assess
impact
The better the systems and processes of a charity,
the more able it will be to adapt and improve
continuously. NPC believes that impact
measurement is crucial if charities are to learn
from their activities, develop their strongest work,
and provide effective help to the people who rely
on them.
Our four pillar approach provides guidance on how
charities can build a measurement framework to
demonstrate the value of their work.
‘However beautiful the strategy, you should occasionally look at the results’
Winston Churchill
Our next paper will cover strategy implementation and how to assess success in more detail.
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WHAT NEXT?
Our top 5 tips
1. Start the process by engaging people and getting them on board
2. Don’t think you have to look at everything at once—maybe start on a single programme
3. Be structured in your approach—you can always come back where you left off if
necessary
4. Don’t reinvent the wheel—use others’ research if relevant
5. Act on your decisions
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HOW NPC CAN HELP
Free guides and publications:
• The little blue book: NPC’s guide to analysing charities
• Theory of change
• NPC’s four pillar approach: Building your measurement framework:
• Keeping account: A guide to charity financial analysis
Training workshops:
• Our expert consultants run regular training sessions on strategy, theory of change, impact
measurement and more—check the events section of our website for the latest dates.
Tailored consultancy services, including:
• Workshops focused on mission, vision and values work
• Theory of change development
• Strategic decision making structures
• Internal capacity analysis
• External environment research, including needs mapping
• Data analysis and measurement frameworks to capture impact
Our strategy work includes checkpoints where NPC and the clients decide together on the next steps.
We encourage participation in the research by as broad a group of stakeholders as possible and
advocate service user involvement wherever practical.
Find out more about our services here.
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NPC CLIENT FEEDBACK
‘NPC facilitated an excellent workshop and did an
extremely good job of writing it up. The charity now has
a theory of change for two of our key aims, which we
are using as a basis for effective communication,
focusing our priorities and developing our
measurement. As an additional benefit, workshop
attendees told us how valuable they found learning
about theory of change and could see its potential in
their day to day work.’
Nina Copping, Strategic Development Director,
National Osteoporosis Society
‘The NPC team were really supportive throughout the
process. It was a challenge to‘ involve our teams in the UK
and Canada equally in developing the organisation’s theory of
change. Iona Joy and Ellie Harries were fantastic at ensuring
everyone’s input was captured during the process and fed
into the final product. The result is that both SKI teams really
feel ownership of the theory of change. It has already been
applied in the development of our evaluation framework and
is being used to guide strategic planning discussions and to
refresh how we communicate about our work.’
Philippa Frankel, Executive Director,
Street Kids International (SKI) UK
‘We sought NPC’s help shortly after I joined MS
Society as chief executive in 2013. NPC’s
comprehensive and thoughtful assessment helped
management and trustees to understand the strengths
and weaknesses of the Society, and to identify future
actions. The process was constructive, and we have
since used the team again to support us in developing
our theory of change.’
‘NPC’s assessment of Sue Ryder was ‘agenda-setting’, and
‘a fair representation of the charity, accurate, [which] gave the
senior management and trustees lots to think about, including
some specific “things to go for”.’
Michelle Mitchell, Chief Executive,
MS Society
Find out more about our consultancy work and read
client case studies on our website.
Paul Woodward, former Chief Executive,
Sue Ryder
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