The Strategic Puzzle

A model of the strategic, foundational elements in an organization-how they work together and flow into a comprehensive functional plan.
Curt Swindoll
This article provided by the Engstrom Institute

Mission statements. Core values. Vision statements. Strategic plans. While these terms and others have been the subject of many books and endless internal debates, confusion and frustration still reign. How do these strategic pieces of the puzzle fit together? Most importantly, how do they ultimately lead to better decisions and a quantifiable impact?

Many senior leaders have failed to fully capitalize on the significant effort they've invested in defining foundational elements because: 1) they don't fully understand strategic components, and 2) they lack a mental picture depicting how the various pieces connect. But make no mistake, long-term operational results can only be fully realized when functional plans are driven from a sound and synergistic foundation.

In our experience, frustration causes leaders to do one of two things. Some choose to attend to pressing operational matters to the exclusion of strategic issues. Others invest time developing and refining core elements, yet fail to integrate them into day-in, day-out execution strategies. Scott Adams, of "Dilbert" fame, has made a mint mocking mind-numbing strategic planning exercises because they rarely produce anything of substantial value!

But failure to follow through on such organizational spadework eventually impacts focus and commitment, even as it creates a host of other organizational ills. Staffs become frustrated, customers disappear, donors leave confused, and financial problems mount.

In response, let's consider a framework that links foundational elements to each other and to functional plans. This model, called The Strategic AgendaTM, assists leaders in understanding what the strategic, foundational elements in an organization are, how they work together, and how they flow into a comprehensive functional plan.

The Strategic Agenda™

Foundational Elements

Understanding The Strategic AgendaTM requires an accurate definition of each element in the model. Review each one to make sure your understanding of each is clear. Circle key words to cement recollection:

Mission Statement: A broad definition of the purpose or reason an organization exists. It should address societal needs and problems, not specific products or services to be offered.

Core Values: The values a staff intends to emphasize in its work with customers/donors and with each other. These principles (along with the mission statement) gives the organization its unique identity and direction. Core values should be limited to five or six to keep them memorable and truly special.

Target Customers/Donors: The group of people an organization intends to reach. These people should share some common characteristics. It's also critical that the organization have some means of cost-effectively reaching targeted customers.

Customer/Donor Profile: The shared characteristics of the customer/donor group being targeted. In particular, it's vital that the organization understands their needs and interests intimately, and have some unique ability to meet those needs effectively and efficiently.

Key Distinctives/Core Competencies: The unique, deeply rooted skills and abilities possessed within an organization, which it will use to create distinctive products/services. Growing organizations find ways to leverage one or two core competencies into a broad set of valuable products and programs.

External Landscape: A comprehensive identification of other organizations offering similar products and services. This includes products or services targeted customers might choose in place of those the organization offers. External landscape also addresses environmental issues, such as the economy, regulatory issues and concerns, technological developments, and anything else going on outside the organization's four walls which could influence interest in or use of its own offerings.

Vision: A clear, concise and compelling statement (not a document!), written in measurable terms, which captures the organization's strategic focus for the next three or more years. There is no more important element for raising funds, motivating staff and challenging everyone associated with the organization. It's the key driver for any organization that desires to accomplish something significant.

Organizational Strengths/Weaknesses: Any special internal capabilities, capacities and constraints worth noting. It's important when establishing operational plans that strengths be utilized and weaknesses either overcome or mitigated as part of the execution effort.

Annual Strategic Plan: A comprehensive document reflecting the organization's financial and operational objectives and plans for the coming year. Revenue, expenses and cash flow are clearly defined for regular review. The plan should also describe how the organization intends to accomplish its vision, and should define each functional department's expected contribution. More than anything, an annual plan helps ensure across-the-board alignment to the organization's vision.

Functional Elements

Financial Strategy: The financial plans of the organization, ranging from investment strategies to cash-flow management, to timely reports and identified financial metrics, which will be used to monitor the financial impact of marketing/donor communication programs, product and service profitability, and the overall balance of expenses.

Communication Strategy: The organization's plan to present a consistent message to its customers/donors. The importance of maintaining continuity in the style and content of the "conversation" can't be overstated, especially in ministries. For example, our firm assists clients in establishing an organizational theme to which all significant messages are connected.

I/T Strategy: Much more than technology, I/T strategies should be driven from the information needs of the organization. They should define how the organization will create quality data and make it available on a timely basis by moving it seamlessly across departmental and application "boundaries" to anyone who needs it to make a decision. I/T should also address application development, hardware, software and security standards.

Production Strategy: An organization's production strategy addresses the development of new products and services as well as the ongoing, consistent and effective delivery of existing products and programs.

Human Resource Strategy: H/R systems manage everything from recruiting quality staff to providing an effective environment for each person to contribute. This includes developing staff and leadership talent, creating succession plans, evaluating performance, and providing reward systems that support the kinds of behaviors the organization wants to see repeated consistently.

Customer Service Strategy: This strategy sets service standards that meet and even exceed customer expectations. To do so, organizations must clearly understand two things: 1) how well performance meets the standards, and 2) what donors/customers value most. High performance in areas most important to customers/donors stands the best opportunity for attracting and retaining them.

Management Strategy: Surrounding all functional strategies and plans are management tools critical to ensuring follow-through and, when necessary, making mid-course corrections. This includes identifying key metrics, holding regular accountability meetings, and providing liberal communication to all staff and volunteers.

The Strategic Agenda Flow

The connection of elements in the strategic agenda framework is simple. Higher elements must be defined before lower elements can be appropriately addressed. For example, the mission statement and core values are the absolute starting point for defining any organization. (The degree of definition required depends on several factors, including the size and complexity of the organization, the nature of the organization's products and services, the demand for what they have to offer, etc.) Every ministry should start with these two elements intact.

Vision, on the other hand, is most effective when it's developed with three areas firmly in mind: 1) the needs/interests of the target customer/donor group; 2) a full understanding of the external environment; and 3) the skills/abilities which make the organization distinctive.

So how does this framework play out? Front line (functional) confusion exists because senior staff lacks a coordinated plan. No plan exists because a compelling vision has not been articulated. And vision is ill-defined because no one has conducted a study of target customers/donors, and no one is sure what other ministries are doing in similar areas.

This example illustrates an interesting aspect in The Strategic AgendaTM framework: Managers traditionally turn to functional strategies when attempting to improve operational results or address operational pain. While changes in functional plans may be necessary, the root causes of pain or lack of progress in an organization usually exist in foundational areas. Foundational elements must be addressed before functional plans (and staff members) can operate at peak performance.

Ministry Alignment

Just as fog in the pulpit creates fog in the pew, all too often tactical decision-making is impaired because strategic elements are not understood, are poorly defined, or have not been developed in alignment with other strategic elements. The net result is pain, frustration, and ultimately, ministry contraction.

Understandably, organizations are complex and can't be reduced to a few simple boxes. Further, every organization is (or should be) unique in some substantial, fundamental way. But the structure of foundational and functional elements is common to every organization, and completing this framework is a central responsibility of every leader.

Your organization has internal and external "stakeholders" who are longing to hear a consistent and exciting organizational story. These same stakeholders become staunch supporters when they observe a fully aligned organization, integrated from top to bottom.

We challenge you to spend time with your leadership team digesting and implementing your strategic agenda. The result will be better decisions, a healthier organization, more stable financial results, and more consistent and prolonged ministry impact.

Curt Swindoll can be reached at cswindoll@energyed.com.