The Social Entrepreneur's Strategic Thinking Workbook

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					A STRATEGIC THINKING AND PLANNING WORKBOOK FOR THE SOCIAL ENTREPRENEUR AND NON-PROFIT EXECUTIVE
"Strategy converts a non-profit institution's mission and objectives into performance." Peter F. Drucker, Managing the Non-Profit Organization.

USING THIS WORKBOOK
This workbook provides a framework to organize and structure what you know about your organization to give you greater insight into its nature, culture, strengths and weaknesses and help you make more effective strategic decisions. It also provides a vehicle to record and document your thinking for future reference. If you have downloaded this workbook to your computer, the spaces provided to record your thinking can be increased or decreased as needed. You can also edit the terminology to make it more appropriate to your specific situation and eliminate those sections that are not applicable to your organization. All organizations exist as part of a larger system and their success is ultimately determined by how well their efforts fulfill their role in this larger system. This is the fundamental principle that guided the design of this workbook. It uses a systems approach to help you examine your organization‟s relationship with the constituencies it serves and how well it is meeting their needs and expectations. One of the characteristics of system behavior is the separation in time and space between an effect and its cause. Understanding system behavior requires discovering this sometimes subtle relationship between an effect and its root cause. Finding the root cause of an event entails looking for patterns of change over time rather than direct cause-effect relationships. This workbook uses an historical perspective to help you discover the patterns of change influencing your organization. You will need to research information from your organization‟s history to look for those defining events or decisions that resulted in significant changes in your organization‟s activities, scope, or direction. These defining events identify significant periods in your organization‟s history. Comparing these periods with the present will present a picture showing how your organization is changing and provide insights about its future. The best way to use this workbook is to complete the pages in pencil. As you progress through it you will gain insights that may cause you to go back and revise some of your original entries. It might be helpful to work through this workbook in stages to give you some time to reflect on what you are finding out about your organization and its place in the universe. This reflection can be made more dramatic by placing the completed pages of this workbook next to each other on a wall, large table or even the floor so you can visualize the picture you are creating of your organization. You can also group these pages in different sequences to accommodate your unique analytical style. You may find it helpful to involve others in this process such as staff members, board members, and members of the community. These people can contribute significant historical insights about the organization and multiple perspectives of looking at the future.

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CONTENTS
Your task as the leader is to prepare your organization for the future. Since this future will be largely determined by how well it meets its social need, the best way to prepare for the future is to keep your organization attuned to its role in society. Part One- CLARIFYING YOUR PURPOSE helps you analyze your organization‟s place in the larger community that nurtures and supports it and clarify your definition of the organization‟s purpose and vision. Achieving a vision usually requires accomplishing results in a variety of areas. Goals provide the mechanism to specify the set of results that will define vision achievement. Part Two- FOCUSING YOUR VISION helps you set the goals that will define vision attainment and identify the barriers that stand in the way of these goals. A marketing tactic is the idea, concept, characteristic, attribute, or image that causes customers to purchase a product or use a service. An effective marketing tactic must overcome the barriers that keep customers from purchasing or using these products or services. Strategy is the decision framework that creates the actions needed to exploit this tactic. Part Three- FORMULATING YOUR STRATEGY leads you through a process to formulate your marketing tactic and a strategy to drive it home. Setting objectives is the critical step in transforming your mission into work. Objectives describe the tasks that must be accomplished to achieve your goals. They are driven by your marketing tactic and strategy and must circumvent or overcome the barriers to achieving these goals. As the leader you must define the performance needed to exploit your marketing tactic and implement your strategy. Performance that cannot be measured or assessed cannot be managed. If you do not define measurable performance standards you are merely supervising a level of effort and your organization has a supervisor not a leader. Part four- SETTING YOUR OBJECTIVES helps you identify and set objectives, create accountability for results, and establish measurable performance standards. The mission statement is an important communication tool. It is the way an organization defines its social commitment and communicates what it does and what it stands for. An effective mission statement should focus the organization on action. It should guide the organization‟s decisions and inspire strong commitment from those responsible for its operations and support. It should implicitly or explicitly reflect the organization‟s purpose and vision. Because writing mission statements can be a stressful experience many organizations continue to use their existing statements even after they have become stale or obsolete. This not only deprives them of the commitment and support that a strong mission statement can inspire but may also lead to an organizational identity crises. Part Five- WRITING YOUR MISSION STATEMENT will help you eliminate this problem by providing a template for writing a mission statement which effectively communicates your organizational message.

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PART ONE - CLARIFYING YOUR PURPOSE
“... a primary task of the organization is the discovery of its place and purpose in the larger system. Every event in its history can be viewed as part of a lesson, the meaning of which is to be intuited by the organization‟s members.” Roger Harrison, Leadership and Strategy for a New Age. ATTUNING YOUR ORGANIZATION One of your primary tasks as a leader is to prepare your organization for the future. Yet the only thing you know about the future is that it will be different than the present. Because your organization exists only as part of a larger system its role or purpose is largely determined by its impact in this system and only partially by you. This is why organizations frequently evolve along a different path than that initially envisioned by their founders. Since you cannot predict the future the most logical way to prepare for it is to attune your organization to its place in the larger community that nurtures and supports it - to look at your organization from a systems perspective. The role of your organization is shaped by the beliefs, values and assumptions of its past and current leadership. These determine the services it will offer and the markets or social segments it will serve. However how the larger community responds to these offerings will define its social role. The importance society assigns to your efforts determines the level of community support they receive and their ultimate success. Attuning your organization entails keeping your internal beliefs and values aligned with the needs of the community you serve. This degree of alignment will be reflected in the quality of the external relationships your organization has developed and sustained over time. Poor performance and diminishing support may be an indication that your organization is out of tune with its social role. The universe is constantly changing which impacts all institutions by eventually altering their social roles. This means that the purpose and mission of all organizations eventually becomes obsolete or invalid. For this reason organizations need to periodically assess the fundamental beliefs and assumptions that provide the logic for their mission to evaluate whether they still reflect current reality. Attuning your organization requires an historical perspective. Events, people and experiences have shaped its character and identity since it‟s founding. Examining this history enables you to evaluate your organization‟s beliefs and values and provides the context for decisions about its future. A review of history provides a current picture of your organization - its strengths, weaknesses, challenges and opportunities and gives you the “big picture” needed to assess how well it is attuned to its societal role. History not only reveals what your organization was and is but it also nurtures the seeds of what it can become. Non-profit organizations exist to bring about beneficial societal change through the individuals or organizations that use their services. This is the basis for their preferential tax treatment and the fundamental reason for their existence. Clarifying your organization‟s purpose is the first step in defining its mission. The following pages will help you discover your organization‟s place in the larger social system in which it is a part.

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PART ONE - CLARIFYING YOUR PURPOSE
STATISTICAL ANALYSIS A logical starting point for strategic thinking is an in-depth analysis of your organization‟s past and current performance. A systems perspective looks for trends and patterns of behavior to discover the interrelationships and dynamics that determine system outcomes. Analyzing the operating, financial, and personnel data your organization has recorded throughout its history can provide quantitative identification of the trends that have and are shaping its outcomes. The value of these trends is greatly enhanced by increasing the number of data points analyzed. For this reason this statistical analysis should extend as far back in your history as reliable data is available. Operating Performance Operating performance data includes constituencies served and locations, number of units of service or output provided to each constituency, client outcomes from your services if you measure them, the size of the population or constituencies served, number of people, families, or organizations served, and other operating results you use to measure success.

Financial Performance Financial performance data comes from your annual financial statements and audits. Useful trend data comes from annual comparisons of revenue from fees for each service offered, contributed income by contribution category, grants received and the programs they funded, direct expenses for each service offered, overhead and fund raising expenses, operating margins, cash position, working capital, long term debt, unrestricted net assets, etc.

Personnel Information Personnel information comes from your payroll records. Useful trend data include annual man-hours in total and by service offering or function (administrative, marketing, overhead, etc.), total salaries and wages paid and by service offering or function, average number of employees or full time equivalent employees in total and by service offering or function, etc.

Productivity Analysis Combining operating and financial performance data with personnel information enables an analysis of productivity. Useful productivity measures include man-hours per unit of service in total and by constituency served, direct and indirect expense per unit of service in total and by constituency served, fees received per unit of service by constituency served, percent of direct and indirect (overhead) manhours, service penetration, etc.

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PART ONE - CLARIFYING YOUR PURPOSE
YOUR HISTORY Discovering your organizations role in society begins with a reflection on its history and the lessons this provides. Use the results of your statistical analysis to help identify the defining events in your organization‟s history and their significance. By definition these defining events mark the end of one period and the beginning of a new one. Name these periods and the issues that defined them. Use these historical periods as the timeframe to record your Past and Present entries in this workbook. Date Examples: July 1985 Event and significance Good Hearted Food Bank founded Historical period and defining issue Founding period. High local unemployment created the need to find sources of free food.

June 1990

Moved to current facility

Rapid growth period. Received government contract to distribute surplus food to pantries and soup kitchens.

REFLECTION What story does your statistical analysis and history tell? What do your defining events say about your organization and its mission? (Too few may indicate possible obsolescence, too many may indicate lack of focus.) Describe your organization‟s personality and culture during its history. Select the following characteristic that most closely describes your organizations approach during each period in its history. Dominant - Creates social change by developing programs and demonstrating results. Values entrepreneurial and problem solving skills, creativity, assertiveness, persistence, and decisiveness. Influencing - Causes social change by advocacy or building and obtaining community support. Values communication and organizational skills, persuasiveness, imagination, and optimism. Supportive - Meets recognized social needs by developing and improving its skills and facilities. Values deliberative, investigative and job service skills, compassion, patience, and practicality. Corrective - Tests and experiments with ways to meet recognized social needs more effectively or efficiently. Values analytical and reasoning skills, accuracy, methodical approaches, and uses of data. Recognizing that cultural changes are very stressful, what does this cultural profile suggest about your organization‟s flexibility and its future potential? Social entrepreneurs are usually found leading organizations with dominant or influencing cultures. Name the historical period your organization is entering now and why you selected that name. Copyright 2002, J. Thomas McIntire 5

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PART ONE - CLARIFYING YOUR PURPOSE
THE SOCIETAL NEED. Describe the social conditions which have defined your organization‟s reason for existence from its founding to the present. These responses indicate how the need for your organization has changed through the years. At founding Example: High community unemployment generated a need for food assistance to a growing number of individuals and families.

Past periods (use the dates and names of the defining events in your history)

Present

Describe the social needs that you believe will define your organization’s reason for existence in the future.

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PART ONE - CLARIFYING YOUR PURPOSE
YOUR WORK. Describe the work your organization performed or is performing to improve the social conditions you are attempting to change. Include the population segments this work is intended to reach. These responses indicate how your organization is responding to changes in social conditions. At founding Example: Located surplus food from the local food industry and scheduled pickup by pantries and soup kitchens serving needy individuals and families in the community.

Past periods (use the dates and names of the defining events in your history)

Present

Complete this analysis after you have defined your purpose and vision on page 20. Analyze whether your present services and population segments will be adequate for the future. If not identify the future services that will be offered and population segments that will be served.

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PART ONE - CLARIFYING YOUR PURPOSE
YOUR RESULTS. Use your statistical analysis to help summarize the major results you achieved in improving the social conditions you are attempting to change. Include where these results occurred and for whom. These results indicate your organization‟s effectiveness and societal acceptance during its history. At founding Example: Brokered 500,000 pounds of surplus food from local food sources to community pantries and soup kitchens in the first year.

Past periods (use the dates and names of the defining events in your history)

Present

Complete this analysis after you have defined your purpose and vision on page 20. Describe the results you want to achieve in the future, the beneficiaries of these results and their locations. This is your organizational vision.

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PART ONE - CLARIFYING YOUR PURPOSE
YOUR CORE BELIEFS AND ASSUMPTIONS. An organization‟s core beliefs and assumptions provide the rationale for its existence and identify its opportunities. They provide the logic that defines the organization‟s importance and social relevance. Core beliefs and assumptions are the source of the emotion that fuels commitment and support for an organization. State the fundamental beliefs and assumptions that you believe guided your organization during each period in its history. Do this by examining your work and the results you identified on the previous two pages and ask, “Why were these important?” Your answers will indicate the organization‟s core beliefs and assumptions during these periods. Tracking these beliefs indicates how your organizational culture is responding to social conditions. At founding Example 1: The food industry generates significant quantities of surplus food that can be reclaimed and distributed to needy people. Providing free or heavily discounted food to low income individuals will expand their limited purchasing power and improve their standard of living. Example 2: Addictive behavior can be controlled by changing a person’s attitudes and worldview. Education changes attitudes and behavior.

Past (use the dates and names of the defining events in your history)

Present

Complete this analysis after you have defined your purpose and vision on page 20. Analyze whether your present beliefs and assumptions still reflect your current reality. If not restate them to more accurately define your present situation and your future aspirations.

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PART ONE - CLARIFYING YOUR PURPOSE
YOUR FUNDAMENTAL VALUES An organization‟s values govern its moral and ethical conduct and motivate its behavior. They are reflected in its leaders‟ decisions, actions and attitudes toward its workforce, customers, and other constituents and how the organization responds to its environment. For example, “Innovation and risk” could be fundamental values for an entrepreneurial organization, or “compassion for the needy” could be a fundamental value for a food pantry. Describe those fundamental values that you believe governed your organization‟s leaders during its history and were responsible for the results it achieved. Do this by examining your organizational cultural profile from page 5 and your organizational results from page 8. Answer the question, “What leadership and organizational attributes enabled the organization to achieve these results?” Your answers will help you define its fundamental values. Tracking these values provides insights into the evolution of your organizational culture. At founding

Past periods (use the dates and names of the defining events in your history)

Present

Complete this analysis after you have defined your purpose and vision on page 20. Analyze whether your present values are adequate to govern your organization in the future. If not restate them to reflect more appropriate values.

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PART ONE - CLARIFYING YOUR PURPOSE
YOUR CAPABILITIES AND COMPETENCIES. Describe the resources (things your organization owns) or competencies (skills it possesses) that enabled or enable your organization achieve its results. These responses indicate how your organization‟s capability and potential are changing. At founding Examples: Resources-a facility with a gymnasium, large warehouse, truck tractor and trailer, etc. Competencies- experience conducting youth addiction programs, warehousing and distribution experience, etc.

Past periods (use the dates and names of the defining events in your history)

Present

Complete this analysis after you have defined your purpose and vision on page 20. Analyze whether your current capabilities and competencies will be adequate for the future. If not identify what you believe the additional competencies and physical resources must be.

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PART ONE - CLARIFYING YOUR PURPOSE
YOUR OUTPUTS AND OUTCOMES. Outputs are the products of your work such as the pounds of food delivered, clients served, meals provided, patient discharges, etc. Many non-profit organizations call these “units of service”. Outcomes are the benefits your customers receive when they use your products or services. Some examples are: self-respect, becoming a productive member of society, free of addictive behavior, etc. The most difficult task for non-profit organizations is measuring outcomes but without some measurement or assessment of outcomes the organization‟s contribution to society cannot be determined. Define your units of service, the desired outcomes customers receive from them, and how you measure these outcomes. Outputs measure your efforts. Outcomes measure your results. Tracking these for each period in your history indicates how your operations are impacting society. Unit of service definition Desired outcomes Outcome measurement At founding Example 1: Addiction program Clients learn to control addictive Recidivism rates among instruction or counseling hour. behavior. graduates. Example 2: A pound of food A meal and encouragement for Number of people served. distributed. needy individuals.

Past periods ((use the dates and names of the defining events in your history)

Present

Complete this analysis after you have defined your purpose and vision on page 20. Analyze whether your present unit of service definition, desired outcomes and outcomes measurement will apply to the future. If not identify the units of service and outcomes that will be used.

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PART ONE - CLARIFYING YOUR PURPOSE
YOUR CUSTOMERS (the recipients and beneficiaries of your products and services). Describe the individuals and/or organizations that have or are using your services or can veto your services because of the power they have over you or your customers, such as parents, employers, or regulators. Include the ultimate consumers if they are different than your immediate customers since these are the people that ultimately receive the benefits from your services. Your services must be acceptable to all of these constituencies. Include the location of your customers and ultimate consumers. These responses indicate the scope of your organizational impact. Customer Location At founding Example 1: Customers- pantries and soup kitchens. County locations Ultimate consumers- needy individuals served by pantries and soup kitchens. County residents. Regulators- County Health Departments (veto power). Each county served. Example 2: Customers- teen-age boys and girls. Defined neighborhood Controlling customers- parents of these teen-agers (veto power). Defined neighborhood

Past periods ((use the dates and names of the defining events in your history)

Present

Complete this analysis after you have defined your purpose and vision on page 20. Analyze whether your present customers and locations will remain unchanged in the future. If not restate them to reflect your perception of your future customers, ultimate consumers, and their locations. The mental models, attitudes, customs, socio-economic conditions, demographic trends, and locations of these individuals may present barriers that must be overcome to effectively serve them.

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PART ONE - CLARIFYING YOUR PURPOSE
YOUR FINANCIAL HEALTH Understanding the economics of your operations is essential to maintaining financial health. A review of your organization‟s contemporary operating and financial reports will indicate current operating and financial trends driving your operations. This is a more concentrated assessment than your Statistical Analysis and examines data over the last 5 to 10 years to evaluate your organization‟s current financial health trends. Operating data. Number of units of service or measured outputs. Description and size of the population or constituencies served. Description and size of each market segment served. Number of units of service or measured output by market or customer segments (if this is significant). Balance sheet data. The balance sheet is an indicator of financial health. Data is at year-end. Cash on hand. Long-term debt. Fund balances or unrestricted net assets (this represents the community‟s equity). Income statement data. The income statement is an indicator of management performance. Total revenue. Income from service fees. Income from contributions, grants, or taxes. Total expenses. Direct operating expenses. Overhead expenses. Operating surplus/deficit (total revenue minus total expenses). Performance indicators from operating and financial data. Operating efficiency (total expenses divided by the number of units of service provided). Market penetration (units of service divided by the size of the population served) Leverage ratio (long-term debt divided by fund balances or unrestricted net assets). Working cash (cash minus current liabilities minus temporarily restricted assets) Operating margin (operating surplus divided by total revenue). Percent of revenue from contributions and grants (income from contributions and grants divided by total revenue times 100). Comparing current data with data at significant periods in your history will highlight changes in the economics of your operations. What are the key economic variables that determine your organization’s financial health?

What organizational activities drive these economic variables?

What does this data and trends tell you about the economics of your operations?

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PART ONE - CLARIFYING YOUR PURPOSE
YOUR SUPPORTERS AND VOLUNTEERS (the people you depend on). Non-profit organizations depend on contributions and volunteers. List the key individuals and organizations whose support is critical to your success. Your supporters, like your customers, have needs that must be met to insure their continued support. Some examples could be: an industrial foundation grant which requires you to create and present educational programs demonstrating their technology, a contributor who wants to help eliminate drug addiction, or an individual who wants to contribute his talents by volunteering in a noble cause. List these key supporters during your history to get a picture of the community support for your organization, the expectations needed to maintain this support, and how this support is changing. Supporter Type of support Expectations At founding Example 1: State Dept of Human Surplus government food and an Distribute government food to all Services. annual financial grant. eligible low-income individuals. Example 2: Volunteers. Man telephone crisis lines. Training and flexible scheduling.

Past periods (use the dates and names of the defining events in your history)

Present

Complete this analysis after you have defined your purpose and vision on page 20. Analyze whether your present supporters and their expectations will be appropriate for the future. If not restate them to reflect your perception of your future support requirements. The mental models, attitudes, customs, socio-economic conditions, demographic trends, and locations of these individuals may present barriers that must be overcome to continue to have their support.

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PART ONE - CLARIFYING YOUR PURPOSE
YOUR RIVALS AND SUBSTITUTES (those you must outperform) Society is generally not very tolerant of competition among non-profit organizations with the possible exception of education and heath-care institutions. In spite of this, non-profits operate in a uniquely competitive environment. They sometimes compete with business organizations and social activities for customers. They also compete with other non-profit organizations for contributions, volunteers, board members, and overall community acceptance and goodwill. List any organizations or activities that presented a significant competitive threat to your organization and the feature or service that was the source of this threat. Indicate your perception of the competitive intensity during your history as slight, moderate, or severe. These responses indicate the nature of the competitive threat to your organization and how this threat is changing. Competing organization or activity Competitive feature or service and threat At founding Example 1: xxx non-profit organization. Offers similar services in our service territory. Slight threat- territory is large enough for two programs. Example 2: Commercial night club for teens. Provides unsupervised youth activities. Severe threat- it is located near our teen program site.

Past periods (use the dates and names of the defining events in your history)

Present

Complete this analysis after you have defined your purpose and vision on page 20. Describe what you believe will be your future competitive threat and its severity. This will present one of the barriers to goal attainment that your operating strategy must overcome.

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PART ONE - CLARIFYING YOUR PURPOSE
“Nonprofit organizations are human-change agents and their results are always a change in people- in their behavior, in their circumstances, in their vision, in their health, in their hopes, above all, in their competence and capacity. Peter F. Drucker, Managing the Nonprofit Organization. STRATEGIC FOCUS Non-profit organizations exist to bring about beneficial societal change through the individuals or organizations that use their services. These organizations must choose the primary type of change they intend to create in the people they serve and in society. Two choices are available. They can focus their efforts on changing the conditions experienced by their customers or they can focus their efforts to create behavioral change within their customers. The first choice is called external change and is characterized as helping or ministering. The second choice is called internal change and is characterized as educating. Since these two choices require fundamentally different approaches, non-profit organizations must choose which of these will be the primary focus of its operations. The following chart shows the difference between these choices. EXTERNAL CHANGE AGENT Changes environmental conditions Focuses on symptoms Results are quick and easy to measure Passive involvement by customers Organizations tend to be process driven examples; homeless shelters, food pantries, community centers, etc. Characterized as ministering INTERNAL CHANGE AGENT Changes behavior Focuses on root causes Results are long term and difficult to measure Active involvement by customers Organizations tend to be achievement driven examples; substance abuse, job training, counseling programs, schools, etc. Characterized as educating

Most non-profit organizations attempt to create both internal and external change, however one of these must predominate and the other plays a supportive role. For example, a teen addiction treatment organization may create a warm welcoming environment to ease the transformation process for its clients but this is in support of its primary purpose of changing client behavior. Organizations that fail to make this choice fragment their efforts between educating and helping and usually do neither very effectively. PROCESS DRIVEN ORGANIZATIONS Process driven organizations focus their energies on ways to improve their processes to serve greater numbers of people, provide greater quantities of product or services, or generate more units of service through improved efficiencies or expanded capabilities. They expand their social impact by increasing the number of people they serve or the quantity of product or services they provide. They measure their accomplishments in numerical values (the number of people served, houses built, pounds of food delivered, etc.). Their purpose centers on the work they do and the social value of this work. Their vision usually alludes to the quantities of work output that will provide the social value they desire. Example: the purpose of Good Hearted Food Bank is to help needy individuals and families raise their standard of living. Our vision is to distribute over 10 million pounds of food annually to needy people in our service territory. ACHIEVEMENT DRIVEN ORGANIZATIONS Achievement driven organizations focus their energies on creating social or behavioral change. They expand their social impact by improving the effectiveness of their programs to change lives or social conditions. They measure their accomplishments by the results they achieve for the individual, organization or society (job skills attained, academic achievements, success stories, etc.). Their purpose centers on the social value of the changes they are attempting to accomplish and their vision describes the results they hope to achieve. Example: the purpose of SayNo Rehabilitation Center is to enable teenagers break their addiction to drugs and alcohol. Our vision is to have all graduated teenagers remain addiction free and become productive citizens.

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PART ONE - CLARIFYING YOUR PURPOSE
CHOOSING YOUR STRATEGIC FOCUS Choosing your organization‟s strategic focus is the first step in setting your vision. This choice defines the nature of your organization - whether it is in the helping business or the education business. It determines whether your organization is process driven or achievement driven and what should be its focus for growth. This decision has a long-term impact on your organization because it determines the characteristics of the services you offer, the customers you will serve and how you will measure performance. Changes in strategic focus create significant cultural shifts that can be very stressful for organizations. State your perception of your organization‟s strategic focus during its history. These responses indicate the stress your organization has experienced and its adaptability. At founding Example: Process driven, external change agent, locating and scheduling pickup of surplus food by pantries and soup kitchens.

Past periods (use the dates and names of the defining events in your history)

Present

State what will be your future strategic focus. This choice will drive your vision, goals, and strategy.

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PART ONE - CLARIFYING YOUR PURPOSE
“Purpose without vision has no sense of scale. Vision without a sense of purpose is just a dream” Peter Senge, The Fifth Discipline PURPOSE AND VISION Purpose defines the fundamental reason for your organization‟s existence. It answers the question, “Why are we doing the things we are doing?” Since the response to this question reflects a value judgment, purpose statements tend to be abstract. Examples: Our purpose is to create a safe environment for neighborhood children. Our purpose is to expand man’s knowledge of the universe. Because it is abstract purpose may not be unique and different organizations could have the same or similar purposes. Purpose is the source of commitment to the organization from its workforce, supporters, customers, and the community. People are motivated by a cause they perceive to be noble and they enjoy being part of group sharing a common purpose. The perceived value and appropriateness of your organization‟s purpose determines the level of commitment and support it receives. An inspiring and uplifting purpose will generate more commitment than one perceived to be superficial or self-serving. For example, “expanding man’s knowledge of the universe” would probably be perceived as nobler than “conducting scientific research in outer space”. Either statement could define the organization‟s purpose but which one is chosen would likely have a significant impact on the level of commitment, energy, and enthusiasm it receives from its workforce and supporters (i.e. the Congress). Vision is a picture of what the organization is trying to accomplish in carrying out its purpose. It describes how the organization intends to focus its role or “business” in the future. It answers the question, “What are we trying to create or achieve?” The vision statement should describe what will be accomplished, where and for whom. While purpose tends to be abstract, vision is specific and measurable or at least assessable. Examples: Our vision is to provide uplifting, supervised before and after school programs for all children in the Central Park neighborhood. Our vision is to put a man on the moon and return him safely. While purpose may not be unique, vision is unique and differentiates the organization from others. The perceived gap between your organization‟s vision and its current reality creates emotional stress. This stress is the source of the energy that drives its actions. Purpose and vision are often used synonymously with mission. This approach has some pitfalls. Using only the purpose as the mission statement does not communicate what the organization does or what it wants to accomplish. Example: Our mission is to create a safe environment for children in the Central Park neighborhood. Since there is no stated gap between current reality and vision, this statement does not generate any emotional energy to drive its activities. This statement inspires operations at a relatively low energy level. Using only the vision as the mission statement leaves out why the organization is engaged in this activity and why people should be committed to it. Example: Our mission is to put a man on the moon and return him safely. Since there is no stated reason for this effort, there is nothing to inspire commitment. This statement may inspire a strong start that loses enthusiasm and support when things get tough. Combining purpose and vision creates a more meaningful mission statement describing why the organization exists and what it intends to accomplish. Our mission is to create a safe environment for children in the Central Park neighborhood by providing uplifting and supervised before and after school programs for all neighborhood children. This mission statement is capable of generating commitment from its sense of purpose and emotional energy from its vision. This statement defines the ingredients needed for high performance. Copyright 2002, J. Thomas McIntire 19

A STRATEGIC THINKING AND PLANNING WORKBOOK FOR THE SOCIAL ENTREPRENEUR AND NON-PROFIT EXECUTIVE
PART ONE - CLARIFYING YOUR PURPOSE
“The vision lives in the intensity of the leader, an intensity that draws others into it.” Tom Peters, Thriving On Chaos YOUR PURPOSE AND VISION Purpose, vision, and mission statements developed by committees are seldom inspirational and challenging. The nature of this group process requires compromises to make these statements acceptable to the more conservative and risk adverse committee members. Statements developed in this manner usually do not provide the compelling sense of purpose and challenging vision needed to drive high performance organizations. However this group process does build agreement on the scope of operations so many organizations use it to develop their formal mission statements. Effective leaders must redefine their organization‟s formal mission statement in terms that make it motivating and operational. The leader’s definition of and enthusiasm for the organization’s purpose and vision determines the commitment it receives, the energy it generates, and the results it achieves. The leader must be able to clearly and sincerely articulate his/her perception of the organization’s purpose and vision. State how you define your organization’s purpose and vision. Ask, “Why are we doing the things we are doing?” Your answer will indicate your purpose. Summarize this into a brief statement.

Ask, “What are we trying to accomplish, where, and for whom?” Your answers will indicate your vision. Summarize this into a brief statement. Go back to page 8 and enter this response in the space indicated.

Combine your purpose and vision into a clear, written statement. This is your definition of the mission that will guide your actions and decisions. It may not be identical to the formal or approved mission statement for your organization but it must be consistent with it.

State how you will measure success. List the indicators you will use to measure or assess vision attainment and the value of these indicators that will define success. Indicators Value

State your core beliefs and assumptions. Ask, “Why are the things we are doing important?” Your answers will identify your core beliefs. Go back to page 9 and enter these in the space indicated.

Go back to pages 7 thru 16 and complete your picture of the future. Reflect on what it tells you. Copyright 2002, J. Thomas McIntire 20

A STRATEGIC THINKING AND PLANNING WORKBOOK FOR THE SOCIAL ENTREPRENEUR AND NON-PROFIT EXECUTIVE
PART TWO - FOCUSING YOUR VISION
“By definition, leaders lead change. When life is orderly, tasks are predictable, and most things are going well, people neither want nor need much leadership.” Judith M. Bardwick, Leader of the Future GOAL SETTING Achieving a vision usually requires accomplishing results in a variety of areas. Goals provide the mechanism to specify the set of results that will define vision achievement. In this way goals clarify and focus the vision. To accomplish this clarity and focus, goals need to encompass all activity that contributes to vision achievement. They must be comprehensive. They should include primary goals that define the operating results needed to achieve the vision, and supporting goals that identify the personnel, financial, facility, and other results that must be achieved to provide the desired operating results. Effective goal setting includes defining how goal achievement will be determined. This means identifying the indicator or indicators that will be used and the quantitative or qualitative value of these indicators that will define goal achievement. For example a primary organizational goal of a food bank could be “To become large enough to make a meaningful contribution to the low income population in our service territory”. The performance indicators could be the total pounds of food distributed annually and the average annual number of meals provided per person in poverty in the service territory. The value of these indicators that would define when this goal has been achieved could be 10,000,000 pounds of food distributed annually and an annual average of 30 meals per person in poverty in our service territory. Well-defined goals create tension between the world described by the goal and current reality. This creative tension or cognitive dissonance is the source of emotional energy for goal achievement. Writing your goals in present tense, as if they had already been accomplished, highlights this creative tension and helps build this energy source. The example goal stated above could be written in present tense as, “The 10,000,000 pounds of food we distribute every year makes a meaningful contribution to the low income population through-out our service territory”. This statement creates uneasiness because it is not true and will continue to create uneasiness until the goal is accomplished. By contrast, writing goals in future tense creates no dissonance and even brings a sense of relief because they reflect good intentions. PRIMARY GOALS Primary goals address the vision. They answer the following questions. How will the world look when we have achieved our vision? How will we measure vision achievement? How many units of service must we provide annually to achieve our vision? Who are the recipients of these units of service and where are they located? Direct customers? Ultimate consumers? What benefits (outcomes) do these recipients receive from our units of service? How do we measure these benefits? SECONDARY GOALS Secondary goals address the competencies and resources needed to accomplish the primary goals. They answer the following questions. What facilities and equipment are required to provide the needed units of service? What personnel skills are needed and in what quantities? Where will these facilities and personnel be located? How do we obtain and finance the resources we need to achieve our vision? What operating margin (revenues minus expenses) must we sustain to provide the working capital and fund balances we need to provide the level of service required by our vision? What financial results must we achieve or maintain to assure our continued financial health?

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A STRATEGIC THINKING AND PLANNING WORKBOOK FOR THE SOCIAL ENTREPRENEUR AND NON-PROFIT EXECUTIVE
PART TWO - FOCUSING YOUR VISION YOUR PRIMARY GOALS List the goals that define the operating results required to achieve your vision, the indicators you will use to measure or assess goal performance, and the numerical value or description that will signify goal achievement. Goal Indicator(s) Success Value(s)

YOUR SUPPORTING GOALS List the goals that identify the personnel, financial, facility, equipment, and other results that must be achieved to provide the desired operating results, the indicators you will use to measure or assess goal performance, and the numerical value or description that will signify goal achievement. Goal Indicator(s) Success Value(s)

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A STRATEGIC THINKING AND PLANNING WORKBOOK FOR THE SOCIAL ENTREPRENEUR AND NON-PROFIT EXECUTIVE
PART TWO - FOCUSING YOUR VISION
BARRIERS TO GOAL ATTAINMENT Barriers are systems obstacles that impede the attainment of goals. Barriers are not problems. Barriers cannot be fixed or solved. They must be recognized and dealt with or circumvented. They are part of the context that the strategy for goal attainment must recognize. Barriers are created by:  Mental models, images, and attitudes (workforce, customers, clients, contributors, taxpayers, investors, etc.).  Social norms and customs.  The competitive environment.  Organizational culture and risk tolerance.  Socio-economic conditions and trends (demographics, economic growth, life styles, etc.).  Physical barriers that cannot be changed (distance from customers, state of the art technology limitations, geography, terrain features, etc.) Barriers are root cause structural relationships that obstruct goal attainment. Identifying barriers to achieving goals requires a systems perspective. Barriers are not a lack of something, such as funds or resources. They are real blocks. They are the reason for the lack of funds or resources, such as outmoded funding strategies or conflicting priorities. Barriers are difficult to identify because they are frequently not obvious. It generally requires root cause problem solving techniques to discover them. The following technique may help you identify these barriers. State each goal and answer the question, “What obstacles must we overcome to achieve this goal (refer to the above list of barriers)?” If your answer is a lack of something, such as money, people, facilities, etc. follow with a second question. “Why is lack of ----- a barrier?” Continue asking “why” questions until you arrive at an answer that does not indicate a “lack of” something. A Root Cause Problem Solving Model ( www.threesigma.com/problem_solving) will show you how to discover root causes or you can contact Three Sigma for assistance (www.threesigma.com) Identify the barriers to accomplishing your goals. List your goals and identify the barriers to achieving each of them. Use the information you have uncovered by reviewing your organization‟s history to help identify the barriers to goal achievement. Since barriers describe root causes or system relationships a single barrier can obstruct multiple goals. Goal Barriers

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A STRATEGIC THINKING AND PLANNING WORKBOOK FOR THE SOCIAL ENTREPRENEUR AND NON-PROFIT EXECUTIVE
PART TWO - FOCUSING YOUR VISION
“An important point to remember in designing a non-profit‟s service and marketing is to focus only on those things you are competent to do.” Peter Drucker, Managing the Nonprofit Organization. YOUR SKILLS AND COMPETENCIES Organizational competencies are functional capabilities and experience the firm possesses by virtue of the way it integrates and blends the individual skills of its employees and achieves results. Examples of organizational competencies are:  Experience in assessment and counseling individuals and families.  Experience in receiving, warehousing, and distributing bulk shelf stable and frozen food.  Experience in planning and organizing fund raising and fund solicitation programs.  Experience in planning, budgeting, and controlling costs.  Experience in attracting, developing, and retaining a highly competent workforce.  Experience in adjusting operations to meet challenging customer delivery schedules. Non-profit organizations need competencies in a range of functional activities (production, marketing, distribution, fund development, etc.). What organizational competencies do you have that enable you to provide your products and/or services to your constituencies? (refer to Your Capabilities and Competencies on page 11)

Identify the competencies you need to improve or acquire to accomplish your goals.

ACQUIRING OR DEVELOPING YOUR FUTURE ORGANIZATIONAL COMPETENCIES There are several approaches to developing organizational competencies. The following table will help you think through the approach or approaches you will use. Check the left column of the approach or approaches you intend to use. Approach Recruit personnel with the needed talent and experience. This approach has merit when you have minimal competency. Train employees to become expert in the needed skills. This approach requires a training program and access to the required skills. Consultants can be helpful in this approach. Obtain organizational competency through strategic alliances, joint ventures, or collaborations. This approach can be useful to develop additional competencies. It may not be effective if your existing competencies are not well developed or non-existent. Build competency by synthesizing existing skills and knowledge into an integrated process. This approach is indicated when the basic skills are present but not yet integrated into a synthesized process. It requires the ability to harmonize a wide variety of skills into a cohesive effort. It requires generalists who can overcome the parochial perspectives of specialists.

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A STRATEGIC THINKING AND PLANNING WORKBOOK FOR THE SOCIAL ENTREPRENEUR AND NON-PROFIT EXECUTIVE
PART THREE - FORMULATING YOUR STRATEGY
“The answer to the question, „What is our business?‟ is the first responsibility of top management. A business is defined by the want a customer satisfies when he buys a product or service.” Peter Drucker, Management, STRATEGY AND TACTICS Your prospect‟s mind is your marketing point of leverage. Your marketing tactic is the concept, idea, or image that convinces the prospect to purchase or use your products and/or services rather than a competing alternative or a competitor‟s products or services. It is the feature that makes your products or services unique and is central to positioning them in your prospect‟s mind. For a thorough description of marketing tactics and positioning read Bottom Up Marketing and Positioning: The Battle for Your Mind by Al Ries and Jack Trout. Your marketing strategy is the decision framework that exploits your marketing tactic. Christopher Lovelock and Charles Weinberg developed a model that systematizes how people perceive product or service costs and benefits. This model can be used to link product characteristics, service attributes, and intangibles to customer needs and perceptions. It is a useful tool to examine how your products and services provide costs and benefits to your customers. It uses five categories to describe the benefits received and costs borne by customers when they purchase or acquire your products or services. The following chart is an adaptation of this model. HOW PEOPLE PERCEIVE PRODUCT OR SERVICE COSTS AND BENEFITS. Costs Sensory costs- undesirable sensory attributes associated with your services or their use. i.e. unsightly facilities, distracting noises, bad smells, pain, discomfort, etc. Psychic costs- negative states of mind generated by your services or the manner in which they are delivered. i.e. rude treatment, emotional distress, fear for personal safety, etc. Place costs- inconvenient or unattractive aspects of the locations where your services are offered i.e. located in a decaying urban area, difficult to get to, unsightly facilities, etc. Time costs- time spent obtaining information, purchasing or using your service. i.e. waiting times, travel time to get to service location, etc. Economic costs- financial outlays involved in the purchase and use of your service. i.e. price, travel expenses, parking fees, childcare, etc Benefits Sensory benefits- desirable sensory attributes associated with your services or their use. i.e. good appearance, feel, sound, smell or taste Psychic benefits- stem from your services ability to stimulate a positive state of mind in the recipients. i.e. sense of achievement, freedom from worry, self-confidence, pleasure, etc. Place benefits- convenience, comfort, and other advantages of the location where your services are offered. Delivering your services is an example of a place benefit. Time benefits- efficiency of purchase and use of your services. i.e. convenient scheduling, quick, reliable delivery, etc. Economic benefits- opportunities your service provides for economic or monetary gain. i.e. enhanced employment prospects, etc.

Since costs and benefits are mutually dependent and tend to be inversely related, organizations must choose whether their tactical approach is to maximize customer benefits or minimize customer costs. Each of these choices requires a different focus and tactic. Maximizing customer benefits entails providing the greatest possible benefit while staying within the customer‟s cost constraints. These customers‟ primary selection motive is to receive the benefits your products or services provide at a cost they perceive as reasonable. Their selection decision is determined by their perception of the value of these benefits compared with alternatives available to them. You enhance the desirability of your products or services by expanding their scope of benefits. The cost of your products or services is a secondary consideration to these customers. Copyright 2002, J. Thomas McIntire 25

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Minimizing customer costs entails providing a given set of benefits at the lowest possible cost to the customer. These customers perceive your products or services as necessities and their primary selection motive is to obtain their benefits in the quickest, most convenient, and least expensive manner. This tactic requires designing your products and services to reduce the total cost burden these customers incur. Developing an effective marketing tactic requires understanding your customer‟s primary purchasing motive (benefit received or low cost), their benefit expectations and cost tolerance. APPLICATIONS FOR NON-PROFIT ORGANIZATIONS. Process Driven Organizations. Process driven organizations strive to increase the number of people they serve or the quantities they provide and usually accomplish this by minimizing the costs experienced by their customers while providing an established level of benefits. Cultural and recreational organizations can be exceptions to this. Many of them function as process driven organizations but their customers are more desirous of the benefits they provide than their cost. These organizations attempt to increase the number of people they serve by maximizing the benefits of their services while keeping their customers‟ costs reasonable. Achievement Driven Organizations. Achievement driven organizations want to change behavior and usually accomplish this by maximizing the benefits experienced by their customers while keeping their customer‟s costs acceptable. CHOOSING YOUR TACTICAL APPROACH Your tactical approach should be determined by the primary purchasing motive of the customers who make the decision to use your services or purchase your products. Some non-profit customers receive services under coercion from controlling authorities that make the product or service decision for them. Examples are an employee undergoing employer directed addiction treatment, or students on a field trip to an environmental education facility. Your tactical approach must satisfy the needs of the decision maker while recognizing the constraining needs of the recipient or ultimate consumer of your products and services. Indicate your tactical approach on the following table. Minimize customer costs Your tactical approach (check which choice applies) DEVELOPING YOUR MARKETING TACTICS Developing your tactics requires you to identify and prioritize your customers‟ cost and benefit expectations and then determine the tactical elements you will use to meet them. These tactical elements must overcome the barriers to goal achievement you have previously identified and be achievable with your organizational competencies. Some of Lovelock-Weinberg‟s cost or benefit categories may not apply to the products or services you offer or be important to your customers. The following examples illustrate how to use the Lovelock-Weinberg model to develop your marketing tactic. The first example is a process driven homeless shelter. Its tactical approach is to minimize customer costs. This means the cost elements are customer critical and are prioritized while the benefit features describe the customers‟ expectations that must be met. Your marketing tactic identifies the critical performance standards your organization must achieve to make your tactic effective. These standards and your performance must be measurable. Maximize customer benefits

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A STRATEGIC THINKING AND PLANNING WORKBOOK FOR THE SOCIAL ENTREPRENEUR AND NON-PROFIT EXECUTIVE
PART THREE - FORMULATING YOUR STRATEGY
Example 1 Homeless shelter Customer segment Homeless individuals Cost elements (and priority for lowest cost customers) Shelter is clean, warm and comfortable 3 Shelter is supervised and secure. 2 Customer‟s primary purchasing motive (check one) Lowest cost X Maximum benefit Cost benefit Benefit features (and priority for maximum category benefit customers) Sensory Users are treated with courtesy and respect. Psychic Showers, soap, and towels are provided. Shelter is accessible by public transportation. Place Time Use of shelter is free. 1 Economic In this example the customer‟s primary need is to find a free place to sleep. The critical tactical elements for this homeless shelter are providing free shelter and safe, secure sleeping accommodations. The benefit features describe the shelter requirements that its users expect. The marketing tactic for this homeless shelter can be stated as follows. Our fundamental marketing tactic is to provide everyone who comes to us with a clean,warm, comfortable shelter with sleeping accommodations and continuous security and supervision. We will provide showers, soap and towels, treat all transients with courtesy and respect, and keep the shelter well maintained and presentable. Critical performance standards that must be met to implement this tactic are: 1. Shelter must have qualified supervisors on duty when it is open. 2. Appropriate security measures must be established and followed. 3. Shelter must have functioning heat, light, and water at all times it is in use. 4. Shelter must be cleaned daily, linens washed, and beds maintained in good condition. 5. Sufficient soap, towels, toilet paper must be on hand to meet customer demand. The second example is an achievement driven organization providing job training. Its tactical approach is to maximize customer benefits. This means its benefit features are customer critical and prioritized while the cost elements define the customers‟ acceptable costs. Example 2 Job training organization Customer segment Customer‟s primary purchasing motive (check one) Unemployed adults Maximum benefit X Lowest cost Cost elements (and priority for lowest Cost benefit Benefit features (and priority for maximum cost customers) category benefit customers) Training area is clean and comfortable. Sensory Graduates get jobs with career potential. 2 Psychic Convenient to subsidized day care. Place Accessible by public transportation. Job training is focused and efficient. Time Job training is completely subsidized. Graduates get good paying, full time jobs within Economic 30 days after graduation. 1 In this example the customer‟s primary need is to get a good paying job quickly. The critical tactical elements for this job training organization is to convince its customers that completing their training program will make this happen. Presenting a training program that gets graduates into good paying, meaningful jobs quickly is the way to exploit this tactic. The cost elements define the customer cost requirements the organization must accommodate. Any reduction in subsidy, loss of affordable day-care, or increased transportation expenses could cause its customers to turn away or drop out of the program. The marketing tactic for this job-training agency can be stated as follows. Our fundamental marketing tactic is to create the relationships needed to place graduates from our training programs into good paying, jobs with career potential within 30 days after graduation. We will minimize the cost to our trainees by completely subsidizing their training and keeping our location accessible by public transportation and on the same bus route that serves a subsidized day-care facility. Copyright 2002, J. Thomas McIntire 27

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PART THREE - FORMULATING YOUR STRATEGY
Critical performance standards that must be met to implement this tactic are: 1. Relationships are established and maintained with employment agencies and employers to provide graduates with full-time jobs with career potential within 30 days after graduation. 2. Relationships are established and maintained with funding agencies to enable job training to be completely subsidized. 3. Training is presented by qualified personnel using a recognized curriculum. 4. Training facility and restrooms are cleaned daily. 5. Relationships necessary to maintain accessibility to subsidized day care and public transportation are developed and maintained. Your marketing tactics identify the critical performance standards needed to make them effective. DEFINING YOUR CUSTOMERS’ EXPECTATIONS Use the following table to identify and prioritize your customers‟ cost and benefit expectations and the tactical elements you will use to meet or exceed these expectations. Customer segment Cost elements (and priority for lowest cost customers) Customer‟s primary purchasing motive (check one) Lowest cost Maximum benefit Cost benefit Benefit features (and priority for category maximum benefit customers) Sensory

Psychic

Place

Time

Economic

FORMULATING YOUR MARKETING TACTIC Use the information from the preceding table to describe your marketing tactic.

ESTABLISHING YOUR CRITICAL PERFORMANCE STANDARDS. Identify the critical performance standards needed to implement your tactic.

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A STRATEGIC THINKING AND PLANNING WORKBOOK FOR THE SOCIAL ENTREPRENEUR AND NON-PROFIT EXECUTIVE
PART THREE - FORMULATING YOUR STRATEGY
YOUR MARKETING STRATEGY MUST BE FORMULATED TO EXPLOIT YOUR TACTIC. Your marketing strategy is the vehicle for exploiting your marketing tactic. Your options for future product and market growth are shown in the following matrix. A focused strategy requires choosing one of these four options to be its primary objective. Market Scope Focus on current markets Scope of Products or Services Offered Maintain current products and services Add new products and services Increase penetration of current markets Add new products in current markets Develop new markets Develop new market segments for current products

Add new products and develop new market segments The concept of a driving force provides a tool to help define your future scope of products, services, and markets. STRATEGY AND THE DRIVING FORCE “We define strategy as the framework which guides those choices that determine the nature and direction of an organization.” Benjamin Tregoe and John Zimmerman, Top Management Strategy The driving force is a management tool to help organizations formulate their strategy. It provides a structure for determining future service and market priorities and choices and for evaluating future growth opportunities. This concept was developed by Benjamin Tregoe and John Zimmerman to describe the strategic element that an organization chooses to be the focal point of its strategy. This workbook adapts this concept to non-profit organizations. There appear to be six non-profit driving forces. They are described in the following paragraphs along with examples of organizations that might choose these driving forces and the organizational competencies in which the organization must excel to exploit them. 1. Services offered driving force. The organization‟s strength is in the effectiveness of its products and or services. It concentrates its efforts on continually improving a relatively limited array of products or services with similar, well-defined characteristics to keep them at the cutting edge of the technology. It offers these products and services to constituencies that value effectiveness and reliability more than low cost. It expands its social impact by increasing its existing market penetration or developing new market segments that can benefit from its specialized offerings (i.e. drug rehabilitation programs, schools, testing organizations, job training organizations, etc.). Competencies required are operations and quality control processes that provide state of the art products or services, strong customer relations and follow-on service support. These organizations tend to be achievement driven. 2. Markets served driving force. The organization‟s strength is in its strong relationships with its clients and constituents. It concentrates its efforts on continually strengthening this relationship by expanding its presence and communication in the market place. It uses its strong customer relationship to expand its social impact by offering a variety of new products or services desired by its current clients (i.e. community centers, youth organizations, business associations, alumni associations, etc.). Competencies required are market research, product or service development, and a strong organizational presence among its clients and constituents. These organizations tend to be process driven. 3. Technology/knowledge driving force. The organization‟s strength lies in its body of knowledge or technology capabilities. It concentrates its efforts on continually improving its technological capabilities. It expands its social impact by using these capabilities to develop new and innovative services for existing, emerging, or completely new market segments (i.e. foundations, health-care and counseling organizations, research laboratories, etc.). Competencies required are professional or technical expertise, applied social research, and program development. These organizations can be either achievement or process driven. Copyright 2002, J. Thomas McIntire 29

A STRATEGIC THINKING AND PLANNING WORKBOOK FOR THE SOCIAL ENTREPRENEUR AND NON-PROFIT EXECUTIVE
PART THREE - FORMULATING YOUR STRATEGY
4. Resources/facilities driving force. The organization‟s strength lies in its access to or control of specialized facilities or resources. It concentrates its efforts on acquiring or developing these facilities or resources. It expands its social impact by offering programs and services that utilize these assets to market segments that value them (i.e. environmental education centers, park districts, summer camps, retreat houses, community centers, festival parks, etc.). Competencies required are facility operations and maintenance, and promotion to increase facility/resource utilization. These organizations tend to be process driven. 5. Marketing/distribution driving force. The organization‟s strength lies in the way it communicates and distributes its services. It concentrates its efforts on strengthening and expanding its communication and distribution capabilities. It develops and offers services based upon the capabilities and limitations of its communications and distribution processes. It expands its social impact by developing and offering services to market segments which can be reached by its communication and distribution capabilities (i.e. food pantries, soup kitchens, telephone listening and referral organizations, etc.). Competencies required are effective customer communications, and a responsive product or service delivery system. These organizations tend to be process driven. 6. Service capacity driving force. The organizations strength lies in its capacity to provide large quantities of product or a high volume of services. It has a large investment in its facility and related service capabilities and its cost effectiveness requires high capacity utilization. It concentrates its efforts on improving the efficiency of its operations through facility and process improvements. It generally offers its services to market segments that are sensitive to cost. It is dependent upon economies of scale and expands its social impact by developing services and markets that will enable it to keep its facilities full or capacity utilization high. (i.e. hospitals, food banks, convention centers, etc.). Competencies required are operational efficiency, and sales force effectiveness in securing markets for its high volume output. These organizations tend to be process driven. CHOOSING YOUR DRIVING FORCE There is no single correct organizational driving force and similar organizations can have different driving forces with different service and market priorities. It is not unusual for organizations to have different driving forces at different points in their growth or when their environment changes. Choosing your driving force is a strategic decision that determines the services you will offer, the customers you will serve and the competencies you must acquire, develop or enhance to be effective. This choice should be driven by your marketing tactic and influenced by the barriers to goal achievement and the organization‟s competencies and capabilities. Because of its long-term impact, changes in driving force create cultural shifts that can be stressful for an organization. Indicate what you perceive to be the present driving force of your organization. Describe the strategic elements that define this driving force. Example- we currently use a Services Offered driving force that focuses on the effectiveness of our alcohol and drug addiction rehabilitation program for teens and young adults. Our focus for growth is to expand our facilities in our service territory to handle the increasing numbers of clients and provide follow-up counseling and support to program graduates.

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Analyze whether your present driving force will effectively exploit your marketing tactic, address the barriers to goal achievement, and be achievable with the organizational competencies you have or expect to acquire. If not select the driving force that will be more appropriate for the future and describe the strategic element and focus that will guide your operating strategy. Example- the XXX Foodbank will use a Service Capacity driving force optimizing our warehouse and distribution capabilities. We will improve the efficiency of our receiving, storage, and distribution processes by modernizing our facility and upgrading our inventory management software. Our focus for growth will be to expand the volume of food provided to organizations in our existing service territory. Our marketing efforts will be focused on expanding the sources and quantities of surplus food donations from commercial sources and developing additional outlets to reach underserved segments in our existing territory.

YOUR MARKETING APPROACH Your marketing approach determines how you intend to expand your organization‟s community impact. It follows from your driving force and identifies the products or services you will offer and the customer segments you will serve. Fill in the cell in the following matrix that corresponds to the choice you made to define your future product and market focus. Indicate the current products/services and current market segments that will be targeted for increased penetration. Indicate the new market segments that will be developed and the current products/services that will be expanded into them.

Indicate the new products/services that will be added and the current market segments that will be targeted.

Indicate the new products/services that will be developed and the new markets that will be developed for them.

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PART THREE - FORMULATING YOUR STRATEGY
YOUR SERVICE AND MARKET PRIORITIES Priorities enable limited resources to be concentrated where they are most effective. Without well-defined priorities work will be inefficient and wasteful. Your driving force and marketing approach can help you determine your market and service priorities. Identify the market segments that will have the highest priority, the products/services that will be offered to these segments, and the reason for this priority?

Identify the market segments and products/services that will receive routine priority and the reason for this priority?

Identify the market segments and products/services that will receive reduced resources and effort and the reason for this reduction?

Identify the market segments and products/services that will be phased out or abandoned and the reason for this?

Identify the market segments and products/services that will be developed for the future and the reason for this?

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A STRATEGIC THINKING AND PLANNING WORKBOOK FOR THE SOCIAL ENTREPRENEUR AND NON-PROFIT EXECUTIVE
PART THREE - FORMULATING YOUR STRATEGY
CAPITAL RESOURCES Capital resources are the land, buildings, equipment, and vehicles needed to carry out your mission. Identifying these resources and determining how they will be acquired is an essential part of your strategy. Identify the capital resource additions, enhancements, or modifications that are required to accomplish your goals and their estimated cost. Capital resource Estimated cost Date Required Example: Warehouse addition (10,000 square feet). $200,000 FY 2003

CAPITAL ACQUISITION Capital can be acquired from operating surpluses, contributions, grants, loans, and taxes (government organizations). Identify how you will finance your capital requirements. Capital resource How financed (source and amount) Example: Warehouse addition. Government grant $50,000. Private contributions $50,000. Internally funded $100,000.

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A STRATEGIC THINKING AND PLANNING WORKBOOK FOR THE SOCIAL ENTREPRENEUR AND NON-PROFIT EXECUTIVE
PART THREE - FORMULATING YOUR STRATEGY
SUMMARIZING YOUR OPERATING STRATEGY Your mission, goals and strategy should be clearly defined to keep your organization disciplined and focused. Use this page to summarize your game plan. Your mission, (as stated on page 20).

Vision attainment indicators and success values, page 20. List the indicators you will use to measure or assess vision attainment and the value of these indicators that will define success. Indicators Value

Your goals, indicators, and success values, page 22. Primary Goals Indicator(s)

Success Value(s)

Supporting goals

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Identify the competencies you will need to improve or acquire to accomplish your goals, Page 24

Approach to improve or acquire future organizational competencies, Page 24. Recruit personnel with the needed talent and experience. This approach has merit when you have minimal competency. Train employees to become expert in the needed skills. This approach requires a training program and access to the required skills. Consultants can be helpful in this approach. Obtain organizational competency through strategic alliances, joint ventures, or collaborations. This approach can be useful to develop additional competencies. It may not be effective if your existing competencies are not well developed or non-existent. Build competency by synthesizing existing skills and knowledge into an integrated process. This approach is indicated when the basic skills are present but not yet integrated into a synthesized process. It requires the ability to harmonize a wide variety of skills into a cohesive effort. It requires generalists who can overcome the parochial perspectives of specialists. Your marketing tactic, page 28.

Your critical performance standards that must be met, page 28,

Your future scope of products/services and markets, page 31.
Indicate the current services that will be targeted for increased penetration. Indicate the new market segments that will be developed and the current services that will be expanded into them.

Indicate the new services that will be added to the current markets.

Indicate the new services that will be developed and the new markets that will be created for them.

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Your product/service market segment priorities, page 32. Identify the market segments that will have the highest priority, the products/services that will be offered to these segments, and the reason for this priority?

Identify the market segments and products/services that will receive routine priority and the reason for this priority?

Identify the market segments and products/services that will receive reduced resources and effort and the reason for this reduction?

Identify the market segments and products/services that will be phased out or abandoned and the reason for this?

Identify the market segments and products/services that will be developed for the future and the reason for this?

Your capital resource requirements and how they will be obtained, page 33.

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A STRATEGIC THINKING AND PLANNING WORKBOOK FOR THE SOCIAL ENTREPRENEUR AND NON-PROFIT EXECUTIVE
PART FOUR- SETTING YOUR OBJECTIVES
SETTING OBJECTIVES Setting objectives is the critical step in transforming your mission into work. Objectives describe the tasks that must be accomplished to achieve your goals. They are driven by your marketing tactic and strategy and must circumvent or overcome the barriers to achieving these goals. Objectives are the basis for work assignments and accountability. Objectives are based on expectations that are informed guesses at best and depend on many factors that are beyond your control, so setting objectives more than 12 to 18 months into the future is usually unproductive. List each of your goals, the barriers to achieving that goal, and the objectives describing the work required to accomplish that goal. For each goal ask, “What work must be done or started within the next 12 to 18 months to accomplish this goal?” and “How can the barriers to achieving this goal be overcome?” The answers will identify your objectives and the critical performance standards that will be required. Goal Barriers Objectives

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A STRATEGIC THINKING AND PLANNING WORKBOOK FOR THE SOCIAL ENTREPRENEUR AND NON-PROFIT EXECUTIVE
PART FOUR – SETTING YOUR OBJECTIVES
Work planning Work planning consists of assigning objectives to responsible individuals for planning and accomplishment. It may be necessary to sub-divide objectives into functional work-tasks so accountability can be assigned to a single individual. Because the future is uncertain designing work in tasks of 12 months or less will make planning easier and provide the flexibility to adjust to unanticipated events. Objectives should include a timetable for completion, budgets identifying the direct resource needs, and measurable standards that define critical performance expectations. The critical performance standards required by your marketing tactic should be clearly specified in the appropriate objectives. Complete the following table for each objective. Objective Timetable for Responsible Critical performance Budget Functional work tasks (if necessary) completion individual standards

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A STRATEGIC THINKING AND PLANNING WORKBOOK FOR THE SOCIAL ENTREPRENEUR AND NON-PROFIT EXECUTIVE
PART FOUR – SETTING YOUR OBJECTIVES
“Leadership is accountable for results and the leaders job is to see that the right results are being achieved, the right things are being done. ...the executive who leads effectively must first answer the question, How is performance in this institution to be defined?” Peter F. Drucker, Managing the Non-Profit Organization. ESTABLISHING PERFORMANCE STANDARDS Your goals, marketing tactics, and strategy establish the performance standards you must achieve. This performance must be measured or assessed and compared to a standard to evaluate its effectiveness. These standards must be clearly communicated to those individuals responsible for accomplishing the work. Use the following table to identify those critical performance standards you must achieve and the observable or quantifiable indicators that you will use to measure performance. Performance standard Performance Indicator Examples: Job training graduates get good paying jobs Graduate and employer feedback. within 30 days after graduation. Employer placement interviews with graduates. Homeless shelter is clean and comfortable. Daily shelter inspection log and client feedback.

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A STRATEGIC THINKING AND PLANNING WORKBOOK FOR THE SOCIAL ENTREPRENEUR AND NON-PROFIT EXECUTIVE
PART FOUR – SETTING YOUR OBJECTIVES
Coordinating the plan, timetables, and performance standards Review your actions, timetables, and performance standards to make sure they:  Are consistent with each other,  Are within the organization‟s capabilities and competencies,  Encompass all significant organizational activity,  Have the commitment of those individuals accountable for results. Budgeting and balancing objectives Objectives must be balanced against attainable revenue. The responsible individuals should prepare and defend the direct budgets for the objectives for which they have accountability. These budgets must be added together and reviewed to ensure they can be accomplished within the revenue you can reasonably expect to receive. Verification Examine this plan of action, timetables, performance standards, and budgets to verify they are consistent with your competitive strategy and will lead to vision and goal achievement. Performance measurement Measuring performance, analyzing variances, and taking prompt corrective action will be necessary to achieve these results. Performance Measurement 101 (www.threesigma.com/perfmeas_model)) will show you how to develop a performance measurement process or you can contact Three Sigma for assistance (www.threesigma.com).

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A STRATEGIC THINKING AND PLANNING WORKBOOK FOR THE SOCIAL ENTREPRENEUR AND NON-PROFIT EXECUTIVE
PART 5 – WRITING YOUR MISSION STATEMENT
“A mission statement has to be operational, otherwise it‟s just good intentions. A mission statement has to focus on what the institution really tries to do and then do it so that everybody in the organization can say, this is my contribution to the goal.” Peter F. Drucker, Managing the Nonprofit Organization. THE PURPOSE OF MISSION STATEMENTS The mission statement is an important communication tool. It is the way an organization defines its social commitment and communicates what it does and what it stands for. An effective mission statement should focus the organization on action. It should guide the organization‟s decisions and inspire strong commitment from those responsible for its operations and support. It should implicitly or explicitly reflect the organization‟s purpose and vision. The narrative on Purpose and Vision (page19) illustrates how combining an organization‟s purpose and vision results in a mission statement that is capable of generating both commitment and emotional energy. The wording and style of mission statements reflect the culture of the organization and the message they want to communicate to their primary audience. If the mission is directed primarily at employees it might focus on the action it wants them to take. Examples, “To give assurance to the afflicted.” A mission statement for a hospital emergency room. “Our mission is to fly and fight.” The mission statement of the USAF during the Vietnamese war. If the primary audience is foundations and government funding organizations it might emphasize the work the organization does. Example, “We are a food-bank reclaiming and distributing surplus food to needy families in east Texas.” If the objective is to inspire public support and contributions it might contain an emotional appeal. Example, “In this time of prosperity it is unconscious able for anyone to be hungry. We intend to eliminate hunger and devote all our energies to that purpose.” A mission statement for a food pantry. If the organization wants to build public awareness its mission statement could combine its purpose and what it does (its work). This is particularly effective if its purpose is widely recognized as noble. Example, “The mission of America’s Second Harvest is to end hunger in America. We feed hungry people by soliciting and judiciously distributing grocery products and prepared and perishable foods through a nationwide network of certified affiliate food banks and food-rescue organizations, and educate the public about the nature of and solutions to the problems of domestic hunger.” DEFINING YOUR MISSION STATEMENT’S PRIMARY AUDIENCE AND PURPOSE Organizational mission statements are generally directed at outside constituencies such as customers, suppliers, supporters, and the public. Employees are expected to act in accordance with the message it communicates. Mission statements for internal organizations or departments are generally intended to inspire desired employee and/or volunteer action. Outside organizations are expected to appreciate and support this action. Define your mission statement’s primary audience and the message it is intended to communicate.

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A STRATEGIC THINKING AND PLANNING WORKBOOK FOR THE SOCIAL ENTREPRENEUR AND NON-PROFIT EXECUTIVE
PART 5 – WRITING YOUR MISSION STATEMENT
COMPOSING YOUR MISSION STATEMENT The following template will help you compose your mission statement. Consider your primary audience and message in following this template. Decide whether your mission statement will describe what you do or what your recipients gain. Process driven organizations generally prefer to describe what they do. Achievement driven organizations generally prefer to describe the benefits their recipients receive.

Determine the elements you want to include in your mission statement. Mission statements traditionally contain one or more of the following elements depending on their primary audience and message. Statement of purpose The work they do. The results they want to achieve The action they want to motivate An over-riding goal Their desired size, capability, or market standing The quantity or quality of product or services they want to provide A vision statement that can include some or all of the above elements Place a check in front of the elements you want to include in your statement. Draft a brief statement for each of the elements you checked.

Write your mission statement. Combine your draft statements into a draft mission statement. Edit and revise this draft until it communicates the message you desire.

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A STRATEGIC THINKING AND PLANNING WORKBOOK FOR THE SOCIAL ENTREPRENEUR AND NON-PROFIT EXECUTIVE
BIBLIOGRAPHY
Collins, Jim and William C. Lazier, Beyond Entrepreneurship: Turning Your Business into an Enduring Great Company, Paramus, New Jersey: Prentice Hall, 1992. Drucker, Peter F., Managing the Nonprofit Organization, New York: Harper-Collins, 1990. Drucker, Peter F., Management, New York: Harper and Row, 1973. Harrison, Roger, The Collected Papers of Roger Harrison, San Francisco: Jossey-Bass, 1995. Lovelock, Christopher, and Charles Weinberg, Marketing for Public and Nonprofit Managers, New York: Wiley, 1984. Senge, Peter M., The Fifth Discipline, New York: Doubleday, 1990. Tregoe, Benjamin B. and John W. Zimmerman, Top Management Strategy, New York: Simon & Schuster, 1980.

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