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Leadership Now

3 Pillars Of A Successful Nonprofit Strategy

Market. Customers. Capacity. Simple, right?

3 Pillars Of A Successful Nonprofit Strategy

Here are the three pillars every successful nonprofit strategy is built upon:

  1. Market
  2. Customers
  3. Capacity

Nonprofits usually look to their board to create strategy, most often a serious mistake. The board does not have (a) the requisite broad market intelligence, (b) the ability to collect impartial data from those the organization serves (the customers), and (c) comprehensive understanding of the organization’s capacity.

It is the board’s place to ordain strategy, not create it. It is the CEO-executive director’s (ED) job to bring potential strategies before the board for its consideration. Then the board can debate, refine, select, challenge, and ultimately determine the strategy best for the company's mission and future.

To do this well, the CEO-ED must use an outside expert. He or she cannot use an employee because the nature of the employer-employee relationship does not provide the neutrality required for to tackle the three pillars with integrity. Let’s take a closer look to see why.

  1. Market
    Market conditions play a role in the success of every organization. For example, it is quite a different game to grow an organization when the market is expanding than when it is contracting.

    Rarely are markets so black and white. More often, they are nuanced with challenges and circumstances that rely on specific conditions and present unique opportunities. That is why you need an expert who can assess the market and present the options in a way that makes it easy for the board to understand, digest, and debate. An independent view ensures the whole picture is presented without an organization-centric bias.

  2. Customers
    The two fundamental questions to answer are: Who are our customers? How are we doing at serving them?

    For most organizations, these are more complex questions to answer than they first appear. For example, it is normal to learn that you have several important sets of customers and, among them, some are happy and others are not, some feel neutral and others detached. It is also normal to learn that you are meeting some needs, missing some, and could be doing better with others.

    It takes neutrality to interact with your customers, gather their candid input, and put it together in a framework that gives an accurate picture of how your organization is perceived by those it serves, for better or worse.

  3. Capacity
    Deep knowledge of your customers and the market is not enough. You must get an assessment of whether or not your operation has the wherewithal to rise to opportunities and meet challenges successfully. To do this, you have to evaluate its ability to act and innovate.

    This requires taking a hard look at the culture, functions, and roles required to design and deliver value successfully. Everyone inside the organization lacks the independence required to accurately assess capacity without bias. Deficiencies and assets must be identified in the areas of talent, resources, responsiveness, systems, and data.

These are the three pillars every successful nonprofit strategy relies upon: market, customers, and capacity. The quality of your strategy rests upon the caliber of these three pillars. Bring in an expert under the direction of the CEO to do the necessary work, examine these three areas, and present the findings to the board for review. You will be glad you did, and so will the people you serve.

[Image: Flickr user Jon Glittenberg]