Strategy Management for Associations: From Issues to Action
By: James G. Dalton (with a commentary by Jimelle F. Rumberg, Ph.D., CAE)
Association management experts have changed the way we think about strategic planning. Now, James G. Dalton explains how to go from thinking about strategy to having one.
The notion that strategic planning isn't what it used to be is now widely accepted. Unfortunately, there's much less agreement on what it has become.
A symposium held at MIT's Sloan School of Management looked back at strategic planning's 40-year evolution from a cutting-edge concept in the early 1960s through its calcification into a fixed template that inadequately addressed the need for flexibility in rapidly changing environments. In the leading MBA programs the subject has evolved to a point where the term "strategic planning" rarely appears in either the titles of the courses or the textbooks they use.
The Strategic Plan in a Three-Ring Binder Is Dead
The association executive's awareness of this changing perspective on planning was documented in a series of focus groups done as a part of an ASAE research project that led to the publication of Managing Change in Associations. When asked to describe their thoughts on the subject, focus group participants made the following observations:
- There was a point in the not-too-distant past when everyone used a similar approach to planning, but there is no longer any uniform understanding of how it should work or whether it is even worth it.
- The comprehensive long-term plan-the three-ring binder type-is dead.
- Some means of anticipating the future and building consensus on what should be done about it was essential.
- The making of strategy, by whatever name or process, must be far more inclusive than before yet faster and more flexible.
Since its inception, the Journal of Association Leadership has been tracking this metamorphosis in strategic thinking with articles on creative new methods associations are using to comprehend the future and explore their options. Porto and McCallen, in the fall 2004 issue, described a cafe method of dialoguing with their members in a way that reached out to everyone and involved listening with openness and discipline. Borawski and Ward, in winter 2004, portrayed Living Strategies in the context of unpredictable ecological systems that must nevertheless anticipate the direction of ephemeral things such as human aspirations and the "collective knowledge" of member communities.
Albrecht, in summer 2005, asked rhetorically if associations were doomed because so many still engage in strategic planning systems that are "little more than elaborate operational planning and budgeting exercises." And in a winter 2006 piece on research concerning the "connectedness" members require in their quest for community, Wedeman gave credence to a theme that was developed in all these articles-namely, an association must maintain a conversation with and for its members.
Fine. But how does a practical executive get from metaphor-rich references to cafes, ecosystems, and industry doom to an understanding of a reason to act and a useful characterization of the actions that should be taken? In other words, when and how does conversation turn into strategy? The fourth edition of ASAE's environmental scan, From Scan to Plan, addresses the connection between broad observations on how the world is changing and the development of strategy. The purpose of this article is to summarize and expand several of the techniques introduced in the environmental scan and identify the lessons learned since that work was published.
Good Strategy Evolves Gradually
The need to reconsider our understanding of strategy making under rapidly changing conditions is captured by James Brian Quinn, a management guru from Dartmouth's Tuck School of Business, in what he calls logical incrementalism. Quinn's thesis is that the development of
strategy in successful organizations is not at all like the rational-analytical systems portrayed in the management literature. He thinks it is fragmented, evolutionary, and intuitive. Good strategy evolves over time in a stream of activities that include conversations, planning, serendipity, failed initiatives, persistence, more conversation, and, yes, technique.
This last element may seem to be at odds with the mix that preceded it. If technique is understood to be a systematic procedure by which a complex task is accomplished, isn't it a bit like that rational-analytical system that Quinn and others seem to reject? Yes and no. In the traditional approach to strategic planning a large batch of information is poured into a rational -analytical model and a plan is produced. In this alternative, which might be thought of as strategy management, a rational-analytical technique is applied to information flow that percolates through a wide variety of events and yields strategies.
Strategy Involves Ongoing Programs, Not Just New Ones
Two models show how this might work in an association context. The first provides an overall framework that distinguishes strategic initiatives from established programs. The second puts the concept of strategy into a consistent format that captures its dynamism and makes it easily manageable.
Figure 1 illustrates the framework used to distinguish strategic initiatives from ongoing programs. This is important, because too often that which is said to be strategic includes an assortment of things such as new initiatives, established activities thought to be critically important, programs that need strengthening, and even some very tactical to-dos. This inconsistency is made worse by what is missing. Most of the ongoing programs that deliver value to the customer are not accounted for or are referred to dismissively as being a part of ongoing operations. Even if there is an operating plan that makes them explicit, rarely is there a systematic connection between established programs and strategic initiatives. In this framework there are two dimensions, vertical and horizontal. The vertical dimension represents the stable portion of an association. In it, the mission and goals give purpose and direction to the programs that deliver value to customers in the current budget year. These programs have what might be thought of as rolling momentum, cyclical activities that generate value year after year.
Although the content delivered by programs such as the annual meeting or the monthly magazine change with each edition, their function and purpose are consistent over time. The managers of these programs will adjust them on a regular basis in what is thought of as continuous improvement, but the basic value proposition is stable. Even programs with high variability, like government relations, are fairly stable in terms of their purpose, execution, and resource requirements. As a rule of thumb, 80 to 90 percent of an organization's resources go into these activities.
The horizontal dimension portrays a dynamic that is the opposite of stability. In it we identify the strategic issues that drive the need for change as well as the initiatives that are launched to address them. The improvements that program managers make in the vertical dimension deal with the effectiveness of the programs. The strategic initiatives in the horizontal dimension change the fundamental nature of the value that the association delivers. To adapt in this significant a manner is to surrender stability and enter into the uncertainty. New programs may be created, established ones may morph into something else, and in some cases these adaptations may alter the mission and goals of the organization.
Management and leadership in this framework are opposite but complementary functions. We manage to accomplish specific objectives on time and on budget. We lead when we help people see the need for change, arrive at a common vision, and deal with uncertainty as we explore the best way of achieving it. These efforts account for the other 10 to 20 percent of the organization's resources.
Peter Drucker came to believe that organizations should have two budgets. An operating budget allocates resources to established programs over a set period. A strategic budget allocates resources for adaptations that address the future viability of the organization and play out over an unpredictable period. This is not a contingency fund for things that may or may not come up. It is for strategic initiatives that must come up. The horizontal dimension symbolizes the crosscurrents of change and lays out a spectrum of events that move from initial efforts to see the forces of change to an understanding of them and then to priority setting that leads to action. Environmental scanning is used to identify these change agents. The ways of doing this range from future studies to conversations with members using methods like those described in previous JAL articles.
The challenge in managing these activities lies in the highly varied types of information that they consider. Studies produce recommendations. Some methods of analysis produce lists. Market trends render data. Conversations generate observations. All of this information needs to flow across the horizontal dimension in a sorting and refining process that clarifies, compares, and selects. In the end, a few highly refined issues will compete for limited strategy making resources.
From Information Overload, Strategic Issues Emerge
Critical to this process is the concept of a strategic issue, the interaction of two variables that are affecting each other in ways that demand your attention. It is expressed in a single-sentence statement that is carefully crafted to highlight tension between the variables. The strategy will be designed to convert this tension into an opportunity. One example of a statement that has these attributes comes from the association that accredits engineering programs:
The growing demand for accreditation of engineering degree programs delivered entirely by distance learning . . . brings into question the site-specific requirements of the laboratory experience.
In this display, the two variables are separated to highlight the distinction. Some people confuse an issue with a topic, which has only one variable. They assume that the topic must be hot enough for everyone to understand why it must be addressed. This is a dangerous assumption that leads to misunderstandings. It is important to note that a strategic issue provides no hint of what should be done. That comes with the strategy. The issue itself provides a clear declaration of the motive to act. There are more strategic issues in the association's environment than any leader can deal with collectively, so the sorting out process comes in the form of a radar screen. It imposes an arbitrary limitation on the number of issues that will be considered at any point in time. That limit is, simply, the number of issues that fit on a single piece of paper, which amounts to about 15 or 20.
The broadest spectrum of members possible should be involved in the identification of issues that will compete for a position on the radar screen. This process can include focus groups, cafe conversations, town hall meetings, surveys, committee input, and more. In the end, the issues that qualify for the radar screen will do so based on two criteria. Strategic issues are those that, one, will have the greatest impact on the association's membership and, two, are within the association's ability to act upon effectively.
Issues Can Be Classified by Clarity and Importance
The issues that do make it onto the radar screen fall into several categories based on their clarity and importance. Typically this involves three groups. Some of the issues will require additional research to understand them more clearly or resolve disagreements on their importance. These issues are referred to the appropriate committee or task force for research. In the second category are those issues that are clear enough but not urgent or high enough on the importance ranking to justify action at the current time. They are, however, on the radar screen because they warrant monitoring for possible action in the future.
The third group includes those that are ready for prime time. These toppriority issues are candidates for strategy making. Everyone is invited to participate in the discussions that identify issues and consider their relative importance, but ultimately the board owns the tool and sets the priorities. This is an extension of the board's fiduciary responsibility, because the strategies they drive typically require a significant investment and are apt to alter the association's fundamental value propositions.
Strategy Has Four Elements
From Scan to Plan considers several definitions of strategy from the management literature and develops one based on the demands placed on the association by virtue of the need to orchestrate the efforts of staff, elected officers, and volunteer committee members. Strategy is defined as a series of causes and effects aimed at a desired outcome. A model can help with the initial develop of the strategy and to monitor its progress over time.
The model treats strategy as a single initiative with four interacting elements that account for the strategy's intelligence. Figure 3 places these elements in a model that is linear in the construction phase but becomes iterative once the strategy deploys.
In constructing a strategy, you start with the strategic issue, or motive to act. Strategic issues may have reams of analysis behind them, but the succinct, single-sentence structure gives it a clear focal point of agreement on the force that is driving the strategy.
This focus is important because two things happen as the strategy proceeds. The strategy manager's understanding of the issue may sharpen as a result of what is learned along the way and the dynamics associated with the issue itself change because issues are not stationary. The adage in baseball comes to mind: keep your eye on the ball. In this case, the issue is the ball and the three remaining elements constitute your swing.
The second element determines the endgame or desired outcomes. These can be expressed in two or three short, crisp statements that provide clear images of what will be accomplished if the strategy is successful. Well-crafted outcome statements are measurable and give the strategy its performance metrics. In the illustration, the outcomes are shown in shades of gray to make the point that these too may shift as a result of what is learned as the strategy advances.
The third element sets boundaries on the strategy manager's prerogatives and introduces a critical relationship between those who approve the strategy and those who manage it. Boards approve strategy and turn the management of them over to the staff, a committee or a task force created exclusively for that purpose. For the strategy to be intelligent, that is, to learn as it goes, the managers must be free to make adjustments in real time. Nevertheless, the board has ultimate responsibility for changes of this magnitude. The guiding principles make cautionary statements on pitfalls that should be avoided or policies that should be respected. They should not be prescriptive to a point where they dictate how the outcomes will be achieved.
The fourth element is the action plan that defines the tasks necessary to achieve the outcome in a manner that respects the principles. Quinn refers to the action plan as an event sequence to make the point that successful strategy rarely goes according to plan. Strategies may have a fixed set of actions when they deploy, but part of being intelligent is recovering from missteps and finding ways around blind allies. In the end, a strategy will have exhibited a distinct set of causes and effects that moved it from the issue to the outcomes, but it probably won't look like the initial action plan. The term "event sequence" is intended to convey the point that it's not about the plan so much as it is about getting there.
The other distinction between an action plan and an event sequence has to do with the difference between management and leadership. Leaders communicate in a manner that can simplify the complex. While the manager needs to deal with the details, this model provides a strategy sketch that simplifies what may at the detail level be a complicated endeavor. It does so because it is designed to serve the needs of the leaders who approve strategy. They need to maintain the big view. Quinn believes that most complex strategies can be captured in four to seven major thrusts. The purpose is to show the strategy's viability and give some scope of the resource requirements. It's a sketch.
For example, one association had a desired outcome that would diversify the membership by including a new demographic group of technicians that were emerging as a consequence of a new technology that was affecting their industry. The outcome statement called for a specific number of new members from this group by a certain point in the future. The event sequence or causes and effects that would make this happen were summarized as follows:
- Develop a database of a thousand prospects
- Send complimentary copies of the magazine to them for three months prior to the annual meeting and include feature stories on the issues they care about
- Schedule several annual meeting sessions that address these issues and highlight them in the magazine issues they receive before the meeting
- Send customized marketing appeals to persuade them to attend the meeting
- Initiate a membership marketing campaign once the complimentary subscription and annual meeting tactics play out
- Assess the effectiveness of the effort and propose phase-2 initiatives and more research on their particular needs
Those who manage this strategy will require much more detail to make these steps happen. But from the perspective of those who approve the strategy, it gives enough of a sketch for them to see the viability and understand the magnitude of the cost.
One of the primary points behind this model is that the four elements -issue, outcome, principles, and event sequence-can be analyzed separately or as a unified force. Looking at them separately makes it easier to decon struct the strategy when it goes awry. Each element carries its own opportunity to misinform the others and that will be the culprit that needs fixing.The strategy may fail because the issue driving it was not understood accurately or because the desired outcome was unrealistic or the guiding principles were too restrictive or the event sequence was unrealistic or underfunded.
The need for dialogue between the board that launched the strategy and the managers responsible for its execution is structured around the interactive nature of these four elements. The strategy section of From Scan to Plan provides guidelines on the roles and responsibilities of the board and the strategy managers with respect to the elements. This is something that will vary according to the cultural norms of the association. As a rule of thumb, the board has the final say on the characterization of an issue that frames the strategy, but all were welcome in the process that identified it and placed it on the radar screen. The outcome statements must be approved by the board, but they should ask the managers to draft them as a part of their initial work in creating the sketch. This will drive a dialogue that will make sure both parties understand each other and agree on where the strategy is bound. The principles are the exclusive domain of the board because they place boundaries on the managers. The event sequence should be the exclusive domain of the managers, but it must pass the tests for viability and affordability.
In the life of the strategy, this sketch, which easily fits on a single piece of paper, is used to keep the board informed. If the managers think that the issue or the outcomes need editing, they would seek approval for this from the board. Board approval would also be required if the event sequence was altered in a way that requires more resources than were allocated. Otherwise the sketch is a simple means of keeping the board informed. For example, the strategy managers might provide the board with a progress report that says the first three of the seven sequence events are now complete, but there are a few issues regarding progress on the fourth. It isn't something that requires board approval, but the managers want a conversation with the board simply to keep them in the loop. The strategy sketch helps to organize this kind of dialogue.
As strategic planning sheds its rigid, elaborate, and somewhat imperial procedures and becomes fast-moving ways of maintaining conversations on the future and launching initiatives to sustain the organization, a simpler set of tools is needed to capture the action. The framework to distinguish established programs from adaptation pursuits and the strategy model are intended to serve this purpose. Regardless of what we wind up calling it, associations must maintain stability, evolve, and document these opposite but complementary requirements.
James Dalton is president of Strategic Counsel. He can be reached at firstname.lastname@example.org.
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