Five years ago this summer, we were in the early days of the pandemic. It was a time of intense uncertainty. Many businesses effectively “froze,” either doing nothing or reacting to events as they happened.
Thankfully, the pandemic has passed. Even so, the frequent and unpredictable actions of our federal government have given rise to a new type of uncertainty — and the “vibe” feels strangely familiar.
Maybe that’s why “strategy” seems out of fashion lately. After all, how do you plan for the long term when even the short term is so unknowable?
Strategy is About Choices
If you think of strategy as a long process conducted by sequestered senior executives attempting to predict the future, it makes sense to curtail that activity in times like these. (Frankly, if that’s what strategy is, it’s probably neverworth doing!)
But that view overlooks the true value of strategy and strategic planning more generally. At its core, strategy is about knowing what makes your organization different and understanding what it needs to thrive — it’s high-level guidance that defines what you should or should not do. It’s not about trying to guess what may happen in the next year (or five).
And it’s precisely because there is so much change in today’s environment that now is a good time to make sure your strategy is up-to-date. Waiting until things “normalize” is not a feasible or realistic approach.
Here are some things to keep in mind as you revisit that process:
#1. Think in terms of “plausible scenarios.”
Nobody knows what will happen. But you can make some educated guesses about what could — and how you would respond.
For example, many universities have been considering what they would do should the tax rate on endowments increase significantly over its current low level. Or what the impact would be (financial and otherwise) if international student enrollment dropped significantly due to changes in the visa process or ICE actions.
As you create scenarios (you can’t consider everything; three or four is generally manageable), it’s best to assume changes that are more than just incremental. For example, I encouraged a client — a professional organization facing the risk that some members would not renew — to reflect on what they would do if half their members went away. That led to very different thinking than had they considered just a 10% drop off.
#2. Identify what matters most.
Not every possible outcome — regardless of probability — would have an equal impact on your organization. So you need to have a clear understanding of your top priorities — which programs or services are truly core to your mission or goals. If future events require program cuts, this understanding will be critical for making the best decisions.
This is especially important because as organizations evolve and grow over time, they tend to add programs, products, or services, some of which may not fit directly with its core aims. As I have written before, while there is value to having diversified offerings, some of those offerings are more expendable than others. You don’t want to pull resources from a critical service while supporting one that is less important by using an “across-the-board” cut.
#3. Understand your key levers.
Different organizations — even within the same industry — can feel the impact of a given change differently. It all depends on the nature of your organization: what it does, who it serves, who supports it, and what its sources of revenues are.
For example, in Boston, WBUR (one of the local NPR radio stations) received only 3% of its budget from the Corporation for Public Broadcasting (CPB). The average rural NPR station, on the other hand, received closer to 17% of its budget from CPB. The elimination of CPB will be difficult for WBUR; it will likely be fatal for the rural stations.
In addition, as you consider possible responses to future changes, think about how and when you will know it’s time to activate an alternative plan. In the case of the membership organization mentioned earlier, they can track membership renewal rates and timing and compare that to patterns from previous years. From there, they can decide if and when the trend indicates corrective action is needed.
Reflections
Uncertainty may feel paralyzing, but it doesn’t have to be. For nonprofit leaders in particular, the discipline of clarifying choices, preparing for plausible scenarios, and identifying the levers that matter most during times like these is not a luxury — it’s a necessity.
The future will never be fully predictable. But the organizations that thrive are the ones that use strategy to put their energy where it really matters, rather than waiting passively for events to unfold.
