Is that a strategic plan I see before me?

Its another US publication, but the Center for Effective Philanthropy recently published a report on how foundations view and design strategy. OK, its about foundations, but put that aside. Its relevant to all of us.

It defines strategy as “a framework for decision making that is 1)focused on the external context in which the foundation works and 2)includes a hypothesised causal connection between use of foundation resources and goal achievement.

OK, nothing surprising, but what it does do, which is interesting, is highlight the continuing survival of organisations in what you might argue to be a strategic position in the sector that effectively act in a non-strategic way. I quote: “the majority of frameworks they describe do not meet our basic definition of a strategy”. They also talk about a “fundamental disconnect” between belief in and actual daily use of strategy. The report can be found here

Wow. Strong stuff. Now, a funny thing for me is that I have always imagined that our north american coleagues are way ahead of us on the issue of strategy and strategic planning.

So where does that leave us in the UK? How much as we walking the talk?

Now, this might look a bit odd, but I’m replying to my own blog. Or rather I am replying on behalf of an old friend who can’t reply in person. Let’s say they are challenged by the technology.

Anyway, I digress. My friend points out that the survival of ‘unstrategic’ foundations isn’t actually that strange. He argues that foundations will survive even by doing nothing, because they don’t need to do ‘something’. The report does indeed say this too – my friend remarked “there is no pressure on them to change or to do anything, so in a sense to me their survival isn’t surprising – they will just continue, and ‘be’ until…well, until the revolution comes? And here, without even a 5% payout requirement that exists in the US, that probably applies even more?” Given the rather obvious fact that these foundations have been around since Adam was a lad, are they living proof that a strategy is a useful but ultimately unnecessary tool? Hmmm…

My friend goes on to argue that “most trustees of most (probably smaller) foundations don’t have any clear conceptual view, or any theory of social change, within which they are operating… They are simply trustees of a foundation that gives money away, and they try and do it honestly and as well as they can – that’s all. End of story. Of course there’s nothing wrong in that per se. But the US book is probably predicated upon a more philanthropic concept that there is a responsibility upon foundations to deal with causes and long term issues.”

In other words, strategy is the difference between just surviving and doing well. And in turn, strategy is about planning for the long-term, based upon a theory of change. This begs the question how much strategic planning (in foundations or otherwise) is based upon a theory of change?

I think theory of change is an interesting topic, and one that is worth discussing further, although I think it is often ignored in strategy. Knowing how change happens can help you influence it, or, if not influence it, then at least understand it better and therefore use it in your strategy. Social psychologists may see this as their realm, but marketing executives have long been using these theories to influence their market, and there is no reason why VCOs should not do the same. After all, strategy is all about making your work more effective, and understanding change and how it happens is an extremely powerful tool in this. Previous posts of mine have looked at this subject (One small step, nudge, nudge) and as this is a particular favourite of mine, I’m sure there will be more to follow.