Strategy from the inside-out: the core and the driver

This is a series of articles, of which this is the second installment, from Mike Stone that explores the core concepts of a strategic planning approach for nonprofits. Mike welcomes feedback on these concepts, which will be included in a book manuscript. See the first installment here.

The elements of the organizational core

Traditionally, strategy development has begun with a review of the statements of vision and mission. Without a doubt, vision and mission are indispensable to the process of strategy development. But that value is limited to providing the broad parameters within which a particular strategy is developed. In other words, while vision and mission are valuable in providing the context for strategy, they are ineffective as drivers of strategy.

When developing strategy from the inside-out, defining the organizational core is the foundational task. The organizational core is comprised of the four organizational characteristics contained in the following statement:

  • Your defining qualities aimed at the highest priority needs of your primary clientele within your domain of operation.

Each of the four elements of the organizational core is described in greater detail below.

Defining qualities

The defining qualities are those competencies, values, or beliefs that guide the work of the organization. Though it does not need to be a distinctive quality, a specific attribute must meet three criteria to be considered defining: 1) it must speak to how the organization does its work; 2) it must be recognized by key stakeholders as adding value; and 3) it must contribute directly to the ability of the organization to create impact in the fulfillment of its mission. Defining qualities may be in the form of specialized training, content expertise, or a particular program approach or philosophy.

Primary clientele

The primary clientele is defined by the characteristics and/or circumstances of the people who benefit most from the work of the organization. For purposes of strategy development, an organization’s primary clientele can be categorized in one of three ways: [1]

The general population, meaning that anyone who chooses to participate is able to benefit from the work of the organization. Examples include a public library, a nature preserve and a local theater company.

A targeted population, defined as a group sharing a set of common characteristics or circumstances that result in similar needs or challenges. Examples of targeted populations include low-income families, at-risk youth and low-achieving students.

A specialized population, defined as a group with a unique set of characteristics or circumstances that require expert knowledge or specialized skills to address. Examples of specialized populations include such diverse groups as adults with developmental disabilities, immigrants and families facing bankruptcy.

Highest priority need

Each nonprofit operates on the belief that its actions will bring about a set of desired conditions for its primary clientele (remember the vision and mission statements). Typically, some form of barrier – social, economic or cultural – prevents those desired conditions from being realized. The highest priority need, in simple terms, is the key resource, asset, or intervention that is required in order to remove the barriers that prevent those desired conditions from coming into existence.

Primary domain

This element of the core ensures that the organization understands the market space within which it operates. The domain is recognized as the sphere within which a nonprofit finds its clients, funders, competitors and potential collaborators. Though often defined by geography, a domain can be defined as a specific industry, such as a state mental health system; or as a special interest, such as environmental preservation.

Harvest home example

Below is the organizational core of Harvest Home, an organization founded in the 1800’s as an orphan’s home and which now offers comprehensive behavioral health services for children and youth:

Defining qualities: Expertise in providing intensive, holistic therapy and support in a residential setting

Primary clientele: Children and youth with severe behavioral health issues (specialized)

Highest priority need: Comprehensive support in a highly-structured environment

Primary domain: State-wide, via county-based referrals

Core mapping

Once established, the organizational core serves as the foundation for the remainder of the strategy development process. Core mapping is a process that “forces” nonprofits to make judgments about the relative value of each program or service by providing a sorting mechanism based on a common point of comparison. The basis for the determination of relative value is the relationship of each program to the organizational core. Programs and services are mapped according the following criteria:

Programs that address directly all aspects of the organizational core are considered to be primary.

Programs that deviate from one element of the organizational core are considered to be secondary.

Programs that deviate from two or more elements of the organizational core are considered to be marginal.

The programs offered by Harvest Home are mapped as follows:

Rationale

Harvest Home has been a residential facility since its founding in the late 1800s. Though its services have changed in accordance with the changing needs of youth, it has always been a place-based service, supplemented by an on-site school so that youth under the care of Harvest Home could continue to attend school regularly. Thus, both the residential program and the school are primary services based on the definition of the organizational core. And while the out-patient counseling programs serves youth in circumstances similar to those in residence, it is considered secondary because it does not include the full continuum of residential support.

Now what?

Several questions usually emerge at this stage of the strategy development process. Among the most common are:

What is the nature of our strategic growth moving forward? Should we do more of the same? Develop new programs and services? Reach new populations?

Should we stop providing the programs that are secondary or marginal?

Should we redefine our mission and organizational core to accommodate what we are doing now or aspire to do in the future?

I offer one response to both questions: It depends. Specifically, it depends on how you arrived at where you are now and, more to the point, where you think you need to be positioned in the future to create the greatest mission impact in the most financially-viable manner.

That is the subject of the next installment.


[1] The development of these categories was informed by Michael Porter’s article, “What is Strategy?”

See also:

Nonprofit Strategic Positioning: Decide Where to Be, Plan What to Do

The Nonprofit Strategy Revolution: Real-Time Strategic Planning in a Rapid-Response World

Photo credits: extremetech.com, malaysia-today.net

Leave a reply


Welcome! Please provide your log-in information below.
Forget your password?
Enter your email or user name and your log-in information will be sent to the email on file.