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| A strategic planning seminar sponsored by UPAAA and UPAAAz |
Strategy refers to a course of action aimed at achieving an overarching goal. This principle applies as clearly to winning a war as it does to succeeding in business, and it is equally relevant for organizations striving to accomplish their specific objectives.
Every organization, whether a non-profit or a business, requires strategic planning. Nevertheless, their methods for approaching this task can differ significantly due to key distinctions, as outlined below.
NonProfits Businesses
Primary Goal promoting societal good generating profits
Revenues donations sales
grants
fees
Stakeholders
donors shareholders
beneficiaries employees
volunteers customers
community suppliers
Metrics social outcomes financial performance
sustainability market share
customer satisfaction
The strategic planning processes in non-profits and businesses share similarities. Both types of organizations typically conduct SWOT analyses to examine their strengths, weaknesses, opportunities, and threats.
The depth of analysis of these four elements can greatly influence the success of the planning. In my experience leading such efforts, it has been remarkable to see a clear strategy evolve when these analyses are comprehensive.
However, it is essential to recognize the differences in strategic planning between non-profits and businesses before engaging in the SWOT analysis. These fundamental distinctions require consideration.
Primary Considerations
For non-profits, maintaining a reputation for ethical behavior is paramount. If an organization is perceived as unethical, it is unlikely to thrive while working for the greater good. Thus, non-profits must concentrate on establishing social equity, which in turn supports the sustainability of their mission.
The role of the Board of Directors is vital in this context (refer to the previous article on “Governance vs. Management”). Should the Board be flagged as a weakness, reinforcing it becomes the immediate priority.
Conversely, businesses that lose their competitive edge risk failing in the marketplace. That is why some for-profit entities may not prioritize building social equity or sustainability, focusing instead solely on short-term financial gains.
Nonetheless, businesses can also aim for long-term sustainability, necessitating that social equity and sustainability become key factors in their strategic planning.
Mission, Vision, Values, and Goals
Non-profits tend to focus on objectives that promote societal or environmental benefits. For instance, the UP Alumni Association in Arizona aims to offer scholarships to deserving UP students who are facing hardships.
Another objective is to ensure that members have a positive experience throughout the process. Hence, events that fulfill both purposes are prioritized. We have successfully sponsored various social activities, including Bingo and other games before the pandemic, virtual events during lockdowns, a hybrid Mini-Conference focused on Filipino culture, and a Fil-Am Gala Event scheduled for November.
Businesses generally prioritize achieving financial success. For example, at MegaLink, our goal was to amplify the volume of transactions processed through our ATM switching facility. Our income was solely derived from the fees collected for these transactions, and we also had to manage our expenses effectively.
Implementation and Evaluation
Given the differences inherent between the two types of organizations, the metrics for measuring success diverge as well.
For example, the UP Alumni Association previously tracked membership numbers and scholarships awarded. Following our strategic planning session, we designated the establishment of new chapters as a key objective to reach and support more members, particularly in underserved regions.
Increased member and chapter numbers will directly lead to greater funding available for scholarships. Our strategy to develop additional chapters aims to deliver higher numbers in a shorter time.
Engaging activities are crucial for sustaining our success. The biennial Grand Reunion and Convention stands out as a highlight that members eagerly anticipate. However, organizing enjoyable local charter activities may help reach even more members.
On the business side, MegaLink’s revenues stem from switch transaction fees. Increasing the number of member banks, cardholders, and ATM locations was pivotal in driving this activity. To foster growth, we concentrated on all three metrics.
Additionally, to reduce attrition, it was critical for employees and bank representatives to feel connected, fostering a sense of being part of a cohesive and welcoming community. We established lively committees, organized frequent enjoyable social events, and coordinated joint international trips aimed at technological innovation.
Ultimately, while the strategic planning process resembles that of both non-profits and businesses, the primary considerations, objectives, and measurement metrics vary significantly due to their intrinsic organizational differences. Recognizing these differences is essential for crafting effective strategies.
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