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What are the Keys to Strategic Agility When It Comes to Fundraising?

On Wednesday, June 22, the Cultural Alliance hosted "Strategic Agility in Fundraising With Kathy Pearson, Ph.D." in partnership with Association of Fundraising Professionals - Greater Philadelphia Chapter (AFP-GPC) and sponsored by DonorSearch.

Kathy Pearson is an Adjunct Senior Fellow at Leonard Davis Institute of Health Economics, University of Pennsylvania, and the Founder and President of Enterprise Learning Solutions. Kathy works extensively with mid- to senior level executives, including high potentials and executive teams, teaching on a variety of topics including Critical Thinking, Strategic Agility, Change Management and Strategic Execution. Kathy’s work with executives spans a wide variety of industries and geographies, and her client list includes Bank of America, Coca-Cola, The Estee Lauder Companies, GlaxoSmithKline and the World Bank.

The session explored the common barriers to agility in nonprofit fundraising, offered tools to overcome these barriers, and described concrete actions in achieving strategic agility within your fundraising and organizational plan. Cultural Alliance members, AFP-GPC members and leaders across the sector were invited to attend, and were highly engaged in the workshop.

Here are some of our key takeaways from the presentation:

  • Every organization is different, but we all want the same thing: results. Think about where you are today, and where you want to be in the future. And it shouldn't be a moving target—you need a strategic pathway to get there. If your target and strategy are uncertain, be prepared to pivot and adapt. Two out of three strategic initiatives fail to meet their goals.
     
  • You should spend 70% of your time planning for the present, but think of strategic agility as your long-term objectives. These of course will differ from the short-term objectives, and may require different skills from staff. However, the short-term and long-term goals must operate in tandem.  


     

  • Most executives assume that problems can be solved with "top-down" alignment, but agility across teams and departments—horizontal alignment—is critical. Some of the common myths (from the March 2015 Harvard Business Review, Why Strategy Execution Unravels – and What to Do About It) around organizational alignment are:

Myth 1: Communication Equals Understanding
REALITY:  It's not about volume—it’s also about clarity and prioritization. There should be clarity of intent, with ownership, adaptability, and continued focus on the ultimate goal. 

Kathy shared "the foot soldier" anecdote: A soldier is told to take the hill. But if he’s not told why to take the hill, it doesn’t help him to be adaptable when things change in the midst of the battle (i.e. – what happens when the hill is blown up?). But if he’s told more of the bigger picture, it gives him 1) motivation; 2) adaptability and 3) focus on the larger goal. 

Myth 2: Execution Should Be Driven from the Top
REALITY: You must drive execution from the middle, and guide from the top.

This JetBlue commercial is a great illustration of a group coming to a consensus because they had a clear goal and a leader who: 1) kept emphasizing the goal 2) allowed conversation and 3) pointed out positive behaviors.

 

Myth 3: Execution Equals Vertical Alignment
REALITY: More coordination is needed across units. The whole cannot be completed without the sum of its parts. You can't optimize the system by optimizing each individual part within it.

Myth 4: Execution Means Sticking to the Plan
REALITY: You need agility balanced with alignment.

MYTH 5: A Performance Culture Drives Execution
REALITY: You must also reward agility, teamwork and ambition. And employees must know why they are "taking the hill": their motivation, how you plan to be adaptable, and the focus on the ultimate goal.

  • There are 4 characteristics of a long-lasting organization, according to research by Arie de Geus of The Living Company:

Financially Frugal: Operationally efficient, with wise use of finances including leverage and cash

Persona: A strong sense of identity and deep, uncompromising set of core values and purpose

Adaptability: Ability to adapt to a changing environment by carefully monitoring the external environment

Tolerance: Encouragement of experimentation and unconventional thinking

To illustrate these principles, Kathy shared an anecdote about the Encyclopedia Britannica. In the 1980s, Bill Gates approached them with technology to put their entire collection on a disc for pennies. But, they insisted that their market was selling the book sets door-to-door. We all know how that turned out!

  • Practice "Productive Paronoia." Kathy shared a story about a certain technology company in direct competition with Apple didn’t allow her to bring an Apple laptop or iPhone on stage when she presented to them. But when she went to speak at Google, she saw someone with an iPhone. She learned Google employees are allowed to use any device; they just have to fill out a form explaining why they like that better. 
     
  • Identify, plan and manage future trends (a future force in which the outcome is very predictable) and uncertainties (a future force in which the outcome is unknown) in the organization's fundraising forecast.

    Some key trends to look out for now: 

Donors are getting older
The rise of digital giving
Consolidation
Diversity
Demand for metrics/outcomes
Foundations pre-selecting grantees
Oversaturation/noise
Foundation strategic evaluation
Increasing donor-advised funds

Some key uncertainties to look out for now:

Economy
Behavior of the next generation of donors
Priorities of funders
Size of millennial donations
Communication technology
Political climate, especially in terms of tax reform
Corporate mergers
The growing number of nonprofits, especially in terms of sustainability
Founder succession

  • Track the key uncertainties by developing a system of dynamically scanning for leading indicators. This is known as "Trendspotting" or "Sense-making." It's a competitive advantage to know what you don't know. 
  • Take action around the key uncertainties by building adaptability into the strategic planning process. You're not trying to predict the future accurately; you need to be prepared for change. Conduct rapid experiments (test the hypothesis), and make small bets (invest a minimal amount initially in one or a variety or of options). 

 

Here is a helpful tool you can use for testing: 

Down the left list your initiatives. Across the top, list each of your uncertainties. For each initiative, evaluate all 5 uncertainties and give it a green square if it’s invulnerable to the uncertainty, or a red square if it is vulnerable. A healthy chart would have a mix of red and green. If you’re all green, you’re not taking enough risks and you’re blind to the key indicators of change in your sector (or beyond). An uncertainty that has a lot of red (across multiple initiatives) means that’s something that you should really keep an eye out for.

For more information, contact Kathy Pearson at Enterprise Learning Solutions, Inc at info@elslearning.com.