Strategic planning in a changing landscape Talent and the sustainability of revenue dominate as the challenges for NFPs to achieve their strategic endeavours in the coming three to five years. Top 3 strategic challenge for NFPs in next three to five years
27%
Attracting and retaining the right talent (staff and volunteers)
22%
Non-government funding sustainability
16%
Sustainability of government funding
Only 53% of survey respondents said they had no barriers to implementing a formal strategic plan, however, all responding NFPs recognise that their organisation must evolve in the coming three to five years to address the current challenges and to survive. The dominant solution to the challenges cited is to grow services and funding sources. For many of the organisations with this expectation and aspiration, the questions must be asked, without a strategic plan how is it known that this is the right solution, how will it be achieved, and lastly, does growth necessarily improve impact? Strategic planning
Key challenges
COVID-19 has impacted attitudes to strategic planning. 85% of survey respondents confirmed that it has led to a refinement of future planning processes. Most commonly, organisations are now intending for plans to be reviewed more frequently and with an increased focus on short term objectives. Almost 20% of respondents state that there will be increased long term planning, suggesting that these organisations had previously been short term focussed and not in a position to look forward beyond the numbers in the current year budget.
Examining the post COVID-19 landscape, NFPs identified that the key challenges to meet their ambitions are attraction and retention of people, and the sustainability of revenue. Uncertainty of revenue, government and nongovernment sourced, continues to be a challenge. It was also a leading cause for uncertainty in our last NFP survey completed in 2019. Increasingly, contestability for consumers, government contracts and grants, together with greater participation from for-profit organisations and lower expected investment yields, results in the ongoing inability to reliably plan for revenue. In response, NFPs must continue to build their brand, engage consumers, measure their performance, be ready to respond to revenue disruption, and have cost control measures in place that are being monitored and reported on an ongoing manner.
Strategic planning is not easy for all organisations, with the internal challenges of resource constraints (people, skills and financial) prohibiting nearly a third from implementing a plan. Interestingly, 25% of NFP respondents are of the view that the everchanging environment is a barrier to long term planning. This need not be the case. This ‘new reality’ can render a static plan redundant, however, working toward a vision that is broken down into incremental steps or goals, that builds on the previous achievements, can resolve this challenge. Building a strategic plan in components allows for assessment and provides flexibility to pivot if the environment changes, whilst remaining accountable to longer term priorities.
It was hardly surprising in 2022, to see the attraction and retention of talent being a threat to NFPs achieving their long terms goals. The same would be said by many for-profit organisations. Interestingly, the talent constraint was more pronounced by our survey respondents in Queensland and WA, being two states which experienced less time in ‘lock downs’. Furthermore, the competition for talent against high paying mining and infrastructure employment opportunities also contributes to this challenge.
2
