Background

All organizations have competition. In the private sector, organizations compete for customers. In the public and nonprofit sectors, the competition is for funding from a finite group of funders. The factors that drive industry competition need to be considered. One factor is the potential for new entrants into a market or sector. There are also suppliers and their bargaining power. At times, there is the possibility of replacement services or products. The customer base is another factor in competition. In addition, there is also competition among the existing entities. Market forces drive existing entities to develop new products or services or to improve the current ones. All of these aspects must be considered when developing long-range plans and, ultimately, strategic plans.

As it starts the planning process, the organization must determine what its core competencies are. Core competencies are the things that the organization does very well. They are also the things that make a significant contribution to the company. These competencies must be linked to what the customer wants or needs. In many cases, there is a relationship to what the competitors are offering. Individuals often hear the term competitive advantage. A potential competitive advantage starts with looking at what a company does well. The company then defines this advantage by saying "What we do well is exactly what the customer wants and is a better match than what the competition offers in response to what the customer wants."

How does the organization know what customers want? The simplest method is to ask them. How this is done may vary. Many organizations use questionnaires, advisory bodies, or focus groups. The data received from these instruments may be quantitative, qualitative, or both. The organization must determine what it wants to find from this process and how much it wants to spend since there are costs associated with each. There are advantages and disadvantages for each type of customer assessment tool, which you will discover in completing an assignment.

Competitive advantages are normally rooted in superior skills, superior resources, or superior position. In looking at these three areas, it is necessary to note that these skills are organizational skills and not merely those of the individuals employed there. If it was only individual skills, then each organization could achieve the same skill level by engaging the workers in training.

Background Information on Organization

The resource area includes a wide range of attributes including patents or trademarks, specialized facilities or technical processes, and organizational relationships with suppliers. In some instances, this includes how services products are distributed or provided. The superior position encompasses products or services, who the customers are, and how much direct competition the organization has. The positional advantage is maintained if the product or service returns sufficient value to the organization. Reinforcers, policies, or processes that either strengthen or hold the market position affect the positional advantage. The organization must ask itself why its advantage still exists and why its competition has not replaced it.

Present and Past Strategies

The feasibility of a strategy must be considered. Given the constraints of financial, human, and other resources, feasibility assesses whether the strategy can be attempted successfully. What does the organization need for the strategy to be successful? In many cases, the organization must have problem-solving capabilities to ensure successful implementation of the strategy. Success also requires that the strategy be acceptable to key personnel responsible for the processes involved. When considering a strategy, there must be some acknowledgment of the need to integrate organizational resources to ensure the strategy is attainable. There are times when strategies are planned, but not implemented. The reason may be that the strategy is unrealistic or the plans are not appropriate for the specific situation. There may be problems that arise that prevent the implementation. This may be due to a change in circumstances whereby what started out as a good idea becomes less attractive. An appropriate coalition may fail to develop as planned. Essential resources may not be available. Some strategies may develop even without being part of the formal plan.

Assessing strategies might best be accomplished by specifically listing all activities and services, as well as current and past strategies whether implemented or not. After developing the list, each of these aspects should be evaluated to determine its current level of activity and to collect data for each function. The data include the number of people served, cost per unit of service, and where the service or function is provided.

Certain management and support positions are essential for ensuring that the envisioned operations can be provided. These positions may be paid or volunteer in nature. They may be found in various divisions or departments within the organization such as marketing, personnel, and facilities management. These aspects should be considered in the organizational profile.

Documentation from the organizational profile may also assist in this phase of the planning process. The planning group should obtain this information for its review. From the historical profile, the group will be able to identify any lessons learned. Also, any indications of growth, development, and stability or recurring indicators of instability need to be noted. These indicators can be categorized for consideration into themes.

A number of factors should be considered when analyzing organizational stability. Stable leadership is an internal factor that can enhance organizational stability. Other factors include stable funding sources and personnel including volunteers.

Completing an organizational profile will ensure that all planning team members have the same basic knowledge about the operation. This framework also assists the team in looking at the programs from a mission perspective. Programs with a common theme can be grouped together to aid in the development of an organizational mission statement.

An organizational profile requires input from individuals in the organization who are very familiar with the organization’s history, programs, and processes. Many current employees may not be open when asked about what did not work in the past. For this reason, it may be good to ask individuals who had recently retired from the organization about what worked and what did not. This can be done through surveys, interviews, or focus groups, for example.

Developing an accurate timeline of the organization’s history may require participation from a large group of people. The timeline should include the dates that specific programs and activities were implemented as well as the external events -- political, economic, social or technological -- that have impacted the organization. These events are forces that influence the organization.

Information from Internal Stakeholders

The organization operates within a given external environment that is subject to trends. An analysis of these trends is usually based on the last five years of experience. Certain questions should be asked to obtain the information that the planning group needs. These include:

  • What are the attitudes or current thinking of major funders?
  • What are the demographic changes that are affecting the demand for, or provision of, service?
  • What are the current or proposed regulatory changes?
  • Who are our competitors?
  • What services do they offer and at what price?
  • Based on customer data, who are the current customers and are there any changes in this customer base?
  • Are there changes in client mix?
  • Have there been changes in quality requirements or in the program base during the past five years?

However, while these questions are appropriate for the external environment, they will not provide information appropriate for the internal environment. Surveys, interviews, questionnaires, and focus groups are generally used for the external stakeholders, but what tools are used for the internal stakeholders?

Organizational management may need to complete some type of self-assessment tool to determine management effectiveness. The assessment should ask what are the values of the leader and are they the same as the organization’s values. The assessment also should look at several components necessary for an effectively managed organization such as leadership, mission, relationships, goals, structure, and systems.

The strategic plan also needs a financial performance assessment. This assessment asks several questions. What are the costs per unit of service? How is the organization doing now compared to this time last year? Are services being subsidized in some manner? Are the organizations funding sources diversified and stable? Is the organization staying within its financial resources? Does the organization have sufficient reserves to carry it through a period of financial difficulty?

Usually, this means an amount equal to at least three months of operating expenses in case of an emergency.

Information from Internal Stakeholders

Nonprofit organizations need to assess the way the board governs the organization. How effective is the board? What are its standards for performance as a board? Are all members working together? A self-assessment questionnaire may reveal useful information.

Information may also be needed from the employees. Are they motivated by the current vision? Do they understand what the planning process is about? Can they provide useful information that the planning teams needs? Getting input from employees is especially important if the development of a strategic plan is going to affect the workers and their work. A focus group or a questionnaire may be useful. It may be one way for the workers to participate and buy into the planning process.

Information about external and internal stakeholders should be obtained before the planning group starts working on its goals, objectives, and strategies.

Stakeholders Assessment and SWOT

As the planning process progresses, the planning group accumulates a great deal of information related to the strengths and weaknesses of the organization. Input and expectations from external and internal stakeholders need to be put into a format the planning group can use. Comments revealing possible trends perceived by the stakeholders as opportunities or threats should be highlighted. The strengths, weaknesses, opportunities, and threats (SWOT) analysis should be conducted at this phase.

What the stakeholders need or expect from the organization and the criteria used to judge performance provide potentially useful information. The organization’s performance measured against the criteria is also information that should be presented. Stakeholder input might indicate areas in which there is a need or desire for more or different services or products. A gap analysis can further illuminate stakeholder expectations. The difference between expected levels of service and those actually provided is a gap. The organization should look at how to make that gap as small as possible. This may require additional information from the stakeholders.

It might be useful to display the information in a worksheet that provides a summary of stakeholder responses.

Stakeholder / SWOT / Comments / Expectations

The column labeled stakeholder should have the individual’s name. The column labeled SWOT should identify the category for each comment (i.e., comments that are evident strengths should be categorized S, weaknesses should be W, opportunities should be O, and threats are T). The comments are a summary of the specific comments provided by the stakeholder to the organization. The expectations column provides an opportunity to list those things that the stakeholder wants the organization to do or how well it should be performing current tasks.

Program Effectiveness

The private sector looks at performance in terms of financial performance including things such as net income, profit margin, and other specific measures. In the public and nonprofit sectors, there is a need to assess programs in terms of effectiveness, not financial performance. As the planning process progresses, it will be necessary to look at the programs and make some decisions as to the status of the programs. Which programs make the most difference to the customers? Which programs are cost-effective? Of the current programs, are there any that have problems with future funding? Are there programs that will be the recipients of increased funding?

Evaluating program performance should be a continuous process, not merely for strategic planning purposes. Such a focus allows organizations to review their current status and make some decisions on what to do with existing programs. Decisions may be made to expand current programs, discontinue programs, change programs dramatically, move a program to another entity, or separate a program into its own functional area, which parallels private sector spin-offs. Having a regular evaluation process would enable the organization to obtain regular feedback for future plans.

Evaluations of programs can be quantitative or qualitative. Quantitative evaluations are facts or fact-based information that might be found by reviewing records or descriptive statistics. Quantitative data is easier to collect because it can be measured, counted, compared, and manipulated statistically. It is also less likely to be disputed. Qualitative data includes comments about the program and may be obtained through interviews, focus groups, observations, surveys, questionnaires, written materials including letters of complaints or of commendation, and other methods.

When initiating a program evaluation, a starting point may be the program staff. These individuals are closest to the external customer and better able to provide insights on the strengths and weaknesses of the program along with the quality of the program. These individuals can also provide valuable insight into the program, the organization, the needs and wants of the customers, and issues regarding competitors. Involving these internal stakeholders in the evaluation process allows for meaningful input into the planning process. In performing the evaluation, it is necessary to evaluate the program and its ability to provide service along with the quality of service. The narrative aspect of the evaluation might include asking the individual why they rated the ability of the program to provide service and why they rated the quality of service.

Evaluation of Programs

As organizations move forward in their strategic planning process, it is necessary that they evaluate their programs. There are a number of aspects that can be evaluated in this process, including assessing inputs, outcomes, or impacts or evaluating the process. Conducting a program assessment involves the staff members who are asked a series of questions relating to the program. The manager summarizes the results. In addition to looking at how the program activities are conducted, there is a need to connect this to the reason for the activity.

When assessing inputs, a number of issues need to be considered. These include the cost of the program and the total resources needed to run the program. Staffing requirements for running the program need to be determined, as well as their need for special certifications or licenses. In order to run the program, there may be specific physical requirements (e.g., square footage or specific equipment) in order to successfully carry out the program.

Assessing the outputs of the programs requires a match between outputs and goals of the program. Does the program meet the desired goals? There is also a need to evaluate these outcomes in terms of the inputs or activities of the organization. In a community policing operation, it might be necessary to look at specific activities and whether these activities meet the goals of the program.

The organization needs to determine what the impacts of the program are. In assessing these, there is the possibility of intended or unintended consequences of any program. All impacts need to be assessed. If a police department assigns each officer a take-home police car and crime in the officer’s neighborhood goes down, that is an unintended consequence. When a new highway is built, the unintended consequences may be more people moving to the area. The organization needs to account for as many influences as possible.

Assessing the process involves looking at how successfully the organization carries out the specific activities.

Discussion Questions

3-A) What is a focus group, and how does it work?

3-B) The public sector has few actual competitors. In assessing its competitive advantage, does this mean it has a good position and thus a good competitive advantage? Support your position.

3-C) When attempting to secure information on customer or stakeholder expectations, there are a number of ways of getting information. Besides the focus group, a number of different methods can be used to secure this information. Name and describe the technique or method as well as the positive and/or negative aspects of the method named.

Assignment 1: Customer Assessment Tool

Using the Internet or other resources, research the various customer assessment tools. Select one of the tools and summarize how the tool operates and what kind of results you should expect.Provide Internet links and references.

Assignment 2: Planning Process

Using the Internet or other resources, research planning processes used by public, nonprofit, or private agencies. Provide Internet links and references.