Outstanding Nonprofit Management! Hallmark #3: Strategy and Innovation

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Welcome to the third installment of my seven-part series on Outstanding Nonprofit Management. If you not have seen the first two posts on Mission and Program and Leadership and Governance visit:

This series was inspired by the Alford-Axelson Award Review Committee’s use of seven Hallmarks of Nonprofit Managerial Excellence℠ to assess the nonprofit management and performance of award applicants:
• Mission and Program
• Leadership and Governance
• Strategy and Innovation
• Human Resources
• Financial Strength and Performance
• Resource Generation and External Relations
• Accountability and Integrity

This post addresses Strategy and Innovation and provides actionable steps that your organization can take to achieve higher performance goals in these extremely important areas.

For each Hallmark, the award review committee used a set of underlying performance criteria to identify exemplary management. For the Hallmark of Strategy and Innovation, the criteria were:

1. Organization has developed a clear, coherent, actionable strategy that directly relates to its mission.

2. Performance indicators have been developed and are used for assessing the effectiveness of the overall strategy as well as specific programs and services.

3. The strategy is regularly reviewed and updated in response to market needs and conditions.

4. There is clear evidence that existing programs have been efficiently and effectively grown to meet the needs of potential service recipients.

5. Organization demonstrates a commitment to ongoing continuous improvement, including a system for feedback from service recipients.

6. Organization has systems or processes in place to cultivate new program ideas and opportunity exploration

7. Organization seeks new avenues for collaboration with other nonprofit and/or for-profit entities.


Here are some insights and actionable steps for developing strategies related to points 1-5 above:

1: To ensure the organization meets these criteria it’s important to engage leadership, staff, founders and board members to seek alignment on performance goals in areas such as fundraising and program development to support the mission. Once clear and realistic goals are agreed upon these same stakeholders should then develop and document strategies for achieving goals, and a project plan to manage implementation, measure progress and outcomes.

2: In addition to specific program measurables (e.g. number of individuals employed through workforce development) performance indicators should also include ROI, Return on Investment, and SROI, the Social Return on Investment, i.e. the benefits and savings to society. The Cara Program does a great job of measuring and reporting on both the ROI and SROI of their programs (see link to their statistics below). This is immensely important because by measuring both they are better able to manage and assess programs and allocate valuable resources accordingly. This performance data is also critical to funders and donors who now expect solid metrics in these areas.

3/4/5: To remain viable and relevant organizations must regularly take the pulse of the markets they serve to assure that their strategies continue to be effective. Social needs may change over time and some programs may no longer deliver the same value. Or, new needs emerge that are consistent with the mission and may warrant reallocating resources. Leadership and staff must keep an ear-to-the-ground and report to the team on what they are hearing about changing market needs, potential new challenges and service recipient feedback. This information should be used to assess/re-orient strategies accordingly.


#6/7: Cultivating new program ideas, opportunity exploration and collaborations with other nonprofit or for-profit entities require innovative thinking. Although many people still associate innovation solely with technology breakthroughs, in reality it’s also about:

o Discovering creative solutions for existing challenges

o Adapting to changes in the marketplace in creative ways

o Finding strategic ways to increase operational efficiencies

o Looking at innovation in terms of new products and services

This array of opportunities applies to any organization, and when all stakeholders are encouraged to contribute to the thought process, much better outcomes can be expected. This can help foster a culture of innovation. See the links below for additional insights and discussions on this topic.

Important Links:

Cara Program’s Calculation of Social Return on Investment (SROI)

Beyond Charity-Recognizing Return on Investment

Stanford Innovation Review-Measuring Social Value-Download

Why is all of this important?

These performance criteria set higher standards which are achievable for a majority of organizations. Improving performance in strategy and innovation will:

• Differentiate your organization in the view of funders

• Help foster a culture of collaboration and innovation

• Increase organizational alignment and focus

• Create a stronger platform to support capacity building and ensure sustainability

• Better support fundraising outcomes with metrics

• Help to further energize staff and board members, volunteers and other stakeholders

In my next post I will examine the fourth Hallmark of Nonprofit Managerial Excellence, Human Resources, so stay tuned!
Please post your questions/comments and share this post with others in the nonprofit world, and feel free to call/e-mail me anytime for a free chat about any questions you may have.
Jim Stoynoff
(312) 920-1700


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