Non-profit directors are not usually spies. They do need to gather and analyse ‘intelligence’ however, to inform their governance activities. This includes monitoring the external environment and internal systems, processes and performance.
Business intelligence software and dashboards are available commercially. While some non-profits will be able to afford these, most smaller entities will seek free or low cost alternatives.
In the EDM model of governance, evaluating and monitoring activities inform the directions set by your board. Both activities rely on access to timely, relevant data, and insightful analysis, to inform board decisions and adjustment (or even pivoting) of your strategic direction.
Environmental scanning is one form of intelligence gathering. This is sometimes treated as an annual or triennial activity rather than as part of a continuous monitoring process. While your board may formalise an overview of key developments in its regular strategic planning program, every board meeting should involve the identification/analysis of, and response to, key developments. Sometimes these developments will be so urgent that they will necessitate immediate governance action.
Stepping back from day-to-day governance activity so that stakeholder needs are re-assessed, and emerging developments are analysed, is essential if your non-profit is to remain relevant to those stakeholders. Most non-profits do this on a cycle somewhere between annually and triennially. Unfortunately, some treat this as an episodic chore rather than a continuous process of staying in touch with the context in which they are working. When boards remain alert, they can flexibly adjust their goals and activities to ensure that the organisation remains up-to-the minute, and at the cutting edge.
The COVID-19 pandemic has demonstrated the imperative for boards to be ever-vigilant. They need to be ready at a moment’s notice to make directional, risk management or resource allocation decisions to anticipate likely scenarios as they unfold. This suggests that your planning cycle should be both continuous and episodic.
Evaluation and monitoring of the organisation’s performance and conformance are not limited to maintaining a ‘steady state’. These activities also help your board to determine where more or less resources and oversight should be directed.
Strategic opportunities can also be identified from looking at demand levels and response capacity. The control systems established by the board through policies and procedures include reporting arrangements which ensure that business intelligence is continuously provided to them.
Strategic analysis tools
Effective governance requires more than a loose recognition that internal and external developments deserve attention. Directors need to use tools and models that have stood the test of time.
The chart below highlights 11 strategic analysis tools, with the traditional SWOT analysis featured because it integrates internal and external perspectives. Five inward-looking and five outward-looking tools are also identified – although there is much commonality between a number of approaches (especially when looking outward).
Links to more information on these models and approaches:
Of the various environmental scanning models suggested by governance and strategy advisers, I have always found the STEEPLE framework offered the most helpful insights. The inclusion of the ethical dimension ensures that social responsibility and the social license to operate are considered alongside other key trends. This chart illustrates only some of the factors and data types such an approach can encompass.