Consider Business Model Analysis
December 7, 2009The current unpredictable economic environment for nonprofits is making the traditional three-year strategic planning time frame obsolete. One approach that makes a lot of sense is business model analysis. How well does your current business model meet the need for keeping your organization is the black?
For example, a theatre company traditionally relied on ticket sales for 60% of its revenue and donations from individuals, foundations and events for the remainder. Now, fewer people are buying tickets and the theatre believes the mix needs to shift to 50/50. Business model analysis would test this assumption and if necessary, adjust it. Perhaps ticket sales will fall more precipitously, or perhaps donations will fall even further.
Business model analysis allows an organization to consider every input into its “economic logic” arriving at the best set of alternatives and choosing the most likely path to success. In this environment three-year projections can be misleading, but you still need a roadmap to your organization’s future.
Tags: nonprofit
December 8th, 2009 at 1:26 am
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December 17th, 2009 at 7:12 pm
David,
Thanks for acknowledging the flaws in the old planning paradigm. Environments and systems are changing faster than our change-resistant minds can accept, and the landscape is rapidly morphing and providing new opportunities.
I figure many companies that created strategic plans 3 years ago didn’t include the explosive growth and importance of social media, and some made strategic course corrections (to their benefit), others didn’t.
The skillset of the future won’t be the ability to achieve clearly-articulated deliverables on a preplanned course. It will be the ability to make rapid, dynamic shifts, and mobilize assets quickly to achieve goals — while maintaining core values.
I wonder how many of the businesses receiving bailout dollars were achieving the goals set in their 3 year strategic plans.
regards,
Ana-Marie Jones
http://www.CARDcanhelp.org
December 30th, 2009 at 7:28 pm
Thanks Ana-Marie – you raise a good point about the bailed out banks – I am sure they all had long-range plans and I am equally sure none of those plans included bankruptcy! We put so much faith in our ability to predict and even to control future events that we forget that we are often caught up in events and need to make constant adjustments. The best approach, as you suggest, is developing an organizational “radar” that allows us to anticipate changing circumstances and constantly adjust, without losing sight of our end goals.