Charting the no-man's land between strategic plan and operating budget
A recent article in Harvard Business Review, "Focus on the Middle Term", focuses on how companies interested in long-term viability need to focus effort and resources on the "middle term", the "no-man's land between the budget and the long-term plan." The article is much about how product-oriented companies spend resources on R&D (long-term, sexy stuff) and the current operation (profit-generating, easy to justify stuff), but ignore what the author, well-known business strategist Geoffrey Moore, calls "Horizon 2" projects - those that represent the "next generation of high-growth opportunities." He goes into considerable detail talking about how resources are continually poached from these projects, how they get the least experienced executives leading them, etc. Moore characterizes Horizon 2 projects this way: "A Horizon 2 project needs a burst of energy to get on board and even then is resented for the initial drag it creates." As I read the article, I stopped thinking about companies launching new products and started thinking about my work in getting foundations and other organizations focused on making good on their strategic plans....by focusing them on exactly this same middle term Moore is talking about.
As it turns out, almost, if not all, organizations are hampered by their inability to focus on the ugly work that doesn't exactly have to get done today and isn't nearly as fulfilling as talking about strategy, mission and vision. I'm taking about that enormous gray area we like to call "operationalizing the strategic plan." It's the discipline of bridging the gap between how things work today and how we want them to work in the future. Often, it is about building infrastructure to enable growth. But, like Horizion 2 projects, it's challenging to get resources dedicated to the work - there's always something more immediate that needs to happen. And, these projects are often resented within the organization for being "outside" the mission - who wants to focus on internal problems when there are so many urgent and interesting external problems. And after all, aren't those the issues we're here to work on? Well, yes. But the fact is that in order to do anything more than barely meet the current need, an organization has to invest in its own structure, resources and tools, in order to meet the challenges that present themselves a month or a year from now. And, in order to reach the emerging breed of donors, the organization needs to have a compelling position on what it wants to accomplish this year and next year - not just "over the next ten years".
Moore identifies a few best practices that can help an organization "break through the choke point" of this no-man's land (I've left some out that aren't really applicable to the philanthropic sector and paraphrased in order to be brief):
1. Insulate the mid-term projects from the immediate term projects: another way of saying that someone needs to be really focused on the mid-term and charged with making it so. If that person is continually forced to prioritze mid-term projects with immediate term work, the now will always take precedence.
2. Measure success on the mid-term projects differently than you do the current business: there's no question the mid-term projects create a drag on resources and probably don't generate anything positive for a while, so if they're measured the same way as other things, they'll never stand a chance. Mid-term projects need their own measuring stick.
3. Put a real leader at the helm of these projects.
4. Prevent resource poaching from mid-term projects.
As we discuss the need for a new type of capital to flow into the philanthropic market in order to help it grow, I would suggest that donors be thinking seriously about how strong organizations develop, including the need for work that, by this moment's standards, appear to be "outside the mission." If you don't build it, they won't come. And, if it's not funded, it won't be built.