(This and the following four blog posts are adapted from my book Leading Out-of-the-Box Change www.leadingoutoftheboxchange.com).
I’m happy to report good news on the planning front. In recent years a very powerful change-focused planning logic and methodology have been developed and successfully tested in all sectors – for-profit, public and nonprofit. In my work as a change consultant and in my book Leading Out-of-the-Box Change, I call this the “Change Investment Portfolio Process,” but you can call it whatever you want; semantics aren’t a passion of mine. In a nutshell, the Portfolio Process, which is run parallel to, and separate from, your organization’s business-as-usual operational planning/budget development process, produces out-of-the-box change in the form of concrete projects that I call change initiatives. These change initiatives are housed in your organization’s Change Investment Portfolio until they are ready to be mainstreamed into ongoing operations – or occasionally abandoned if they’ve proved unworkable.
The change initiatives housed in your organization’s Change Investment Portfolio are intended to address a small number of issues – think of them as “change challenges” – that your organization is facing, in the form of opportunities to grow – in terms of program and service diversification, revenue generation, or customers/clients – and challenges and threats to your organization’s future stability and growth. By far the most challenging aspect of the Portfolio Process is to select the “right” issues to address: the ones that are so high-stakes and so complex that you could not reasonably expect them to be handled effectively through the parallel, business-as-usual operational planning/budget development process. Never forget that your annual operational planning/budget development process is a very effective vehicle for dealing with the great majority of issues your organization is facing at any particular time, as I observe in the Overview; but there will always be issues you wouldn’t want to trust to mainstream planning.
Each of the change initiatives being managed in your Change Investment Portfolio (let’s call it the “CIP” from this point on) at any particular time will have its own time frame, which is why arbitrary cycles such as three or five years make no sense. For example, let’s say that an international professional association is handling four change initiatives in its CIP right now: ((1) developing and pilot testing a new member service (18 months); (2) re-designing its governance structures and processes, including the board of directors (24 months); (3) building an international presence (30 months); and (4) merging with a sister association (6 months). The Portfolio Process is by design highly selective for the simple reason that your organization’s resources – in staff time, money, and technical capability – are limited. The Portfolio Process is at the opposite pole from “supermarket planning” lists of ten, fifteen, or more goals. In my years in the change business, I’ve never seen a public or nonprofit organization effectively manage more than three to five change initiatives concurrently at any given time. Of course, as change initiatives are implemented, they drop out of the CIP and are integrated into your organization’s operating plan and budget, and new change initiatives are regularly added to your CIP.
Keep in mind that what I’m talking about couldn’t be more different from the old-time notion of a “strategic” umbrella (consisting of five-year goals and strategies), within which your organization would develop its annual operating plan and budget, which in theory is tied back to the goals and strategies that your umbrella encompasses. So far as I can tell, these ties have always been more theoretical and aesthetic than practical. Instead, think of parallel processes that proceed concurrently. During every fiscal year your organization prepares next year’s annual operating plan and budget (your “in-the-box” planning), while concurrently – but through a separate and parallel process – your organization manages change initiatives in your CIP and adds new change initiatives to your CIP to address new issues that your organization has identified. These two separate and parallel processes typically share a common starting point. usually a daylong planning retreat kicking off the annual planning cycle, and are linked at the end by the mainstreaming/budgeting of completed change initiatives, which become part of the annual operating plan.