There have been radical changes to the way in which community services are funded in recent years. It’s not as simple as the money just coming from a different place, the changes have completely transformed the business model for many organisations, particularly in areas such as aged care and disability, where purchasing decisions are now made by consumers, not commissioners. This comes alongside other changes in the way that people engage with causes, organisations and work; and rapidly developing technologies and stakeholder expectations of how organisations use technology to engage and deliver services. All this means that, even if you haven’t had a major change in your business model, your organisation is still going to be impacted by a changing external context.

This context is vital to effective strategic planning. There are some well established ways of bringing the external environment into your strategy planning sessions – such as PESTLE and SWOT analyses – but these too frequently rely solely on your internal resources providing their view on what’s going on outside, and that’s rarely the full picture.  The 2017 report from the Asia Pacific Social Impact Centre Philanthropy: Towards a Better Practice Model, gives some vivid examples that the way we see ourselves, and consequently the lens through which we look at the world, can be very different to how other view us. As well as key differences in priorities between philanthropists and the organisations they fund, there were very different views about their mutual relationships. 84% of philanthropic respondents thought they built a good relationship with the organisations that they fund, but only 38% of not for profit respondents said that they had strong relationships with their funders. Relying solely on your self-perception of your organisation, and of your customers’ needs and expectations, can be dangerous.  It risks leaving you with lots of blind spots, the worst of which can be complacency.

We’ve been working with organisations on strategy from a couple of different perspectives. The first is focused very much on market insights. In these cases, organisations have come to us for independent, expert analysis on their market, particularly around the size of their target market (or as near as we can get with public data) and their competitor mix. In many cases we’ve completed this analysis for organisations to discuss with their leadership and board, to inform their strategic decisions about market focus and growth. Some clients have approached it from the other end – asking for support with a more traditional strategic planning exercise, but in the context of a fast evolving external environment, it’s becoming increasingly difficult to run traditional planning day without having some reasonable market data. Strategy development – particularly for organisations on the cusp of closure or growth – can’t just be a navel gazing, introspective exercise. It needs to be located in a real world context and, in consumer driven community services, that means understanding market and customers.

We really encourage you to bring an external perspective to your strategic planning – and not just in the form of a session facilitator. As a minimum, look to understand your customer market and competitors.  If you’re working in an area that is subject to evolving government policy and regulation, understanding these is also critical. Your leadership team may be all over it, but don’t assume that your board has the necessary understanding of the implications for your customers and your organisation. If their day job is in a different area, you can’t expect them to be across the detail unless you’ve provided it to them, and the risk is that their perceptions of aged care or NDIS may be more determined by media coverage than the real life experience of your organisation and its customers.

So, before you arrange your strategic planning session, try pulling together some data on the following:

  • Potential size and spend of your target market
  • Information on your competitors
  • Data on your existing services and clients, including volumes, financials and how these have changed over time
  • Information for your board on the overall policy and regulatory context

If you’re a fan of a SWOT or PESTLE analysis, you can still go ahead with the exercise, but now you’re working with data, not just instinct, to help you determine the realistic opportunities for you, and the risks. This in turn can inform the detail of your planning, helping to identify low hanging fruit, risks to be navigated and priorities for sustainability and growth.