A strategy that has stopped guiding decisions needs one of three responses. It may need using again, because nothing is wrong with it except that nobody refers to it. A refresh fits when the direction still holds, and the circumstances around it have moved. Or it may need resetting, because the priorities no longer describe what the charity has to do next.
What decides between them is what has gone wrong and how far, and the calendar has very little to do with it. A two-year-old strategy can need a reset, and a five-year-old one can need nothing more than a board that picks it up again. Each response costs something different, and the wrong one either wastes board time or leaves the real problem in place.
Can see the strategy has slipped, but not sure how far? Working out where a charity really stands is the first step in how we approach strategy work. See how we work on charity strategy.
How to tell a strategy has stopped working
The evidence is in the charity’s own records, and reading them is more reliable than asking people how they feel about the strategy. Take the last few significant decisions the board made, such as a new project, a hire or a funding application, and look at the papers and minutes. If the strategy is not mentioned anywhere in the reasoning, it was not part of the decision.
Then compare this year’s budget with the priorities. Money follows the work a charity is doing. If most of the spending and most of the staff time sit with work the strategy barely mentions, the charity has moved, and the strategy has not been told.
The success measures are the third place to look. On a one-page strategy, there should be three to five of them, each tied to a priority. If they are no longer being reported, or they are reported and nobody discusses them, the priorities they were meant to test have quietly lost their standing.
None of these tells you what to do about it. They tell you the strategy is no longer steering, which is where a review has to start.
Why a review date does not catch it
Strategic plans are usually agreed for three to five years at a time, as NCVO’s strategic planning guidance notes, and some boards add an annual review in between. Both are useful. The trouble is that a review booked in the calendar tends to check progress against the plan, and it may never ask if the plan is still the right one.
Under the Charity Governance Code, the question is framed differently. Its principle on organisational purpose expects the board to review regularly how changes in the operating environment affect delivery of the charity’s purpose. That is a response to change, and the changes that matter do not arrive on schedule.
Some events should prompt a look at the strategy on their own. The loss of a major funder is one. A change of chief executive or chair is another, as is a sharp rise or fall in demand, the end of a programme the strategy depended on, or a new rule that changes what the charity can do. So is any shift in what the charity can carry, which is a financial fact that moves when income or staffing does. If one of these happens, the next board meeting is the review date.
When to keep going, refresh or reset
Keeping going is the right answer when the strategy is reliable and has stopped being used. The purpose is right, the priorities still describe what matters, and the boundaries still make sense, but the page has gone unread while the board’s attention went elsewhere. Rewriting it would produce a new document that gets ignored in the same way. The fix is to put it back on the agenda, test decisions against it, and report the measures again.
Refresh when the direction holds, and the facts around it have changed. The “where we are now” section needs rewriting, one priority may need adjusting or replacing, and the measures may need new targets or dates. A refresh is a few focused conversations and a board decision. It keeps the charity pointing the same way with an honest account of where it now stands.
A reset is for the case where the priorities themselves no longer describe what the charity has to do. Income may have shifted, the need may have changed, or the charity may have grown or shrunk past what the strategy assumed. The purpose may still stand. What changes is which shifts the charity is pursuing, what it will stop, and how it will know the new direction is working. A reset made under financial pressure, narrowing focus to what can be sustained, is the hardest version.
The purpose itself may not need to change, even when the strategy feels broken. If it does, check how far the change reaches. Describing the charity’s work in new words is a strategy matter. A change to the charitable purposes written in the governing document is a legal one, with steps and sometimes Commission consent attached, and changing a governing document works differently depending on the charity’s structure.
Carrying out a reset? The e-book When Your Strategy Stops Guiding Decisions takes you through it: deciding what to keep and what to let go, rebuilding a direction the board and team will use, and bringing funders back round to it.
What the review should look at
Start with an honest account of where the charity is now: income and where it is fragile, the team and what it can carry, demand, and what is about to change. Every other judgement in the review depends on this, and it is the easiest part to write as the board would like things to be.
Then take each priority in turn. Is it still the right change to pursue, and has there been progress towards it? A priority with no progress is worth a direct question. Sometimes the delivery fell short. In other cases the priority was never resourced. And occasionally the change it described turned out to be the wrong one.
Where results have fallen short, look at the reasoning as well as the delivery. A theory of change sets out why the charity believes its work leads to the change it wants. If the work was delivered well and the change did not follow, the reasoning is what needs revisiting, and no amount of better delivery will fix it.
Check the boundaries next. Which ones were crossed, and why? A boundary that has been crossed once under pressure may still be right. One that has been crossed every time it was tested was probably never agreed in the first place.
And bring in the people the strategy affects. The Governance Code expects boards to consider the views of service users and other key stakeholders. A review held only among trustees risks confirming what the board already thinks, and the people using the charity’s services see its direction from somewhere the board does not.
Keep the budget in view throughout, because that is where any change the review agrees will have to show up.
Who decides, and what happens next
The choice between keeping going, refreshing and resetting belongs to the board. The chief executive will usually do much of the work of the review and should propose an answer, but the decision is the trustees’ to make collectively and to record with its reasons. How trustees make decisions that hold up covers what that involves.
Be honest about the board’s own part. It may have let the strategy slip by filling agendas with operations, approving papers that never mention priorities, or leaving the review until it was overdue. If that is part of what happened, a board effectiveness review is worth running alongside the strategy review, and the wider question of how the board holds direction may need attention too.
Whatever the board decides, it should change something visible. Keeping going shows up on the agenda, with the strategy discussed at every meeting. A refresh shows up in the next set of board papers and the measures being reported. With a reset, the change appears in the budget, in how staff time is spent, and in what the charity stops doing, which is a decision with people attached and needs handling with care of its own.
If the review stalls because the problem may not be strategy at all, find that out first. Governance, income, systems and capacity can all look like a strategy problem from inside. The Charity Growth Diagnostic looks at strategy alongside them.
When the board cannot agree on which response it needs, a review can stall, and the strategy stays where it is. Someone outside the room can help the board reach a decision it will stand behind. Book a free 30-minute call.
