Here at Funding for Good we were recently introduced to a new term: “construction at-risk.” This means starting a construction project–including hiring contractors–before all of the permits and other logistical pieces are in place.
To us, this sounds a lot like an organization operating without a strategic plan.
California’s struggling effort to build a high-speed rail line connecting San Francisco and Los Angeles reveals just how much risk is involved in “construction at-risk.” The project is billions over budget and years behind schedule. As revealed by an in-depth New York Times piece, the project’s challenges come down to flawed decision-making.
For nonprofit leaders, there are some key lessons worth considering.
Without A Roadmap It’s Easy to Lose Sight of Vision and Mission
Vision and mission are the heart of a nonprofit. A stellar vision and mission statement will inspire and motivate your staff, Board of Directors, donors, community, and more.
Considering the goals of California’s high speed rail project, we can surmise that:
- The project’s “vision” was to increase sustainability and reduce pollution from air and car travel.
- The project’s “mission” was to connect San Francisco and Los Angeles by rail, with a travel time of two hours and 40 minutes. This would make rail faster and more convenient than air travel. Thus, people would naturally choose train travel over air travel.
With vision and mission in hand, the next step would be to translate them into a strategic plan. This plan would guide the decision-making of everyone involved. This is what we call strategic decision-making.
However, according to the New York Times:
Political compromises created a project so expensive that almost no one knows how it can be built as originally envisioned.
The Power of Strategic Decision-Making
Despite whatever business plans the California High-Speed Rail Authority created, it’s clear that strategy did not drive decision-making on the project.
Each of the political compromises detailed by the New York Times happened at key decision-points.
For example, when determining the route between the state’s two largest cities, political interests lobbied to forgo the original, more direct route. Instead, they pushed for more “difficult and costly routes” that would benefit individual developers, elected officials, and business interests. Further, motivated by highly restricted federal funding, the Rail Authority issued contracts before they had even secured the land needed to build on.
This is the opposite of strategic decision-making.
The truth is, there are always outside pressures pushing and pulling nonprofit leaders’ decision-making in opposing directions.
While the stakes may not be on such a grand scale, these pressures can skew decision-making within our own organizations. It could be something as simple as a board member who wants to keep a specific program going, despite evidence that it’s not measuring up, or the decision to pursue grant funding that’s clearly mission creep.
By creating a strategic plan, board and staff leadership alike the ability to evaluate decisions based on shared values and goals. Together, you and your leadership team can easily assess:
Are we making choices that advance our mission and vision, and align with our strategy?
The result is strategic decision-making. Which every organization can benefit from.