A few weeks ago, I taught an introductory Balanced Scorecard (BSC) course to a group of individuals from small nonprofits at Washington, DC’s, Center for Nonprofit Advancement. As part of the class, I walk through a case study of a nonprofit that successfully implemented the BSC and I stop along the way and give participants exercises to work on so they get a feel for developing a strategy map and scorecard.
Well, I had just gone over the strategy map and asked the students to take some time to develop their own “quick and dirty” strategy map. The idea was to get them thinking about the limited number of strategic objectives for their organizations over the next three to five years.
The case study I used was of a fairly decent sized pediatric hospital whose strategy map had 12 strategic objectives. I provided a template containing each of the four standard BSC perspectives—financial, customer, internal processes, and learning and growth—and 12 empty boxes for the strategic objectives and I think this threw them a little.
I received questions about the right number of objectives for a strategy. Because all of the participants were from pretty small nonprofit organizations, coming up with 12 strategic objectives was a lot for them. My bad—the template needs to be updated. Some of the participants could only come up with four or five objectives. I told them this is fine, especially for small organizations where there may only be five people at most—and sometimes only one—working to execute the strategy.
Five Strategic Objectives May Work Best
In fact, I would argue that five strategic objectives may be ideal for really small nonprofits. One—at most—in the Learning & Growth perspective; two in Internal Processes—one regarding advocacy, another on program management; one in the Customer/Client perspective; and one in the Financial perspective. This very simple format may be enough to help keep a small nonprofit focused on executing its strategy.
In my experience, nonprofits run into trouble executing their strategy when they try to do everything. They often have a hard time saying, “No.” The most focused ones keep their strategies simple and use the strategy as a filter by which they can decide what is strategically important to the organization and, therefore, what they should and should not do.