There’s a new tool in the strategy toolbox for for-purpose organisations. Impact-led design (ILD) unlocks a different way to develop your strategy that supports agility and nimbleness as we move into an external environment.

As a leader in a for-purpose organisation, have you ever been uncertain of what strategic choices to make? Have funding opportunities driven strategic choices, even when you know they may not be the best approach?

Or perhaps the plethora of goals, objectives, targets and key performance indicators have blurred the picture so much, it is unclear what strategy is being pursued? Or maybe you are frustrated that every strategic plan you’ve drafted is out of date as soon as it is signed off by the Board!

I’m not in the camp that says ‘strategy is dead’ – although a few hours spent Googling the array of articles propagating this view has certainly developed my thinking. But I’m there in terms of acknowledging that ‘traditional strategic planning is dead!’ I was probably there even before COVID-19 dramatically altered the external environment.

I recall starting work with a client in 2021 on their new strategy, where one of the initial tasks was a review of their previous strategic plan from January 2020 – that was definitely out of date within a couple of months!

The pandemic is an extreme example of volatility, but when I talk to for-purpose leaders today they increasingly recognise it is the shear multitude of smaller external factors that makes strategic choices difficult in the sector. ‘Everything seems to be constantly changing’ is a constant commentary.

So, what to do?

The first step is easy – the best thing you can do is abandon traditional strategic planning processes. Particularly if they are focused on producing a weighty document with a set of goals and the actions to achieve those goals.

Following that it is harder, as you may now be stepping into the unknown. This is where impact-led design (ILD) comes into play.

Impact-led design is an approach developed by Think Impact. It blends aspects of human- centred design, evidence-based practice and collaborative commissioning to engage key stakeholders (communities, service providers, policy makers, funders, academics, etc.) into service redesign. But more and more at Think Impact, we’ve been using ILD to drive strategy development.

Key aspects of an impact-led designed strategy

There are three key aspects at the heart of an ILD approach to strategy development:

1. A focus on impact. For-purpose organisations primarily exist to achieve social or environmental impact. The focus of strategic conversations needs to be on where they are creating impact (and this means having high-quality evaluation to provide the data) or where they intend to have impact.

It is essential that organisations developing strategy ‘think impact’. This ensures the strategic choices made are located in the change you want to see in the world.

2. Ensure you have a strong anchor. Linked to the above is ensuring there is organisation- wide clarity on vision, purpose, values and strengths. These are the anchors that will assist your organisation to make better strategic choices in a fluctuating external environment. There is probably a whole separate article on how to ensure these four aspects are harmonised, but here I’d like to focus on strengths.

It is rare for for-purpose organisations to talk about strengths, but I’ve seen some great examples. Including a community housing organisation who summed up their strengths in the concept of their ‘way’, which encompassed being community-led, high performing and working in partnership. This was what they did well, what they wanted to continue to do well and knowing this helped them make better strategic decisions.

3. Involve your people. Strategy is about understanding the external environment you operate in and making choices that take advantage of opportunities or threats. We’ve hopefully moved beyond the point where in a for-purpose organisation the strategy is only developed by the CEO, Executive Team and Board (or worse still, a set of consultants on their behalf – and I say that as a consultant!).

With the sheer scale of volatility in the external environment, for-purpose organisations relying solely on a small leadership team to drive strategy will miss the opportunity to respond to opportunities or threats as they arise.

Impact-led strategy development seeks to galvanise the whole team to determine and understand the strategy, the assumptions behind it and the way they can help shape it. This requires great facilitation – the art of impact-led design.

I encourage you to add impact-led design to your strategy toolbox. It will enable you to build a robust and flexible strategy in a changeable and uncertain environment.