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Aligning Strategy and Governance
By Ron Robinson, President of ABARIS Consulting Inc.
November 3, 2003
Many organizations view strategic planning for their organization as a linear process that is the responsibility of the Board of Directors and therefore is determined by the Board and communicated to the staff to implement. According to the report, "Building on Strength: Improving Governance and Accountability in Canada's Voluntary Sector", there are approximately 175,000 nonprofit organizations in Canada, two-thirds of which have annual revenues of less than $100,000. The implication is that the work that is completed within most organizations is driven primarily by volunteers (including the Board of Directors) with little or no paid staff. As such, the Board of Director's becomes a key driver in the ability of the organization to implement its strategic plan, at both the volunteer and governance levels.
While process in developing the organization's strategy is critical to obtaining buy-in, the ability for the organization to achieve sustainable improvement requires that the strategy has to be effectively implemented. It is the desire to ensure sustainable improvement and facilitate implementation of the organization's strategy that underlies the concept "structure follows strategy". The concept that "structure follows strategy" is derived from the work of Chandler that was conducted in the 1960s. His work essentially stated that strategy is "the determination of long-term goals and objectives, the adoption of courses of action and associated allocation of resources necessary for carrying out the goals", while structure is "the design of the organization through which it is administ ...