ARTICLE
Strategic Planning: What’s Better, A One-Year Or Five-Year Plan?
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In today’s rapidly changing world, clinging to the traditional five-year strategic plan is not just outdated—it’s impractical. Organizations need to adapt quickly to survive, and a long-term plan often becomes a liability and burden rather than a guide and roadmap. Instead, a one-year nonprofit strategic plan, monitored monthly and updated annually, proves to be a far more effective and cost-efficient approach to planning.
The pitfalls of the five-year plan
The allure of the five-year plan stems from an era dominated by large organizations like IBM, The Nature Conservancy, and large city governments. These entities, often under pressure to appease investors, super donors, and to justify tax levies, adopted long-term planning as a way to demonstrate their foresight.
However, the reality is that these plans, despite the months of effort and, in some cases, millions of dollars poured into them, often turned out to be obsolete as soon as they were published.
The world moves too quickly nowadays for such rigidity. Economic gyrations, political whirlwinds, technological advancements, and competitor dynamics are just a few of the unpredictable external factors that can derail even the most carefully laid plans.
Internally, organizations face ever-changing challenges such as staff turnover, shifts in funding, changes in leadership, and swings in capacity cycles. These are realities that no five-year plan can accurately account for, rendering it a relic of a bygone era.
The case for a one-year nonprofit strategic plan
Given the inherent unpredictability of the future, it makes far more sense to focus nonprofit strategic planning efforts on a one-year horizon. A well-crafted one-year plan, aligned with long-term vision statements, “north star” goals, and cornerstone objectives, provides the flexibility needed to navigate the uncertainties of the modern world.
A one-year plan isn’t about abandoning long-term thinking. Rather, it’s about being practical and realistic. Many nonprofits struggle to meet even their one-year goals and objectives, often because circumstances and situations change, people leave, funding short falls suddenly occur, board desires change, or their strategic plans simply end up sitting in a folder, forgotten and gathering dust.
Engagement and accountability
One of the critical advantages of a one-year plan is that it keeps the organization’s leadership engaged and accountable. The goals feel obtainable. People can see the end zone. When a plan is updated monthly by staff and reviewed regularly by the board or by a dedicated committee, it stays at the forefront of everyone’s mind. This regular review process ensures that the plan remains relevant, and adjustments can be made in real-time as circumstances change.
This level of engagement is rarely achieved with a five-year plan. Too often, long-term plans are treated as a formality, something to be created and then forgotten until it’s time for the next cycle. The result is a lack of ownership and engagement, and a plan that fails to drive the organization forward.
Cost and time efficiency
In addition to being more effective, one-year plans are also more cost-efficient. Developing a five-year plan may require extensive research, countless meetings, and they are often extremely expensive. The entire process is time-consuming, and the result is a document that may quickly become irrelevant.
In contrast, a one-year plan can be developed and implemented in a fraction of the time, usually in one or two days and at a fraction of the cost. This allows organizations to focus their resources on implementation and execution rather than endless planning.
It’s important to keep in mind there is also an opportunity cost associated with extensive strategic planning processes that many organizations fail to account for. Meaning, an organization needs to account for the money it’s spending on all the work the staff is doing and all the time they are spending in meetings during the strategic planning sessions instead of doing their normal jobs. This is a real cost and it should be added to the total cost an organization spends on strategic planning.
Conclusion
In a world where rapid change is the only constant, organizations need to be agile and responsive. The five-year strategic plan, once the gold standard, is now an anachronism—outdated, cumbersome, and often ineffective. They may look good on paper but often they take an inordinate amount of staff and board time, are exceedingly expensive, become stale with inaction, and have little mission impact in practice.
Instead, organizations should embrace the one-year plan with near-term achievable priorities and objectives, combined with long-term vision statements, “north star” goals, and cornerstone objectives. Then they should monitor the plan’s progress monthly, make necessary changes to stay on track, and then update the plan annually to reflect the latest business realities to ensure it remains a relevant and living document that gets executed and drives real results and impact.
Does your organization embrace a one-year nonprofit strategic plan? Let us know in the comments.
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Jeff McGinnis