Foreword
Strategy should never be a dusty document sitting on a shelf. Too often, organizations spend months crafting elaborate strategic plans only to file them away while returning to business as usual. The result? A growing disconnect between lofty vision and daily reality, between strategic intentions and actual practice.
The Strategy Habit changes this dynamic entirely.
Inspired by continuous integration in software development—where code is constantly updated and deployed without allowing untested changes to accumulate—The Strategy Habit ensures there is never daylight between your strategic thinking and your organizational reality. Just as software developers push code frequently to avoid the risks of large, untested releases, organizations must continuously refine and adapt their strategy to stay relevant in a rapidly changing world.
The concept is simple: successful organizations need to engage with strategy at least once a week, not once a year. Strategy becomes a living practice, not a periodic event. Your strategic thinking evolves continuously, responding to new insights, changing circumstances, and emerging opportunities.
This playbook provides twelve strategic "recipes"—one for each month of the year, giving you a complete annual program of strategic development. Each month, gather your team to explore one recipe together. If the discussion sparks deeper interest, assign a small group to investigate further and report back. This creates a rhythm of strategic reflection that keeps your organization agile, relevant, and aligned.
By working through all twelve recipes over the course of a year, your organization will develop a comprehensive understanding of strategic thinking while building the habits and capabilities needed for continuous adaptation and growth.
The beauty of The Strategy Habit lies in its integration with daily operations. Instead of strategy being something separate from "real work," it becomes woven into how you think, discuss, and make decisions. Your team develops strategic muscles through regular practice, making everyone more capable of spotting opportunities, identifying threats, and adapting to change.
This work is published under a Creative Commons Attribution 4.0 International License, making it freely available for use and adaptation, even for commercial purposes, as long as you provide proper attribution.
Welcome to The Strategy Habit. Your organization's future depends not on having the perfect plan, but on continuously thinking, adapting, and evolving your approach to creating impact.
How to Use This Playbook
The Monthly Rhythm
- Each month, select one recipe from this playbook
- Schedule a 90-minute team discussion (adjust timing based on team size)
- Follow the facilitation guide provided with each recipe
- If the topic generates significant interest, form a small working group to explore it further
- Have the working group report back within 2–3 weeks
- Document key insights and how they might influence your current approach
Who Should Participate
- Core leadership team (3–7 people works best)
- Include diverse perspectives: program staff, operations, fundraising, communications
- Occasionally invite board members, beneficiaries, or external partners for fresh viewpoints
Creating the Right Environment
- Schedule at a consistent time each month
- Choose a comfortable space away from daily distractions
- Encourage open, honest dialogue
- Focus on learning and exploration, not immediate decisions
- Document insights and questions that emerge
Big Hairy Audacious Goals
What bold, inspiring goal could galvanize your organization for the next 10–30 years?
Why This Matters
Organizations often trap themselves in incremental thinking, making small improvements while the world needs transformational change. A Big Hairy Audacious Goal (BHAG) forces you to think beyond current constraints and imagine what's truly possible. It cuts through the temptation of gradual progress and challenges you to find solutions that can scale to 10× more impact.
JFK's promise to put an astronaut on the moon within a decade exemplifies a powerful BHAG. It was bold but not impossible, clear and time-bound, and it motivated and focused an entire nation's efforts.
BHAGs work because they force breakthrough thinking beyond current limitations, inspire and motivate teams around a shared vision, provide clarity for strategic decision-making, attract partners, funders, and talent aligned with ambitious goals, and create urgency and focus that drives innovation.
Monthly Discussion Guide (90 min)
Reflection Questions for Working Groups
- What other organizations have achieved similar transformational goals?
- What capabilities would we need to develop?
- How would this BHAG change our current programming?
- What partners would we need to achieve this goal?
- How would we measure progress toward such an ambitious target?
Signs of Success
Your BHAG is working when team members can explain it simply and get excited sharing it, it influences current decisions, it attracts new partnerships, it helps you say "no" to misaligned activities, and external stakeholders find it both ambitious and believable.
Turning Constraints into Opportunities
What is your most gigantic obstacle, and how can you transform it into an audacious goal?
Why This Matters
Every organization faces constraints that seem insurmountable: limited funding, regulatory barriers, entrenched opposition, or technological limitations. Traditional thinking accepts these as fixed realities. Strategic thinking reframes constraints as innovation opportunities.
When told tunnel-boring machines were too slow for underground transportation, Elon Musk turned the constraint into a goal: "Let's make them 10× faster." The fight against malaria reframed "poor families can't afford mosquito nets" into "find enough funding to make nets free."
Constraint reframing transforms problems into innovation challenges, reveals assumptions that may no longer be valid, generates creative solutions others miss, and creates competitive advantages through novel approaches.
Monthly Discussion Guide (90 min)
Creative Exercises
Assumption Reversal
List all assumptions about your constraint, then systematically reverse each one.
Future History
Imagine you overcame the constraint 5 years from now. Write the story of how you did it.
Resource Multiplication
If you had 10× more money, people, or time, how would you attack this constraint?
Outsider Perspective
How would a tech company, government agency, or social movement approach this problem?
Resource Imagination Exercises
How would your strategy change if you had unlimited resources? What would you do with zero budget?
Why This Matters
Resource constraints often limit our strategic imagination before we fully explore what's possible. We unconsciously restrict our thinking to what seems fundable rather than what could be most impactful. This exercise breaks those mental barriers by exploring two extremes: unlimited resources and no resources at all.
The unlimited resources exercise reveals what you would do if you could truly focus on impact without worrying about funding. It often uncovers strategies that seem impossible but might be achievable through partnerships, policy change, or innovative business models.
The zero budget exercise forces creativity about influence, persuasion, and systemic change. Many of the most powerful social changes — from civil rights movements to policy reforms — happened through organizing and advocacy rather than large budgets.
Monthly Discussion Guide (90 min)
Deep Dive Questions
For Unlimited Resources
What successful examples exist of similar large-scale approaches? What would be the biggest implementation challenges? How could we test assumptions with smaller pilots?
For Zero Budget
What successful advocacy campaigns could we learn from? Who are the key decision-makers we need to influence? What evidence or stories would be most persuasive?
Environmental Scanning
What three changes in the political, economic, social, technological, legal, or environmental landscape will most significantly impact your work?
Why This Matters
Organizations often become so focused on current operations that they miss important shifts in their environment. By the time these changes become obvious, it may be too late to adapt effectively. Strategic environmental scanning helps you anticipate changes and position your organization to benefit from emerging opportunities or mitigate potential threats.
Successful organizations regularly scan across multiple dimensions using the PESTLE framework:
- Political: Changes in leadership, policy priorities, regulatory environment
- Economic: Funding trends, economic conditions, new financial models
- Social: Demographic shifts, changing attitudes, cultural movements
- Technological: New tools, platforms, data capabilities, automation
- Legal: Regulatory changes, court decisions, compliance requirements
- Environmental: Climate impacts, resource constraints, sustainability trends
Monthly Discussion Guide (90 min)
Trend Monitoring System
Assign each team member 1–2 trends to track monthly. Create a shared document for trend updates and insights. Set up Google alerts or other monitoring tools. Schedule quarterly deep-dive discussions on trend implications.
Early Warning Indicators
- Changes in funding patterns or funder priorities
- New regulations or policy discussions
- Emerging competitor organizations or approaches
- Shifts in public opinion or media coverage
- Technological developments affecting your sector
- Changes in beneficiary needs or preferences
Core Competence Discovery
What is the one thing your organization can be the best in the world at?
Why This Matters
In a crowded nonprofit landscape, organizations that try to do everything often accomplish less than those that focus intensely on their unique strengths. Your core competence — the capability that only you can master better than anyone else — becomes the foundation for sustainable competitive advantage and maximum impact.
Core competence isn't about being good at something; it's about being the best. This distinction is crucial because being the best at something unique allows you to create irreplaceable value for beneficiaries, attract resources and partnerships naturally, build reputation and influence in your field, maintain focus and avoid mission drift, and develop deep expertise that compounds over time.
The key is finding competence that is simultaneously unique to your organization, valuable to your mission, and difficult for others to replicate.
Monthly Discussion Guide (90 min)
Illustrative Examples — Homeless Services
Consider how organizations serving the same population differentiate: "Best at understanding root causes" → go-to research and policy organization. "Best at rapid rehousing for families" → develops replicable models others adopt. "Best at policy advocacy" → influences legislation and government programs. "Best at changing public perceptions" → leads narrative change campaigns. "Best at connecting individuals with family support" → develops innovative reunion programs.
Strategic Pruning
If we had to operate with 50% of our current budget, which activities would we keep?
Why This Matters
Strategy is as much about what you choose not to do as what you choose to do. Yet most organizations accumulate activities over time without systematically evaluating their relative value. This leads to diffused impact, stretched resources, and teams that are busy but not necessarily effective.
Michael Porter captured this essence perfectly: "The essence of strategy is choosing what not to do." Organizations that master strategic pruning often achieve greater impact with fewer resources because they can focus intensely on their highest-value activities.
Strategic pruning is difficult because we become emotionally attached to programs, stopping activities feels like failure, staff may be personally invested, funders may resist changes, and we fear missing opportunities. Despite these challenges, regular pruning is essential for organizational health.
Monthly Discussion Guide (90 min)
BCG Matrix for Nonprofits
⭐ Stars
High impact, high growth potential — worth investing in.
🐄 Cash Cows
Stable impact, efficient operations — maintain but don't expand.
❓ Question Marks
Uncertain impact — require investigation and possible pivoting.
🐕 Dogs
Low impact, inefficient — candidates for elimination.
Implementation Considerations
- Set clear criteria before evaluating specific programs
- Separate program effectiveness from staff performance
- Consider implementation timeline and transition planning
- Plan stakeholder communication carefully
- Build in evaluation periods for retained activities
- Schedule annual pruning discussions going forward
Portfolio Management for Impact
Which of our activities are Stars, Cash Cows, Question Marks, or Dogs?
Why This Matters
Organizations need a balanced portfolio of activities to ensure both current impact and future sustainability. Without this balance, organizations either become stagnant (too many mature programs, not enough innovation) or chaotic (too many experimental programs, not enough stable impact).
A healthy portfolio typically includes 1–2 Cash Cows providing stable impact and potentially funding other programs, 1–2 Stars representing the future direction of your work, 2–3 Question Marks being tested for Star potential, and ongoing elimination of Dogs to free resources for more promising activities.
Monthly Discussion Guide (90 min)
Category-Specific Strategies
Stars — Invest for Growth
Allocate your best staff and resources. Document and systematize successful approaches. Build partnerships to accelerate growth. Plan for scaling challenges before they arise. Attract additional funding for expansion.
Cash Cows — Maintain & Optimize
Focus on operational efficiency and quality. Train others to deliver effectively. Use stable programs to cross-subsidize Stars and Question Marks. Consider replication or franchising models.
Question Marks — Investigate & Decide
Set clear criteria and timelines for evaluation. Design small-scale tests to assess potential. Gather market research about growth potential. Make go/no-go decisions within defined timeframes. Either invest heavily to create Stars or eliminate quickly.
Dogs — Eliminate or Transform
Plan graceful elimination strategies. Consider whether other organizations are better positioned. Develop transition plans for beneficiaries. Redeploy resources to higher-impact activities. Document lessons learned.
Impact Pathway Design
What endgame strategy best supports achieving our Big Hairy Audacious Goal?
Why This Matters
Many organizations focus intensely on activities without clearly understanding their pathway to large-scale impact. Having great programs doesn't automatically translate to systems-level change. Strategic organizations explicitly choose their impact pathway — their theory of how local work contributes to broader transformation.
Alice Gugelev and Andrew Stern identified six fundamental endgame strategies that describe how organizations achieve large-scale impact. Understanding your endgame strategy is crucial because each requires different capabilities, partnerships, and resource allocation.
The Six Endgame Strategies
1. Open Source
Conducting research and development, then sharing knowledge freely. Best for organizations with strong research capabilities and broad network reach. Core activities: research, knowledge creation, thought leadership, convening.
2. Replication
Creating proven models that other organizations can implement. Best for organizations that excel at program design and implementation. Core activities: model development, documentation, training, quality assurance.
3. Government Adoption
Developing pilot programs that governments adopt and scale. Best for organizations with policy expertise and government relationships. Core activities: pilot development, policy advocacy, government partnership.
4. Commercial Adoption
Creating solutions that for-profit actors find profitable to implement. Best for organizations that can create market-viable solutions. Core activities: product/service development, market demonstration, business model design.
5. Mission Achievement
Directly solving your target problem through your own services. Best for organizations with strong operational capabilities and clear, achievable missions. Core activities: direct service delivery, operational excellence, geographic expansion.
6. Sustained Service
Providing long-term services that fill permanent gaps. Best for organizations filling permanent market or government gaps. Core activities: long-term service provision, relationship building, continuous improvement.
Monthly Discussion Guide (90 min)
Many successful organizations combine endgame strategies sequentially or simultaneously: start with Mission Achievement then move to Replication, use Open Source to support Government Adoption, or combine Commercial Adoption with Sustained Service.
Business Model Innovation
What business model would best support our mission for the next 10 years?
Why This Matters
Your business model — how you generate the resources to fund your activities — fundamentally shapes what you can accomplish and how you can grow. Many organizations accept their current funding approach as fixed, but business model innovation can unlock entirely new levels of impact and sustainability.
Traditional nonprofit funding models often create constraints: grant dependency forces short-term thinking and mission drift, limited earned revenue reduces flexibility, single-source funding creates vulnerability, and complex reporting consumes resources that could support programs.
Business model innovation involves designing revenue streams that align with and reinforce your mission rather than competing with it. The most powerful business models create virtuous cycles where generating revenue actually enhances impact.
Monthly Discussion Guide (90 min)
Ten Nonprofit Funding Models
1. Heartfelt Connector
Individual donations from those moved by emotional connection to mission.
2. Mind Trust
Funding based on intellectual credibility and expertise.
3. Beneficiary Builder
Revenue from beneficiaries who pay for valuable services.
4. Member Motivator
Funding from members who benefit from collective action.
5. Big Bettor
Large-scale funding from major foundations or government.
6. Policy Engine
Funding to influence policy and systemic change.
7. Resource Recycler
Revenue from redistributing resources or managing assets.
8. Market Maker
Revenue from facilitating transactions between parties.
9. Local Nationalizer
Replicating local success through franchising or licensing.
10. Enterprising Nonprofit
Commercial revenue streams that support mission.
Economic Engine Identification
Which key economic indicator, if you increased it steadily over the years, would lead you to the most revenue and financial sustainability?
Why This Matters
Every sustainable organization has an economic engine — a fundamental financial driver that, when improved consistently over time, leads to long-term success. Jim Collins introduced this concept in "Good to Great," noting that great companies identify the single metric that most drives their economic success, then organize their entire operation around continuously improving that metric.
For nonprofits, economic engines often differ significantly from for-profit businesses, but the principle remains powerful. Your economic engine might be lifetime value per major donor, cost per beneficiary served, revenue per staff member, percentage of unrestricted funding, or number of sustainable partnerships.
Monthly Discussion Guide (90 min)
Economic Engine Examples
Lifetime Income Per Funder
Best for relationship-based funding. Invest heavily in funder relationships and long-term stewardship. Track total giving per funder over 5+ year periods.
Impact Per Employee
Best when staff capacity is the primary constraint. Maximize productivity through systems, technology, and skill development. Measure total outcomes per FTE.
Percentage of Unrestricted Funding
Best for maximum strategic flexibility. Build strong case for general operating support. Focus on individual donor development and earned revenue.
Cost Per Successful Outcome
Best for organizations with measurable, standardized outcomes. Improve program effectiveness while controlling costs. Evidence-based programming drives growth.
Cultural DNA Analysis
What cultural elements — both positive and constraining — most shape how we work and what we can achieve?
Why This Matters
Organizational culture is often called "how we do things around here," but it runs much deeper. Culture encompasses your shared values, unspoken assumptions, behavioral norms, and collective stories that shape every strategic decision and operational choice. As Peter Drucker famously noted, "Culture eats strategy for breakfast."
Understanding your cultural DNA is crucial because culture determines which strategies your organization can actually execute, cultural strengths can become competitive advantages when leveraged strategically, cultural blind spots can undermine even well-designed initiatives, culture change requires intentional long-term effort, and authentic strategies that align with culture are more likely to inspire staff.
Monthly Discussion Guide (90 min)
Cultural Assessment Activities
Story Collection
Interview long-term staff about organizational folklore and legends. Collect stories about breakthrough results.
External Perspective
Interview former staff about what made your culture distinctive. Ask partners about strengths and blind spots.
Cultural Artifacts
Review communications for language patterns. Analyze meeting structures and decision-making processes.
Alignment Assessment
Evaluate how well strategies align with cultural strengths. Identify strategies requiring cultural evolution.
Systems Integration Through Cycles of Change
How can you connect all the steps in your change process — including learning, programming, and revenue generation — into a self-reinforcing cycle?
Why This Matters
The most powerful strategies create virtuous cycles where each component strengthens and supports the others. Instead of managing separate programs, fundraising efforts, and communications activities, strategic organizations design integrated systems where success in one area automatically enhances performance in others.
A well-designed cycle of change typically includes: impact creation (direct work with beneficiaries), learning and improvement (systematic reflection), story and evidence development (documentation that demonstrates impact), stakeholder engagement (communication that attracts resources), resource generation (funding and partnerships), and capacity building (investment in organizational capabilities).
When these elements connect in a self-reinforcing cycle, your organization becomes increasingly effective and sustainable over time. Success builds on success, creating momentum that attracts additional resources and opportunities.
Monthly Discussion Guide (90 min)
Cycle of Change Examples
Direct Service Organization
Service Delivery → Outcome Measurement → Story Development → Stakeholder Communication → Resource Attraction → Service Enhancement → back to step 1 with enhanced capacity.
Policy & Advocacy Organization
Research & Analysis → Solution Development → Coalition Building → Policy Advocacy → Impact Documentation → Credibility Building → back to step 1 with enhanced credibility and resources.
Capacity Building Organization
Training & Consulting → Client Success → Case Study Development → Thought Leadership → Market Development → Service Innovation → back to step 1 with enhanced offerings and market position.
Integration Strategies
Program–Fundraising
Design programs that naturally generate compelling stories for donors. Create engagement opportunities that enhance rather than interrupt programming.
Communications–Learning
Use external communications deadlines to drive internal reflection. Create feedback loops where external communication enhances internal understanding.
Your Year of Strategic Development
Congratulations! You've now embarked on a year-long journey of strategic development through twelve monthly recipes designed to transform how your organization thinks about and approaches strategy. By committing to this monthly rhythm, you're building strategic thinking into your organizational DNA rather than treating it as an annual exercise.
Remember, the goal of The Strategy Habit isn't perfection — it's continuous improvement and adaptation. Each month's discussion will generate new insights, challenge assumptions, and open possibilities you hadn't considered before. Some recipes will resonate more than others, and that's exactly as it should be. The key is maintaining the discipline of regular strategic reflection while remaining flexible about how you apply what you learn.
As you work through these recipes throughout the year, you'll likely discover powerful examples from your own organization and others that could enrich future discussions. I'm actively collecting real-world examples to enhance this playbook for other organizations embarking on their own Strategy Habit journey.
I'd love to hear from you! If you discover compelling examples that illustrate any of these twelve recipes — whether from your own organization's experience or from other nonprofits you admire — please share them with me at daniel.desposito@gmail.com. Your insights could help other organizations learn and grow through the power of shared experience.
Here's to your success in building a strategically adaptive, continuously improving organization that stays ahead of change rather than simply reacting to it.
Keep strategizing,
Daniel D'Esposito