Charities Turn to Chief Strategy Officers to Help Plan Their Futures

When Ray Chung was named chief strategy officer at Neighborhood Centers, he immediately gathered employees’ ideas for helping the Houston antipoverty nonprofit grow.

Those ideas helped him create a “strategy playbook,” detailing ways the charity could expand its work to lift the number of students who graduate from high school, help low-income families improve their finances, and promote residents’ involvement in their neighborhoods.

So when the opportunity to compete for a government contract to run eight career centers opened up, Neighborhood Centers was ready to pounce. Following an approach mapped out in Mr. Chung’s playbook, it quickly assembled a proposal and won the $15-million contract.

Laying that groundwork was critical to the group’s success, says Mr. Chung: “Being strategic is looking at where you want to be further down the road as opposed to being totally preoccupied with day-to-day operations.”

Buffeted by increased competition for resources, a growing number of nonprofits are hiring high-level strategy officers like Mr. Chung as a way to focus on the future and improve performance today.

The positions are most common—although not exclusively—in fields like health care and human services that are undergoing fundamental shifts in the way services are delivered and paid for and at large organizations with multiple programs and locations. But the work that this new class of nonprofit officials is taking on offers lessons for all charities that want to be more deliberate in the way they approach their missions and plan for what’s ahead.

Trends and Threats

The new strategy leaders scan the horizon for emerging trends and looming threats that could affect their organizations’ work, oversee traditional strategic planning, and make sure programs are tightly aligned with goals. And with donors and government demanding more information about results, many strategy officers are also charged with developing systems to collect and analyze data about programs and operations.

“It’s a job that has lots of tentacles,” says Josh Wachs, chief strategy officer at Share Our Strength.

The antihunger group created Mr. Wachs’s position because it wanted to make strategy a part of its everyday operations, says Bill Shore, the charity’s leader. For a long time, he says, Share Our Strength’s focus on strategy was episodic.

“Like everybody else, we would go through a strategic-planning process and do a strategic plan,” says Mr. Shore. “Then we’d kind of go back to what we were doing.”

A big part of the job is to make sure the organization’s activities directly support its goal of ending childhood hunger by 2015—and to make changes when they don’t. That’s meant phasing out grants that the group used to make to community gardens, children’s hospitals, and emergency food-assistance programs. The nonprofit now rarely uses its own name in publicity and fundraising materials; instead it promotes the group’s No Kid Hungry campaign.

Sticking to the organization’s plan takes discipline, and having someone focused full-time on strategy makes a big difference, says Mr. Shore.

“It’s really easy to slide off of strategy,” he says. “There are dozens of temptations a day, a week, or a quarter to say, ‘Well, you know, maybe we did as well as we could there, and so now let’s do something else.’”

Unrealistic Hopes

But adding the position doesn’t always work out as planned. For example, College Summit and Sesame Workshop hired chief strategy officers in 2012 who no longer work for the organizations. Neither group would discuss what happened or say whether they planned to refill the positions.

Nonprofits sometimes have unrealistic expectations, says David Lewis, executive director of Save the Bay, an environmental group in Oakland, Calif.

Save the Bay has had a chief strategy officer since 2010, but Mr. Lewis still advises charities to be cautious about adding the job. Hiring a strategy officer is not a shortcut to transforming an organization’s culture, he says: “It’s a lot to ask of one person or one position, even a senior position.”

The Alliance for Children and Families, which represents nearly 350 charities, has created a program called Strategy Counts to see what happens when social-service organizations place a greater emphasis on strategy. The four-year program was financed with a $5.4-million grant from the Kresge Foundation.

Twenty charities won grants either to cover a portion of the cost of hiring a chief strategy officer or to undertake a project to change the way the organization works. The alliance hopes that focusing more on strategy will bolster the groups’ ability to adjust to change, use data for decision making, collaborate, and develop new approaches to fighting poverty.

A lot of the groups are coming up with processes to streamline activities that often eat up a lot of leadership time, such as deciding whether to go after a new grant, says Michael Mortell, director of Strategy Counts.

“What are the key things to look at that will tell us ‘Go’ or ‘No go’?” he says. “It becomes a little bit more routine rather than a big, special case that pulls people off of their regular work.”

The time saved, says Mr. Mortell, can then be used for problems that require greater creativity and to plan for the future.

Analyzing Data

At many nonprofits, chief strategy officers are building systems to collect and analyze data to help improve program results and decisions.

Starr Commonwealth, a social-services charity in Albion, Mich., has long measured program results for clients, but analyzing its own performance was a different story.

So Elizabeth Carey, chief strategy and administrative-services officer, spent a lot of time with managers to develop new ways to measure operations, which have changed the way the organization makes decisions.

Tracking information about the young people the charity wasn’t able to serve in its residential programs helped Starr decide to open more spots in its 90-day residential substance-abuse program.

“We have now moved from gut reactions and a sense of what we think we need to do to ‘What does the data tell us?’” says Ms. Carey.

Qualities Needed

Finding someone with the skills a successful chief strategy officer needs can be challenging, says Angela Blanchard, chief executive of Neighborhood Centers.

To be effective, she says, strategy officers need to be equally comfortable thinking creatively about the big picture and sitting at the negotiating table to hammer out the details of a partnership agreement.

Ms. Blanchard recommends looking for someone who has held a variety of jobs at different organizations. Financial-management skills are key. “When you pursue a strategy without addressing the resources, that usually leads to trouble,” she says. “They have to have a strong grasp of the current financial picture and the possible one to be a real use to the organization.”

Charities are split on how important it is for candidates to have extensive expertise about a nonprofit’s cause.

When the Center for Investigative Reporting, in Berkeley, Calif., set out to hire a chief strategy officer, it wanted someone who had a different perspective on technology and distributing information than the organization’s leaders, who are journalists, says Robert Rosenthal, the center’s executive director. So the group tapped someone who had worked in an administrative position in broadcasting and had a strong track record in social media.

In his first year on the job, the strategy officer, Joaquin Alvarado, organized a series of innovative events to promote the group’s journalism, including a partnership with a theater company that developed plays based on the center’s reporting.

Says Mr. Rosenthal: “Coming to something where you really don’t know the way it should be done and the way it has been done is really important.”

By contrast, Laurie Stillman, chief strategy officer at Health Resources in Action, says her long experience in public health has been critical to identifying new opportunities and building relationships with grant makers who support health-care projects: “I can talk their language.”

‘Sheer Relentlessness’

At SCO Family of Services, a social-services group in New York, the job of the chief strategy officer is to help the organization make strides to become the best organization it can be and to focus on what’s next for the charity, says Gail Nayowith, the group’s leader.

A case in point: Rose Anello, SCO’s chief strategy officer, is redesigning the group’s training program to help develop a pool of employees who in time will be able to move into leadership roles.

Ms. Nayowith says that fighting the undertow of everyday crises to keep the nonprofit moving forward requires commitment. One of the most important qualities her organization’s chief strategy officer possesses, she says, is sheer relentlessness.

What Makes a Strong Chief Strategy Officer: Advice From Nonprofit Leaders

• Has held a variety of senior positions at different organizations
• Is equally adept at thinking about the big picture and managing small details
• Knows how to build and navigate relationships
• Enjoys a good rapport with the chief executive Possesses strong financial-management skills
• Can juggle multiple projects at the same time
• Isn’t bothered by uncertainty