1. National Council for Voluntary Organisations Third Sector Foresight Look out: the future of the relationship between the third sector and local government Sarah Coombes

2. National Council for Voluntary Organisations Third Sector Foresight Make better decisions – www.3s4.org.uk Our mission NCVO Third Sector Foresight helps organisations to understand how the world is changing around them and use this knowledge to make better strategic decisions

3. National Council for Voluntary Organisations Third Sector Foresight Make better decisions – www.3s4.org.uk Objectives and outcomes of today To undertake an analysis of drivers in the external environment which may impact on the future of the relationship between the VCS and local government To explore the implications of these drivers to support local infrastructure organisations to….

4. National Council for Voluntary Organisations Third Sector Foresight Make better decisions – www.3s4.org.uk Objectives and outcomes…. Stay relevant Improve sustainability Become more risk aware Increase innovation

5. National Council for Voluntary Organisations Third Sector Foresight Make better decisions – www.3s4.org.uk The external environment. What? Drivers… …are trends or forces outside of your organisation which could have a positive or negative impact on your organisation’s future

6. National Council for Voluntary Organisations Third Sector Foresight Make better decisions – www.3s4.org.uk What? These could be political, social, economic, technical, legal and beyond…. –Funding - commissioning and procurement –Policy - localism agenda –Social attitudes - toward immigrants –Demography – an ageing population –Technology – web based networks

7. National Council for Voluntary Organisations Third Sector Foresight Make better decisions – www.3s4.org.uk The external environment. Why? Changes in the external environment have an influence on the voluntary and community sector

8. National Council for Voluntary Organisations Third Sector Foresight Make better decisions – www.3s4.org.uk Why? A good analysis of the potential impact of change helps organisations to make clear strategic choices and plan ahead. This supports organisations to;

9. National Council for Voluntary Organisations Third Sector Foresight Make better decisions – www.3s4.org.uk Why? Stay relevant Improve sustainability Become more risk aware Increase innovation

10. National Council for Voluntary Organisations Third Sector Foresight Make better decisions – www.3s4.org.uk The external environment. How? Strategic Analysis: from scanning to planning…

11. National Council for Voluntary Organisations Third Sector Foresight Make better decisions – www.3s4.org.uk Strategic analysis, of the external environment, is about… …understanding how the world is changing around your organisation and using this knowledge to make better strategic decisions

12. National Council for Voluntary Organisations Third Sector Foresight Make better decisions – www.3s4.org.uk A strategic planning cycle Getting the direction right Evaluation Implementation Strategic analysis Options and choices Planning

13. National Council for Voluntary Organisations Third Sector Foresight Make better decisions – www.3s4.org.uk Key steps of strategic analysis – scanning to planning….. ONE Mapping the drivers - identifying and recording the major trends or forces that could positively or negatively shape or influence the future of the organisation TWO Sorting the drivers into the vital, the important and the interesting THREE Carrying out further research into the drivers that matter to the organisation FOUR Considering the implications of these drivers for the organisation and as a result, generating opportunities and options FIVE Taking strategic action – making decisions as to how the organisation will respond

14. National Council for Voluntary Organisations Third Sector Foresight Make better decisions – www.3s4.org.uk Key steps of strategic analysis Today will focus on… ONE Mapping the drivers TWO Sorting the drivers FOUR Considering the implications of these drivers and generating opportunities and options

15. National Council for Voluntary Organisations Third Sector Foresight Make better decisions – www.3s4.org.uk How? The three key questions… What? - the key drivers that may affect your organisation and its beneficiaries in the future So What? – what might this mean? Now what? – what should you do about it?

16. National Council for Voluntary Organisations Third Sector Foresight Make better decisions – www.3s4.org.uk Exercise 1: Getting into a future focussed frame of mind! Headlines 2013 2019 2024

17. National Council for Voluntary Organisations Third Sector Foresight Make better decisions – www.3s4.org.uk Anticipating future events for the next five years and beyond… What is your organisations’ purpose? Who are the important ‘stakeholders’ for your organisation?

18. National Council for Voluntary Organisations Third Sector Foresight Make better decisions – www.3s4.org.uk STEP ONE – Mapping the drivers The first step in strategic analysis is to open up thinking about the external environment and the numerous drivers. PEST is a useful tool to help organisations do this… Political Economic Social Technological factors in the external environment PESTEL or STEEPLE could also be used Environmental/Ethical Legal

19. National Council for Voluntary Organisations Third Sector Foresight Make better decisions – www.3s4.org.uk PEST….for example Political Continued shift from grants to contracts Individual budgets Fast changing localism agenda Next election change of government? Economic Economic downturn squeezing funding Increasing competition for less funding Efficiency and value for money Changes to how infrastructure is funded Social Ageing population New migrant populations Inequality between local areas Technological Growth of online communities Empowered consumers/information society

20. National Council for Voluntary Organisations Third Sector Foresight Make better decisions – www.3s4.org.uk STEP TWO – Sifting and sorting the drivers into the vital, the important and the interesting When deciding which drivers really matter to your organisation it helps to think about their level of… IMPACT - from certain and uncertain PREDICTABILITY - from high to low

21. National Council for Voluntary Organisations Third Sector Foresight Make better decisions – www.3s4.org.uk STEP TWO – Sifting and sorting You may want to prioritise those with a potentially high impact that are predictable. It is often these drivers that need to be part of strategic plan. Unpredictable drivers, where you are not clear about the drivers and/or their likely implications, are often those with the greatest potential impact because you are less likely to be able to prepare.

22. National Council for Voluntary Organisations Third Sector Foresight Make better decisions – www.3s4.org.uk Drivers wall Do these drivers reflect the potential challenges and opportunities faced by local infrastructure organisations? Are there any drivers that are missing? Which of these drivers do you see as most important to your organisation? Which drivers do you feel will have the biggest impact on your organisations? Which drivers do you think are most likely to happen?

23. National Council for Voluntary Organisations Third Sector Foresight Make better decisions – www.3s4.org.uk Exercise 2 - PESTEL In your groups, start to jot down the main drivers in your external environment you see as influencing the future of the relationship between the VCS and local government. Green - high impact and predictable Pink – low impact and unpredictable

24. National Council for Voluntary Organisations Third Sector Foresight Make better decisions – www.3s4.org.uk Exercise 3 – Sift and Sort For the future of the relationship between the VCS and local government this will help us identify….. The drivers you see as most important The drivers you feel will have the biggest impact The drivers you think are most likely to happen

25. National Council for Voluntary Organisations Third Sector Foresight Make better decisions – www.3s4.org.uk STEP TWO – Sifting and sorting – using the information Plan Develop scenarios Develop tactics and policies Review HIGH IMPACT LOWER IMPACT UNPREDICTABLE PREDICTABLE

26. National Council for Voluntary Organisations Third Sector Foresight Make better decisions – www.3s4.org.uk STEP FOUR Considering the implications of these drivers for the organisation and as a result, generating opportunities and options

27. National Council for Voluntary Organisations Third Sector Foresight Make better decisions – www.3s4.org.uk STEP FOUR….

28. National Council for Voluntary Organisations Third Sector Foresight Make better decisions – www.3s4.org.uk STEP FOUR - Considering the implications What? = scanning the external environment to identify and prioritise the drivers So what? = considering the implications for the organisation and key stakeholders spotting opportunities and threats and risks Now what? = considering the next steps the organisation might want to take: honing the opportunities down creating some strategic options making decisions about future plans

29. National Council for Voluntary Organisations Third Sector Foresight Make better decisions – www.3s4.org.uk The Impact Assessment Grid Helps you to identify…… So what might be the impact on the organisation? What new challenges, threats and risks might emerge? What opportunities might there be for improving effectiveness and impact?

30. National Council for Voluntary Organisations Third Sector Foresight Make better decisions – www.3s4.org.uk Exercise 4 – Impact Assessment What are the opportunities and challenges for…. Users Relationships Workforce Skills

31. National Council for Voluntary Organisations Third Sector Foresight Make better decisions – www.3s4.org.uk STEP FIVE - Taking strategic action – making decisions about how your organisation will respond This step in the process is about linking ‘so what?’ and ‘now what?’ Making sure your organisation has… considered a healthy range of opportunities/threats developed a range of possible responses considered responses and decided which are the most appropriate Perhaps you could use the Improve, Innovate, Improvise idea….

32. National Council for Voluntary Organisations Third Sector Foresight Make better decisions – www.3s4.org.uk STEP FIVE - Taking strategic action Narrowing down responses… What are the strengths and weakness of your proposed responses to the drivers and implications you have identified? On balance, which option/s work best for your organisation?

33. National Council for Voluntary Organisations Third Sector Foresight Make better decisions – www.3s4.org.uk Narrowing down responses Key opportunity template…

34. National Council for Voluntary Organisations Third Sector Foresight Make better decisions – www.3s4.org.uk Matrix ranking of options Extending the evaluation of options thinking…

35. National Council for Voluntary Organisations Third Sector Foresight Make better decisions – www.3s4.org.uk Taking strategic action Perhaps your organisation could think about…. What is realistic and achievable in the next five years? Are there quick wins that could be made in the next year? Are there ideas to capture but to be taken forward in a more gradual way or agreed to revisit at some later point?

36. National Council for Voluntary Organisations Third Sector Foresight Make better decisions – www.3s4.org.uk STEP FIVE - Taking strategic action With your strategic analysis of the external environment… Populate your strategic plan and implement your strategy!

37. National Council for Voluntary Organisations Third Sector Foresight Make better decisions – www.3s4.org.uk Some tips on Strategic Analysis Remember that the future is uncertain – you can only anticipate what might happen you can’t predict the future Strategic analysis cannot forecast precisely what is going to happen but it can help you to keep an eye on emerging developments and where necessary, adapt to changes in your external environment Don’t discount the power of intuition, luck and gut instinct but channel these into a clear process of checking and analysing what you believe to be relevant or true

38. National Council for Voluntary Organisations Third Sector Foresight Make better decisions – www.3s4.org.uk Tips… Strategic analysis is a continuous process not a one off event or activity It’s not always linear Be careful not to go off on a tangent, which is easy to do when you are finding lots of interesting and seemingly useful information. Remember your Mission – what you are there to do

39. National Council for Voluntary Organisations Third Sector Foresight Make better decisions – www.3s4.org.uk Third Sector Foresight Website Use information on drivers Tailor the drivers yourself to make them relevant and specific Share views and news with the sector Sign up to the bulletin

40. National Council for Voluntary Organisations Third Sector Foresight Make better decisions – www.3s4.org.uk

41. National Council for Voluntary Organisations Third Sector Foresight Make better decisions – www.3s4.org.uk

42. National Council for Voluntary Organisations Third Sector Foresight Make better decisions – www.3s4.org.uk Contact details and thank you! Sarah Coombes Third Sector Foresight Officer Sarah.coombes@ncvo-vol.org.uk 020 7520 2437 www.3s4.org.uk

43. National Council for Voluntary Organisations Third Sector Foresight Make better decisions – www.3s4.org.uk ‘For tomorrow belongs to the people who prepare for it today’ African proverb