Planning

The following are ten steps MFIs might follow when doing planning at the establishment of the organization or periodically during the organization's existence. The social mission - as financial considerations - of the MFI should figure prominently in all ten steps.

Step 1 - The Team: Determine who should be involved in strategic planning activities. The planning group should represent the diverse interests of your organization, including social performance. Ideally, the planning group should consist of most people who are decision-makers, whose buy-in will be important to the implementation of the strategy.

Step 2 - The Mission: Revisit or develop the organization's mission statement. What is the real mission of the organization? Are there key elements that are not explicitly stated? Does your mission statement reflect the view of your key stakeholders?

Step 3 - The Goals: Establish or clarify social goals. What does the organization want to achieve in regards to its mission? Broadly define the social goals of the institution in terms of: outreach to target groups; quality of service; and positive economic and social changes in clients.

Step 4 - Objectives and Strategies: Set clear and realistic performance objectives, targets and strategies to meet social goals. If serving poor people is a social goal, deepening outreach to poor women maybe a social performance objective. A performance target could then be having 50% of new clients be below the poverty line.

• Reaching target clients: Have you clearly defined the characteristics of your target clients (e.g. location, gender, poverty level, type of economic activity)? Are specific categories of clients being systematically excluded?
  
• Meeting client needs: Do you have measurable objectives for service provision (e.g. quality, accessibility, client satisfaction etc)
  
• Creating change: Have you clearly defined your desired outcomes in terms of changes as a result of the services? Organizations sometimes use the SMART rule when defining objectives:
  
• Specific - What precisely is the organization going to achieve?
  
• Measurable - How will the organization know when the objective is achieved? (i.e., 25% increase in loans to a particular demographic).
  
• Achievable - Are the objectives possible?
  
• Relevant - Are the objectives appropriate in the given context, in terms of the organization’s mission and environment? Timed - When are the objectives going to be achieved?

Step 5 -The Double Bottom Line: Scrutinize the mission and goals together in terms of the double bottom line (the organization's social and financial objectives). Sometimes, social objectives and the financial bottom line do not lead the organization in the same direction. Other times, short-term trade-offs between social and financial performance evolve into long-term synergies. How can an MFI balance its social and financial imperatives?

Step 6 - Identify pathways to impact: Identify how program activities will lead to meeting social objectives. This will create a better understanding of what MFIs need to do to achieve their desired social objectives.

What are the social performance objectives ? What services do MFIs provide to meet these objectives ? What are the intermediate steps that lead from MFI services to meeting social objectives ? What can go wrong ? Is the MFI tracking these variables to know when things actually go wrong? Can they intervene with appropriate products to help clients get back on the pathway to meeting social objectives?

Step 7 - The SWOT: Brainstorm about issues that may impact the achievement of the mission, including economic, social, demographic, political, legal, technological and internal issues. Evaluate through a SWOT (Strengths, weaknesses, opportunities and threats) analysis.

Strengths	Weaknesses
What, internally, puts the organization in a strong position to achieve its social mission? For example: Commitment of board of directors to the social mission and organization Good management information systems that track economic levels of clients and drop-outs Products that meet the needs of client groups that the MFI seeks to reach	What, internally, does the organization need to improve to achieve its mission? For example: Absence of specific social performance objectives that MFI intends to meet No training for staff to understand and respond to client needs Products not specifically aligned to the needs of very poor clients
Opportunities	Threats
What external circumstances can the organization take advantage of to achieve its mission? For example: New funding opportunities to target the poor Partnerships with other community organizations to leverage impact	What external threats exist that the organization needs to mitigate or defend itself against? For example: New government regulations capping interest rates Different reporting requirements from donors and investors

Step 8 - The Implementation Plan: Incorporate objectives and strategies into a solid implementation plan, or revise the existing implementation plan. This plan may be split into three separate plans: the strategic plan, the operational plan, and the financial plan. The implementation plan will be detailed enough to hold the relevant responsible people accountable, and give the organization enough guidance to carry out the plans. Social performance issues should be reflected in the organization's strategy, operations, and finances. The implementation plan should also ideally include a social performance monitoring plan.

Step 9 - Realignment: Revisit the implementation plan periodically. Does it still hold true? Does the plan fully support the goals and mission of the organization? How is the organization living up to the plan, the goals, and mission of the organization?

• Social Performance Management in Microfinance Guidelines.
  
  
• MicroStart: A Guide for Planning, Starting and Managing a Microfinance Programme. United Nations Capital Development Fund. (http://www.uncdf.org/english/microfinance/microstart/guide/one-b.php)
  
  
• Starting and Improving a Savings and Credit Programme. The Global Development Research Center. (http://www.gdrc.org/icm/ppp/start-improve.html)
  
  
• Better Communications and Planning Toolkits. CIVICUS. (http://www.civicus.org/new/civicus_toolkit_project.asp?c=036FB9)
  
  
• Results Based Management. Canadian International Development Agency (http://www.acdi-cida.gc.ca/CIDAWEB/acdicida.nsf/En/NIC-31595014-KEF)
  
  
• The Theory of Change explores all the elements needed to bring about a long-term goal, maps out the pathway of change, and provides a plan for achieving the goal. The Theory of Change can be applied to a variety of organizations.
  
  
• AcumenSMS is a tool developed by Acumen Dynamics, a strategy consulting firm working with both for-profit and non-profit organizations. The AcumenSMS is a strategic framework for organizations looking to effectively translate their mission across five perspectives: 1) financial 2) internal business process 3) customers 4) learning and growth 5) vision, governance and continuity.