Business Planning in
Associations
a theoretical approach and a practical case:
The BP of ESTRO
Alessandro Cortese, ESTRO CEO
ESAE Vice President
Social entrepreunership
Profit Potential
+
x
Old School
Corporation
−
Old School
Not for Profit
−
Profit with a Purpose
Impact
+ Social
Potential
Challenges in Social Profit
Paths to growth
Paths to growth are not idiosyncratic but
strategic
Any organization that wants to be relevant,
to deliver value at scale, and to sustain
itself must clearly articulate and evolve its
business model
Translate mission, vision, strategy and
business model into business plan
→Multi-year Plan (Long Term)
→Year Plan (Short Term)
Challenges in Social Profit
Dual Focus
Cultivate a distinct set of funders
Identify beneficiaries and create
value through programs
However, what is the difference
between shareholders and
stakeholders?
Provide clarity about
→how you will fund your mission
→how to deliver your programmatic
impact
Often main focus on beneficiaries ↔
fundraising on an ad hoc basis
Challenges in Social Profit
Key drivers to growth
Identify beneficiaries and make
difference for them with programs
→Beneficiaries usually fund only part of your
mission
 Cultivate a distinct set of funders
→ Building and scaling sustainable financial
support
Key drivers to growth in non profit
→Choose right business model that is a natural match for your mission
→Choose transparant governance model to achieve your goals
Some elements to define a Business Plan
• The business plan is not abstract, uninformative, theoretical or
mysterious
• It’s a document that convincingly demonstrates that your
business can sell enough of its products or services to make a
satisfactory social profit and be attractive to potential backers
• it is a selling document
• The plan writers should have an in depth understanding of financial
pro forma statements, cost and cash flow analysis and revenue
modeling.
Definition
• A business plan is a formal statement of a set of business goals, the
reasons why they are believed attainable, and the plan for reaching those
goals.
• In non-profit organizations, creative tensions may develop in the effort to
balance mission with "margin”.
• a 3 to 5 year business plan is essential to any organization…
FUNDAMENTALS
Multi-year Plan:
FUNDAMENTALS
•
Financial forecast over 3 to 5 years
•
Key Performance Indicators forecast over the same period
•
Detailed Program Plan
Annual Plan:
•
Budget
•
Description of key processes and procedures
•
Include a cash flow analysis next to the P&L (costs & revenues)
Processes and Procedures:
•
Standardization of operational activities
•
Definition of accountabilities and controls
From Strategy to Business Planning
Mission
Vision
Strat.
Strategic Plan
Business Plan
LT
Plan
ST
Plan
THE PRINCIPLE OF DELEGATION OF POWERS
AND REPORTING
Transfer of authority by one person or group to
another person or group:
• Authority
• Accountability
• Responsibility
12
Why is strategic planning important?
• to bring everyone on board – to engage and to mobilize
towards the vision
• to be proactive vs reactive to external forces of the environment
• to guide decision making at all levels
• to be accountable to the key stakeholders and to the public
• to improve organizational learning and capacity
• to communicate to the public what is important
Business Model: the step to business planning
Mission
Vision
Strat.
LT
Plan
ST
Plan
Stakeholders Segments
For who are we creating value?
Who are our most important stakeholders?
Value Proposition
What value do we offer to the Stakeholders? Which one of our
stakeholders problem / need are we helping to solve? What bundle of
products and services are we offering to each stakeholders segment?
Channels
Through which channel do our shareholders want to be
reached? How do we reach them? Which channels
work best and which ones are the most cost-efficient?
Shareholders relationship
What type of relationship does each of our stakeholders segments
expect us to establish and maintain with them? Which ones have we
established? How are they integrated with our model?
Revenue Streams
For what value are our shareholders and customers really willing to
pay? For what do they currently pay? How much does each revenue
stream contribute to the overall revenues?
Key Resources
What key resources do our value proposition require? Our distribution
channels? Stakeholders relationships? Revenue streams?
Key Activities
What key activities do our value proposition require? Revenue
streams? Stakeholders?
Key Partners
Who are the key partners? Who are the key suppliers? What key
resources do we retain from partners? What key activities are performed
by partners?
Cost Structure
What are the most important costs inherent in our business model? Which
key resources are most expensive? Which key activities are most expensive?
The 9 building blocks of a business model
Architecture of the value creation, delivery, and capture mechanisms
Stakeholder Relations
Key Activities
Value Proposition
Stakeholder Segments
Key Resources
Channels
Key Partners
Cost Structure
Revenue Streams
Fundamental Questions
• Where are we now? (Assessment)
• Where do we need to be? (Gap / Future End
State)
• How will we close the gap (Strategic Plan)
• How will we monitor our progress (Balanced
Scorecard / KPIs)
• How will we integrate all components of the
organization in one model.
)
Business
Model
Mission
Vision
Strat.
LT
Plan
ST
Plan
Starting Prespective
ESTRO in 2009
Created in 1980
No little changes in Statutes
Environmental Changes in Oncology
From ‘Grocery store’ to ‘Supermarket’ …. To chain of supermarkets
From ‘ad hoc’ planning to growth modeling
Key Paths to Growth
Recommendations received
Clear vision & mission of the social profit organisation
Clear strategy to involve stakeholders in the realisation of the organisation’s goals
Clear roles & positioning of the different functions
Clear delimitation of tasks between the different functions
Balanced and educated Board of Directors
Close attention for the decision-making process
Complementary tasks to the members of the Board
Integrity of management
From Strategy to Business Planning
Mission
Vision
Strat.
Strategic Plan
Business Plan
LT
Plan
ST
Plan
MISSION: Organizational Audit and New Articles of
Incorporation and Internal Rules
Mission/
Objectives
Organization/
Governance
Laws/
Bye Laws
1980
changed
2010
AS IS
2010
TO BE
2015 / 2030
WP
1
changed
WP
2

WP1: Review current organization
and governance model

WP2: Review of laws and bye laws
(legal perspective)

WP3: Review future objectives

WP4: Consolidate observations and
present recommendations

WP5: Draft action plans and provide
plan for implementation
same
WP
4/5
WP
3
VISION: New Statement
VISION: New Statement
Every cancer patient in Europe will have access to state
of the art radiation therapy, as part of a multidisciplinary
approach where treatment is individualised for the
ESTRO Vision for 2020
specific patient’s cancer, taking account of the patient’s
personal circumstances.
In order to achieve this vision ESTRO will support the
Vision
following initiatives and model of clinical care as part of
the future strategic development of the Society:
Vision 1.1: Optimal individualised patient care will be achieved
Every
cancernew
patient
will
havefrom
access
state are
of the
art to
radiation
therapy,systems
as
1.
All to
patients
entitled
access healthcare
by integrating,
clinical in
andEurope
preclinical
evidence
biology,
enableis
the
highest quality radiotherapy
delivered
molecular/functional
and anatomicapproach
imaging, andwhere
the use treatment
ofthat
novel
part
of a multidisciplinary
individualised
for the specific
within a safe healthcare environment, and on completion
systemic agents together with the delivery of high-precision
patient’s
cancer,
taking
account
of
the
patient’s
personal
circumstances.
of treatment
have
access to appropriate long term followradiation therapy in a safety-aware environment.
up, advice and support from members of the clinical
radiation oncology team.
Vision 1.2: The majority of patients will live cancer free with
2. All patients are entitled to receive full information on
minimal toxicity following the use of radical radiation therapy
the used
primary benefit, and where unavoidable, the potential
when used as a single curative modality of treatment or when
side effects associated with their proposed radiation
in combination with surgery, systemic chemotherapy and/or
therapy treatment programme.
systemic targeted therapeutics….
Business Model: the step to business planning
Mission
Vision
Strat.
LT
Plan
ST
Plan
Vision Linked to the
Business Model
Vision Linked to the
Business Model
• vision linked to model
Influence Practices
Protection Practices
Economical Information
Vision Linked to the
Business Model
• vision linked to model
Influence Practices
Protection Practices
Economical Information
Vision Linked to the
Business Model
• vision linked to model
Economical
Information
Vision Linked to the
Business Model
• vision linked to model
Influence Practices
Protection Practices
Economical Information
Vision Linked to the
Business Model
Protection Practices:
•Patents
•Contracts
•IT platforms
•Membership
•…
•Legislation
Vision Linked to the
Business Model
• vision linked to model
Influence Practices
Protection Practices
Economical Information
Vision Linked to the
Business Model
Influence Practices:
•Lobbying
•Marketing
•Professional Practice standards
•Organizational models
•Patients awareness
Vision Linked to the
Business Model
• vision linked to model
Influence Practices
Protection Practices
Economical Information
STRATEGY: 13 Actions
Focus on ‘Vision initiatives’ with budgetary impact on reference period:
Action 2:
•To implement a renewed ICT platform
 To provide a solution for internal and external communication (in terms of responsibility,
management and affordability) according to state of the art modern technology
Action 3:
•To create a new structure (committee) that will enable an oncology intelligence /horizon scanning &
monitoring function for the society
Action 4:
•To create new categories of membership offering an expanded range of choices
Action 6:
•To invest in a stable, affordable and reliable engagement of young inside the ESTRO organisation
STRATEGY: 3 years KPIs, translating vision in measurable objectives
Membership
•
The objective of ESTRO is to increase significantly its representation factor by
growing its membership reaching a higher percentage of the total Radiation
Oncologists, physicists, radiobiologists and RTT in Europe, focusing on providing
relevant benefits and services, and linking those to the ESTRO activities.
•
ESTRO can count on a basis of around 4.400 members in good standing and on a
base of over 8000 persons which every year attend an event or a teaching course
or are members without participating to any activity.
•
Three Membership programmes exist today: individual, joint and corporate. A
new Programme will be launched to meet the growth opportunity with a revised
set of categories.
•
•
Based on the previous considerations, ESTRO aims at reaching the ambitious goal
of 8000 members in a three to five years timeframe.
STRATEGY: 3 years KPIs, translating vision in measurable objectives
Education: Teaching Courses
•
The educational offering of ESTRO is one of the most important “stars” of the
Society, having grown steadily in the last years.
•
Over the years the number of Teaching Courses offered by ESTRO hasn’t stopped
increasing. For 2010, 31 courses and 4 pre-meeting courses are scheduled. Out of
those, 3 are new courses.
•
The faculty of ESRO is today made of over 190 teachers. Plateau?
•
The offering of teaching courses is planned to grow to 33 in 2011 and to 35 in
2012.
Multi year and annual Plans
Mission
Vision
Strat.
LT
Plan
ST
Plan
FINANCIAL PLANNING : THE CONCEPT
Starting point of the model:
•
Input = budget based on actual figures and averages on long term
•
Explanations for the deviations between the budget and the actual
figures
To facilitate decision making, the model should:
•
Allow working with changing assumptions
•
Allow measuring the expected revenues and costs of a single scenario
•
Include a cash flow analysis next to the P&L (costs & revenues)
FINANCIAL PLANNING : OBJECTIVES
In order to be a working instrument, the model should be made dynamic, allowing to:
1.
2.
3.
4.
5.
6.
7.
Verify the financial impact of strategic choices
Verify the actual economic investment and return of a single action
Allow assumptions and scenario changing
Allow variable input
Allow comparison with actuals
Payroll cost is normally split over different levels
Allocation of indirect costs is normally on a more activity based
principle
8. Include measurements for KPI’s, both qualitatively and quantitatively
9. Include both P&L and cash flow analysis
FINANCIAL PLANNING : PRINCIPLES
•
The budget of the plan has been based on historic data (accounting data for previous
years or meetings)
•
Assumptions are based on the strategic choices made by the board or are based on
assessing specific information by management, such as:
•
•
•
Clustering activities, and their respective revenues and costs
•
Indirect costs (overhead)
•
Growth of the organization (FTE)
•
Specific information (eg: estimation of forum costs and revenues, negotiations with
Elsevier…)
Indirect costs:
•
Based on historical data
•
Calculated as an amount per FTE
•
Together with salary costs, fixed at 110 Keur / FTE
Evolution in FTE and turnover is possible
FINANCIAL PLANNING : OUTCOME
New dynamic budgeting and controlling tool:
•
Starts from historic and audited data
•
Consolidates data against a structure to accomodate new strategic plan
•
Defines assumptions for each component of the budget
•
Defines a growth model through dynamic scenarios
51
Q&A