Strategy and Change in the Public Sector Kevin Hinde.

Strategy and Change in the Public Sector

Kevin Hinde

The Vocabulary of Strategy

Introduction

What do you understand by the term ‘Strategy’?

Board Blast your views.

Organisational Strategy

“A strategy is defined as a pattern, of purposes, policies, programmes, actions, decisions, or resource allocations that define what an organisation is, what it does, and why it does it. Strategies can vary by level function, and by time frame.”

– (Bryson, 1995, p.32)

Public sector patterns have been identified as ‘developmental’, ‘political’ or ‘protective’.

Strategy is thus about ‘Fit’: matching resources and capabilities with the environmental context.

The Vocabulary of Strategy

Strategy, Mission and Vision (see next slides) Goal

– General statement of aim or purpose Objectives/Outcomes

– Quantification (if possible) or more precise statement of goal

Issues– Fundamental policy questions or critical challenges that

affect an organisation’s mandate, mission and values; product or service level and mix; clients, users or payers; or costs, financing, organisation, or management. (Bryson, 1995)

Activity: Vocabulary of Strategy and this course

Write down what your goals are in respect of this course.

What outcomes do you expect? What strategies will you employ to achieve

your desired outcomes?

Mission and Vision

Mission

This is usually a statement establishing what the organisation does

It often contains language that sets outs – values – behaviour and – Strategic intent

Missions can change over time but only very slowly. Some say that they are timeless.

Vision

Vision Statements reflect the desired future state of the organisation.

They are sometimes seen to be aspirational even inspirational….”Animating the dream” (Hamel and Prahalad). However, they should embody realism.

NASA’s Mission and Vision Statement

NASA’s Mission is to– Understand and protect our home planet– Explore the universe and search for life– To inspire the next generation of explorers

NASA’s Vision is to– Improve life here.– Extend life to there.– Find life beyond.

Northumbria University’s Mission

The University's mission is to meet the diverse needs of an international learning community and to contribute to society and its economic development through research, excellent teaching and high quality student support.

Northumbria's Vision is to become one of the World's leading teaching and learning Universities, renowned for its innovation and research-based practice and exercising its regional, national and international role through an extensive network of locations and partnerships.

Wigan Council’s Mission Statement

"Within the resources available to it, Wigan Council commits itself to secure quality services, delivered fairly, courteously and responsively by well-informed employees who take pride in what they do.

"Our services are delivered by our employees who are our most valuable and important resource. In making this commitment we recognise that we must continuously invest in them and ensure that they are appropriately trained at a time of rapid change."

North Devon District Council

"To reduce inequalities and remove discrimination and other causes of social exclusion in disadvantaged groups and communities in North Devon in order to ensure that it is a place where everyone has the opportunity to live happily, healthily and prosperously in tolerant, caring communities."

Northumberland County Council’s Vision

“The County Council will ensure that by 2010 Northumberland enjoys a prosperous economy supported by high quality services tailored to meet the particular needs of all the diverse communities of the County. Our communities will be vibrant and sustainable and everyone living here will have the opportunity to achieve their full potential.”

Activity: What is your Organisational Mission?

Draw up a Mission Statement for your organisation. It could identify the

– Main activities;– Geographical boundaries;– The stakeholders and partners;– The desired consequences of the activities;– Values and behaviour;– and strategies

The Ashridge Management Centre says that an organisation has a mission when its ‘strategy matches its culture’.

Strategic Goals and Issues

Strategic Goals Example 1 : Investor’s in People

Goal 1: We will strengthen credibility of Investors in People through research, sharing knowledge and by producing evidence of the relationship between Investors in People and achieving business success

Goal 2: We will develop the range of products and services available to organisations under the Investors in People brand to ensure that the wide and differing needs of employers are met and best practice is recognised and encouraged.

Goal 3: We will ensure that the reputation and quality of Investors in People and any associated products are maintained and enhanced through effective quality assurance

Goal 4: We will ensure through effective marketing, that Investors in People is positioned as an organisation/business improvement tool. Accessed through a broad range of intermediary and business support organisations to provide benefits to both employers and employees.

Goal 5: We will help partner organisations achieve their objectives and targets to stimulate workforce development

Goal 6: We will be an exemplar employer, and an exemplar Non-departmental Public Body. We will make the best use of the people and financial resources available to us, and we will work with our partners to achieve our vision and strategy.

Source: http://www.iipuk.co.uk/IIP/Internet/AboutUs/VisionAndStrategy/Part2-Overview/default.htm

Strategic Goals Example 2: NSP Cultural Strategy Aims

1. Northumberland will accelerate its renaissance by ensuring it is an attractive and celebrated place in which to live, work, visit and invest by improving its infrastructure and marketing its strengths to the region and beyond. Key Agency: Northumberland County Council

2. Northumberland will become more accessible and inclusive by developing needs-led programmes that allow individuals and communities to fully experience, participate in and benefit from cultural activity. Key Agency: Local Authorities

3. Northumberland will create the conditions in which new or existing organisations and partnerships can empower communities to improve their confidence and well being. Key Agency: Northumberland Strategic Partnership

4. Northumberland will provide an environment in which cultural entrepreneurs can run sustainable businesses. Key Agency: Business Link for Northumberland

5. Northumberland will build an adaptable and highly skilled workforce by raising participation and attainment through high quality cultural education and training. Key Agency: Learning + Skills Council and Local Education Authority

6. Northumberland will use information and communication technologies to help culture to flourish. Key Agency: Northumberland Strategic Partnership

Source: http://www.nsp.org.uk/media/cultural_strategy_lo.pdf

Activity: What are your strategic goals/aims?

List your top 6 to 8 strategic goals for the department/ organisation.

– Don’t forget goals associated with service user satisfaction Performance on innovation Budgetary and income performance

Rank your goals and consider how you perform on your goals relative to similar organisations

Activity: Strategic Issues

Consider a recent strategy and the associated planning process.

List and prioritise the strategic issues that it was intended to deal with?

Did the strategy deal with the intended strategic issues? (score each 0 = failure; 1=neutral; 2 = success)

What factors determined the success or otherwise of the strategy?

What lessons have been learnt from this strategy?

Summary

Reassess the process

Develop an effective implementation process

Establish an effective organisational vision

Review and adopt the strategic plan or plans

Formulate strategies to manage these issues

Identify the strategic issues facing the organisation

Assess the external and internal environments to identify SWOTs (Strengths, Weaknesses, Opportunities and Threats)

Clarify Organisational Mission and Values.

Identify Organisational Mandates

Initiate and agree upon the strategic planning process.

1

10

Typical Public Sector Planning Process

What does it involve?

Formulation Choices Implementation

(Johnson and Scholes (1999))

Analysis Appraisal Action

(Smith (1994))

Can we ever be in control?

Strategic Planning

“A disciplined effort to produce fundamental decisions and actions that shape and guide what an organisation is, what it does, and why it does it”

Bryson (1995, p 4-5) It is concerned with content given by

strategy.

The Benefits of Formal Planning Systems

A structured means of analysis and thinking about strategic problems.

Encouraging questioning and challenging of the taken for granted.

The involvement of people in strategy development.

Contributing to ownership and co-ordination of strategy.

A means of communication of intended strategy. A means of control against agreed objectives.

Dangers and Problems of Formal Planning Systems

The neglect of cultural and political dimensions of organisations.

Delegating responsibility to specialists Failure to achieve ownership of plans Individuals understanding parts rather than the

whole of plans Detail rather than vision Information overload Strategy as `the plan’ The search for the mythical `right strategy’.

 10 years

Community StrategyA shared vision for the long term future of Northumberland agreed by

partners across the county

 Northumberland

 10 years

County Council Vision and ValuesA statement of the County Council’s longer term aspirations and the

values it feels are important to the way it conducts its business

 County Council

 4 years

Strategic StatementA statement of the County Council’s policy priorities covering the life

of the currently elected Council

 Political Administration

 3 years

Annual Executive StatementYearly statement by the Executive setting out key development

issues for the County Council over the next 3 years, together with a view on relative priorities in the light of anticipated resources and

Council Tax levels

 Executive

 1+1 year

Northumberland Performance PlanForward and backward looking plan setting out the County Council’s key priorities, reflecting on performance in the past year and setting

out its plans for improvement in the next year

 CountyCouncil

 1 year

Directorate Service PlansService delivery plans setting out how Directorates will improve their

services in line with the key priorities of the County Council, supported by detailed operating plans at Divisional/Team level.

 Directorates

 1 year

Personal Action PlansIndividual work programmes setting out the role every individual plays

in achieving the key priorities of the County Council.

 Individuals

NCC’s Strategy Documentation

Activity. Planning

What is your Personal Action Plan for the next 3 months?

Is it realistic? Are you over-stretching yourself or underachieving?

What events/ individuals will determine the success of your plan?

Do others know about or understand your PAP?

Factors Influencing Strategy Development

Intendedstrategy

Unrealisedstrategy

Realisedstrategy

Imposedstrategy

Strategyas outcome

(of cultural andpolitical processes)

Strategy development routes

Factors influencing Strategy development

Where does Strategy come from? THE SNOWFLAKE DIAGRAM

Profile Dominant dimensions

Characteristics

(a) Logical Incremental

Planning incrementalism

Standardised planning procedures Systematic data collection and analyses Constant environmental scanning On-going adjustment of strategy Tentative commitment to strategy Step-by-step, small-scale change

(b) Rational command

Planning Command

Senior figure determines and directs strategy Strong vision or mission Definite and precise objectives Analysis and evaluation of environments Clear plans

I

The Snowflake Diagram (1)

Profile Dominant dimensions

Characteristics

(c) Logical Incremental

Cultural Political Incremental

Bargaining, negotiation and compromise accommodate conflicting interests of groups Powerful groups with control over critical resources more likely to influence strategy Standardised ‘way of doing things’ Routines and procedures embedded in organisational history Deeply rooted beliefs and assumptions Strong resistance to change Gradual adjustments to strategy

(d) Externally dependant

Enforced choice Political

Strategy is imposed by external forces (e.g. legislation, parent organisation) Freedom of choice severely restricted Groups dealing with the environment have greater influence over strategy Political activity within organisation and between environment likely Externally driven strategy

The Snowflake Diagram (2)

Activity: What Factors influence Strategy in your organisation?

You are to work on the ‘snowflake diagram’ activity.

What factors most influence strategy in your organisation?

What factors do you believe should influence how strategy develops in your organisation?

Strategy Development: Public versus Private Sector Scores

Dimension Public Private Significant

Planning 3.92 3.94 NSD

Command 3.97 4.17 S 0.1%

Incremental 4.34 4.39 NSD

Political 4.14 3.82 S0.1%

Cultural 4.26 4.09 S0.1%

Enforced Choice 4.76 3.64 S0.1%

Source: Collier, Fishwick and Johnson (2001) in Johnson and

Scholes (eds.) Exploring Public Sector Strategy.

Strategy Development: Public Sector Scores

Plan Com Inc Pol Cul EC Market Less** More***Less** -- Less*** --NHS Less* -- -- More*** -- --Local -- Less** More*** -- More** More**Gov.Police etc More*** -- -- Less** Less* --Probation -- Less** Less* Less*** -- --

*=S@ 5%; **=S@1%; ** [email protected]% ; -- =NSDAdjusted for hierarchical variations using a weighted average.

Source: Collier, Fishwick and Johnson (2000) in Johnson and Scholes (eds.) Exploring Public Sector Strategy.

Stakeholder Mapping

Stakeholder Mapping- Some Guidelines

Positioning stakeholders relative to specific strategies

Stakeholders may need to be sub-divided Distinguish the role for the individual Identify “political” priorities by:

– plot how stakeholders would line up– plot how stakeholders would need to line up– identify mismatches– include key maintenance activities

Source: Adapted from A. Mendelow, Proceedings of 2nd International Conference on Information Systems, Cambridge, MA, 1991.

A B

C D

Minimaleffort

Keepinformed

Keepsatisfied

Keyplayers

LowLow

HighHigh

POWERPOWER

LEVEL OF INTERESTLEVEL OF INTEREST

LowLow HighHigh

Stakeholder mapping: the power/interest matrix

SOURCES OF POWER (a) Within organisations Hierarchy (formal power),

e.g. autocratic decision making

Influence (informal power), e.g. charismatic leadership

Control of strategic resources, e.g. strategic products

Possession of knowledge/skills, e.g. computer specialists

Control of the environment, e.g. negotiating skills

Involvement in strategy implementation, e.g. by exercising discretion

(b) For external stakeholders Control of strategic

resources, e.g. materials, labour, money

Involvement in strategy implementation, e.g. distribution outlets, agents

Possession of knowledge (skills), e.g. subcontractors

Through internal links, e.g. informal influence

Sources and indicators of power

INDICATORS OF POWER

(a) Within organisations

Status Claim on resources Representation Symbols

(b) For external stakeholders

Status Resource dependence Negotiating arrangements Symbols

Sources and indicators of power

Assessing Interest

More difficult than power. Assess the likely actions not words of various stakeholders.

How high is this strategy on their priorities – are they likely to actively support or oppose this strategy? Or will their interest be short-lived?

Typical StakeholderMaps (i)

Political Battleground

Dream Ticket

Potential Lost Cause

Key Features

Dangers Political Priorities

Political mechanisms

+++

- - -

+++

+++

- - -

- - -

Strong support and opposition

Champions and no powerful opposition

Little support and powerful opposition

Limbo

Complacency

Progress impossible. Other strategies harmed.

Reduce risk by

•supporting followers

•Reducing resistance

•Creating stalemate

Keep stakeholders informed and satisfied.

Change orientation of some stakeholders or modify/abandon strategy

Building resource base; overcoming resistance; ‘divide and rule’

Alliance building and maintenance

Overcoming resistance

Source: Johnson (2001)

Typical StakeholderMaps (ii)

Lone Champion

Dogged Opponent

Political Trap

Key Features

Dangers Political Priorities

Political mechanisms

+

-

???

???

One powerful champion

One powerful opponent

Little support and powerful opposition

Champion is lost

Opponent prevails

Progress impossible. Other strategies harmed.

Keep on board; strengthen support

Change orientation; reduce interest; reduce power; find champion

Change orientation of some stakeholders or modify/abandon strategy

Maintain participation and /or communication; foster interest and momentum for other stakeholders

Overcome resistance; side payments; new priorities; associate strategies with elite; participation/ communication

Keep satisfied; raise their interest through participation/ communication

Source: Johnson (2001)

Typical StakeholderMaps (iii)

Worthy Cause

Political Timebomb

Autocrat’s Dream

Key Features

Dangers Political Priorities

Political mechanisms

+++

+++

- - -

- - -

???

???

Supportive stakeholders –all with little power; no key players

Opponents all with little power

No powerful or interested stakeholders

No levers for adoption

Arrogance incites action /lobbying

Complacency

Find a champion from box B or C

Maintain in Box B

Proceed to implement strategy

Empower stakeholders:

•Help them organise

•Alliance building

•Communication (for lobbying)

Keep informed; achieve compliance

Direction/edict; keep monitoring stakeholder activities

Source: Johnson (2001)

Activity: Stakeholder mapping

Consider a strategy with which you are familiar.

List all the relevant stakeholders. Assess their power and interest using + - or 0. Place them on the stakeholder grid.

Can you identify a map ‘type’? What should be your political priorities for these groups? How would you manage the stakeholders?

Summary so far.

Organisational Highs, Lows and Themes Exercise

Brainstorm your Organisations Highs and Lows over the past x years.

Examples might include: budget issues, schools closure, loss of significant personnel, innovations, etc.

How high were the highs? How low were the lows? Put them on the following chart….

Organisational Highs, Lows and Themes Exercise

1999 Now

5 Years Hence?

2000 2001 2002 2003

Highs

LowsCan you identify SWOT Themes?

Organisational Highs, Lows and Themes Exercise

What opportunities have we had? Which have we taken advantage of, which were we unable to take advantage of, and which have we ignored?

What threats have we had to deal with? Which have we handled successfully, which unsuccessfully, and which have we ignored?

What strengths have we relied upon to deal with the threats and to take advantage of the opportunities? Which have we ignored?

What weaknesses have had in dealing with threats and opportunities? What have been done about them?

Can you see patterns or themes of SWOT over time? How would you like to carry this forward?

Business EthicsCorporate Governance

Organisational purposes

Stakeholders Cultural context

Who should the organisation serve?How should purposes bedetermined?

Which purposes should be prioritised?

Why?

MissionObjectives

Which purposes are prioritised?Why?

Whom does the organisation serve?