The Government Manager's Guide to Strategic Planning

Kathleen E. Monahan

• Publisher: Berrett-Koehler Publishers
• Year: 2013
• ISBN:
  9781567264333
• Edition: 1
• Topic: Business
• Subtopic: Investments & Securities
• Index: Business

Strategic planning deals with long-term goals and objectives. Performance management focusing on the performance of an organization, department, process, or employee—is what makes strategic planning work. Neither can be done without the other, but both must be adapted to the organization. This volume is designed as a reference for those involved in the day to-day challenge of performance management and measurement. Government managers will find ideas and practices that can be applied effectively in the federal environment.

Chapter 1

AN INTRODUCTION TO STRATEGIC PLANNING

Planning is planning, right? Not really. In fact, there are all kinds of plans and all kinds of planning and planning approaches. All of these approaches and types may be in play at any one time within an organization. Any organization will have plans at different levels, from the five-year (or more) plan to the weekly plan for a project or program.

While working for the Department of Homeland Security, I once sent out a memorandum to department components requesting copies of their “plans.” I received a call back from one component informing me that if I wanted all their “plans,” I would need an extra building for storage. They had their five-year strategic plan, their annual plans (strategic and budget), operational plans, and tactical plans for specific long-term goals, with interim goals.

This handbook provides guidance for strategic planning in the public sector and advocates an approach that balances performance and financial measures. That doesn’t mean that some of the practices discussed can’t be adapted to other types of planning. They can be. As I advise later in this book, adapt, don’t adopt. No concept or practice fits every organization perfectly, so always think about how to adapt a practice to your organization’s specific culture and structure or to your specific planning needs.

WHAT IS STRATEGIC PLANNING?

Strategic planning is a process that defines an organization’s long-term direction. The process includes a vision statement describing where and what the organization wants to be. The mission statement defines what the organization is mandated to do. The plan that results from this process and that moves the organization from where it is to where its vision statement wants it to be is a strategic plan. It can be broken down into shorter-term, more specific goals, usually with a one-year time frame. The strategic plan is revisited and re-evaluated on a rotational basis, annually or every few years, depending on the organization. Most strategic plans cover the next three to five years.

The strategic plan states where an organization is going, how it’s going to get there, and how it will know if it got there. The way a strategic plan is developed depends on the nature of the leadership, the culture of the organization, and the structure and size of the organization. For example, a massive federal department will have multiple planning efforts by smaller organizations within it, resulting in a series of smaller plans that in turn result in a single departmental strategic plan. A smaller organization with a single focus, such as a local fire or police department, will have a less complicated process. (The strategic planning process is discussed in more detail in Chapter 3.)

Manager Alert

The way a strategic plan is developed depends on the nature of the leadership, the culture of the organization, and the structure and size of the organization.

An organization must first answer two questions before any strategic planning process can begin:

1. What, exactly, do we do—and NOT do? In the public sector, this can be a very complicated question. Over a period of time, “mission creep” sometimes occurs—when an organization begins to take on responsibilities that are not part of its official mandate.
In seeking the answer, the planning process should include asking management to write down what they do, then having them define under what mandate (e.g., a law, an executive order, or perhaps a congressional unfunded mandate) they do it. Never, ever settle for the answer “we do it because we always have.” This process should result in a mission statement.

2. Who are our partners, stakeholders, and customers? Begin by identifying partner, stakeholder, and customer roles, as well as each group’s expectations. Roles should be defined as specifically as possible during the planning process. There will always be some crossover among these three groups; it is possible for someone to be both a stakeholder and a customer.
This question can be answered through consultation efforts (discussed in Chapters 2 and 3). Consultation will also help define outcomes and goals. This consultation activity, and all resulting discussions, are the consultation phase.

In addition to answering these fundamental questions, the planning process should include the following activities:

• Defining an end state for the organization—whether five, ten, or more years out—that results in a vision statement

• Establishing long-term and short-term goals

• Allocating resources to achieve both the long-term and the short-term goals

• Understanding the current status

• Communicating goals and plan back to the customer, stakeholder, and partner.

A second consultation phase helps focus the proposed goals. This should be continual throughout the process until the goals and plan are finalized.

Strategic Planning in the Public Sector

The Government Performance and Results Act (GPRA) brought private-sector accounting concepts to government agencies. When it was first implemented in the 1990s, many felt that government management was somehow different—that the same rules that applied to the private sector could not apply to the public sector, or at least not in the same way, and compliance with GPRA was “beneath” them. After all, government agencies don’t have a bottom line or profit margin. But history has shown that this assumption is not true. The bottom line for most government organizations is their mission—what they want to achieve.

Manager Alert

The bottom line for most government organizations is their mission—what they want to achieve.

Like the private sector, they cannot achieve this mission by managing in a vacuum. The roles of customer, partner, stakeholder, and employee in an organization’s day-to-day operations are vital to its success—and must be incorporated into planning for that success.

The history of strategic planning in the public sector began on separate paths that eventually merged. The private sector experimented for several years with different types of performance management and measurement. These include, among others, Management by Objective, Zero Based Budgeting, and Total Quality Management (TQM). As these various practices began to demonstrate significant improvement for private-sector entities, state and local governments began to experiment with them. Frequently led by elected officials with private-sector experience, these governments soon began to develop better communication and management systems.

Federal-sector organizations also began experimenting, especially with Zero Based Budgeting and Total Quality Management. The United States Coast Guard acknowledges that its experience with TQM paved the way for its highly successful continuous improvement and performance efforts today.

Legislation in the late 1980s and early 1990s began to move the federal sector toward more responsible performance management and measurement. Among the laws and regulations that formed the basis for public-sector strategic planning were the following:

• Federal Managers Financial Integrity Act of 1982, Public Law 97-255. Commonly referred to as “FMFIA,” the act encompasses accounting and financial management programs and operational and administrative areas and establishes specific requirements for management controls in federal agencies. Agency heads must establish controls that responsibly ensure that (1) obligations and costs comply with applicable law; (2) assets are safeguarded against waste, loss, unauthorized use, or misappropriation; and (3) revenues and expenditures are properly recorded and accounted for in accordance with the law. Additionally, agency heads must annually evaluate and report on the control and financial systems that protect the integrity of federal programs.

• Chief Financial Officers Act of 1990, Public Law 101-576. The CFO Act of 1990 was enacted to improve the financial management practices of the federal government and to ensure the production of reliable and timely financial information for use in managing and evaluating federal programs.

• Government Management Reform Act of 1994, Public Law 103-356. GMRA furthered the objectives of the CFO Act by requiring all federal agencies to prepare and publish annual financial reports, beginning with fiscal year 1996 activities. At the same time, GMRA authorized the Office of Management and Budget to implement a pilot program to streamline and consolidate certain statutory financial management and performance reports into a single, annual accountability report.

• Government Performance and Results Act of 1993, Public Law 103-62. GPRA is the primary legislative framework through which agencies are required to set strategic goals, measure performance, and report on the degree to which goals were met. It requires each federal agency to develop strategic plans and a subsequent annual performance plan to provide the direct link between the strategic goals outlined in the agency’s strategic plan and the day-to-day operations of managers and employees. GPRA requires that each agency submit an annual report on program performance for the previous fiscal year, reviewing and discussing its performance compared with the performance goals it established in its annual performance plan. The report also evaluates the agency’s performance plan for the fiscal year in which the performance report was submitted to show how an agency’s actual performance is influencing its plans.

• Executive Order 12862: Setting Customer Service Standards, September 11, 1993. This executive order puts “people first … ensuring that the Federal Government provides the highest quality service possible to the American people.” It requires continual reform of the executive branch’s management practices and operations to provide service to the public that matches or exceeds the best service available in the private sector. All executive departments and agencies are required to “establish and implement customer service standards to guide the operations” of each agency and to “provide significant services directly to the public … in a manner that seeks to meet the customer service standard established herein.” They are also required to report on Customer Service Surveys and Customer Service Plans.

• Presidential Memorandum for Heads of Executive Departments and Agencies: Improving Customer Service, March 23, 1995. With “Setting Customer Service Standards” as the first phase, this presidential memorandum directs that, to continue customer service reform, agencies shall treat the requirements of the earlier executive order as continuing requirements. The purpose is to establish and implement customer service standards that will guide the operations of the executive branch. “Services” include those provided directly to the public, delivered in partnership with state and local governments by small agencies, regulatory agencies, and enforcement agencies. Results achieved are measured against the customer service standards and reported annually. Customer views determine whether standards have been met on what matters most to the customer, and replacement standards will be published, if needed, to reflect these views. Development and tracking are to be integrated with other performance initiatives. Customer service standards should relate to legislative activities, including GPRA, the CFO Act, and GMRA. Employees are to be surveyed on ideas to improve customer service and will be recognized for meeting or exceeding customer service standards. An important observation is made within this memorandum: “Without satisfied employees, we cannot have satisfied customers.” It is also recommended that agencies initiate and support actions that cross agency lines to serve shared customer groups and take steps to develop cross-agency, one-stop service to customer groups.

• Information Technology Management Reform Act of 1996 (also known as the Clinger-Cohen Act or the CIO Act), Public Law 104-106. This act repeals Section 111 of the Federal Property and Administrative Services Act of 1949 (40 U.S.C. 759), often referred to as the Brooks Act, and gives the General Services Administration exclusive authority to acquire computer resources for all of the federal government. It assigns overall responsibility for the acquisition and management of information technology (IT) in the federal government to the Director of the Office of Management and Budget (OMB). It also gives the authority to acquire IT resources to the heads of each executive agency and makes them responsible for effectively managing their IT investments. The primary purposes of the bill are to streamline IT acquisitions and emphasize life cycle management of IT as a capital investment. The key IT management actions are to require agency heads to design and implement an IT management process, integrate it with the other organizational processes, establish...