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Focused lens on public sector

Olivia A. Smith, senior economist

Focused lens on public sector

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In previous articles, we looked at the importance of activity-based costing or programme management in the public sector.

What is important, however, if the organisation is to be focused on what it is doing and how effective its programme expenditure is, then the department (or even organisation if in the private sector) must have a strategic /business/operations plan in place. This plan must answer the following questions: (i) what needs are we expected to fill as a public sector department? (ii) what is the scope of services we are expected to provide? (iiii) is there potential for providing additional services?, (iv) how are we going to provide these services and deliver them well and efficiently? Now that I have you on this train of thought, I’m sure that you can come up with other relevant questions.

Strategic planning is the identification of a desired long-range outcome, and the development of a sequence of actions to achieve that outcome, based on analysis of the organisation’s resources and its environment.

The process requires effective communication and clear thinking. Gathering and analysing data from inside and outside of an organisation – and subsequently turning that data into information – requires clear and concise communication between all of the involved parties. Likewise, taking the information and developing an understanding of it, such that appropriate strategies can be developed and actions taken require extreme clarity of thought. The best way to synthesise data into information and information into strategy is by thinking and communicating visually during the planning process.

Most of us think and communicate visually whether we realise it or not. The human brain can and does convert auditory and kinesthetic information to visual information, but the efficiency of the process is dependent upon the complexity of, and speed at which information is being communicated. Educational researchers have conducted studies which have shown that 83 per cent of human learning occurs visually.

Scholars at Stanford University have found that depicting concepts and relationships visually often reveals that vital data have been overlooked, inadequately correlated, or never collected in the first place. Visual analytics and communication enable diverse and remote groups to reach consensus about issues far faster than textual and auditory communication alone.

For the plan to be successful, the vision and scope of plans for the organisation must be “sold” to employees. If the selling tactics are effective, then the employees will embrace the message, see themselves as part of the solution, and fully engage in the activities to make the plan a success.

Once the mission and goals to be pursued have been determined, it is time to look at what is happening in the world outside of the company and determine how, if at all, specific events might affect the company in the long run. These analyses of the external environment include broad, global (macro) issues like social changes, new technologies and the economic, political and regulatory environments. A frequently-used chart for analysing the macro external environment is the PESTLE chart. PESTLE is an acronym for the Political, Economic, Social, Technological, Legal and Environmental variables as they are examined to determine how they are affecting the organisation and vice versa.

A critical component in the strategic planning process is documenting what the company knows about itself. What defines the corporate culture of the company? What is its image in the eyes of its stakeholders and others? Who are the key employees and stakeholders in the organisation? How is the firm organised, and how much experience does it have relative to its competitors? Is the firm efficient with its resources? Does it have the capacity to grow? Is there an awareness of the company’s brand in its markets? What market share does the firm enjoy? Are there sufficient financial resources to meet its long-term goals? What exclusivity in customers and/or contracts does the firm enjoy relative to its competitors? Does the firm have intellectual property it can leverage? This volley of questions begins the process of a company looking internally at itself, and determining the answers will enable it to develop an understanding of its strengths and its weaknesses relative to those of the other participants in the markets it serves. Similar questions can be asked of public sector entities, but of course these ought not to be concerned with market-share, company brand or exclusivity of customers.

Strategic Planning is applied in the public sector through an already existing instrument called the programme budget document. This document is one which is currently submitted by all ministries and departments along with their Estimates of Revenue and Expenditure for a given financial year. It highlights the main programmes, services and general areas of activity proposed to be conducted. The document should show planned activities, targets, achievements, project spend and beneficiaries who benefited from the implemented programmes.

Planning, alignment of programmes to mission and accountability for performance and non-performance are new paradigms for public sector management. However, the most frequent criticism of reinvention, re-engineering, and quality improvement processes in government is the alarmingly low success rate they seem to have. Bureaucracy renders the public sector very slow to effect decisions, take action and influence change. This seems to work against the activities, time frames and level of accountability, which are inherent features of strategic planning efforts.

More often than not, the development of the plan is less complicated than is its implementation. In fact, surveys indicate that nine out of ten organisations fail to properly implement the strategies they formulated. Often, poor communication of the plan, failure of the majority to buy-in tends, and failure to develop implementation plan tend to be at the root cause of the problem.

Every unit within the organisation needs to understand the mission and goals that have been established, accept the necessity of a plan, agree to its direction, and be guided on how to implement actions specific to their areas of responsibility.

Improvements in the quantity and quality of outputs from government departments requires improved accountability through the programme budget document, greater degree of flexibility of departments to adjust to political cycles, and use of strategic planning logic to aid adjustment and flexibility in the planning and execution processes.