Strategic Planning in Departments

The SRA/KRA process cannot be the sole source of strategic capacity in government. The result areas have to be derived from exploration of how the course of policy might be changed to accomplish long-term objectives. Strategic planning has become in recent years the instrument with which some departments chart their future course and signal the changes they wish to make.

Strategic planning offers some opportunity to bring departmental actions into line with governmental aims and purposes. But there also is risk that in defining its future, a department may seek to move in directions that run counter to the government's interests. A balanced approach would encourage strategic planning by departments under arrangements that provide for guidance from relevant Ministers, review and input by one or more of the central agencies, and notice or consideration by Cabinet. In other words, strategic plans should be seen as expressions of the government's interests, not of the affected department's alone.

Departments are required to prepare strategic business plans when they seek a capital contribution; they are not required to do so at other times. Nevertheless, strategic planning has gained momentum in recent years, spurred by the government's own long- and medium-term plans and the successful formulation and use of strategic and key result areas. Some Ministers have instructed their departments to prepare strategic plans; in other departments, the chief executive has taken the initiative. Some plans are more programmatic than strategic; they set out desired initiatives but do not assess the department's capacity to deliver on its ambitions or the changes that may be needed in policy or operations. Nor do they generally discuss the hard choices and trade-offs that may be necessary to achieve planned objectives. They stake out claims on future resources, but the strength of these claims often is diminished by failure to connect the plan to the budget.

There are some notable exceptions, however: departments where the strategic plan is not just a document but a force for change, where planning is a transforming process. For example, New Zealand Customs' Strategic Plan, published in 1994, was linked to action plans that specified the strategies and operational targets to meet departmental goals. The strategies and targets were stated in a form that facilitated monitoring progress in achieving them. The Department of Social Welfare also has invested heavily in strategic planning. Day-long workshops involving the chief executive and senior managers were held in September 1993 and February 1995. In addition to discussing the structure of the department (in particular, whether certain functions should be transferred to Crown entities), the second workshop explored the policy and organisational implications of moving from benefit dependency to self-reliance and positive contributions to society. The workshop (and ensuing strategic direction documents) acknowledged that this overriding goal would not be achieved without major changes in policy and operations. Other departments that have given serious attention to strategic planning include the Ministry of Education, Inland Revenue, and (what was then) the Ministry of Agriculture and Fisheries. This list is not complete; it is meant to indicate the extent to which strategic planning has taken hold in New Zealand departments.

Despite the growing popularity of strategic plans, I would be wary of requiring all departments to issue plans on a fixed schedule. Genuine strategic planning is costly. It demands a great deal of attention at top levels, considerable expense in gathering and interpreting data, and time-consuming work in reconciling different perspectives and forging a coherent consensus that is more than the compilation of various wish lists. In view of the already burdensome demands on departments, it would be imprudent to add yet another requirement. Moreover, routine is the enemy of strategic thinking. Effective planning is opportunistic, undertaken willingly when conditions are favourable, not when the calendar dictates that another round of plans is due. The SRA/KRA components of the strategic process have been routinised because they feed into annual resource and performance decisions; there is no need to routinise the overall planning process.

Although strategic plans should continue to be optional, it may be helpful for the central agencies to provide guidance on their preparation and use. As the lead agency in strategic management, DPMC should take an interest whether departmental plans are congruent with the government's interests; Treasury should examine the economic and financial implications of plans; and SSC should be concerned with the capacity of the department to pursue and implement its objectives. Strategic plans should not be longer-term versions of annual corporate or business plans but should concentrate on objectives, the means of achieving them, and the changes to be made in the department. Their main focus should be the department itself - how it is to be changed to achieve the vision and purposes set for it. Strategic planning that merely promotes the department and campaigns for a bigger budget is not of much value. The substantial investment of attention and other resources is justified only when strategic planning generates bold thinking and willingness to change.

Ideally, strategic statements should bear the imprint of the Responsible Minister; it should not be the chief executive's alone. The Minister should be sufficiently engaged in preparing the plan to ensure that it reflects her/his strategic perspective. But the role of the Minister cannot be standardised; some will actively participate in the planning process, while others may get involved only to ensure that the plan gives priority to their objectives.

Some regard the role of the Minister for the Environment in preparing Environment - 2010 Strategy as a model for other Ministers. In this case, the Minister drove the planning process and had significant involvement in defining goals, actions, and priorities that span the responsibilities of several Ministers and departments. The document is a cogent, coherent, and powerful statement of the directions that environmental policy might take over the next fifteen years. But because it lacked a short to medium- term action component, the plan was not followed up with as much action as some might have hoped.

This and other strategic planning exercises indicate that what happens after a plan has been prepared may be as important as the plan itself. It is not uncommon for plans to be ignored after they have been published or to be taken off the shelf only during budget season to justify a bid for additional funds. I believe the stature of plans, and the likelihood that they will guide policies and budgets, would be enhanced by having them reviewed at the centre of government. There is substantial difference between documents floated by individual Ministers or chief executives and those vetted through the machinery of government. In some cases, it may be appropriate for DPMC and the other central agencies to review draft plans, or for these documents to be considered by Cabinet. I would not go so far as to suggest express Cabinet endorsement (or rejection) of proposed plans, but it would be a good idea for Cabinet to take note of what Ministers and departments are doing to prepare for the future.

In fact, Cabinet already is involved through its own planning activities and its issuance of strategic result areas. It would be foolhardy for strategic plans and SRAs to operate in entirely separate tracks; what happens in one should inform the other. Some departments have taken steps to link their plans to relevant SRAs; all should do so in the future.

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