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Introducing Strategy

An Introduction to Strategy in Government

Strategies help organisations think through what they want to achieve and how they will achieve it. Putting strategies into practice and acting strategically ensures that they are focused on the things that really matter - not buffeted by events or short-term distractions - and are able to allocate their resources accordingly.

There is a huge literature on strategy in business and in warfare; strategy in government is similar, but tends to be more complex. It generally involves multiple goals rather than one single bottom line and it is implemented through a wide range of policy instruments, including laws, taxes and services. Far from being a neat linear process, it is shaped by unexpected events and political pressures. It also often needs to be more visible and accountable than strategy in other fields.

As a rule, the best strategies in governments and public services are:

• clear about objectives, relative priorities and trade-offs
• underpinned by a rich understanding of causes, trends, opportunities, threats and possible futures
• based on a realistic understanding of the effectiveness of different policy instruments and the capacities of institutions (strategies that work well on paper but not in practice are of little use)
• creative - designing and discovering new possibilities
• designed with effective mechanisms for adaptability in the light of experience
• developed with, and communicated effectively to, all those with a stake in the strategy or involved in its funding or implementation.

Strategies vary greatly. Some are very precisely defined and imposed top-down through organisational hierarchies. Others emerge in a more evolutionary and co-operative way from discussions, experiments and learning.

In either case, taking a strategic approach should ensure that decisions on strategic direction, policy design and delivery are seen as an end-to-end process of change management, with constant testing, feedback, learning and improvement. In a democracy, the end purpose will be to create public value (pdf) - services and outcomes that are valued by the public. Policies need to be developed within the framework of a longer-term strategy, taking into account the practicalities of implementation. All strategies need to be adaptable, with quick feedback and effective information flows to respond to new information, and take account of changing circumstances or unexpected events.

A Framework for Strategic Direction

A strategy needs to provide a clear sense of direction - based on analysis of different strategic choices and their implications. Defining the strategic direction or desired way forward will often involve a vision, together with aims and short, medium and long term objectives that provide a coherent and consistent framework for co-ordinating government activity:

• a vision is a statement of aspirations describing a desired future
• aims are the outcomes needed to bring about that desired future
• objectives are those things that need to be achieved in order to realise these outcomes.

An example from a Strategy Unit project is set out below:

In addition to a framework setting out strategic direction, strategies need to provide evidence-based policy recommendations to act as a clear route map of how the objectives will be delivered. Examples of strategies developed across a broad range of government policy areas can be found on the Strategy Unit's website.

The Relationship Between Strategy and Policy

The terms strategy and policy are used in many different ways, and sometimes interchangeably. For the purposes of this guide, the following definitions are used:

• Strategy is the overall process of deciding where we want to get to and how we are going to get there.
• Strategic direction describes the desired future and sets out what needs to be achieved in order to bring it about. It provides the guiding principles that give context and coherence to action.
• Policy provides the means of moving in that direction - and often a number of policies need to work together to deliver particular strategic outcomes. Policy design work is concerned with identifying how to achieve strategic objectives, selecting the most suitable policy instruments for doing this, and detailing how these instruments will work in practice.

The relationship between strategy and policy is very close, and should be highly interactive. Strategies should be developed together with a realistic idea of how they might be realised, and policies should exist within a strategic framework that explains how they contribute to desired outcomes.

Divorcing strategy and policy creates the risk of setting unachievable strategic objectives and allowing policy programmes to develop legitimacy from their longevity rather than their contribution to meeting public needs. Close integration will help to ensure that strategies are implemented using the most suitable policies, and that different policies are not contradictory, but work together towards strategic outcomes.

The Relationship Between Strategy and Delivery

Strategies and policies that are not deliverable are of little use. Strategy work needs to involve frontline practitioner knowledge from the outset, and proceed grounded in a realistic understanding of delivery capability. Feedback mechanisms are needed from delivery back into strategy and policy design in order to create adaptable learning systems that can evolve in the light of experience and unexpected results.

Questions for Strategy Development

As the underlying framework that guides government thinking and action, strategy is concerned with asking and answering a number of questions. The diagram below demonstrates that while strategic issues may be highly complex and ambiguous, the questions at the heart of strategy development are searching yet fundamentally simple. This in no way detracts from how difficult it can be to answer these key questions, but provides a valuable anchor at times when the complexity is overwhelming.

The first four questions (across the top of the diagram) cut to the heart of strategy development by establishing an understanding of the world as it is today and determining the desired state of the future. The further two questions (underpinning the process) recognise that effective strategy development can not occur in either an ivory tower or black box, but must occur collaboratively using open and transparent methods and approaches. These questions are closely mirrored by the typical phases of a strategy development project and highlight the importance of the full range of strategy skills.

Components of a Strategic Approach

In practice, strategic thinking may not be as linear as the above questions suggest, but may involve a more iterative consideration of a number of key components.

• Vision & Values: a vision of the desired state of the future founded on government's wider values and principles, that sets priorities, recognises trade-offs and describes the relationship to and fit with strategy in other policy areas.
• Evidence & Analysis: an understanding of the current situation, trends and likely states of the future, together with their drivers and causes, and a realistic evaluation of the effectiveness of different policy instruments. This should be based on a broad evidence base including economics, science, social research, statistics etc. and placed within a context of benchmarks and international comparisons.
• Stakeholders: a deep appreciation of their views, concerns and perspectives and a plan for how they should be involved in strategy and policy development, and the role they may play in delivery.
• Delivery Capability: an evaluation of the delivery system, and the culture and available resources of organisations within it, that highlights potential barriers to change and successful delivery.

These four components need to be considered objectively from first principles to identify the real issues, challenge implicit assumptions and question existing approaches.

A development in any one of the components may provide the initial impetus for fresh strategic thinking and drive a need to develop thinking in the other components. In the same way, strategy development is often an iterative process with the components developing and evolving in response to each other.

Strategic Solution Generation

Implicit in adopting a strategic approach is a rational and reasoned process for developing solutions. In contrast to an ad-hoc approach that is likely to result in a more 'random' set of solutions, a strategic approach is underpinned by guiding principles and a set of appraisal criteria that frame the generation and appraisal of alternative options.

The appraisal criteria that should be used for this process are applicable to all decisions about government action, and address the suitability, feasibility and acceptability of each option:

• Suitability - do the proposed actions address the key issues and will they be able to deliver desired outcomes?
• Feasibility - can the proposed actions be delivered with the potential system capabilities and resources?
• Acceptability - is there sufficient political and public support to legitimise the proposed actions?

Maintaining a Strategic Perspective

The need for strategic thinking extends far beyond the realms of a formal strategy development project. At all stages of policy design and delivery, a strategic perspective is needed to ensure that government action is focused on and capable of meeting the true needs of the public. The questions posed by the three criteria of suitability, feasibility, and acceptability form the basis of such a strategic perspective.

In a dynamic world, public managers and policymakers need a strategic perspective to keep these three key questions in mind, and act to redress any gaps:

Building Strategic Capability

Building strategic capability, both in terms of the ability to develop strategies and the ability to maintain a strategic perspective in day to day operations, requires a focus on demand, supply and organisation:

• demand for better strategy work from Ministers, CEOs, Directors, and senior officials
• a culture of bottom-up challenge and 'rocking the boat' that encourages strategic thinking
• organisational structures and processes which reinforce demand for a strategic approach
• a strong evidence base that provides an accurate understanding of issues and how to respond them
• skilled and confident people with diverse experience and access to best practice resources.

The Strategic Capability Team at the Strategy Unit provide support to government departments seeking to assess and develop their strategic capability, please contact us for further details.

References

The Strategy Unit discussion paper Creating Public Value (pdf) describes the concept of public value, and how it can be used to think about the goals and performance of public policy.

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