Strategic Management and Governance

Strategy Execution Around the World

Paul Joyce

• Publisher: Routledge
• Year: 2022
• ISBN:
  9781351045773
• Edition: 1
• Topic: Business
• Subtopic: Business Strategy
• Index: Business

This book is an investigation into the evolving nature and consequences of strategic management in public governance. It is prompted by the practical as well as the academic interest in the application of strategic management to public governance and to the public sector.

The main features of this book are its management focus, its use of published statistics and expert ratings to develop empirical insights into the capabilities and processes of strategic management in government, and its concern for practical relevance. Although this book deals with governments, it is a management book and not a political book. It is, in fact, a management book that "frames" strategic management in government as a tool of (or enabler of) the public governance process. This is relatively novel. The book's management focus has several themes, which can be summed up as comprising: the use by government of long-term strategic visions and strategies, effective management of the delivery of strategic visions and strategies, the performance of national governments, and the implications of strategic state capabilities for the quality of public services, for sustainability, and for managing strategic crises.

This book will be relevant reading to researchers, scholars, advanced students, policy makers and public administrators in the fields of strategy, strategic management, and public governance.

1 Strategic Management and Governance

DOI: 10.4324/9781351045797-1

Introduction

If you are a politician or civil servant and you ever read a business management book, did you try to apply it to a public sector environment? Did it work? There is a great deal written about managing private sector companies. If you browse a bookshop, online or in-person, you will find thousands of books about how businesses should be built, managed, run, adapted, the list goes on. When you look for that same theory and understanding for government or for the public sector, it tends to feel like private sector management theories have been shoe-horned into the public sector world. While it may seem that the theory is transferable, it isn’t. In fact, blindly applying private sector theory to the public sector and expecting it to work is, in my opinion, rash and irresponsible. The public sector is distinct from private companies in so many ways, in structure, funding, impact, objectives, so it needs distinct and separate theories.

But this isn’t the first book to attempt to deal with the processes of government and management. Obviously, management is important for all manner of bodies, public and private. Objectives should be set, plans formulated, directions given, departments and individuals managed, decisions implemented, lessons learnt, and adjustments and adaptations made. But management in the government sector is different from that in the private sector. The circumstances are massively different, and the purposes and consequences of management in government are enormously important and special for communities and societies. This book is not following in the tracks of some previous attempts to relate management to government, where the effect was to recast government in the image of management. Burnham (1962) outlined his ideas of a managerial revolution in which “managers” would rule all sectors of society, and parliaments would be replaced by administrative bureaus. The dominance of government by managers is not envisaged here. As a glimpse of the analysis and arguments to come, it might be said that this book is about the development of a new type of public governance that is modernized and reformed around strategic management as a tool of sound public administration. In this analysis, politicians remain in their key roles in political processes, but the credibility and effectiveness of government are reinforced through the growth and use of strategic capabilities.

A recent book on how to be a civil servant summed up the function of civil servants as one of advising ministers and helping them to deliver their long-term goals (Stanley 2016). Several duties assigned to senior civil servants appeared to be consistent with this definition of the function: they were to agree strategic aims with ministers, agree and provide financial and human resources needed to deliver the strategic aims, carry out project management, and troubleshoot. This statement of the role of senior civil servants seems to me to imply that strategic management is a key tool of public governance.

People have been thinking about, and writing about, strategic planning by governments for more than thirty years. It is not a new topic. There is now a lot of advice about how to do strategic planning in public sector organizations and what part it can play in sound public governance (Bryson 2011; OECD 2020). The case for governments to become more strategic in how they function and the importance of them making use of long-term strategic visions and planning as tools of public governance have been made cumulatively in a series of authoritative statements (OECD 2013, 2020; Osborne and Gaebler 1992; United Nations 2019; World Bank 1997).

An argument for embedding strategic planning in public governance could go something like this. First, public governance is a process that has the aim of serving citizens (OECD 2013, 8). Second, an effective governance process can be used to steer public services and national development and make it more likely that governments serve the interests of citizens effectively. Third, competent public governance can be built around a process of formulating long-term strategic visions and strategic plans and implementing them.

But, still, it is not easy to use strategic visions and plans as tools of public governance and the usefulness of much of the advice given really ought to be empirically tested.

In this opening chapter, the aim is to introduce the idea of strategic decision-making and examine some key philosophical ideas about the nature of reality and the meaningfulness of predictions of the future. This will set the foundations for thinking about strategic management processes. We have moved a long way from the early days of strategic thinking for the corporate sector when strategic processes were largely conceptualized in terms of the setting of objectives, analysing situations, and choosing options. This phase of expert opinion made it seem that the key moments in strategic management were intellectual and analytical. The subsequent work of implementation of a strategy just did not receive much attention in the classic texts of this period. In a later stage, there was a realization that strategic implementation had to be taken more seriously. Some took this too far and even went as far as to belittle the ability of corporate leaders to set objectives and determine strategies. One expression of this was a low opinion of headquarters staff engaged in analysis and planning and a recommendation that corporations should do their way into strategy (act first, think later?).

The initial view taken here would rebalance the view of the strategic management process by proposing that all stages of the process matter. I would suggest that each, and every, stage is critical, and we should not pick one stage and give it all the importance of the whole process. We can suggest the stages are: setting the strategic vision, designing strategies, then implementation, and, finally, monitoring and evaluation of strategies. Do any one of them badly and successful execution is put at risk. Even monitoring and evaluation is essential since strategic learning leads to revisions and adjustments.

What we think about the knowability of the future will affect how we configure the whole process of strategic management. For example, if we believe that we can make very accurate and infallible long-term predictions of the future, we might feel that implementation can be done by creating a programme of change, designing new budgets, systems, and roles, and allocating people to the roles and training them to carry out the new roles very precisely. But if we think knowing the future is inherently problematic for various reasons, we will decide that we need implementation to be more experimental and to provide sturdy opportunities for evaluation and learning. We will also put more emphasis on adaptability and flexibility in organizational matters, and so will not expect to slot individuals into a new structure in a single move. We might instead say we will pilot new structures and ways of working and only confirm them or roll them out more generally when we are sure we have learnt all the lessons that need learning.

How we think about the knowability of the future, and how we think about this in the sense of what we might anticipate or expect in the future, matters not just at the stage of first agreeing strategic visions and goals and strategies but also in how we approach strategic implementation and learning.

The ubiquity of strategic decision-making

Should we be surprised that we now expect governments to be strategic and use strategic planning? Back in the 1950s, one of the earliest management gurus, Peter Drucker (1955), prophesized that strategic decision-making would become increasingly important. Drucker's idea of strategic decision-making did not seem simple or easy to execute in practice. And yet he saw strategic decision-making as growing more significant, and intuitive and tactical decision-making being less important for tomorrow's managers.

His conception of strategic decision-making was multi-dimensional. The situation of a strategic decision-maker was neither known nor simple and the facts known to the decision-maker were normally incomplete. It was important that strategic decision-makers took great care when formulating the questions to be considered in decision-making – they needed to address the right questions in their decision-making. He stressed that it was not obvious in the case of strategic decisions what alternative actions might be taken. Further, strategic decision-makers had the difficult task of making sure strategic decisions were effectively delivered. Finally, it was important that strategic decisions were made that fitted in with decisions being made elsewhere in the organization and that were aligned to the goals of the whole organization. Drucker clearly anticipated the concerns sixty years later of many of those giving advice to leaders in public governance systems about the challenges of implementation and the challenges of ensuring whole-of-government coordination.

The nature of strategic thinking

What can be said in a concise way at the outset of this book about the character of strategic thinking? As a preliminary orientation to the nature of strategic thinking, we might say that it is like doing social science and like doing a puzzle. Why is it like doing social science? Because seeing strategic thinking in this way emphasizes that it is akin to scientific experimental thinking in which the strategy is equivalent to a hypothesis and implementation is the testing of the hypothesis. Like social science, strategic thinking requires observing what happens when strategy is implemented and valuing the facts that can be observed. Finally, as in social science, the correctness of an individual's strategic thinking can only be established by empirical verification.

There is also something useful in thinking of strategic planning as like doing a “puzzle”. The key thing about a puzzle is that its solution normally requires some ingenuity. We can think of this ingenuity in strategic thinking as taking the form of an intellectual journey of discovery when we first formulate strategy and second learn from implementation. During this journey, we think through, and revise, what we think will be the essence of the best possible strategy. Strategic thinking for the individual, to the extent that it is like solving a puzzle, can be very engaging and stimulating and, maybe, on occasion, exciting.

Context matters

Ferlie and Ongaro (2015) have emphasized that context matters in strategic management. We can think of contexts as made up of an infinity of conditions or factors, some of which are pertinent to matters under consideration and an infinity that are not pertinent. If we think of the public sector as a specific context, then we should be sensitive to the need to investigate how causal relationships and social processes may be affected by pertinent conditions in the public sector context.

To take a simple example, let us look at how some specific types of strategy document will be affected by being produced in a public sector space. The documents in question are called “issue briefs” and “issue position papers” (Heath 1997). The first of these types of documents – the issue brief – is a clarification and an exploration of a strategic issue. It does not suggest a strategy to solve the issue but establishes the seriousness of the issue, sets out some options, and outlines the power and interests of relevant stakeholders. The structure of the brief can be as follows: the consequence of not doing anything about the strategic issue (how important is the issue), timescales (how urgent is action on the issue), strategic options, stakeholders (who are they, how powerful are they, and what are their interests). The second document – the issue position paper – can be seen as building on the work of strategic analysis done in an issue brief. It evaluates strategic options (ideally giving a lot of attention to feasibility) and then recommends that strategic decision takers choose one of them. Evidently, these two specialist strategy documents can be written by advisers to a strategic management team or a board or a strategic leader.

This may seem very logical and very technical. It may seem that the main constraint on the usefulness of these documents is the availability of information or data. What happens when now we think about the equivalents to these documents being produced by civil servants? To keep this simple, we can think about the UK civil service. In the UK, civil servants are not, formally speaking, responsible for setting the strategic aims of government or approving the strategic plans of government departments. Civil servants are expected to help government ministers. Civil servants are advisers to ministers. They advise ministers on how to achieve long-term goals. Civil servants write “submissions” and “briefs”. They must do this, in theory, without compromising their “impartiality”.

Impartiality is a key norm in the UK civil service. This refers to political impartiality. This proves on closer examination to be a complex norm to uphold. The UK version of political impartiality includes two distinct ideas. First, for a civil servant to be impartial requires he or she has a concern for objectivity in the sense that is meant in science – that is, claimed facts must be verifiable. Second, a civil servant can support government's policies but he or she cannot explicitly or implicitly criticize the government's political opposition. Thus, political impartiality is a peculiar mixture that creates a partisan and one-sided objectivity. Civil servants are on the side of government but must be objective and must not attack political opposition parties. It is worth stressing that this means that civil servants do, in fact, take part in adversarial politics to support the government's actions and policies.

Civil servants imbued with accepted norms of the UK system of public governance cannot approach the writing of submissions or briefs relating to government strategies and their implementation as a purely analytical or technical exercise. They must always keep in mind their political impartiality.

Is the future already determined?

Given the scope of this book, it would not be right to stray too deep into philosophical discussions, but it is important for a book on strategic management to appreciate the shortcomings of a view that assumes a total state of determinism dominates all experiences and the future. Determinism says everything is caused and all events in history are linked together in a web of cause and effects. This is a problematic perspective if you believe people have free will and can think and act purposively, making use of means to secure ends. Strategic management assumes the purposive nature of people who can act intelligently in the circumstances they find in existence around them. How does the appeal of determinism work its magic to such an extent that many politicians and public officials look for authoritative predictions of the future, with prediction not being equated to a guess but equated in some secular sense to a scientific prophecy? One answer might lie in the way our minds reflect on and process change. This is set out in three points:

First, a possible future may become an actual future, but this is not inevitable.

Second, if a possible future becomes an actual future, it does so at the cost of an alternative possibility for the future failing to become actual.

Third, when a possible future becomes an actual future, it may feel very difficult to imagine that it was origi...

Table of contents

• Cover
• Half Title
• Series Page
• Title Page
• Copyright Page
• Dedication
• Contents
• List of Figures
• List of Tables
• Acknowledgements
• Preface
• 1 Strategic Management and Governance
• 2 It’s Not Easy
• 3 Strategic Visions and Priorities
• 4 Taking Strategy Seriously
• 5 The Whole-of-Society Approach
• 6 Intelligent Government Acting in and for Society
• 7 Quality Public Services
• 8 Sustainability and the 2030 Agenda
• 9 Strategic Crisis Management
• 10 Strategic Leaders
• 11 A Moment of Renewal
• Appendix: Data Sources
• Index