Public%20Value%20

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Public Value Strategic Management

• José Jorge Saavedra

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A little bit of history...

• Sun Tzu The Art of War
• Carl von Clausewitz About War Prussian military
  philosopher (1780-1831).
• Strategy comes from the Greek Strategos which
  means a general group of maneuvers taken to
  defeat an enemy in battle

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The Themes of Strategic Management

• Relationship between organizational capacities
  and the environment
• What permits a good fit between the organization
  and its environment?
• Why are some organizations more successful than
  others?
• Why do managers have to achieve a more effective
  fit?

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SWOT Analysis
Source Mintzberg et al., 1998. Learned,
Christensen, Andrews y Guth, 1965
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Definition of Corporative Strategy

• Corporate Strategy is the stream of decisions in
  a company that determines and reveals its
  objectives, purposes or goals, produces the
  principal policies and plans to achieve those
  goals and defines the type of businesses the
  company will take, the type of economic and human
  organization that it has or pretends to have, and
  the nature of economic and non-economic
  contribution that it tries to make towards its
  share-holders, employees, clients, and
  communities.
• Andrews, 1965

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• Differences between private and public
  management

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Relation Between Mission, Values, and
Resources In the private sector there is an
automatic relationship between an increase in the
achievements of the organizational mission and an
increase in usefulness. In the public sector,
organizations get resources by persuading the
respective authorities about the importance of
its objectives and means to receive fiscal
appropriation. The mission of public
organizations do not depend on usefulness, but on
the creation of value and the support of the
authorities.
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DIFFERENCE BETWEEN PUBLIC AND PRIVATE
SECTOR PRIVATE SECTOR In the private sector,
value-creation is a linear process between
clients and shareholders. Shareholders Organi
zational Product Client PUBLIC SECTOR In the
public sector, value is created by serving the
public mandate, the mission of the organization
and the aspirations of the citizenry.
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PRIVATE SECTOR Social value is aligned with
financial performance and with organizational
survival.
Social Value
Financial Performance Organizational Survival
Products Services
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PUBLIC SECTOR Social value is NOT NECESSARILY
aligned with financial performance or
organizational survival.
Financial Performance Organizational Survival

Products Services
Social Value
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Definition of Corporative Strategy

• Corporate Strategy is the stream of decisions in
  a company that determines and reveals its
  objectives, purposes or goals, produces the
  principal policies and plans to achieve those
  goals and defines the type of businesses the
  company will take, the type of economic and human
  organization that it has or pretends to have, and
  the nature of economic and non-economic
  contribution that it tries to make towards its
  share-holders, employees, clients, and
  communities.
• Andrews, 1965

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Creating Public Value
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Individuals must be seen as beings that if
given the chance will actively participate in
shaping their own destiny, not only as passive
receptors of ingenious development programs.
(Amartya Sen, 1999)
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Four models for decision making in the public
sector

• Rational
• Bureaucratic
• Political
• Cultural

Fuente Adaptado de Graham T. Allison
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Goals and Principles of Social Management

• The purpose of Social Management is the creation
  of PUBLIC VALUE by ensuring that public
  interventions contribute significantly to the
  following five principles
• Reduction of Inequality
• Reduction of Poverty
• Strengthening of Democratic States
• Strengthening Citizenship
• Promoting Development Effectiveness

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The Creation of Public Value

• Public value must be perceived by all citizens or
  society. It must be used or enjoyed collectively.
• By public we do not imply the simple
  aggregation of individual preferences, but the
  stream of collective decisions regarding what is
  valued and what are the priorities for a given
  community.

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The Creation of Public Value

• The concept of Public Value helps managers of
  social development keep focused and gives
  strategic direction to their actions.
• It can guide their actions with a simple
  reflection Is what we are doing valuable and
  valued by society?

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Public Value can be created through

• Pertinent answers to relevant problems of
  beneficiaries and citizens.

• New opportunities for the community and its
  future generations

• Processes that build trust, community,
  citizenship, social capital and a stronger
  democracy.

• Public accountability that demonstrate the good
  use of public funds, governance and
  responsiveness.

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Public Value
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Key Questions in Strategic Management

• What is our Business?
• Who are our Clients?
• What is our Value Proposition? How do we get
  support, develop programs and deliver that value?

Peter F. Drucker
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Issues of Strategic Management

• 1. What is our core Business?

Peter F. Drucker
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MISION VISION

• CORE IDEOLOGY
• Purpose
• Core Values

• ENVISIONED FUTURE
• BHAG
• Vivid Description

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The Creation of Value

• The creation of value does not occur by accident,
  nor is it determined by law. It depends on a
  deep comprehension of what the population values
  and the development of the organizational
  capacity to deliver solutions to these
  necessities in an effective, equitable, and
  sustainable manner.

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Issues of Strategic Management

• 2. Who are our Clients?

Peter F. Drucker
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Who is the Client?

• Citizens

• Beneficiaries/Users

• Clients

• Subjects

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Issues of Strategic Management

• 3. What is our Value Proposition? How do we get
  support, develop programs and deliver that value?

Peter F. Drucker
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The role of public interventions
Pobreza en América Latina
Expectations
Public Value
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Programmatic Management
Public Policy, Programs Projects
Public Value
Authority, Resources Legitimacy
Operational and Organizational Capacity
Political Management
Organizational Management
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Program Management

• The objective is to carry out the organizational
  mission and create public value through a package
  of policies, programs, and pertinent projects.
• To guarantee the pertinence and to strengthen
  social inclusion, these programs should be formed
  or constructed in a participatory manner with the
  multiple actors involved, to achieve their
  participation, compromise, and guarantee a
  successful implementation.

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Political Management

• The objective of political management is to
  achieve authorization, resources, support, and
  legitimacy to implement the organizational
  mission.
• It includes management with politicians,
  legislators, bureaucrats that have supervisory
  power over the organization and decision-making
  power over financing and development of
  activities.
• It also includes organized civil society, social
  movements, NGOs, the media, the private sector
  and the citizenry. These are key actors and may
  have related interests with the operations of the
  organization.

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Organizational Management

• The objective is to have a strong organization
  committed with the mission and with
  organizational capacity to carry out the
  different activities in an effective, efficient,
  equitable, ethical and sustainable fashion.
• The organizational capacity refers to the fact
  that members of organization are the ones to
  finally implement the strategy.
• This leads us to think in the skills and
  capabilities that the organization needs and the
  values that define its culture, as well as the
  organizational structure, process and systems.

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Programmatic Management
Public Policy, Programs Projects
Public Value
Authority, Resources Legitimacy
Operational and Organizational Capacity
Political Management
Organizational Management
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Six Challenges for Social Management
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Challenge 1

• The final objective of public organizations is
  to create public value trough its management,
  which has to contribute significantly to the
  reduction of poverty and inequality as well as
  the strengthening of the democratic States and
  citizenship.

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Challenge 2

• Public resources, which are limited or scarce in
  relationship to the necessities or desires of the
  public, are assigned by a political process that
  determines their priority. Public organizations
  should compete effectively for these scarce
  resources.

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Challenge 3
Citizens have the last word about the
actions to be taken by the government and its
agencies, this voice is expressed by deliberation
mechanisms and politic representation, therefore
public organizations respond to different social
mandates.
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Challenge 4
People have multiple roles in their
interactions with public organizations. The State
must provide pertinent and quality services to
clients, beneficiaries and subjects. And at the
same time, they have the obligation to inform,
respond and be accountable to the public,
treating all stakeholders with respect because
they are all citizens.
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Challenge 5
The scope of public management is composed
by interinstitutional networks which will be
called macro management and internal
organizational processes denominated micro
management
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Challenge 6
Outcomes should not be conceived only as the
delivery of products and services. These outcomes
should be focused on the impact of the products
as well as the quality of the processes that
produce these outcomes.
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STRATEGIC MANAGEMENT
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Definition of Strategy
It can be said that an organization has
strategy when its managers and the organization
as a whole have committed to a particular vision
of how to operate and achieve support to
implement a series of activities that create
social value.
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• Strategy is a concept that simultaneously
• Declares the organizations mission and vision in
  its proposal of how to create public value.
• Determines the source of support and legitimacy
  that will be used to achieve the organizational
  objectives.
• Defines the areas of action to implement public
  policies, projects, and programs.
• Explains how the organization will be organized
  and managed to implement the programs and achieve
  the objectives that generate public value.

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Instruments
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Instruments to Define Value

• Revision of Mandates
• Clarifying Purpose
• Mission Validation
• Strategic Planning
• Participation and Consultation

• Mission

• Vision

• Definition of Mission Vision

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Instruments to Improve Public Management

• Stakeholder Analysis
• Political Mapping
• Negotiations
• Leadership
• Advocacy
• Networking
• Political Marketing

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Instruments to Improve the Programmatic Management

• Planning
• Project management
• Logical framework
• Monitoring and Evaluation
• Stakeholder analysis

• Negotiations
• Leadership
• Advocacy
• Participation
• Networking
• Information Technology

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Instruments to Improve Operational Management

• Strategic Planning
• Re-structuring
• Decentralization
• Re-engineering
• Total Quality
• Service management
• E-government
• Privatization
• Strategic Alliances

• Performance Measurement
• Management by Results
• Variable budget
• Human Resource Management
• Hiring by aptitude and attitude
• Training
• Evaluation
• Teamwork
• Accountability

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Instruments to Improve the Analysis of
Surroundings

• PESTI Analysis
• Political Mapping
• Stakeholder Analysis
• Analysis of National Agenda
• Analysis of Emerging Themes

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TYPES OF INNOVATIONS
Mandate New mandate, new vision, new objectives
Political Political support, more resources,
greater authority
Programmatic Old objectives, new means
Operational Structure/process/measuring
performance
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Modern Citizenship
Pobreza en América Latina

• Civil Rights basic right of freedom, associated
  with courts of law. (Equality before the law)
• Political Rights right to participate,
  associated with the executive and legislative
  powers (one person one vote)
• Social Rights right to a minimum level of
  wellbeing, associated with social services
  (education, health, work)
• Fourth Generation Rights (Environment, future
  generations, cultural identity)

Source Adapted from Will Kymlicka
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Thank You !