Strategic Planning - SP 101 AzGU Course MGT3001 July 9

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Strategic Planning - SP 101AzGU Course
MGT3001July 9 11, 2003

MANAGING FOR RESULTS WORKSHOP

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Workshop Objectives

• Understand Arizona's strategic planning model
• Understand basic strategic planning concepts and
  tools
• Understand the use of performance measures
• Be able to apply what you learn to strengthen
  your strategic plan and performance measures
• Know the requirements of Arizonas Budget Reform
  Legislation

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Why Conduct Strategic Planning?

• Planning for change
• Managing for results
• Customer support
• Adaptability
• Promotes communication
• Essential for management
• Future-oriented
• If you fail to plan, you plan to fail

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Arizonas Model

• Asks and answers the following questions
• Where are we now?
• Where do we want to be?
• How do we measure our progress?
• How do we get there?
• How do we track our progress?

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Arizonas Model

• Asks and answers the following questions
• Where are we now?
• Internal/External Assessment
• Customer and Stakeholder Identification
• Where do we want to be?
• Mission
• Vision
• Principles
• Goals
• Objectives

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Arizonas Model

• Asks and answers the following questions
• How do we measure our progress?
• Performance Measures
• How do we get there?
• Strategies
• Action Plans
• How do we track our progress?
• Tracking System

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Internal/External Assessment

• Where are we now?
• An analysis and evaluation of internal and
  external data, factors, conditions and issues
  that affect the organization.
• Often referred to as a SWOT analysis referring
  to internal Strengths and Weaknesses and external
  Opportunities and Threats.

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Internal Assessment

• Also called a situation inventory
• Identifies strengths and weaknesses
• Evaluates the organization's position,
  performance, problems and potential
• Identifies internal critical or strategic issues
• Evaluates capacity to respond to issues, problems
  and opportunities
• Motivates improvement

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Critical Internal Factors

• Agency scope
• Agency functions
• Organizational structure
• Resource needs

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Key Questions

• What is the current internal environment?
• Is any additional training needed?
• Is the technology adequate?
• Are all mandated (by statute or law) functions
  being performed? If not, why
  not?
• How can we use our strengths to overcome our
  weaknesses?

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External Assessment

• Also called an environmental scan
• Analyzes key external elements, forces and issues
  that affect the environment in which an
  organization functions
• Focuses on opportunities and threats present in
  the current environment and anticipates changes
  in the future environment
• Identifies external critical or strategic issues

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Critical External Factors

• Demographics--population, unemployment rate, etc.
• Economic variables
• Impact of federal or local government statutes
  and regulations
• Technological developments
• Public policy issues

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Key Questions

• What is the current external environment?
• How may the environment differ in the future?
• What are the implications of political, economic,
  legislative, etc. changes for the organization
  over the planning horizon?
• What are the most promising external
  opportunities?
• What are the most immediate threats?

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Internal/External Assessment
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Strategic Issues

• Issues of critical importance to the
  organization.
• May be internal or external to the agency.
• Do not always fall neatly within the boundaries
  of a particular program instead, they may impact
  several programs or the entire agency.

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Customer

• Anyone whose best interests are served by, or who
  receives or uses the products or services of, an
  agency, program or subprogram.

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Internal Vs. External Customers

• Internal Customers
• Any group or person whose work depends upon other
  work units or persons inside the same
  organization.
• External Customers
• Any user of the organization's products or
  services.

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Stakeholder

• Any person or group with a vested interest in, or
  with expectations of a certain level of
  performance or compliance from, an agency,
  program or subprogram.

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Customer/Stakeholder ID Worksheet

Expectations
Priority
Internal Customers
External Customers
Stakeholders
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Gaining Customer/Stakeholder Input

• Written or phone surveys
• Focus groups
• Interviews
• Comment forms
• Board meetings
• Public meetings

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Mission

• Where do we want to be?
• A brief, comprehensive statement of purpose of an
  agency, program or subprogram.

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Mission Statement

• Answers the following questions
• Who are we?
• What do we do?
• For whom do we do it?
• Why do we do it?
• Why are public resources devoted to this effort?

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Mission Statement Litmus Test
Does it clearly state what business you are
in? Can all employees of the organization see
their contribution in the mission? Is the mission
rarely changing? Can the mission survive changes
in administration? Is the rationale for the
programs existence clear?
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Mission Statement Litmus Test
Will it make sense to the average citizen? Does
it answer who we are, what and for whom we do
what we do and why its important? Is it obvious
why we spend public dollars on such an
effort? Will you be embarrassed if you see it in
the media? Does it articulate the ultimate
outcomes you want?
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Vision Principles

• Vision a compelling, conceptual image of the
  desired future.
• Principles core values and philosophies that
  describe how an agency conducts itself in
  carrying out its mission.

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Gap Analysis

• The process of examining any disparity or "gap"
  that exists between the current and desired
  states.
• Current state identified during the SWOT
  analysis.
• Desired state identified during the goal setting
  process.

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What Is A Gap?
Desired State (Where we want to be)
Why the Difference? (Gap Analysis)
Current State (Where we are now)
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Key Questions

• Are current products and services meeting our
  customers' needs and expectations?
• Are any new products or services needed?
• If so, can they be provided within existing
  resources using redeployment, reallocation and/or
  reduction of current services and still meet
  customers' needs?
• Are any products or services unnecessary?

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Key Questions

• How do our internal strengths and weaknesses
  impact the gap analysis findings?
• How do our external opportunities and threats
  impact the gap analysis findings?
• How do we deal with these gaps in the strategic
  plan? Do these gaps in service require their own
  goal statements?

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Planning Assumptions

• Resources
• Demographics
• Economic
• Policy issues
• Government/Legislative
• Technological Development

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Goal

• The desired end result, generally after three or
  more years.
• A goal represents the to be state, not the
  action of getting to that state.
• If strategic issues were identified during the
  SWOT analysis, dont forget to address them in
  the plan with specific goals. This is especially
  important if the agency will be asking for
  additional funds in their budget submittal based
  on the issues.

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Goals Litmus Test
Does the goal support the mission? Is it
consistent with your legislative authority? Does
the goal deal with just one issue? Does the goal
represent a desired result that can be
measured? Does the goal reflect a primary
activity, a strategic direction, a strategic
issue or a gap in service? Is the goal
challenging, but still realistic and
achievable? Does the goal encompass a relatively
long period, i.e., three years or longer?
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Goals Litmus Test
Is there at least one key goal for each
program/subprogram, but not more than can be
reasonably managed? Is the goal important to
management? Is the goal important to policymakers
and customers? When taken collectively, will the
goals reflect most of the programs budget? Will
someone unfamiliar with the program or subprogram
understand what the goal means?
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Objectives

• Specific and measurable targets for
  accomplishing goals.

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Developing Objectives

• Review mission and goals
• Decide the results that are wanted/needed
• Set a time frame for achieving results
• Build in accountability

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Criteria for Objectives

• Objectives should be SMART
• Specific
• Measurable
• Aggressive but Attainable
• Result-oriented
• Time-bound

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The Objectives Stretch Factor

• Setting achievable objectives that stretch
  resources and outcomes requires
• Knowledge of current and future demand
• Process and staff capability
• Baseline and, if available, historical data
• Benchmarking data to know what is possible
• Clear idea of actions needed for achievement

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Objectives Litmus Test

Does the objective reflect specific, desired
accomplishments? Can progress toward completion
of an objective be measured? Is the objective
aggressive and challenging, yet realistic and
attainable within available resources? Does the
objective specify a result rather than an
activity? Is there a specific time frame for
completion of the objective?
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Objectives Litmus Test

Have you identified who will be accountable for
meeting the objective? Will completion of the
objective lead to goal attainment? Is there at
least one objective for each stated goal? Will
someone unfamiliar with the program or subprogram
understand what the objective means?
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Performance Measures

• How do we measure our progress?
• Used to measure results and ensure
  accountability.
• Evaluate performance
• Track progress against plan
• Identify improvements
• Reward performance

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Performance Measures

• Should be
• Meaningful
• Simple
• Comprehensive
• Credible

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Categories of Measures

• Inputs Resources needed to provide a
  particular product or service.
• Outputs Products or services provided.
• Outcome Result of providing service or
  product.
• Efficiency How effectively are resources
  being used?
• Quality How good are the services and
  products and how satisfied are the
  customers?

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Output vs. Outcome
Output Outcome
Discharged patients living independently
Patients discharged
Is not the same as
Reduction in incidence of vaccine preventable
diseases
Vaccines given
Is not the same as
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Key Questions for Selection of Master List
Budget Measures

• Ask the impact questions
• What did the Agency itself accomplish?
• Is the outcome for this measure shared with other
  entities or State Agencies? How much of the
  outcome is attributed to the Agency?
• What is the difference between the actual
  outcomes and the outcomes that would have
  occurred if the Agency had not existed?
• Can it be compared to another best-practice
  government entity?

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Outcome vs. Family of Measures

• No one comparison of a single outcome measure
  with a single performance standard will provide a
  definitive evaluation of a State Agency or
  program.
• Therefore, a Family of Measures may provide a
  more credible and conscientious picture that is
  comparable to multiple standards for evaluation
  of performance.

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Family of Measures

Internal
External
Input
Output
Outcome
Efficiency
Quality
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Family of MeasuresLicensing and Regulation
Internal
External

Input
Number of applications Number of complaints
Output
Number of licenses issued
Number of licensed practitioners
Outcome
Number of disciplinary actions per 100 licensees
Efficiency
Unit cost per complaint
Average days from receipt of complaint to
resolution
Quality
Percent reduction in processing errors
Customer rating of service
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Performance Measures Litmus Test
Does the measure relate to the mission it
represents? Does the measure relate to the
goal it represents? Does the measure relate to
the objective it represents? Is the measure
important to management?
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Performance Measures Litmus Test
Will it be possible to collect accurate and
reliable data for this measure? Taken together,
do the performance measures accurately reflect
the key results of the budget unit, program or
subprogram? Is there at least one key
performance measure for each goal?
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Selection Criteria MatrixChoosing Key Measures
for the Executive Budget
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The Futile Search for the One Best Measure

• What gets measured gets done, but unfortunately
  what people measure is often not precisely what
  they want done.
• Performance measures can shape behavior in both
  desirable and undesirable ways and there is no
  one magic performance measure.
• Ask instead the PURPOSE for which the measure
  will be used and if the measure conveys the
  appropriate message.

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Action Plan

• How do we get there?
• A detailed description of the strategies used to
  implement a strategic plan.

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Developing Action Plans

• Identify all possible strategies.
• Evaluate the costs, benefits and consequences/
  trade-offs of alternative strategies.
• Choose the strategy to be taken.
• Develop step-by-step actions with related
  timelines.
• Decide who has responsibility for each step.
• Determine the resources needed to carry out the
  plan. (Work within existing resources as much as
  possible.)

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Action Plan Litmus Test
Does the action plan contain a time frame for
completion? Is the action plan broken down
into important steps (e.g. have
operations, procedures and processes
been included). Has responsibility for
successful completion of the action plan
been assigned?
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Action Plan Litmus Test
Will additional resources be needed to accomplish
the action plan? Have arrangements been made
for additional resources? Does the action plan
contain sufficient detail to track
milestones? Will the action plan help to achieve
the objective? Does the action plan relate to
the goal?
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Tracking and Reporting Results

• How do we track our progress?
• The purpose of reporting results is to show
  movement toward expected results and progress
  toward the goals in the strategic plan.

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Tracking Document Elements

• Goals
• Objectives
• Performance Measures
• Identification of the position, unit, section
  and/or division responsible
• Room for comments or explanations of actions
• Information on current status

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Tracking and Reporting Results

• Keep reports simple, yet meaningful.
• Determine how the data will be rolled up for
  various reporting requirements.
• Display numbers graphically. Using charts,
  tables, etc. makes reports easy and quick to
  understand.
• Establish a regular reporting process and build
  it into the management system.
• Recognize that program managers will want more
  frequent and detailed information than
  policymakers.

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Levels of Planning
Three Levels of Strategic Planning
Agency
Program
Subprogram
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Integrating Plans
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Strategic Management
Strategic/Quality Planning

Program Evaluation
Resource Planning Human, Capital,
Information Technology
Results
PerformanceMonitoring Reporting
Budgeting
Program Implementation
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Strategic Management

• Promotes customer satisfaction
• Emphasizes employee teamwork
• Focuses on measurable results
• Supports management by fact
• Requires top management commitment
• Strives for continuous improvement

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Strategic Planning

• Sets strategic direction
• Defines expected results aids performance
  monitoring
• Facilitates resource allocation
• Strategic Planning (5 Year Plans) Laws 2002,
  Chapt 210
• Only applicable to Annual Budget Units (17)
• Due January 1st Annually
• Program/Subprogram planning
• Not submitted--but source documents for Master
  List
• Agency Operational Plans Laws 2002, Chapt 210
• Included in Master List of State Government
  Programs
• Due September 1st Annually

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Master List of State Government Programs
A.R.S. 35-122

• Reference document for agencies, policymakers,
  and the public
• Defined in Laws 2002, Chapter 210 as the Agency
  Operational Plan with performance measures linked
  to the budget resource cycles
• Includes key goals and performance measures from
  program/subprogram plans
• Due September 1st annually

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Master List Required Elements

• Mission
• Description
• Strategic Issues
• Goals
• Performance Measures
• Prior year actual and expected for current year
  and out years in budget request submittals
• Funding and FTE position information
• FY 2003 actuals through 13th month (prior year)
• FY 2004 appropriated (the current year)
• FY 2005 as appropriated or requested in budget
• Capital Fund information is no longer required

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Strategic Program Area Review (SPAR) A.R.S.
41-1275

• Evaluates efficiency and effectiveness of state
  government programs selected by the JLBC
• Results in decision to retain, eliminate or
  modify the program
• Includes, as a major component, the full
  strategic plan for the program/subprogram being
  SPARd.
• Due June 1, odd-numbered years
• Next projected SPAR cycle June 1, 2005

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Companion Documents

• Three-Year Information Technology (IT) Plan
• Articulates IT resources needed to implement
  agency, program and subprogram goals
• Due September 1, every year to GITA
• Next submittal September 1, 2003

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Companion Documents

• Operating Budget Request
• Justifies appropriated funds
• Communicates accountability for spending tax
  dollars on agency activities
• Links planned activities and required resources
  with funding needs
• Includes agency goals--from most recent Master
  List
• Includes one-page summary of agency key
  performance measures--from most recent Master
  List
• Includes all program/subprogram performance
  measures
• Due September 1, annually
• Next submittal September 1, 2003

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Cascading Nature of Strategic Planning
Long-term Comprehensive
Mission/Vision
Goals
Objectives
Performance Measures
Action Plans
Short-term Detailed Focused
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Managing for Results HandbookArizona State Model

• Additional detailed information should be
  reviewed in the Managing for Results Handbook -
  the textbook for SP101.
• To download the handbook visit
• http//www.state.az.us/ospb/handbook.htm