ADAPTATION AND
APPLICATION William J. Siembieda* Introduction It is being done in cities (Rio de Janeiro, Quebec, Santiago, and San Francisco), in states (Oregon, Utah, and Minnesota) and on tribal lands (San Juan Pueblo, New Mexico, U.S.A.). Strategic planning is being used more today in the public sector than ever before. Why is it being used? What is it? How can it be applied, and how should it be used at the state and municipal levels by public, non profit, and governmental organizations? This paper presents a brief evolution of strategic planning, examines its potential application in the public sector, identifies common factors, describes a generic model and presents examples of how it is being practiced in North and South America. Why Use It? A primary reason to use strategic planning is that we live in a period of rapid and unexpected change. Examples of change in the Latin American context include extensive urbanization and instability of central economic development models. Some have struggles with various forms of socialist governance. Changes caused by national structural adjustment programs and policy directives from donor/lender institutions are now making new demands on state governments for improvements in service delivery and cost efficiencies (World Bank 1994). Not only the number of changes, but the pace (rate and type) of change has increased during the last four decades. The more change that occurs, the greater is our need for tools that help us adjust to change but also work with it to achieve our goals. In most instances external change (influences from outside of the organization) leads to internal change, which in turn effects the actions of operating organizations (Einsweiler and Miness 1992). For example, when sprawling urban communities are linked to worsening automobile-generated air pollution, local groups begin to demand that growth controls or alternative transit programs be implemented by state and local government agencies. A city level example is in Rio de Janeiro, where uncontrolled urban growth has contributed to the decline of new employment and a decline in the economic environment of many people. These pressures set the stage for Rio de Janeiro’s strategic planning process. This metropolitan-wide effort has established a working mission for municipal leaders and brought various segments of Rio de Janeiro’s diverse communities together for the first time (Lessa 1994). At the San Juan Pueblo in the State of New Mexico (U.S.A.) the local pueblo tribe (resera indigenous) is being pressured by expanding tourism and immigration to preserve their heritage resources, while at the same time responding to the community economic development opportunity that tourism and other economic development can provide (Moss and Agoyo 1993). This tribe’s response is a strategic plan for their historic cultural resources. A second reason to use strategic planning is the need for planning methods that can respond to the rate and type of change being experienced in urban areas. The rate refers to the number of changes faced by the organization over a period of time. Change by type refers to the tendency for the form of change to be different in each instance. For example, during a single program cycle, a municipal transportation agency trying to solve central city congestion problems can be told to make multiple adjustments for deductions in maintenance and construction funds from the central government, while at the same time accommodating increasing rates of suburban expansion. This rate of change cannot be addressed through traditional planning methods. The municipal transportation agency that 10 years ago saw change only in terms of technical adjustments in roadway design, now faces the problems of mitigating environmental damages caused by automobile-based systems, contending with citizens groups opposing environmentally inappropriate highway systems and accommodating the privatization of certain road systems and intra-city bus lines. The acceptance of change as a functional reality (something structural in the environment) has led more public sector decision makers (elected and appointed) to try to understand the nature of change as it affects them. The trend is to rely less on prediction and more on strategy. These are the primary reasons why strategic management, originally developed as a private sector business tool, is being adapted to public sector efforts. Examples of this in practice will be presented in greater detail shortly. What Is It? What is now being practiced in the public sector is a variant of strategic management, a conceptual process begun at the Harvard Business School in the 1920s. Here was established the strengths, weaknesses, opportunities, and threats (SWOT) process that still forms the basis for today’s contemporary versions of strategic thinking and action. This represents the rational model of management thought. The purpose of conducting SWOT process is to determine the best “fit” between the organization and the environment in which it operates. The term “fit” generally means a position in the environment (business/ market/political) where the organization can function most effectively. For private enterprise this means understanding the business environment they wish to compete in and putting resources into achieving objectives that fulfill the company’s basic mission. For example, in the early 1980s General Electric (GE), the large U.S. electronics company, established an objective of increasing its position (market share) in the expanding U.S. defense and space industry. It did this by acquiring Radio Corporation of America (RCA), retaining RCA’s radar and advanced satellites divisions and disposing of its consumer electronics divisions. This was General Electric’s strategic resource allocation plan in action. In companies such as Royal Dutch Shell (the petroleum corporation), the strategic management concept was transformed into operating strategic planning units within the company. Royal Dutch Shell’s strategic planning units introduced the widespread use of multiple scenarios rather than a single prediction, forecast, or trend as part of normal business analysis. Trends analysis was continued as one methodology along with multiple scenarios, which broadened the corporation’s options and strengthened its capacity for absorbing information from multiple sources on a continuous basis. This process allowed Royal Dutch Shell to position itself in emerging markets throughout the world. Over the years attempts were made to formalize the steps in SWOT and to establish a calculus of action. The learning school (Quinn 1980 and Ackoff 1983), the pattern recognition school (Moss 1993), and the strategic programming school (Mintzberg 1994) all have attempted to provide their own version of SWOT in a form that reflects modern management practice. The learning school believes that an organization acts first, finds out what works, and then retains those behaviors it believes desirable. The organization adopts and learns from experience. The role of leadership is not to preconceive deliberate strategies but to manage the process of strategic learning. The pattern recognition school looks for patterns of change that are established from logical analysis, using continuous information monitoring, and from intuitive responses to environmental signals. The emphasis is on identifying the pattern and its rhythm, and designing a strategic response. The SWOT process is extended to include different sectors of the environment; typically social, economic, political, technology, environment, culture and physical form and image. The strategic programming school separates strategic thinking from strategic planning. Strategic thinking is about synthesis and involves intuition and creativity. The outcome of the process is an integrated perspective on the enterprise or organization under consideration. In order to produce new perspective and combinations, the thinking must go beyond narrow organizational categories such as programs for a single department. In this school the planning activity is used as a tactical tool to clarify strategies and to render them operational. Toward a Working Definition There is a wide range of definitions and approaches to what is called strategic planning, be it in the private or public sector. Therefore, it is understandable that some confusion exists as to what it is, how it can be used, and if it is really useful. This section presents various definitions that are used in public sector practice. An important distinction between strategic planning and strategic management is that of time. Strategic planning attempts to takes a longer view; a view of the future based on an identification of key driving forces. On the other hand, strategic management is short run, guiding the organization through its environment in the near term as defined by the organization or the operating environment. Another distinction between public and private approach is the focus of the effort. Strategic planning in the private sector developed with a focus on the organization and its needs to survive, transform, and prosper. This focus differs from that of government which focuses on finding ways to satisfy the needs of competing interests within economic and social sectors of society (usually defined as the State’s response to the dominant economic made of production). This is illustrated in the definition given by Moss (1993, 2), that “strategic planning determines where your organization should be going, so that the organizational efforts can be pointed in that direction.” An example of determining where you are going is the strategic plan for the state of Oregon (U.S.A.), which established the state’s three key initiatives for the next two decades: a superior work force, an attractive quality of life, and an international orientation to business and cultural life (Goldschmidt 1989). These strategic initiatives form the framework for state funding of new education programs, environmental conservation, and relations with business sectors in other countries. Reworking the business sector definition to fit a public use, Olsen and Eadie (1984, 4) state: “Strategic Planning is a disciplined effort to produce fundamental decisions shaping the nature and direction of governmental activities within constitutional bounds.” This definition reaffirms a belief in rational thought as the keystone of decision theory. For example, the strategic planning effort of the state of Utah (U.S.A.) focuses on areas that government alone can affect. Thus, it reflects an operational approach to decision making. For example, Utah’s mission statement for environmental and natural resources is to “enhance our local and global environment through prudent development, conservation and preservation of our natural resources while protecting public health” (Utah Tomorrow 1993). Definitions of strategic planning vary according to the specific application and context. However, there are common elements in the strategic planning process that distinguishes it from traditional (comprehensive) planning. According to Bryson (1988, 15), these include an emphasis on action, consideration of a broad and diverse set of stakeholders, and attention to internal opportunities and threats and internal strengths and weaknesses. To this list can be added the adaptation to environmental change, linking of plans to actions, being focused rather than comprehensive, and utilizing patterns of change to form decisions regarding future actions. How Does It Work? Applications for Large Organizations There is no single accepted model of strategic planning for the public sector. Possibly this is due to the variety of organizational types that exist in government (ministries, departments, agencies, and multi-jurisdictional units such as water authorities, etc.); and there are many approaches to the practice of strategic planning. The various approaches reflect, in part, the cultural context that informs the practice. Practice is contextual, adaptive, and usually attempts to achieve some objectives. The approaches presented here have some commonalities as listed below. Common Factors in Strategic Planning
Practical Models Strategic planning in the public sector is being practiced in different ways by different units of government. The following examples demonstrate that strategic planning is a hemispheric-wide activity. In Quebec, Canada, strategic planning is codified through a metropolitan area ordinance; while in Chile, it is an contemporary process of the Federal Ministry of Housing and Planning. The basic steps (activities) are explained below. While presented here sequentially, it must be understood that some of these steps may take place simultaneously, or can overlap, and may occur more than once in a planning cycle. The following examples characterize how strategic planning is thought to fit into the municipal management process. The examples are not exact presentations of municipal efforts but adaptations of practice. Quebec’s Basic Steps (Activities) in the Strategic Plan Process Quebec’s basic steps are listed below, followed by an explanation of each step. Quebec’s Strategic Plan Process
Step: Analyze the principal observed or perceived tendencies. The objective is to identify patterns of change that appear on the edge of your time horizon. What are the key factors that impact your organization? For example, will the rate of new population growth in your region threaten the air quality in a time horizon of 10-15 years? If so, what strategies are available to intervene now? An application of this step is found in the “Oregon Shines” project, which identifies the global forces and the regional patterns that impact the economic well-being of the state and their potential long-term influence. The focus of effort in this step is on key factors of change and for change. Step: Describe the mission and fix the goals that will guide future actions. The development of the organization’s mission is a critical element in the strategic plan. It must be clearly understood. This is the “where are we going” statement and requires knowing something about who you are in relation to the world around you. According to Moss (1994), this is the most important step in the process because it requires the consensus of decision makers and is the basis for determining the key factors, driving forces, the SWOT, and the strategy. All are referred back to the mission, or the need to change the mission. Step: Diagnose internal and external conditions. This analysis is carried out to identify and probe the factors that will drive the change that most likely will impact the organization’s mission. It is here that different segments of the environment and the patterns or indicators of potential environmental change are identified. The analysis starts with the identification of key decision factors (positive and negative) that have the greatest impact on the potential achievement of the organization’s mission. For example, the San Juan Pueblo (an indigenous tribe in the State of New Mexico, U.S.A.) determined that tourists (an external force) visiting their lands would likely increase in number over time and threaten the tribal artifacts, the environment, and their way of life. This analysis allowed the tribe to design a strategic plan for preserving its heritage resources. The strategy was based on a mission statement that included the protection, interpretation, display, and management of a significant archaeological site and more generally the management of the tribe’s cultural and environmental resources. Step: Fix precise objectives and the strategies to reach them. Rather than being comprehensive, the task in this step is to focus on specific goals translated into objectives that can be moved forward to an action agenda. From these, one or more strategies can be established. A strategy is a series of decisions that pursue one or more objectives within an environment (context). Strategy making is a key element as its information is gathered by the absorption of the internal/external diagnostic (sometimes referred to as the “environmental scan”). Strategy is a combination of calculation, systemic thought, and intuition (Mintzberg 1994). Strategies serve as the foundation of action that relates to the organization’s whole environment. For example, in the state of Utah, an environmental and natural resource goal is to protect the public and the environment from exposure to contamination caused by improper management of solid, radioactive, and hazardous waste. Strategies linked to this goal include minimizing waste generation and improving waste management procedures. Step: Prepare a preliminary action plan. This task links the strategies with the resources to form actions. It is an important continuation of the focus on a specific goal. This step also is a test of the organization’s capacity for action because it means allocation of resources for different projects and programs. Step: Establish a network of internal and external participants, including key stakeholders. In the public sector more can be accomplished with broad support than through narrowly conceived decisions made by a small group of people. Because power to take concrete actions is typically shared across public agencies and involves community collaboration, bringing more people into the process assists the implementation process. Also called key stakeholder analysis, it is essential for the process to identify those groups of people most affected and bring them into the process. In the Rio de Janeiro experience, the establishment of a city-wide network of groups strengthened the strategic plan program’s ability to discuss issues and formulate a vision for the city that was useful in establishing a set of strategies that could be acted upon. Steps: Conceive a scheme of indicators to follow the process. Feedback loops, surveillance, and control are central to the process of continuous information being brought in and used to recognize patterns of change that may influence the organization. The state of Oregon established benchmarks, measurable standards linked to goals. There are two benchmarks categories: urgent ones that must be addressed quickly and core benchmarks that are fundamental to measuring the state’s vitality and health. Examples of urgent benchmarks for the state of Oregon are reduction in the teenage pregnancy rate and increased deployment of lumber and wood industry employees into value-added industry jobs that have high wage rates. Chile: Basic Steps
(Activities) In Chile, actions are being taken to use strategic planning as part of a national effort at decentralization of planning and incorporation of the spatial dimension into economic and social plans for regional and urban development (G�mez 1994). The steps presented below are illustrative of the potential variation based on political and cultural realities. Chile’s Regional Strategic Planning Process
Evaluation and reformulation of the plan. Step: Define the region’s potential and constraints. Focus on the driving forces that are likely to have impact on a long-range basis. The “Oregon Shines” strategic plan focus on the “Pacific Rim” reflects this step. Step: Identify the role the region will play in the national and international context. The use of scenarios occurs here and their results are then integrated into the identification of the driving (key) forces influencing the region. Step: Establish an “objective image” that is flexible and in continuous development. This is a long-range view where the future image for the region is established, but not fixed. This is also called the “vision.” Step: Draft a preliminary proposal that incorporates regional and urban development alternatives. Here strategies are drawn up and used to form the basis for further debate and participation. Goals and objectives begin to be linked to resources. Step: Use the preliminary draft as the basis for discussion among key agents from various sectors. Here the emphasis is on collaboration with public agencies and community interests (groups, societies, organizations) that will be making investments. Step: Develop a program of public participation that incorporates the process of participation. Establish working formats and the mechanisms by which agents (key stakeholders) in the region can be integrated and grouped according to their interests. Design participation activities that allow people to contribute their ideas and support. Step: Reformulate the initial proposal into its first definitive version incorporating the elements brought forth through the participation process. This is an iterative step of plan refinement and building constituencies and support among the key stakeholder groups. Step: Establish an implementation plan to chronologically carry out the defined strategies. This includes assigning the implementation to a lead agency charged with coordination of public investment, coordination of private investment and their impacts, management of mega-projects and public-private partnerships, generation of regulatory instruments, project programming, and assignment of resources. The implementation requires participation of the various agents (key stake holders) according to the various strategies included in the plan. Step: Evaluation and reformulation of the plan. The process of management and implementation of the plan requires a permanent and ongoing procedure. This can be viewed as a surveillance activity through which information is brought inside the process on a continuous basis. Oregon’s “benchmarks” are an example of this process. How Does it Work? Applications at the Micro Scale While it may seem that strategic planning is something that only large public organizations or businesses engage in, this is not the case. Presented below are four “snapshot” cases of applied strategic planning. The cases are organized in four parts: the pattern of change (the merging problem analysis), the vision (or the mission statement), the strategy (the set of action decisions), and the plan or action. By separating the process into these four types of activities it is easier to see the connection between theory and practice. Example 1: Creating
a market for smog rights Pattern of Change (Emerging Problem): Increasing amounts of airborne industrial contaminants and the threat of the loss of employment in the region due to contaminant control. Vision: Control of future expansion of contaminants through utilization of market planning principles. Strategy: Link the contaminant-producing industries and public agencies responsible for air quality through market mechanisms that permit the allocation of contaminant rights. Plan/Action: Establish a pool (fixed amount) of air contaminant rights and allow regional market interests to allocate those rights among users. Example 2: Stabilization
of an industrial labor force Pattern of Change (Emerging Problem): Increasing rates of turnover of highly trained auto assembly workers. Vision: Satisfied, stable, and loyal assembly workers. Strategy: Link housing tenure and neighborhood quality with the workplace and job stability. Plan/Action: Build quality worker housing and neighborhood facilities and rent them to workers with rights to ownership after 12 years of work with the company. Example 3:
Entrepreneurial solid waste Pattern of Change (Emerging Problem): No control over regional solid waste management or reuse of waste byproducts. Vision: A single regional solid waste facility capable of recycling and reuse. Strategy: Eliminate multiple sites serving different communities in the region and provide additional environmental benefits. Plan/Action: Offer a single solid waste site with market-priced dumping fees that would require no public subsidy. Advantages: Self-financing service, lower regional impacts through fewer sites, and reuse of methane gas in municipal vehicles. Example 4:
Environmental and self-sustainable Pattern of Change (Emerging Problem): Urban development overtaking wetland areas and causing environmental problems. Vision: Protect functioning wetlands and utilize the waste water flows for electric generation. Strategy: Redesign the area for multiple land uses, including wetlands, recreation, electric cogeneration, and housing. Plan/Action: Channelize drainage flows to a hydroelectric plant, construct recreation area adjacent to channelized wetlands, and construct housing for municipal workers on recaptured land sites. Key Actions: How to Think Strategically No matter what approach you take it is useful to gather together some of the elements that compose strategic thinking and thus allow for strategic planning to be practiced. The list below and the explanations that follow is not inclusive, but does contain useful conceptual procedures. Key Actions in Strategic Thinking
Concluding Remarks The models and examples presented in the previous sections tell us that public organizations are looking for more flexible approaches to the practice of public planning. However, we must keep in mind that strategic planning is a tool, not a panacea. Strategic planning requires a great deal of effort on the part of large numbers of decision makers, their staff, and key stakeholders (groups and individuals). It has the potential to be empowering to broad groups and interests within an organization and possibly to groups of outside stakeholders. If practiced correctly it has value in accepting uncertainty as an element in the planning process, and in the committing of resources to a chosen strategy. This paper has focused on public organizations mainly at the government level, not at the community level. Community-based strategic planning requires a different terminology (language of practice) and process because it usually addresses more immediate problems of people’s everyday life. Therefore, the discussion above, while useful, is not meant to be directly transferable to community-based practice. While there is clear evidence of the growing use of the strategic planning approach, less is known about how effective it is over the long run as a viable alternative to the rational model of decision making in the public sector. Its potential is likely to depend on how skillfully it is practiced, how widely it is shared within and among public agencies, and if it delivers something to the people. * Dr. William J. Siembieda is a Professor at the Faculty of Community and Regional Planning Program, School of Architecture and Planning, The University of New Mexico. He has vast experience as a professor, advisor, and consultant in programmatic planning in Latin America, and is author of numerous academic publications. This article is based on presentations given at the Seminario de Gesti�n Urbana Estrat�gica II, Puerto Montt, Chile, June 1994, Ministerio de Vivienda y Urbanismo.
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