STRATEGIC PLANNING PART II PROCESS & PLAN COMPONENTS MANAGEWARE Carolyn S. Lane Office of Planning and Budget Division of Administration State of Louisiana

STRATEGIC PLANNING

PART II

PROCESS & PLAN COMPONENTS

MANAGEWARE

Carolyn S. LaneOffice of Planning and BudgetDivision of AdministrationState of Louisiana

October 2006 Louisiana Office of Planning and Budget

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Strategic Planning

APPLYING THE STRATEGIC PLANNING PROCESS,

COMPONENT BY COMPONENT

ANSWERING THE FIVE MANAGEMENT QUESTIONS


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APPLYING THE STRATEGIC APPLYING THE STRATEGIC PLANNING PROCESSPLANNING PROCESS Who are we?

VISION

MISSION

PHILOSOPHY (VALUES)

Together, these constitute the organization’s unique identity—its organizational DNA.


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APPLYING THE STRATEGIC APPLYING THE STRATEGIC PLANNING PROCESSPLANNING PROCESS Who are we?

Crystallizing the organization's identity is a responsibility of leadership but, to be successful, it should be based on input from all.

KEY

POINT

CRYSTALLIZING THE ORGANIZATION’S IDENTITY

● Linking vision, mission, and values creates a powerful synergy.

● Each is important yet they are codependent.

•Without a vision, there is no inspiration.

•However, a vision without a mission is an impractical notion.

•And a mission without values could lead to an "ends justify means" philosophy.

Vision

ValuesMission


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Your visions become your reality.

- Star Wars: The Phantom Menace

APPLYING THE STRATEGIC APPLYING THE STRATEGIC PLANNING PROCESSPLANNING PROCESS VISION

A COMPELLING CONCEPTUAL IMAGE OF THE DESIRED FUTURE


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APPLYING THE STRATEGIC APPLYING THE STRATEGIC PLANNING PROCESSPLANNING PROCESS VISION

A COMPELLING CONCEPTUAL IMAGE OF THE DESIRED FUTURE

A vision statement should be:

• brief and memorable

• inspiring and challenging

• descriptive of the ideal

• descriptive of future service levels

• extraordinary but authentic

• appealing to everyone in the organization and to customers and other stakeholders


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APPLYING THE STRATEGIC APPLYING THE STRATEGIC PLANNING PROCESSPLANNING PROCESS INSPIRING VISIONS

To be a low cost producer of the highest quality products and services that provide thebest customer value.

Ford Motor Company

North Carolina will be a desirable place to live a productive, rewarding and satisfying life. Its people will have a shared sense of place, stewardship and values.

Commission for a Competitive North Carolina

To provide innovative and creative leadership focused on outcomes and improvementsthat promote a new image for Louisiana.

Louisiana Division of Administration

Minnesota's economic activity will create wealth and provide a good standard of living for all our people.

Minnesota Milestones

Louisiana: Vision 2020

Twenty years into the 21st Century, Louisiana will have a vibrant, balanced economy; a fully-engaged, well-educated workforce; and a quality of life that places it among the topten states in which to live, work, visit and do business.


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APPLYING THE STRATEGIC APPLYING THE STRATEGIC PLANNING PROCESSPLANNING PROCESS MISSION

A BROAD, COMPREHENSIVE STATEMENT OF PURPOSE

The mission identifies what an organization does and for whom it does it. That is, it describes an organization’s products or services and its customers.

The mission is all encompassing and rarely changes. It is the ultimate rationale for the existence of the organization.

A well-written mission statement:

• Identifies purpose but not process.

• Identifies customers or users of the organization’s products.

• Identifies services or products provided by the organization.

• Is clear and succinct.


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APPLYING THE STRATEGIC APPLYING THE STRATEGIC PLANNING PROCESSPLANNING PROCESS MEANINGFUL MISSION

STATEMENTS

EXAMPLES:

The Alliance for Youth, led by General Colin Powell, is dedicated to mobilizing individuals, groups and organizations from every part of American life to build and strengthen the character and competence of our youth.

- America’s Promise

California Literacy, Inc. is a non-profit, volunteer assisted, educational organization which provides statewide leadership to new and existing literacy programs and their students by offering diverse training, resources, consultation, and advocacy to help people gain the literacy skills they need to participate more effectively in society.

- California Literacy Incorporated

The mission of the Education Commission of the States is to help state leaders develop and carry out policies that promote improved performance of the education system.

- Education Commission of the States


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STATEMENTS

LOUISIANA:

“Louisiana: Vision 2020 communicates to the citizens of Louisiana a long-term strategic economic development plan to expand and diversify our economy. It demonstrates to those outside Louisiana the state’s commitment to reinventing itself. It shows the state’s commitment to raising income levels for all people and combating poverty. It analyzes Louisiana’s competitive position and builds upon existing strengths. It will continue to serve as road map and field guide outlining a comprehensive and visionary set of economic development policies that show the path to a vibrant Louisiana of 2020.

“The mission of the Department of Environmental Quality is to maintain a healthful and safe environment for the people of Louisiana.”

“The mission of the Department of Health and Hospitals is to protect and promote health and to ensure access to medical, preventive, and rehabilitative services for all citizens of the State of Louisiana.”


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LOUISIANA:

"The mission of the Criminal Law and Medicaid Fraud Program is to seek justice on behalf of the citizens of the State of Louisiana by the execution of superior, professional, and effective investigation and prosecution of all matters referred to the Department of Justice.“

FEDERAL GOVERNMENT:

“The mission of the Office of Management and Budget (OMB) is to help the President in carrying out his constitutional and statutory duties.“


STATEMENTS


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APPLYING THE STRATEGIC APPLYING THE STRATEGIC PLANNING PROCESSPLANNING PROCESS WRITING A MISSION

STATEMENT

POINTER: Write a mission statement with the assumption that readers have no knowledge of the organization, what it does, whom it serves, why it is needed, or how it works.

POINTER: Avoid using technical terminology, abbreviations, and acronyms.

POINTER: To develop a brief, clear mission statement, imagine giving a one-minute explanation of the organization to a legislative committee, the general public, or a community group. Think about how to best describe the organization in terms they can understand.


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POINTER: Use the following template to help develop a mission statement.

The purpose of the (fill in the name of the organization) is to

provide (identify the service or deliverable) to (identify the

customers who will receive the service or benefit from the service or

deliverable) .


STATEMENT


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Some organizations may opt to expand the mission statement by adding one of the following phrases to the end of the mission statement:

“in order to____________________________________________” or

“so that ______________________________________________” or

“so they can _________________________________________.”

Although this additional material is not required, it is sometimes helpful to an organization (particularly, at the program or activity level) that is struggling to identify desired outcomes (goals and objectives) and performance measures. Use this approach cautiously, however, in order to avoid rambling, unfocused mission statements.


STATEMENT


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APPLYING THE STRATEGIC APPLYING THE STRATEGIC PLANNING PROCESSPLANNING PROCESS PHILOSOPHY (VALUES)

CORE VALUES DESCRIBING HOW THE ORGANIZATION CONDUCTS ITSELF IN CARRYING OUT ITS MISSION

Philosophy puts a foundation of principles or beliefs behind the vision and mission.

Philosophy statements express the organization’s attitude about three things:

PEOPLE: The way in which people inside and outside the organization are treated.

PROCESS: The way in which the organization is managed, decisions are made, and products or services are produced.

PERFORMANCE: Expectations concerning the quality of its products and services.


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APPLYING THE STRATEGIC APPLYING THE STRATEGIC PLANNING PROCESSPLANNING PROCESS EXPRESSIVE PHILOSOPHY

STATEMENTS

"We want to give the best customer service of any company in the world."

- International Business Machines

"Working together to create an environment for positive change."

- Louisiana Division of Administration

“Quality is job one.”

- Ford Motor Company


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STATEMENTS

"Economic development is primarily a private sector phenomenon, the offspring of an active free enterprise system. Actions taken by government should be designed to foster private development, not to supplant it.

Government should attend to infrastructure needs: education, public sector research and development, transportation, and communications. Appropriations should be viewed as investments in the economic future, not as expenditures. Government should provide a stable and fair tax, regulatory, and legal environment in which business may be done efficiently and profitably. In many cases, strong, effective public-private partnerships should be utilized to achieve economic development objectives.

Louisiana must continue with its significant and sustained efforts to change the way it does business. While the new Louisiana called for in Vision 2020 will be a better place economically, educationally, and environmentally, it should remain identifiably Louisiana, a place like no other."

- Louisiana: Vision 2020 (2003 Update)


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All members of the Department shall serve the public to the best of their ability by being dedicated and accountable and by managing all allocated resources effectively and efficiently. This agency seeks to preserve the peace and to protect the persons, property, rights, and privileges of all people in the state of Texas through ethical leadership and superior employee development. To this end, it is imperative that all employees uphold the Department motto of COURTESY – SERVICE – PROTECTION and respect the constitutional right of all persons to liberty, equality, and justice.

- Texas Department of Public Safety


STATEMENTS


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What makes the organization unique?

VISION

MISSION

PHILOSOPHY (VALUES)

CRYSTALLIZING THE ORGANIZATION’S IDENTITY

APPLYING THE STRATEGIC APPLYING THE STRATEGIC PLANNING PROCESSPLANNING PROCESS


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INTERNAL/EXTERNAL ASSESSMENT

Where are we now?

AN ANALYSIS AND EVALUATION OF INTERNAL CONDITIONS AND EXTERNAL FACTORS THAT AFFECT THE ORGANIZATION

The process of conducting an assessment if often referred to as a SWOT analysis because it involves a review of an organization’s internal Strengths and Weaknesses and external Opportunities and Threats.

A thorough understanding of both internal and external factors enables planners to most advantageously position the organization to respond to its environment and prosper in the future.

The internal/external assessment should be conducted prior to goal setting.


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APPLYING THE STRATEGIC APPLYING THE STRATEGIC PLANNING PROCESSPLANNING PROCESS INTERNAL/EXTERNAL ASSESSMENT

Internal/external assessment involves:

Situation Inventory – an assessment of an organization’s position, performance, problems, and potential.

Environmental Scan – an analysis of key external elements or forces that affect the environment in which an organization functions.

Foresight or Anticipation – explicit efforts to systematically identify, monitor, and analyze long-term trends and issues that are likely to affect the organization’s future environment and to examine the implications those trends and issues may hold for alternative organization goals and possible organization actions.

Issue Analysis – an identification and analysis of strategic issues—problems or concerns of critical importance to the organization and its customers, other stakeholders, and expectation groups.


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Customers

Services

Authority

Capacity

Track Record

Opportunities

APPLYING THE STRATEGIC APPLYING THE STRATEGIC PLANNING PROCESSPLANNING PROCESS SITUATION INVENTORY

AN ASSESSMENT OF AN ORGANIZATION'S POSITION, PERFORMANCE, PROBLEMS, AND POTENTIAL

Position

Performance

Problems

Potential

Strengths

Weaknesses


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CONDUCTING A SITUATION INVENTORY

A situation inventory asks:

Who are the organization’s customers (internal and external), other stakeholders, and expectation groups? What are their needs and expectations?

• Stakeholders

• Customers

• Compliers

• Expectation Groups

Where has the organization been?

• What is the track record?

• What has changed?



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Where is the organization now?

• What are the organization’s current programs and activities? Under what authority does the organization operate them?

• Does the existing program structure make sense? If not, what changes would benefit both the organization and its customers?

• What is going on in programs and activities? How do processes work? What is being done well? What is being done poorly? Are performance standards being met?

• What is the public perception of current programs and activities?

• What benchmarks compare the quality and cost of the services, programs, and activities?

• Do current programs support one another? Are any in conflict? Do they support or coordinate with programs in other agencies? Do any conflict, duplicate or overlap?

• Are planning, budgeting, and accountability integrated?




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POINTER: When you break down a policy, program, or process into its component parts, you use "systems logic" to develop a model of how it should work.

INPUT OUTPUT & OUTCOMEPROCESS



EFFICIENCY

QUALITY

Use metrics to gauge and assess your process, diagnose problems, and formulate solutions.


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What opportunities for positive change exist? What remains to be accomplished?

• How are the needs and expectations of customers changing?

• Has the organization planned to accommodate that change?

What are the organization’s strengths and weaknesses?

• What advantages does the organization possess?

• What barriers or constraints does the organization face?

• What is the organization’s capacity to act?

• How can the organization build on its strengths and overcome its weaknesses?




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INFORMATION SOURCES:

• Policy development files

• Internal databases

• Annual reports

• Budget requests

• Undersecretary management/program evaluation reports (Act 160 reports)

• Program evaluations

• Financial and performance audits

• Quality assessment surveys

• Employees

• Customers


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REMINDER: The strategic plan must include a brief statement identifying the principal clients and users of each program and the specific service or benefit derived by such persons. Remember to identify internal and external customers duringthe situation inventory. Relate these customers to the servicesor benefits they receive.

REMINDER: The information gathered as part of the situation inventory will be used throughout the planning process. It will help define mission, express philosophy, set goals, formulateobjectives, build strategies, and select performance indicators.

REMINDER: Keep records. Not only will this facilitate and enhance the rest of the planning process, but you will be prepared for performance audit.




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APPLYING THE STRATEGIC APPLYING THE STRATEGIC PLANNING PROCESSPLANNING PROCESS ENVIRONMENTAL SCAN

AN ANALYSIS OF KEY EXTERNAL ELEMENTS OR FORCES THATINFLUENCE THE ENVIRONMENT IN WHICH AN ORGANIZATION

FUNCTIONS

Economy

Tradition

Marketplace

Technology

Government

Physical Environment

DemographicsPolitical Climate

Public Opinion

Use environmental scanning tokeep tabs on external factors.

Many external factors influence an organization and its mission.


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An environmental scan examines the current environment and, combined with foresight methodologies, anticipates changes in the future environment. An environmental scan asks:

What is the current environment?

• What external environmental elements currently affect the organization? How? Do they help or impede the organization? Which are most critical?

• What major current issues or problems affect the organization? Are these local, statewide, regional, national, or global in scope? Why are they of such importance?

• What current events, issues, or trends have captured the attention of the public? How do these affect the organization?


CONDUCTING AN ENVIRONMENTAL SCAN


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How may the environment differ in the future?

• What are the biggest external threats and opportunities?

• What forces that might alter key elements of the environment are at work?

• What are the most likely scenarios for the future?

• Are trends likely to continue or are changes forecast?

• What major new issues are anticipated?

• What implications do these future forces and environmental changes (trends and issues) hold for the organization? Which are most critical?




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You could try

But we recommend


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• Federal and state government statistical reports and databases

• Federal, state, and local government legislation, regulations, executive orders or actions, budgets, policy statements, and special studies

• Court decisions and actions

• National and regional professional organizations or associations

• Interest or advocacy groups

• Media

• University and college resource centers

• Agency advisory and governing boards


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REMINDER: The strategic plan must include an identification of potential external factors that are beyond the control of theorganization and that could significantly affect the achievementof its goals and objectives.

REMINDER: The information gathered as part of the situation inventory will be used throughout the planning process. It will help define mission, express philosophy, set goals, formulateobjectives, build strategies, and select performance indicators.

REMINDER: Keep records. Not only will this facilitate and enhance the rest of the planning process, but you will be prepared for performance audit.



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APPLYING THE STRATEGIC APPLYING THE STRATEGIC PLANNING PROCESSPLANNING PROCESS FORESIGHT (OR ANTICIPATION)

Foresight methods generally fall into four categories:

• Issue identification - involves methods to identify policy issues that are likely to occur in the future.

• Goal setting - generally used to develop directions or chart the future course for an organization.

• Trends analysis - often used in demographic, economic, technological, and social forecasting, to analyze trends and attempt to project future developments.

• Alternative futures - a method that uses scenario building to investigate possible or probably future paths.


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APPLYING THE STRATEGIC APPLYING THE STRATEGIC PLANNING PROCESSPLANNING PROCESS ANALYZING ISSUES

An issue is a matter in dispute—a point of controversy. Before an issue can be addressed, it must be analyzed. This involves:

• Define the issue or problem; determine its parameters.

• Understand who is affected and how they are affected.

• Determine how serious and immediate the issue or problem is.

• Project future trends for the issue or problem.

• Determine the underlying causes of the issue; identify and verify the key cause(s).

• Assign a priority relative to other concerns.


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STRATEGIC ISSUES

ISSUES OF CRITICAL IMPORTANCE TO THE ORGANIZATION AS A WHOLE

Strategic issues are high priority issues that merit special attention. These might be described as the “make you or break you” kinds of issues. Strategic issues:

• may arise as a result of an organization’s internal assessment;

• may be generated by external forces;

• may lead to strategic planning goals;

• may lead to management improvement efforts or budget modifications;

• may be addressed in the short-term or long-term;

• may emerge in an unexpected manner and become important after the strategic plan has been completed and approved.



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APPLYING THE STRATEGIC APPLYING THE STRATEGIC PLANNING PROCESSPLANNING PROCESS Where do we want to be?

GOALS AND OBJECTIVES

Goals establish direction and destination. They describe the general end results toward which effort is directed.

Objectives are specific, measurable targets for accomplishment.

Do not attempt to set goals and formulate objectives until you have completed the “Where are we now?” portion of the strategic planning process. Use the results of your internal/external assessment to support the setting of goals and formulation of objectives.


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APPLYING THE STRATEGIC APPLYING THE STRATEGIC PLANNING PROCESSPLANNING PROCESS GOALS

THE GENERAL END RESULT TOWARD WHICH EFFORT IS DIRECTED

• Goals are a description of the desired future that is possible.

• Goals chart direction and provide a framework for more detailed levels of planning.

• Goals describe the “to be” state.


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APPLYING THE STRATEGIC APPLYING THE STRATEGIC PLANNING PROCESSPLANNING PROCESS Why set goals?

"Our plans miscarry because we have no aim. When a man does not know what harbor he is making for, no wind is the right wind."

- Seneca (4 B. C. - 65 A. D.)

"If you don't know where you are going, every road will get you nowhere."

- Henry Kissinger

"If you don't know where you're going, be careful. You might get there."

- Yogi Berra

If you don't know where you are going, any path is as good as another...but you won't realize if you're lost, you won't know what time you'll get there, you might unknowingly be going in circles, and other won't understand how they can help. And, since you could pass right by without knowing it, you won't get the satisfaction of having arrived.

- Jim Lundy, Lead, Follow, or Get Out of the Way


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APPLYING THE STRATEGIC APPLYING THE STRATEGIC PLANNING PROCESSPLANNING PROCESS CRITERIA FOR GOALS

Harmonize with the organization’s vision, mission, and philosophy as well as other goals.

Are within the organization’s authority.

Chart a clear course for the organization but do not determine specific ways to get there.

Reflect the primary concerns and strategic direction for the organization—not a comprehensive listing of everything an organization does.

Reflect the results of an internal/external assessment and are developed in response to strategic or critical issues.

Encompass a relatively long period.

Tend to remain essentially unchanged until a shift in the environment under which they were created occurs.

Are challenging but realistic and achievable.

Have some degree of measurability.


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POORLY WRITTEN GOAL STATEMENTS

GOAL: To continue to provide services to customers.

(What’s wrong? Not challenging.)

GOAL: To conduct one seminar in every institution each year.

(What’s wrong? Unclear purpose; may be more appropriate as part of an objective or strategy.)

Try Again!

APPLYING THE STRATEGIC APPLYING THE STRATEGIC PLANNING PROCESSPLANNING PROCESS WRITING GOALS

Try Again!


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WELL WRITTEN GOAL STATEMENT

GOAL: To create a clean, healthy, and attractive environment, minimizing pollution, litter, and physical deterioration while instilling civic pride.

(What's right? Clear direction and destination are identified. A strong framework for further planning is built. The goal provides clear pointers to areas in which specific objectives and effective strategies can be developed--for example, improvements related to "clean, healthy, and attractive environment," and reductions in pollution, litter, and physical deterioration.)

Well Done!



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GOAL: To assure clean and sufficient statewide water supplies through conservation, development, and pollution control in order to protect public health and preserve beneficial water uses.

(What's right? Again, clear direction and destination are identified and a strong framework for further planning is built. The goal can lead to the formulation of specific objectives related to water quality, supply, and usage as well as the development of strategies related to conservation, development, and pollution control.)

Well Done!



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GOAL: To promote traffic safety, the preservation of the peace, and the prevention and detection of crime.

(What's right? Again, clear direction and destination are identified and a strong framework for further planning is built. The goal can lead to the formulation of specific objectives and strategies related to traffic safety, law enforcement, crime prevention and investigation.)

Well Done!



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APPLYING THE STRATEGIC APPLYING THE STRATEGIC PLANNING PROCESSPLANNING PROCESS TIPS FOR GOAL SETTING

Hold your goal-setting session away from the office.

Use the information gathered in your internal/external assessment.

Verify that it is within your authority to set goals in particular areas.

The number of goals will vary among organizations. However, keep the number of goals manageable.


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Goals may be internal or external.

• Internal goals reflect improvements to process and productivity; they are concerned with the way things are done.

• External goals usually relate to major components of the mission or address strategic issues; they are concerned with the things to be done.

Some strategic plans may have no internal goals; these plans may address internal or process issues at a strategy level.

Other plans may contain several internal goals emphasizing an overriding need to address process changes.

However, strategic plans should not focus exclusively on internal goals.


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There is a natural tendency to focus on internal issues, such as pay and civil service job classification plans, communications, technology, equipment, travel, training, management policies, and organizational image. These are troubling issues for many organizations, particularly since available resources generally have not kept pace with the demand for services. However, many of these issues fall back on management by input." "Managing for Results" shifts the focus to outcomes rather than inputs.

Internal goals should point to an end result that positions an organization to provide better services or outcomes. Many state agencies experience high employee turnover rates because of low pay scales; others cannot provide the level of employee training that is desired. A goal to improve employee pay and training emphasizes inputs; it does not point to an improvement in services or outcomes. In fact, this poorly written goal elevates a strategy to goal level. Improving employee pay and training is a means to an end. That end result is a stable, skilled, and equitably compensated workforce. Having such a workforce would have a positive impact on the services provided by the organization. Therefore, a better way to address this issue would be a goal to develop a stable, skilled, and equitably compensated workforce.

REALITY CHECK


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To the extent possible, goals should be placed in a priority sequence.

An internal/external assessment reveals many issues that could be the focus of management’s attention and organization resources. The goal-setting process must surface the most vital and establish priorities among them.

REMINDER: Each strategic plan must have a statement of the goals that reflect the benefits the organization expects to achieve on behalf of thepublic or specific groups.


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APPLYING THE STRATEGIC APPLYING THE STRATEGIC PLANNING PROCESSPLANNING PROCESS OBJECTIVE

A SPECIFIC AND MEASURABLE TARGET FOR ACCOMPLISHMENT

• Objectives describe specific results that a program seeks to achieve and set targets for performance.

• Objectives are measurable, time-based statements of intent.

• Objectives represent milestones, interim steps, or intermediate achievements toward realizing vision, mission, and goals.

• Objectives relate to achievement, not means.


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APPLYING THE STRATEGIC APPLYING THE STRATEGIC PLANNING PROCESSPLANNING PROCESS CRITERIA FOR OBJECTIVES

Well written objectives are SMART.

That is, they are:

S pecific

M easurable

A gressive but A ttainable

R esult-oriented

T ime-bound


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POORLY WRITTEN OBJECTIVES

OBJECTIVE: To reduce processing time. (What's wrong? The objective is not specific, measurable, or time-

bound. How much reduction in what kind of processing will be achieved within what timeframe?)

OBJECTIVE: To eliminate highway deaths. (What's wrong? The objective is not realistic; it is simply not

possible to achieve this outcome. The objective sets up failure. Even if it were realistic, it does not specify a time frame.)

Try Again!

APPLYING THE STRATEGIC APPLYING THE STRATEGIC PLANNING PROCESSPLANNING PROCESS WRITING OBJECTIVES

Try Again!


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POORLY WRITTEN OBJECTIVES

OBJECTIVE: To maintain current service levels through FY 2003-2004.

(What's wrong? This objective does not give specifics or target change. Perhaps the organization has had static funding levels and does not anticipate any additional revenues. Perhaps it is a challenge just to continue serving the same number of clients over the next few years. However, this objective fails to tell the full story.)

OBJECTIVE: To receive and process applications for permits,

collect application fees, and issue permits. (What's wrong? This objective targets no specific outcome or time frame;

rather it seems to be a list of ongoing activities or strategies to achieve something. It is a list of what the program does, not what it accomplishes.)

Try Again!


Try Again!


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WELL WRITTEN OBJECTIVES

OBJECTIVE: To reduce the average cost of processing new hires by 5% (from the FY06 base of $100) by June 30, 2012.

(What's right? A specific amount of change is targeted within a specified time frame. Progress can be measured and compared directly with the targeted outcome. The amount of change does not seem unreasonable.)

OBJECTIVE: To reduce the state's highway death rate from 2.1 in 2006 to

1.9 by 2009. (What's right? Again, a specific amount of change is targeted within a

specified time frame. Progress can be measured [highway death rate is a standard statistic calculated for each state annually] and compared directly with the targeted outcome. The objective does not represent an impossible target.)

Well Done!


Well Done!


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WELL WRITTEN OBJECTIVES

OBJECTIVE: To maintain the number of clients served at 2,500 annually while holding per client cost to no more than $3,500 through FY 2009-2010.

(What's right? This organization anticipates a standstill budget over the next few years but will maintain service levels at the same cost per client by growing more efficient. This objective is specific, measurable, and time-bound as well.)

OBJECTIVE: To reduce liquefied petroleum gas accidents by 10%

between June 30, 2007, and June 30, 2011. (What's right. This objective targets a specific, measurable outcome within

a designated time frame. One of the strategies to achieve this objective involves the permitting of handlers of liquefied petroleum gas.)

Well Done!


Well Done!


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APPLYING THE STRATEGIC APPLYING THE STRATEGIC PLANNING PROCESSPLANNING PROCESS FORMULATING OBJECTIVES

1. Review the organization’s mission and goals.

2. Be sure that you understand the internal and external factors affecting the organization.

3. Decide what results you want.

• Baseline performance; benchmarks; room for improvement

• Targets

• Variables or factors that may influence outcomes

• Standards or expectations (mandated or not)

• Consistency with policies, values, priorities

4. Set a time frame for achievement of results.

5. Build in accountability.


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REMINDER: Each strategic plan must have a statement of objectives relative to each program which the organization expects to achieve in attaining its goals. Each plan must include, where applicable, a description of any program evaluations used to develop objectives and an identification of the primary persons who will benefit from or besignificantly affected by each objective within the plan.

REMINDER: Use the information gathered in your internal/external assessment (situation inventory, environmental scan, foresight activities, and issue analyses) to support the formulation of objectives.



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Consider the following input variables:

TARGET GROUP VARIABLES

Demographic and economic characteristics of the target population.

POLICY AND PROGRAM VARIABLES

Those things that the program manipulates (such as resource allocation, intensity of service, or incentives for performance).

EXTERNAL VARIABLES

Factors not controlled through the program that may have independent and significant effects on outcomes (such as economic downturns, population shifts, technological advances, or cultural differences or changes).


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BASELINE PERFORMANCE LEVEL

Assess baseline performance levels before deciding how much change is needed or wanted.

• A baseline is established with data collected at the beginning of an improvement process so that it can be compared with future data to measure progress and improvement. In other words, baseline performance represents the “before” state in a “before/after” evaluation.

• If historical data are available, they can be used to determine the baseline. The baseline is usually derived from the most recent one-year period or, if appropriate, an average of several prior years. Sometimes industry averages can be used.


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BENCHMARKING

Benchmarks are the highest levels of quality within specific programs, processes, or services.

> Best in the business> Professional standards, accreditation standards, or quality practices

> Highest or lowest rankings (whichever is more desirable)> Performance or workload levels set in statutes, regulations, or official guidelines

Benchmarking is the process of rating an organization's practices, processes, and products against the best and then emulating them.

> Seek out best-in-class performers inside or outside your organization.> Study them to determine why they are the best at what they do.

> Apply what you have learned to your own operations.

Benchmark for both best management practices and best measurement practices.


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ROOM FOR IMPROVEMENTAfter comparing baseline status and the benchmarks for a particular program or service, managers and staff know how far the organization must go to equal the best performers. This difference or gap between the actual baseline performance and the benchmark target represents "room for improvement."

BASE LEVEL PERFORMANCE BENCHMARK

ROOM FOR IMPROVEMENT


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APPLYING THE STRATEGIC APPLYING THE STRATEGIC PLANNING PROCESSPLANNING PROCESS TIPS FOR BENCHMARKING

1. Do the benchmarking study quickly or not at all. > Resources > Groundwork > Experts > Scope 2. Identify suitable issues or activities to benchmark. Choose a broad-and-shallow or narrow-and-deep scope. Place higher priority on issues or activities that: > Have the highest costs; > Are key to service delivery or program survival (critical success factors); > Appear to have room for improvement; and/or > Have the capacity for improvement.

3. Identify suitable benchmarking partners. > Direct comparables > Parallel comparables > Latent comparables > Out-of-category organizations

4. Gain the cooperation of benchmarking partners.

5. Gather information from benchmarking partners. > Questionnaires > Interviews > Visits 6. Use the information gathered to identify improvement opportunities and implement changes. Manage the change from the start.


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APPLYING THE STRATEGIC APPLYING THE STRATEGIC PLANNING PROCESSPLANNING PROCESS How do we get there?

STRATEGIES AND ACTION PLAN

To achieve results, it is not enough to know where you want to be. You must know how to get there.

Strategies indicate in general terms how goals and objectives will be achieved. Action plans detail tasks and assign responsibilities for strategies.

STRATEGY – The method used to accomplish goals and objectives.

ACTION PLAN – A detailed description of how a strategy will be implemented.


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HALLMARKS OF SUCCESSFUL STRATEGY

BUILDING


Successful strategy building incorporates:

Reality and reasonableness

Self-awareness

Awareness of competition

Emphasis on action, execution, and follow through

Willingness to change and/or take risks

Diverse thinking

Inclusiveness and perspective


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APPLYING THE STRATEGIC APPLYING THE STRATEGIC PLANNING PROCESSPLANNING PROCESS BUILDING STRATEGIES AND

DEVELOPING ACTION PLANS

Alternative strategies may be identified through:

• Brainstorming how to achieve results

• Researching what works

• Evaluating what is already in place


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Cost-benefit analysis is an excellent tool. Cost-benefit involves calculating or estimating the known costs and potential benefits of a course of action under consideration. It is a method to compare various alternatives and facilitate a ranking of these alternatives.

• Costs are generally considered to be the inputs required to implement a course of action. These include personnel, operating expenses, and capital expenses.

• Benefits are the anticipated outputs (services provided) and outcomes (results) of the course of action.

• Cost-benefit can be summarized as a comparison of:

What do we give? What do we get?


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REMINDER: Each strategic plan must include a statement of each strategy that the organization will use in achieving each stated goal and objective; an explanation of how duplication of effort will be avoided when the operations of more than one program are directed at achieving a single goal, objective, or strategy; and a description of any program evaluations used to develop strategies.

POINTER: Be sure that you consider the costs and benefits of alternative strategies; explain the rationale for your selected strategy or strategies; and keep records for process documentation.


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Once a strategy has been chosen, the steps necessary to successfully implement the strategy need to be identified. These are the action steps that will appear in the action plan. An action plan operationalizes a strategy. The action plan is where actual production occurs. Action plansteps describe who does what and when he or she does it. To successfullydevelop and manage an action plan, it is necessary to:

> Assign responsibility for completion.

> Set a time frame for completion.

> Detail the action plan in steps.

> Determine the fiscal impact of the action plan and the resources needed to carry it out.

> Organize the action plan.




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REMINDER: Action Plans are valuable for internal program management. However, they generally should not be surfaced for inclusion in the agency strategic plan.

POINTER: Use the sample format for action plans to set up action plans and the sample format for tracking action plans to follow progress.


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When we come back, we’ll talk about building in accountability.


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APPLYING THE STRATEGIC APPLYING THE STRATEGIC PLANNING PROCESSPLANNING PROCESS How do we get there?

ACCOUNTABILITY

THE METHODS USED TO MEASURE RESULTS

To succeed, you have to know how well you are doing. The most comprehensive, elegant, and technically perfect plan written is of no worth

unless it works.

What gets measured gets done.

Accountability monitors progress. It tracks the extent to which strategieshave been implemented. It measures performance and compares actual

with expected results of goals and objectives.

Accountability must be built into the strategic plan.

What gets measured gets changed.


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WHAT PERFORMANCE ACCOUNTABILITY IS NOT

Accounting

Conformance with Rules and Regulations

Traditional Quality Control (End-line Inspection)

Balance SheetDebits Credits

$xx.xx $xxx.xx$\x.xx $xxx.xx

Office Policies

Inspected byNo. 435

APPLYING THE STRATEGIC APPLYING THE STRATEGIC PLANNING PROCESSPLANNING PROCESS BUILDING IN ACCOUNTABILITY


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HALLMARKS OF SUCCESSFUL PERFORMANCE ACCOUNTABILITY

Built into strategic plans and policy development

Built into internal management and decision making

Primary focus on outcomes

Balanced sets of performance indicators

Consistent data over time

Internal and external comparisons

Reports regularly and publicly

Good feedback system


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PERFORMANCE INDICATORS ARE THE TOOLS USED TO MEASURE PERFORMANCE.

Performance indicators are made up of two parts:

• Name of indicator - describes what you are measuring

• Value of indicator - the numeric amount or level achieved during a given measurement period.

EXAMPLE:

Indicator Name Indicator Value Number of clients served 3,250

BUILDING IN ACCOUNTABILITYAPPLYING THE STRATEGIC APPLYING THE STRATEGIC

PLANNING PROCESSPLANNING PROCESS


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POINTER: Concentrate on the development of a balanced set of performance indicators for each objective. A balanced set of indicators will provide a clear picture of performance without needless detail.

Louisiana uses five types of performance indicators: Input Output Outcome Efficiency Quality

A balanced set may include more than one of any indicator type and none at all of some.




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Act 1465 required that a strategic plan include, for each objective, one each of four kinds of performance indicators.

Input Output Outcome Efficiency

Act 1169 of 1999 amended Title 39 to require at least one of any of the following:

Outcome Efficiency Quality

accompanied by as many input and output indicators as needed.

SO, NOW YOU CAN DEVELOP, USE, AND REPORT A BALANCED SET OF PERFORMANCE INDICATORS FOR EACH OBJECTIVE.




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Performance indicators are based on process or systems logic--that is, how the system or process works.

Inputs Outputs & OutcomesProcess

Efficiency:

OutputsInputs

Outputs or OutcomesCost

Outputs or OutcomesTime

Quality: Effectiveness in meeting the expectations of customers, other stakeholders; and expectation groups.

(Products)(Services)

(Results)

(Expenditures compared to productivity;caseload per staff member.)

(Cost per item produced, serviceprovided, or client served; cost perresult achieved.)

(Production or turnaround time; timeliness of results.)

(Demand)(Need)

(Size of Problem)(Resources)




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EXAMPLES OF INPUT INDICATORS

Budget allocation

Number of staff members or full-time equivalent (FTE) employees

Current illiteracy rate in Louisiana

Number of clients eligible for program

Number of customers requesting service

Number of applications received

Number of school age children

Current level of child immunization against communicable disease

Current teen pregnancy rate

Current visitor rate and advertising/revenue ratio at museum

Level of motor carrier compliance with weight limits




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EXAMPLES OF OUTPUT INDICATORS

Number of students enrolled in an adult literacy program

Number of clients/customers served by program

Number of applications reviewed

Number of vaccinations/inoculations given

Number of teens enrolled in pregnancy prevention class

Number of museum visitors

Dollar amount of museum revenues raised

Number of motor carrier weight violations cited




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EXAMPLES OF OUTCOME INDICATORS

Number/percentage of students able to read and write after completing an adult literacy program

Percentage change in number of applications reviewed

Percentage change in number of clients/customers served

Percentage change in number/percentage of school age children who are vaccinated/inoculated against communicable disease

Reduction in incidence of communicable disease

Percentage of teens enrolled in pregnancy prevention program who become pregnant within 12, 18, 24 months after program end

Percentage change in museum visitor rate and revenues raised

Change in motor carrier compliance with weight limits

Percentage completion of database




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EXAMPLES OF EFFICIENCY INDICATORS

Cost per student in an adult literacy program

Cost per application reviewed

Average or maximum processing time for application review

Administrative cost as a percentage of total program cost

Average cost per client/customer served by program

Number/percentage of eligible clients receiving services

Average or maximum waiting time on eligibility list

Average cost per vaccination/inoculation

Cost per teen enrolled in pregnancy prevention program

Annual cost per visitor to operate museum

Revenue return on every advertising dollar spent on promoting museum

Savings (time, personnel, and/or costs) from automation of processes and procedures




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EXAMPLES OF QUALITY INDICATORS

Number of repeat audit findings

Number/percentage of errors during application review

Compliance with error tolerance levels in program guidelines

Percentage accuracy of data entry

Customer survey satisfaction rate

Number of client/customer complaints filed

Percentage of client/customer complaints substantiated

Awards or recognition for service excellence

Accreditation of program/facility or licensing of staff

National or regional ranking




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BUILDING IN ACCOUNTABILITYAPPLYING THE STRATEGIC APPLYING THE STRATEGIC PLANNING PROCESSPLANNING PROCESS

PERFORMANCE INDICATOR LEVELS

Some performance indicators will be used only for internal management purposes.

Some indicators will surface for performance-based budgeting decision making.

Some indicators will be used for both purposes.


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PERFORMANCE INDICATOR LEVELS

For performance-based budgeting, present performance information at different reporting levels in order to surface key data while maintaining the availability of support and explanatory material.

Louisiana uses:

Key Performance Indicators

Supporting Performance Indicators

General Performance Information

Explanatory Notes



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How do we know what a performance indicator actually means?

Explanatory notes help everyone gain a more complete understanding ofperformance indicators. They establish context and fill in the background.They identify input variables, program variables, and external variables andexplain how those variables affect performance.

Explanatory notes provide a link among indicators that should be used intandem.

Explanatory notes justify differences between performance standards andactual performance.

BOTTOM LINE: When reporting performance, feel free to footnote.

EXPLANATORY NOTES



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CRITERIA FOR PERFORMANCE INDICATORS

The usefulness of performance indicators is dependent upon their validity, accuracy, and reliability.

Performance indicators should be:

Valid and meaningful – a good fit

Accurate, reliable, and verifiable – solid source, reproducible data

Clear and simple – understandable by layman

Balanced – tells a complete performance picture




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POINTER: When selecting performance indicators to measure progress, compare for:

Validity – appropriateness to activity/objective being measured

Clarity – clear and simple terms; no jargon

Timeliness – frequency of reporting and time from observations

Reliability and consistency – proven, consistent data and source

Calculation methodology – standard or nonstandard measure

Cost to gather and analyze – practical

Utility – internal management or external reporting or both




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DEVELOPING PERFORMANCE INDICATORS


TO SELECT PERFORMANCE INDICATORS:

• Review objectives. What outcomes are targeted?.

• Determine what evaluation methods will be used.

• Decide what information is needed to tell whether or not expected changes are occurring.

• Determine whether actual or proxy indicators will be used.

• Consider what types of indicators will best tell the performance story.

• Consider potential reporting levels (key, supporting, or general performance information).

• Generate an initial list of indicators; then review and compare alternatives.

• Select a balanced set of indicators to monitor and report performance.


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USEFUL TECHNIQUES:

• Identify objectives that have obvious indicators associated with them

• Review performance information that is collected already

• Ask key decision makers what they most want to know

• Think about what stakeholders most want to know

• Benchmark

• Seek expert advice


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POINTER: When selecting performance indicators to build a balanced set of indicators, keep in mind how you will evaluate performance. Select performance indicators that will support your evaluation methodology.

Common ways to evaluate performance are:

Comparison of planned performance with actual performance

Comparison of “before” and “after” data

Comparison of population segment(s) served and not served by project, service, or grant

Controlled, randomized experimentation

Feedback from clientele




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POINTER: If much of your service delivery is performed through grant recipients and/or contractors, keep in mind the requirements of performance-based contracting.

Some agencies administer significant amounts of “pass through” funding.

Under Louisiana’s performance-based contracting provisions and procedures, contracts for professional, personal, consulting, or social services must include specific goals and objectives, measures of performance, and a plan for monitoring the services to be provided.

“Pass through” funds distributed by contract may fall under these requirements. If so, information related to service provision and service beneficiaries should be available. Use this information to show the results generated by the administering program through contract service providers.




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CUSTOMER SURVEYS

One of the most overlooked and underused tools for monitoring performance in state programs is the customer survey. To find out how well a program is delivering services, ask the recipients of those services.

Remember, however, that to be meaningful, customer surveys must be well planned and designed, scientifically valid, and auditable.

PROCESS:

1. Plan, test, and document the survey process. 2. Identify customers. 3. Construct and ask questions. 4. Edit and archive data. 5. Analyze data and results. Explain the results of the analysis.

How's my driving?Call 1-800-xxx-xxx.

Customer Survey Card _________________________________________________




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POINTER: When selecting a balanced set of performance indicators to measure progress toward each objective, consider:

What data you already collect, analyze, and report.

How you collect, analyze, and report existing data.

What additional data you need to collect, analyze, and report.

How (and at what cost) you will collect, analyze, and report.

How the indicator will be used—internal management and/or performance based budgeting.

After selecting a balanced set of performance indicators, organize to collect, analyze, and report data.


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TIPS FOR SELECTING PERFORMANCE INDICATORS


Get consensus among those who establish expectations (set goals and objectives), those who bear responsibility for achieving expected outcomes, and those who evaluate, utilize, or value performance.

Since it is often necessary to settle for proxy (or surrogate) indicators, be sure that proxy indicator is as close to the real thing as possible.

When both available and proxy indicators are not sufficient, it may be necessary to change the way that data are collected--to establish new databases; to sort or analyze existing data differently; to gather comparative data from other states or programs; and/or to use multiple sources.


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Some programs gather volumes of data, much of which is necessary for good program management. Program managers should select and use as many performance indicators as they need to ensure quality service delivery.

However, avoid the trap of reporting too many measures to higher management levels or for budget decision making. This can signal a lack of clarity about program mission, goals, and objectives.

Anticipate the levels at which performance indicators will be reported. Although all performance indicators should be useful for internal management decision making, not all indicators need to surface for performance-based budgeting.


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Take care that performance measures do not lead to wrong incentives. For example, if you focus on the number of cases processed, staff may be tempted to accept only the easiest cases in order to generate the highest processing ratings.

A balanced set of measures can help overcome this potential shortcoming. Another approach is to group measures for internal purposes (such as by type of customer/client or by geographical area) to reflect workload difficulty.

Develop and select performance indicators, when objectives are set. Do not wait until time to report performance to develop performance indicators.

Keep records.


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REMINDER: Each agency must submit documentation to the Division of Administration as to the validity, reliability, and appropriateness of each performance indicator, as well as the method used to verify and validate the performance indicators as relevant measures of each program's performance.

Additionally, each agency must indicate how each performanceindicator is used in management decision making and otheragency processes.


POINTER: Complete the Performance Indicator Documentation Sheet (in MANAGEWARE and OPB guidelines) for each indicator. Questions from that sheet are shown on the following slide.


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Indicator Name: LaPAS PI Code:

What is the indicator type and level? What is the rationale for the indicator? How will the indicator be used in management decision making and other agency

processes? Will the indicator be reported for performance-based budgeting? Is the indicator clear? Does it contain jargon, acronyms, or technical terms? Is the indicator valid, reliable, and accurate? How do you know? Has it been

audited? What is the source of the indicator data? What is the frequency and timing of

collection or reporting? How is the indicator calculated? Is this a standard calculation? What is the scope of the indicator? Is it aggregate or disaggregate? Does the indicator have limitations or weaknesses? Proxy? Biased source? Who is responsible for data collection, analysis, and quality?

PERFORMANCE INDICATOR DOCUMENTATION




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POINTER: In addition to determining how you will measure and evaluate performance, you must decide how you will monitor and report performance progress.

As part of your plan for monitoring and reporting performance, determine:

• Who will monitor and report performance? Assign responsibility.

• How and with what frequency will performance be monitored and reported?

• How will performance progress be reported? For what purpose? (Internal management? Budget development?) Format and frequency?

• How will performance data be checked (or audited) to ensure accuracy?




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When you identify and select performance indicators to measure progress, you are committing to the use and reporting of those indicators over the lifetime of the strategic plan. For those indicators that are to be used and reported as part of performance-based budgeting, you must be prepared to report those indicators in your operational plans and LaPAS for five years.

There must be a compelling reason to change performance indicators during the lifetime of a strategic plan. Such changes must be justified and should be discussed with other users of those data before changes are made.

KEY

POINT


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Built-in performance accountability links strategic planning, budgeting, and implementation of statewide, agency, and program activities.

Performance measures are identified during strategic planning.

Performance standards are formulated during budget development and appropriation processes.

Performance accountability feeds further policy development, strategic planning, and operational planning.

Actual performance is monitored and tracked during the fiscal year through performance progress reporting.



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RESOURCE ALLOCATIONAPPLYING THE STRATEGIC APPLYING THE STRATEGIC


THE DETERMINATION AND ALLOTMENT OF RESOURCES OR ASSETS NECESSARY TO CARRY OUT STRATEGIES

AND ACHIEVE OBJECTIVES, WITHIN THE PRIORITY FRAMEWORK ESTABLISHED IN THE GOAL-SETTING

PROCESS

• Strategic planning leads ultimately to resource allocation decisions.

• Strategic planning identifies the highest priorities or best uses for funds, personnel, facilities, equipment, and other resources.

• Strategic plans drive annual operational plans.

• Strategic plans guide capital outlay plans.


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TRANSLATING STRATEGIC PLANS INTO BUDGETS: Louisiana’s Experience

CAPITAL OUTLAY

REQUEST TRACKING

SYSTEM CAPITAL OUTLAY BUDGET

DECISIONS

OPERATIONAL PLAN

OTHER BUDGET REQUEST FORMS

& ADDENDAPERFORMANCE PROGRESS REPORTS

AUDITS

OPERATING BUDGET

DECISIONS

Louisiana: Vision 2020

AGENCY STRATEGIC PLAN

PERFORMANCE ACCOUNTABILITY


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TRANSLATING STRATEGIC PLANS INTO BUDGETS: Louisiana’s Experience

As part of the total operating budget request package, each budget unit must submit an annual operational plan that includes:

Department and/or budget unit mission and goals

For each program in the budget unit:

program description (including program mission and goals and brief description of major activities)

program performance objectives from strategic plan performance indicators for each objective

Contact person(s)


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See the Office of Planning and Budget website for guidelines and requirements for strategic planning.

“Applying the Strategic Planning Process” (under Performance-Based Budgeting Forms & Guidelines)

“How to” information in MANAGEWARE (under Publications)

INFORMATIONAPPLYING THE STRATEGIC APPLYING THE STRATEGIC


OPB Website Address:http://www. doa.louisiana.gov/opb/index.htm

Documents

STRATEGIC PLANNING PART II PROCESS & PLAN COMPONENTS MANAGEWARE Carolyn S. Lane Office of Planning and Budget Division of Administration State of Louisiana