Get under the skin of it
8. Public Sector Strategic Management
8.7 Something Borrowed
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In the UK, changing forms of government have grown to include networks and
multi-organisational partnerships. Lowndes and Skelcher (1998) suggest that the resource restrictions on public services has driven the development of partnerships between government bodies, with private as well as not-for-profit (NFP) agencies in the voluntary sector.
A shift is seen from competition to collaboration that McNulty (2003) observes in the UK Health Service with the removal of demarcation and ‘unnecessary boundaries’ to create new
organisational forms. Differentiation is a strategy for survival but it is also a strategy within the organisation for maintaining power – it is difficult to manage multiple specialisms that can resist management attempts to standardise practices or make processes transparent (McNulty, 2003).
Breaking down barriers within the organisation brings increased efficiency and overall
effectiveness when delivering complex or seamless services. And partnerships increase service and resource potential, offering ‘collaborative advantage’ rather than the competitive advantage of the private sector.
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Nutt and Backoff (1993) posit that different approaches to strategy will produce different strategies. Given the differences in the environments that public and private sector organisations exist in then some approaches will be inappropriate such as strategic processes geared towards profit or market share or strategies geared towards competition. Nutt and Backoff (1993) suggest that public sector strategic leaders should in fact ‘avoid’ private sector approaches to strategic development.
Nutt and Backoff (1993) suggest an approach that develops content and process pari passu in what they refer to as the “… dance of the what and the how …” (Nutt and Backoff, 1993:313), their approach suggests the implementation of strategy rests on:
1. Exploration/evaluation of the situation 2. Understanding history
3. Uncovering of issues 4. Identification of strategy 5. Assessment of feasibility
Nutt and Backoff (1993) take a situational approach to strategy by looking at histories. The logic of this activity stems from the idea that the further back you go to consider your current position the further you will be able to conceptualise in to the future. Discussing key events act as temporal markers in the process of recapturing or avoiding past events.
Winston Churchill’s famous quote that ‘Those who do not learn from history are destined to repeat its mistakes’ is evoked here, though similarly those who are not locked into their history are free to choose a different future. If we understand our past, and from its principles, we can envisage our desired future then exploring the situation will help identify the likelihood of achieving this future. Nutt and Backoff (1993) suggest the use of SWOT analysis though they point out the different focus of the tool in the public sector such that:
“In firms [private sector], the challenge for strategic management is to recognise threats in an ocean of opportunities. In public sector organisations, a way to identify
opportunities in a turbulent sea of threats is needed.” (Nutt and Backoff, 1993:316) The strategic issue agenda results from the historical evaluation and situational analysis of trends, opportunities and threats, events and desired futures. Nutt and Backoff (1993) suggest the issues centre on four concerns that of human resource needs, innovation and change, maintenance of tradition and rationalising processes.
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The issues arise out of tensions between these concerns. The framework acts to focus strategic thinking and help avoid the possibility of ignoring key issues. The framework suggests that strategic issues tend to evolve out of the fluctuations of being both pushed and pulled in
particular directions due to the gravity of the primary concerns. For example being too proactive might lead to being out on a limb (and so vulnerable to attack) and too reactive will see the organisation fire fighting rather than managing in an organised efficient manner. In the public sector the notion of tensions is particularly significant in the light of multiple competing political, ethical and financial issues that surround strategy.
Strategies can be developed from the issue tension agenda in terms of developing strengths, overcoming weaknesses, taking advantage of opportunities and defending against threats. The issue tension-SWOT combination is likely to be more fruitful in the public sector as there is a need to be incremental in developing strategy in balancing opportunities and threats. Divesting, vertical (or horizontal) integration, mergers and acquisition and globalising are unlikely strategies for a public sector organisation. As are cost leadership and differentiation, as there is no real opportunity to segment a market for a public sector organisation – it would be unrealistic for the Fire Brigade to offer niche differentiated fire extinguishments.
New markets and related or unrelated innovation (or diversification) are rare in the public sector unless new social developments occur (pre-school child care or hospice care for AIDS victims are perhaps examples). So the notion of issue tensions rather than more instrumental approaches are likely to offer more practical benefits to the public sector organisation.
In assessing feasibility the resource requirements and key stakeholder perspectives in relation to strategies under consideration need to be recognised. The perspectives of the users and providers of services as well as resource providers are clearly important to the feasibility of any strategy in the public sector. The supporters and blockers of the strategies under consideration are much more important in public sector than private sector organisations as overseeing bodies such as governmental commissions are able to intervene – the sites for nuclear power stations or other large scale projects can often go beyond the scope of the local decision makers.
Implementation is a balancing of the other five activities to organise resource allocation and stakeholder satisfaction in particular. Implementation of strategy ultimately involves change of some sort even if we are changing in an attempt to stay the same. Partly due to the changing ideologies of the formulators, economic changes and growth (as well as diminution) of the public sector over time, much of the research into public sector strategy has a fairly significant change dimension. We need to expand the implementation process to consider change and the processes within it.
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