As we explored in our previous blog, it can be challenging for public sector leaders to set strategy at a time of increasingly complex demands, shifting political will, and a renewed imperative for the public sector to be more purpose-led, collaborative and adaptive.
Creating strategy is one challenge – delivering it is another. Our experience in both the public and private sector space tells us that leaders can ease the path by focusing on structural alignment.
Strategy delivery often calls for significant structural adjustment: closing outdated functions and processes; moving people out of established roles; and ways of working and governance arrangements that may not instinctively appeal to leaders across any organisation. This is where, in the absence of ambitious plans and willpower of senior leadership, strategy risks becoming ‘shelfware’ – widely promoted with a brief flurry of communications and then quickly forgotten until a successor arrives in a year or two. Or where energy is committed at a leadership level, the wheels spin, but traction in the wider organisation is found wanting. This leads to, at best, incremental change rather than successful strategic renewal.
For strategies to drive improvements in organisational performance, those delivering them need to be working from a common set of priorities. This is particularly true in organisations with complex missions and/or large workforces, and where there is a heightened risk of pet projects and zombie programmes – those that fester for months or years, pulling resources away from activities that deliver the greatest strategic impact.
A strong strategic centre is critical in aligning and prioritising resources to deliver true value. It enables an organisation to refresh its governance, and to ensure relevant committees have the right mandates and representation to drive the delivery of relevant strategic priorities. While there is no one-size-fits all approach to a strategic centre, several core functions are typically required. Most public sector organisations already have such functions, but fail to locate them in a single, cohesive strategic centre. This results in missed opportunities to reduce complexity and shift strategic direction quickly.
Strategy team: Any strategic centre needs to be built around a strategy team that can develop a purposeful long-term direction, and that can refresh this when there is evidence of a need for a new strategy. This team should be constantly horizon scanning, identifying new external trends and opportunities that the organisation may need to enhance its performance. A good strategy team will augment and constructively challenge disparate teams across the organisation, ensuring policies and transformation initiatives are consistent with the organisation’s long-term direction.
Portfolio management office: An empowered and proactive portfolio management office shapes and allocates funding towards activities to deliver the desired change. It’s an often overlooked – but fundamental – part of strategy success. It can be easy for government departments to focus on policy work at the expense of portfolio planners who can connect strategic intent with programmatic delivery. An effective portfolio management function will identify the benefits from prospective changes, plan implementation in a cohesive and cogent way, and assure their realisation through constructive scrutiny and focused interventions.
Design authority: The design authority is the ultimate insurance policy for corporate decision making. It acts as custodian of the organisation’s operating model, and is comprised of senior managers from a range of areas who understand and serve as sponsors of different operating model components. Acting in partnership with the portfolio management function, the design authority drives consistency and integrity in change activity – often spending more time preventing unhelpful and distracting change activities rather than approving new ones. It ensures the delivery of change initiatives is planned in a way that makes the transition to the organisation’s intended target state as effective as possible, with funding apportioned accordingly.
Corporate enabling functions: Implementation of any strategy is predicated on an organisation’s ability to staff, fund, procure and/or manage delivery of the individual elements. This is typically the work of corporate enabling functions: Technology, Human Resources, Financial, Commercial and, increasingly, Data & Information Management. There are several ways this can be done, ranging from organising all these functions in the strategic centre itself through to small central organisation with responsibility disaggregated to business units. While a single strategic centre provides the most control, it is more suited to smaller public sector organisations. In larger ones with more complex missions and larger workforces, it’s difficult to manage on a sustained basis. Other approaches might see any combination of embedded roles, dual reporting arrangements and carefully crafted functional sub-strategies. These can create the alignment that ensures enabling functions are producing outputs that directly contribute to strategy delivery. It also creates the connections to the specialist support that is integral to the implementation of any strategy.
We supported the structural alignment of a prominent public sector defence organisation that found itself held back by complex structures and processes when developing its corporate strategy. In supporting the development of the new strategy, we conducted a full review of the organisational design, governance structures and processes in place to manage strategy within the organisation. Overall, our work helped ensure that our client’s strategy had a compelling and coherent narrative that would drive action and resource allocation internally, and that the organisation had the governance and performance management processes in place to effectively deliver their plans.
Crucially, this strategic centre needs to ensure there is sufficient accountability for delivery. This comes from executive leaders having collective accountability for realising the strategic outcomes, with specific responsibility for delivering different strategic themes and responses. Strategic objectives can only truly be realised when they cascade down through realistic business plans and into personal objectives.
Leaders should be supported by an organisation that enables good decision making. A critical role is that of a central knowledge repository to maintain a single version of the truth. To enable other functions in a strategic centre, there must be a consistent and comprehensive grasp of performance against strategic priorities at any given time through systematic storing and updating of key business intelligence and management information.
The approach above can create the structural alignment necessary to avoid the common pitfalls of strategy work and deliver a strategy that sticks. Crucially, it’s structural alignment that provides both the guardrails and the platform to focus on strategic value – and it’s this that we’ll discuss in our next blog.