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PART VI:

THE PAST AS

PRELUDE: WERETHE PREDICTIONS

OF CLASSIC

SCHOLARS

CORRECT?Theodore H. Poisteris a professor of

public management and Policy at the

Andrew Young School of Policy Studies at

Georgia State University. He has published

widely on strategic management and

performance measurement in the public

sector. His current research focuses on the

impact of strategy and strategic planning on

the performance of public transit systems inthe United States.

E-mail:[email protected]

S246 Public Administration Review December 2010 Special Issue

Theodore H. Poister

Georgia State University

Te Future of Strategic Planning in the Public Sector: Linking

Strategic Management and Performance

While it has become ubiquitous in the public sector overthe past 25 years, strategic planning will need to playa more critical role in 2020 than it does at present if

public managers are to anticipate and manage changeadroitly and effectively address new issues that are likelyto emerge with increasing rapidity. Tis article argues

that making strategy more meaningful in the futurewill require transitioning from strategic planning tothe broader process of strategic management, whichinvolves managing an agencys overall strategic agendaon an ongoing rather than an episodic basis, as wellas ensuring that strategies are implemented effectively.Complementing this move to more holistic strategicmanagement, we need to shift the emphasis of the

performance movement from a principal concern withmeasurement to the more encompassing process of

performance management over the coming decade inorder to focus more proactively on achieving strategic

goals and objectives. Finally, agencies will need to linktheir strategic management and ongoing performancemanagement processes more closely in a reciprocatingrelationship in which strategizing is aimed largely atdefining and strengthening overall performance while

performance monitoring helps to inform strategy alongthe way.

In 1942, John A. Vieg wrote that after a centuryand a half of a deliberate lack of public planningin this country, the kind of planning that had

arisen out of the New Deals approach to the GreatDepression with vigorous government action washere to stay because it was desperately needed, and

because the consequences of not planning would betoo costly. Since then, planning has evolved over thesecond half of the twentieth century, with city plan-ning, metropolitan planning, regional planning, advocacy planning, policy planning, program planning,andtransitioning into the twenty-first centurystrategic planning all gaining prominence. Tus, planning has become firmly established in the Americangovernmental system, just as Vieg predicted.

In compelling fashion, many of Viegs observationsregarding the nascent field of planning more than60 years ago still ring true today. For example, thepurpose of planning is to protect and promote thepublic interest, and planners will endeavor to weighall the relevant facts but will also use their disci-plined imagination (Vieg 1942, 65). In addition,Vieg asserted that planning should be a continuingprocess, that planning is synthesis more than analy-sis, and, above all, that planning should be pointedtoward action (6768). Tese characterizations areparticularly relevant to strategic planning, as is Viegs

emphasis on the importance,and the diffi culty, of developinconsensus around the values on

which planning is predicated.

Tis article looks at the mid-term future of strategic plan-ning in the public sector from managerial perspective over thenext decade to the year 2020.

After briefly reviewing the cur-rent status of strategic planningin public agencies, it focuseson three related movementstransition from strategic plan-

Tis article looks at themid-term future of strategicplanning in the public sectorfrom a managerial perspective

over the next decade to the year2020. . . . it focuses on three

related movements . . . that willbe essential in order for strategic

planning to assume a moremeaningful role in the UnitedStates over the next 10 years.

Guest editors note:In 1942, the University of ChicagoPress published a book edited byLeonard D. White titled TeFuture of Government in the

United States.Each chapter inthe book presents predictions con-cerning the future of U.S. publicadministration. In this article,Teodore H. Poister examines

John Viegs predictions on thefuture of government planningpublished in that book, commentson whether Viegs predictions werecorrect not, and then looks to the

future to examine public adminis-tration in 2020.


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The Future of Strategic Planning in the Public Sector S24

United States (Poister and Streib 2005), have found that strategicplanning efforts are credited with bringing about improvementsin both organizational capacity and performance. Furthermore,new case study research suggests that strategic planning was associ-ated with success in bringing about significant changes in severalfederal agencies (Kelman and Meyers 2009) and led to beneficialchange in a large regional collaborative enterprise (Bryson, Crosby,and Bryson 2009).

Research notwithstanding, the experiences of two organizations thaI have been quite familiar with over time illustrate that strategicplanning can and does strengthen organizations, improve effective-ness, and create public value in different ways. First, the Pennsylva-nia Department of ransportation (PennDO), one of the earliestpublic agencies to engage in strategic planning, has periodicallyconducted formal strategic planning efforts since 1982, led by fourdifferent secretaries of transportation under two Republican andtwo Democratic administrations. Strategies that resulted from theseefforts early on included affi rming the top priority of maintainingexisting highways rather than expanding capacity in the system,professionalizing highway maintenance operations in the field andconverting county-level maintenance managers from political pa-

tronage jobs to civil service positions, instituting an employee-cen-tered quality improvement program, investing in a leading-edgecomputerization initiative when such a massive commitment to newtechnology was highly controversial, and instilling a customer focuin all program areas.

Strategies launched in the last two administrations included instituing a Baldrige organizational assessment process, initiating the Agiity program under which PennDO entered into service-swappinagreements (e.g., providing line painting services in exchange forroadside mowing) with several hundred local governmental unitsin order to streamline operations at both levels, reengineering themanagement of complex highway preconstruction and construc-tion processes in order to deliver PennDOs capital program moreeffectively, shifting top priority from road maintenance to bridgesafety, ensuring adequate funding for public transit systems acrossthe commonwealth, and right-sizing capital projects to meet locacommunities needs for highway capacity expansion projects withlower construction costs.

Second, River Valley ransit (RV), an agency of the city ofWilliamsport, Pennsylvania, has conducted two formal strategicplanning efforts over the past decade that have been aimed largelyat broadening its mission and expanding its portfolio of responsi-bilities. Over this period, RV, which at the outset was responsible

solely for operating the local public transit system, has become thecontract manager of the citys parking authority, assumed responsi-bility for overseeing the city department that manages public workand parks, expanded its tourist-oriented historic trolley operations,partnered with a local nonprofit organization in operating a paddle

wheel boat on the Susquehanna River, and built a large trade andtransit center in downtown Williamsport that houses offi ce spacefor the local chamber of commerce, a community theater, and smaretail outlets, in addition to the operations center for its bus system

While strategic planning at PennDO has helped that organiza-tion pursue its already substantial mission much more effectivelyover the years, such planning has helped RV diversify its portfolio

ning to strategic management, a shift from performance measure-ment to performance management, and a closer linkage of strategicplanning with performance managementthat will be essential inorder for strategic planning to assume a more meaningful role in theUnited States over the next 10 years.

Strategic Planning in the Public SectorStrategic planning is concerned with formulating strategy. In hisseminal book on strategic planning in the public and nonprofitsectors, Bryson presents strategic planning as a set of concepts,processes, and tools for shaping what an organization (or otherentity) is, what it does, and why it does it (2004, 6). In the longrun, its purpose is to promote strategic thinking, acting, andlearning on an ongoing basis. Tus, strategic planning takes a bigpicture approach that blends futuristic thinking, objective analysis,and subjective evaluation of values, goals, and priorities to chart afuture direction and courses of action to ensure an organizationsvitality, effectiveness, and ability to add public value.

Virtually unheard of in government in the United States in 1980,strategic planning is now ubiquitous in the public sector at pres-ent, at least as measured by self-reported data. All federal depart-

ments and agencies periodically develop and update strategic plans,as required by the Government Performance and Results Act of1993, and these efforts may well constitute the most thorough andadvanced strategic planning activity carried out in the U.S. publicsector today. Surveys also indicate that strategic planning has been

widely adopted by state agencies (Berry 1995; Brudney, Hebert,and Wright 1999), and that many local government jurisdictionshave been undertaking strategic planning efforts as well (Poister andStreib 2005).

However, the extent to which these efforts are worthwhile is notall that clear. Hatry (2002) observes, for example, that the effortsof many public agencies that are nominally engaged in strategicplanning are not meaningful because they fail to meet even mini-mal criteria such as identifying desired outcomes and developingstrategies to achieve them. In addition, reports published by theU.S. Government Accountability Offi ce (2004, 2005) found that

while federal agency strategic planning had improved over initialefforts, in certain areas, federal managers had diffi culty establishingoutcome-oriented goals, addressing issues that cut across federalagencies, adequately soliciting or incorporating consultation fromexternal stakeholders in strategic plans, relating annual goals tolong-term goals, and identifying the budgetary, human resources,and other resources needed to achieve these goals. Critics have alsoasserted that the top-down, one-size-fits-all approach mandated

by the Government Performance and Results Act limits agenciesabilities to tailor strategic planning efforts to their own needs andcircumstances (Long and Franklin 2004; Roberts 2000).

On the other hand, case studies of strategic planning best practicesin the U.S. military (Barzelay and Campbell 2003; Frentzel, Bryson,and Crosby 2000), along with case studies of strategic planning inlocal government (Hendrick 2003; Wheeland 2004), indicate thateffective strategic planning on the part of public agencies can beinstrumental in bringing about meaningful change. In addition,surveys of public managers in Welsh local authorities (Boyne andGould-Williams 2003), as well as municipal governments in the


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ment of strategists from the realities of the nuts and bolts at theoperating level and the world that surrounds it. Clearly, if planningis to be done well in the public sector, strategy needs to be formu-lated by top executives and line managers, with planners in supportroles; the analysis of strategic issues must be based on extensiveintelligence gathering including soft data rather than intensivenumber crunching; and strategy formulation should be influencedby experience, intuition, inspiration, and even hunches, as well as akeen sense of political feasibility.

Tus, strategic planning processes need to facilitate understand-ing of the forces driving issues, explore options in terms of theirfeasibility and likely consequences, and stimulate candid discussionregarding the costs and risks associated with various alternatives.If managers can engage in these kinds of assessments and developgenuine consensus around strategies among the power players

within the organization and outside it whose support or activeinvolvement is essential for success, the strategies arrived at standa much better chance of success in moving the organization in thedesired direction.

Regarding this last point, given the boundary-spanning nature of

many of the issues they are confronting, public agencies need tomake greater efforts to be more inclusive in their strategic planninginviting key external stakeholders to become involved in parts ofthe process or making greater efforts to solicit input from outsidersthrough surveys, focus groups, executive sessions, or other forums.Furthermore, given that public policy is often determined and car-ried out in networked environments rather than by single agencies,strategic planning will need to be applied increasingly to collabora-tive enterprises (Bryson, Crosby, and Bryson, 2009).

Recognizing the importance of other public as well as private andnonprofit organizations to the advancement of their own strategic

agendas, public agencies often assess criticalexternal stakeholders support for or opposi-tion to their plans and then develop strate-gies as part of those plans to capitalize on orrecruit supporters while accommodating ormaking end-runs around opponents in orderto move those plans forward more effectively(Nutt and Backoff 1992). Although it maybe more cumbersome and challenging, itmay be much more effective in the long runfor the agency in question to attempt toconvince these other organizations to workcollaboratively in developing a strategic plan

for the larger network and then work withinthat process to try to ensure that the plan

that results reflects its own substantive objectives to the extent pos-sible. For example, most state transportation departments developtheir own strategic plans and then attempt to develop buy-in fromexternal stakeholders as needed. Te Florida Department of rans-portation (FDO), however, led a variety of entities representingnumerous transportation interests across the state in developing astrategic multimodal transportation plan for Florida looking out to2020. FDO then developed its own organizations strategic plan,

which was heavily oriented to advancing the larger state transportation plan that was supported by these external stakeholder groups.

of services considerably and capture significant synergies fromconnecting these various enterprises at both the management andoperating levels.

In both of these cases, the initial creative sparks that eventually ledto substantial changes rarely originated in formal strategic planningefforts. Rather, many of these ideas were part of the new agen-das of successive incoming chief executive offi cers, in the case ofPennDO, or sprang from the fertile imagination of the long-termvisionary general manager of RV, or they were suggested along the

way by others in these organizations in the course of managing theirown areas of responsibility and even by outsiders who interacted

with these agencies. In both cases, strategy has evolved over thelong run in ways that are consistent with the logical incrementalismmodel advanced by Quinn (1978) and management by gropingalong described by Behn (1988).

However, formal strategic planning in both cases served in vari-ous ways and at various stages of the development of these ideas toflesh them out in terms of what they would actually look like andhow they would be undertaken; to subject them to scrutiny froma variety of perspectives; and to assess their feasibility, desirability,

and fit with the more general direction in which these organizationswanted to move. Ultimately, the discussions generated by the formalplanning efforts led to validating some of these proposals and reject-ing others or tabling them for future consideration. More generally,strategic planning has served in these cases to involve managers inthinking systematically about the future of the organization and theenvironment in which it operates; to promote learning and discus-sion about what is important, what the priorities should be, and

what will work and what will not work; to build consensus aroundand commitment to strategic initiatives; and to communicate direc-tion, overall strategy, priorities, and plans to broader constituenciesinside and outside the organization.

The Future of Strategic PlanningTough it has become orthodox practice in thepublic sector over the past 25 years, strategicplanning will need to play a more criticalrole in 2020 than it does at present if publicmanagers are to anticipate and manage changeadroitly and address new issues that seem toemerge with increasing rapidity. Tis meansthat more public agencies will need to advancebeyond the point of inventorying currentoperations and programming future activitiesbased on extrapolations of past trends to more

creative out of the box thinking about futuredirections in response to candid assessments oftheir own capacities as well as realistic expectations regarding emerg-ing trends and issues and forces beyond their control.

If public agencies are to use strategic planning processes more ef-fectively, however, they need to avoid the kinds of traps identifiedin Mintzbergs (1994) classic critique, which argued that strategicplanning in the private sector often spoils rather than facilitatestruly strategic thinking as a result of overly formalized planningsystems, the central role played by professional planners as opposedto managers, overreliance on quantitative data, and the detach-

Tough it has become orthodoxpractice in the public sector

over the past 25 years, strategicplanning will need to play a

more critical role in 2020 thanit does at present if public

managers are to anticipate andmanage change adroitly and

address new issues that seem toemerge with increasing rapidity.


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and utilize project management approaches to ensure that they willbe carried out to completion. o provide accountability for results,they can assign lead responsibility for implementing strategies toindividual managers or operating units, and they can create ac-tion teams to flesh out and oversee the implementation of cross-functional strategies. More generally, they can mandate that majordivisions or other organizational units develop their own strategicplans or business plans within the framework of the agencys overalstrategic agenda. In addition, agencies can do a number of otherthings to ensure that strategy is translated into action, such as,

Identifying and monitoring appropriate performance measureto track progress in implementing strategic initiatives and achieving strategic goals and objectives Assessing performance data in periodic strategy review sessionand making adjustments as needed to keep implementation ontrack Aligning budgets with strategic priorities, allocating resourcesto fund new strategic initiatives, and challenging operating unitsto show how their budget proposals advance strategy Incorporating goals and objectives related to the strategic planin individuals performance planning and appraisal processes and

rewarding contributions to the advancement of strategy as possib Promoting the agencys vision and strategic plan internally tomobilize commitment throughout the organization Communicating strategy to external stakeholders and solicitintheir assistance in advancing strategy as needed Emphasizing consistency with strategy in proposals, requests,and other external communications to build credibility andsupport on the part of governing bodies, oversight agencies, andother key constituencies

Without this kind of follow-through on numerous fronts, pub-lic agencies are unlikely to see the real value of their strategicplans brought to fruition. Indeed, halfhearted efforts regardingimplementation beg the question of the value of strategic planningin the first place. On the other hand, as illustrated by PennDO,among others, a full court press and continuing attention tocoordinating a variety of approaches to implementing strategycan strengthen organizational capacity and improve performancesignificantly.

More generally, strategic management involves shaping, imple-menting, and managing an agencys strategic agenda on an ongo-ing rather than an episodic basis, in a way that is highly consistent

with Quinns description of a purposeful, incremental approach tostrategy formulation mentioned earlier. Tus, strategically managed

agencies might charge major divisions andthen successively lower levels of management

with responsibility for cascading planningdown through the organization in order todevelop initiatives that advance the visioncreated at the top with actionable strategies athe operating level.

Effective strategic management must also beconcerned with monitoring external trendsand forces as well as internal performance onan ongoing basis, refreshing intelligence alon

More immediate, however, public managers need to link strategicplanning much more closely with performance management pro-cesses in response to continued pressure for accountability as well astheir own commitment to managing for results. More specifically,

we will need to effectuate three fundamental changes in the way inwhich we manage public agencies over the next decade:

1. Shifting from strategic planning to strategic management2. Moving from performance measurement to performance

management3. Linking strategy and performance management more ef-

fectively

Making these three transitions will be essential to enable publicagencies to focus attention on the most appropriate goals and tomanage effectively to achieve those goals.

From Strategic Planning to Strategic ManagementParadoxically, Mintzbergs claim that strategic planning oftenamounts to strategicprogrammingin practice may be on target, inpart, in identifying what is needed in terms of overall strategic man-agement in public agencies. Strategic programming as described by

Mintzberg consists of clarifying strategy and translating broad visioninto more operational terms; elaborating strategies in greater detailand developing action plans that specify what must be done to real-ize strategies; and assessing the implications of strategic mandates onthe organizations operating systems and revising budgets, controlsystems, and standard operating procedures. As planners attend tothese critical tasks, they will help their agencies shift from strategicplanning to broader strategic management.

It is hoped that public agencies will move further toward morecomprehensive strategic management over the next 10 years as theynot only see the value of good strategic planning, but also feel theneed to use strategy to drive decisions and actions and to advancetheir strategic agendas more effectively (Vinzant and Vinzant 1996).Strategic management is concerned with ensuring that strategy isimplemented effectively and encouraging strategic learning, think-ing, and acting on an ongoing basis. Te implementation aspectinvolves working all of the management levers in a concerted ef-fort to implement strategic initiatives, advance the strategic agenda,and move an organization into the future in a deliberate manner.Tese levers include, but are not limited to, operational and busi-ness planning, budgets, workforce development and training, othermanagement and administrative processes, internal and externalcommunications, analytical and problem-solving capabilities, pro-gram delivery mechanisms, legislative agendas, leadership skills, and

an organizations ability to influence other ac-tors in the networks through which it operates(Poister and Streib 1999).

Strategic management is largely a matter ofutilizing and coordinating all of the resourcesand venues at top managements disposal, en-forcing a kind of omnidirectional alignmentamong them in the interest of advancing thestrategic agenda (Poister and Van Slyke 2002).Public agencies can develop action plans forimplementing particular strategic initiatives

[S]trategic managementinvolves shaping, implementing,

and managing an agencysstrategic agenda on an ongoingrather than episodic basis, . . .

[employing] a purposefulincremental approach to

strategy formulation.


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measures are less actionable in the hollow state, where responsi-bility for conducting much of governments business is contractedout to other entities (Frederickson and Frederickson 2006), inmany quarters, performance measurement seems to be assumed toautomatically lead to improved performance.

However, actual performance management, actively utilizing per-formance information to strengthen policies and programs, improvperformance, and maximize the benefits of public services, stillappears to seriously lag performance measurement activity (Hatry2002). Grades from the 2008 Government Performance Project fogenerating appropriate information and using it to support deci-sion making reflect the current state of performance managementin practice; only 6 of the 50 states received an A rating on thiscriterion, while 20 received a B rating, and the remaining 24 statesreceived a C or even D rating (Barrett and Green 2008).

At the federal level, while some agencies, such as the Centers forMedicare and Medicaid Services, have increased their use of perfor-mance information for various management decisions, this is notthe case in general. According to a recent report by the Government

Accountability Offi ce, more than the 16 years since the Govern-

ment Performance and Results Act was passed, agencies across thefederal government have developed strategic plans and are routinelygenerating performance information to measure and report progresstoward their strategic goals. However, . . . our periodic surveys offederal managers on their use of performance information show that

while significantly more federal managers reported having perfor-mance measures for their programs than they did 10 years ago, theirreported use of performance information to make management decisions has not changed significantly (2009, 12). On the other handsome recent research suggests that selected governmental units are beginning to use performance data to improve performance (Ammonsand Rivenbark 2008; De Lance Julnes et al. 2008; Moynihan 2008)

In part, the lack of true performance management originates withgoverning bodies that lack the political will to make the kinds of dificult decisions that are required to achieve substantial performanceimprovements in fields such as crime or education and insteadredefine the issues as problems of mismanagement and ineffi ciencyand then vow to hold the respective bureaucracies responsible (Frederickson 2005). Similarly, Moynihan (2008) finds that althoughagency managers see improved decision making and performanceas the most important purpose of measurement, elected offi cials aremore likely to be interested in accountability and the symbolic valuof requiring agencies to report on their performance. Tus, while

performance management doctrine calls

for allowing administrators greater discre-tion in managing their programs in order tofacilitate performance improvement, stateshave been reluctant to provide increased flexibility regarding financial controls in terms oresource allocation, procurement, and budgeexecution or human resource management interms of hiring, performance appraisal, andcompensation practices.

Nevertheless, there still are possibilities forusing performance information to strengthe

the way, and revising strategy when and as needed. For example, theGeorgia Department of ransportation has adopted a 360-degreestakeholder survey process to solicit periodic feedback from keycustomer groups, business partners, suppliers, and state legisla-tors, as well as its own employees to help inform regular strategicplan monitoring and update efforts. Te Kansas Department ofransportation and other state transportation departments havebeen experimenting with the use of social networking media suchas Facebook, MySpace, and witter to solicit the publics views andfeedback on transportation needs and programs as well as to com-municate outwardly regarding the challenges they face and theirplans for addressing these issues.

Indeed, one of the most important functions of strategic manage-ment is to ensure that monitoring the internal and external environ-ments, gathering information from a wide variety of sources, andsensing how circumstances are perceived and how values might bechanging on the part of an array of constituencies continues to goon in between active rounds of strategic planning. Te resultingsense of how things stand can be invaluable in shaping the timingand nature of strategic planning efforts. Very often, for example,strategic planning efforts appropriately consist of plan updates or

refinements of existing strategy, or otherwise looking for ways to ad-vance existing priorities more effectively. At times, however, agenciesmay need to recognize that they are at a crossroads and face epochalshifts (Barzelay and Campbell 2003) in environment and expecta-tions that may call for refocusing their entire mission, moving innew directions, and revamping priorities substantially.

Tis was the situation facing PennDO in the early stages ofa major turnaround effort beginning in 1979 in response to agrowing consensus in state government circles and among a widerange of stakeholders that it had become highly dysfunctional andneeded either to be reinvented or eliminated. Similarly, in its earlystrategic planning effort, RV recognized that it had reached apoint at which it needed to decide whether to continue operatingsolely as a public transit system or to move aggressively to becomea multimodal transportation agency and a force in downtownredevelopment efforts. Strategic planning efforts can be orientedappropriately toward more routine updates of existing functions or amore dramatic paradigm-changing type of strategizing, but in eithercase, they can be undertaken more effectively if an agency has beenactively monitoring its environment on an ongoing basis.

From Performance Measurement to PerformanceManagementParalleling the transition from strategic

planning to strategic management, we needto shift the emphasis of the performancemovement from performance measurementto a focus on performance managementoverthe coming decade. Clearly, governments atall levels in the United States are operating inan era of performance. Performance measure-ment systems are ubiquitous, and althoughthe top-down, one-size-fits-all systems man-dated at the federal level and in many stateshave been criticized as being problematic inmany cases (Radin 2006), and performance

Paralleling the transitionfrom strategic planning to

strategic management, we needto shift the emphasis of the

performance movement fromperformance measurementto a focus on performance

managementover the comingdecade.


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nor outcomes lend themselves to direct measurement, agenciesshould monitor systematic feedback on the value of their servicesto customers and the public as well as reciprocal relationships withother entities (Boschken 1992) through periodic surveys or othermechanisms for soliciting meaningful information from criticalexternal stakeholders groups.

Most importantly, perhaps, public agencies can consistently andcandidly communicate their performance information, includingthe problems they face as well as success stories, to a wide range ofexternal audiences, including governing bodies, working over thelong run to convince these critical stakeholders that performancedoes indeed matter, that they are committed to improving it, andthat they need support and cooperation in doing so. Governingbodies, it is hoped, will come to appreciate the value of performancimprovement and accountability over time, and will begin to sup-port the great bargain by relaxing controls on agencies financialand human resource management practices in exchange for holdingthem accountable for substantially higher performance expecta-tionsbut that is a long-run proposition. In the meantime, mean-ingful performance management, rather than simply performancemeasurement, needs to become the rule rather than the exception a

the agency level, generating incremental but ongoing improvementin the performance of public programs.

Integrating Strategy and Performance ManagementMore generally, performance management is the process of settinggoals for an organization and managing effectively to achieve those

goals and eventually bring about the desiredoutcomes. In that sense, strategic managemencan be viewed as performance managementat a strategic level. However, large, complexpublic organizations typically maintain a widvariety of performance measurement systemsat different levels and in different parts ofthe organization. Tese systems are likely tofocus on different programs or processes, servdifferent purposes, and be oriented to theneeds of different audiences or intended userTus, performance measurement and, it ishoped, performance management are ongoinprocesses at all levels and across numerous

applications, and they are much more encompassing and pervasivethan strategic planning and management systems.

While strategic planning and management should be focused veryselectively on issues of the most fundamental importance, organi-

zations still must manage their core businesses and more routineoperations on an ongoing basis. Whereas strategic managementfocuses on taking actions now to position the organization to moveinto the future, performance management is largely concerned withmanaging ongoing programs and operations at present.

Strategy is usually oriented to change that is aimed at enhancing anorganizations role in the larger environment or the way it pursuesits mission. Implementing strategies is the province of strategicmanagement, but when strategic initiatives have been completedand/or strategic goals have been attained, they typically should movoff the strategic agenda. However, some of these strategies may still

performance. Perhaps the best known examples include a numberof U.S. cities, such as San Francisco, Atlanta, and St. Louis, thathave followed Baltimores lead in implementing CitiStat systems,in which the mayor and/or top aides conduct regular meetings withdepartment heads and their staff to review performance data anddiscuss performance, objectives, and strategies for achieving them(Behn 2006). At the state and federal levels, Moynihan (2008) advo-cates building agency-centered performance management, althoughhe cautions that the success of such efforts is dependent on a num-ber of organizational characteristics, such as the degree of autonomy,functional areas of responsibility, clientele and stakeholders, politicalcontext, and resourcing.

Measurement systems are most likely to produce actionable perfor-mance data in circumstances in which outputs and outcomes aremore readily observable and agencies have more control over theoutputs they produce and greater leverage over the outcomes theyare expected to generate (Jennings and Haist 2004). Particularlyin these kinds of agencies, public managers must proactively seizethe opportunity to utilize the information produced by measure-ment systems to help improve performance, in part by linkingperformance data to manager- and employee-centered performance

management systems. For example, they can designate appropriateindividuals in the organization as results owners and charge them

with lead responsibility for maintaining or improving performanceon particular measure sets. Tey can also give the performanceimperative a real-time edge by negotiating target levels of per-formance to be attained in particular time frames that are bothaggressive but also realistic and by incorpo-rating results data in employee performanceappraisal systems. More generally, agenciescan utilize performance data as the basis fortriggering performance improvements, includ-ing the following:

Actively reviewing performance datawith managers who are responsible forprograms on a regular basis and challeng-ing them to assess underlying reasons forchronically poor or eroding performanceand develop plans for corrective action Redirecting internal budget allocationsand program activities to the extent possible to make programsmore effective Providing training to service delivery staff and mountingquality and productivity improvement initiatives to overcomeperformance deficiencies

Working collaboratively with partners, contractors, and suppli-ers to find ways to overcome performance problems Commissioning task forces or formative program evaluationsto investigate performance problems when solutions are not morereadily forthcoming

With respect to programs whose outcomes are not so readily observ-able, but whose outputs are measurable and held to be effective and

worthwhile in contributing to desired results, agencies can focusprimarily on these outputs, particularly in terms of service qualityand quantity, perhaps using expert review panels when more objec-tive indicators are not available. In cases in which neither outputs

[P]erformance management isthe process of setting goals foran organization and managing

effectively to achieve those goals

and eventually bring aboutthe desired outcomes. In thatsense, strategic management

can be viewed as performancemanagement at a strategic level.


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measures were removed from the strategically oriented Compass buretained in other systems at the program and operating levels.

Te point here is that strategic planning will become more meaningful as more agencies transition to comprehensive strategic manage-ment approaches that, among other things, drive their performancemanagement systems forward. At the same time, as agencies shiftfrom simply measuring performance to incorporating the resultinginformation into systematic efforts to actually improve performancthose performance management systems will be more effective inthe long run if they are aligned with strategy and driven by strategicmanagement processes.

Tus, the preferred type of performance measurement/manage-ment system will depend in large part on the nature and contentof strategy. For example, if an agencys principal strategies focus onproducing significant improvements in its immediate service de-livery processes, as was the case with the New Mexico Departmenof ransportations COMPASS, for instance, a stats-type systememphasizing the quantity and quality of outputs, customer orcitizen satisfaction, and outcomes, with frequent reviews and clearexpectations for action plans to correct deficiencies as required,

may be very useful. On the other hand, when strategy concernsthe implementation of new programs or other initiatives, a projecmanagement approach may be more helpful, while an agency

whose strategies focus more on longer-term change in policies oroverall direction may find that monitoring a wider range of performance data, perhaps including leading as well as lagging indicatorat longer time intervals is more useful in determining whether theorganization is on course and whether plans need to be revised.

Moreover, performance management processes in an immediatesense operate within a context characterized by numerous factorsthat may limit performance improvement, such as structure, orga-nization culture, service delivery arrangements, and technology, inaddition to constraints in terms of authority and resources. In somecases, when there seems to be little opportunity for working insidethe box to improve performance at a programmatic or operatinglevel, strategic planning at a higher level may be able to bring aboumore systemic change and remove barriers to productivity in termsof redesigning structure, developing a productive culture, institut-ing new service delivery arrangements, and even securing additionaresources or expanding formal authority in order to facilitate performance improvement.

For example, the Sexually ransmitted Disease (SD) Divisionof the U.S. Centers for Disease Control (CDC) initiated a per-

formance measurement system at the beginning of this decade tomonitor the performance of the SD prevention and treatmentprograms operated by health departments in all 50 states and severalarge cities to which the CDC gives grants for programmatic sup-port. Te measures were developed through a participative processinvolving representatives of the state and local programs and relatedacademics and advocates from professional groups, as well as CDCcentral offi ce managers and field personnel. Tey were initiallypiloted in a few states, then implemented by all grantees and laterincorporated into the CDCs triennial grant solicitation process, ana task force was convened a few years ago to review the system andadd, eliminate, or adjust some of the measures.

be important in the sense of being embedded in the way an organi-zation does business on a continuing basis, and thus they may needto be supported through the ongoing performance managementprocess.

With few exceptions (Bryson 2004; Poister 2003), strategic plan-ning and performance management are not closely connected inthe public management literature. However, we need to manage theinterplay between strategy and performance management to muchgreater advantage. While strategic plans usually identify perfor-mance measures that are monitored and may feed meaningful in-formation into strategy review and update efforts, often they are notlinked systematically to goal structures and measurement systems atthe program management and operating levels, where performanceimprovement is most likely to be generated. Without such linkages,strategic planning is much less effective in driving decisions andactions in an agency and moving purposefully into the future. Ofcourse, in many large federal departments as well as multifunctionalorganizations at the state level, strategic plans are likely to be devel-oped at multiple levels (e.g., the department, agency, and programlevels), and in many local jurisdictions, strategic plans are developedboth at the corporate level and by individual departments. In such

cases, strategic plans can and should be linked directly to perfor-mance management systems at each level.

From a performance management perspective, Hatry asserted thatstrategic planning is not really essential to successful government,arguing that governments at all levels are continually taking numer-ous actions to improve their services without significant input fromstrategic planning (2002, 353). Clearly, however, performancemanagement systems that are not tied to or at least consistent withstrategy run the risk of maintaining and/or improving immediateperformance on previously established criteria of success but increas-ingly missing the mark in terms of where the organization should beheading in the longer run.

For example, for several years beginning in the mid-1990s, theNew Mexico Department of ransportation used its performancemanagement system, called the Compass, very aggressively to sub-stantially elevate the performance of its core mission: building andmaintaining highways. Indeed, the system became so firmly rootedas the driving force of decisions and actions in the department that

when strategic planning was mandated for all state agencies in NewMexico in the late 1990s, the Department of ransportation re-sponded by simply writing a plan around the performance measuresin the Compass as its de facto strategy, thus passing up an opportu-nity to question broader strategic issues.

A few years later, however, recognizing the limitations of existingstrategy in a context of changing development patterns, transporta-tion needs, and mobility options, a new secretary appointed in 2002initiated a strategic planning process that opened a broader discus-sion on future directions and set new priorities for public transit,commuter rail, and intercity bus services, as well as highway safety.Te Compass, which had worked so effectively in channeling thedepartments energy and resources to its traditional mission, buthad also become somewhat outmoded with respect to changingneeds and priorities, was then reoriented to focus attention on thedepartments rebalanced strategies. At the same time, many of the


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While the measures are reported every year and the CDC activelyreviews the data and encourages and challenges grantees to workharder and smarter to strengthen their outputs and immedi-ate outcomes, the results do not show the kind of performanceimprovement that the CDC had been anticipating. Instead, oncritical indicators such as the proportion of primary and second-ary syphilis cases interviewed within 7, 14, and 30 days or theproportion of positive chlamydia cases from family planning clinicstreated within 14 and 30 days, performance in the aggregate hasbeen quite static over the past several years. A consensus is develop-ing that part of the reason for this lack of movement in the data isthat significant improvement in performance in these areas requiresincreased cooperation on the part of a number of other entities inthe larger SD system, e.g., schools, health maintenance orga-nizations, community-based organizations, and jails, and that thestate and local SD programs have not been able to leverage suf-ficient influence through these networks to bring about the kindsof needed responses from these other actors. Tus, at present, theCDC is planning to initiate a strategic review and planning processto identify the critical issues regarding these programs and, it ishoped, move to a new networked based paradigm in the interests ofimproving performance.

Conversely, while strategic planning and management providean essential framework for effective performance management,performance management itself can sometimes enrich strategicplanning by clarifying strategy (Moynihan 2008) and even findingstrategy (Mintzberg 1994). For instance, ongoing experience withperformance management systems can inform strategic plannersabout realistic expectations, opportunities, and limitations regard-ing attempts to strengthen the performance of a given program inits operating context in ways that might help thinking strategicallyabout other programmatic options in the long run. In addition,performance reports that break performance data down by decen-tralized operating units, supplemented with information regardingdifferences in the environments in which they operate, may helpidentify strategies that are more or less effective in particular operat-ing contexts.

In addition, over the coming decade, it is imperative for publicagencies to engage much more widely in developing comparativemeasurement systems with other similar agencies and programsin order to facilitate benchmarking efforts aimed at identifyingevidence-based best practices on the part of leading performers thatmight be able to be adapted profitably by other agencies (Ammonsand Rivenbark 2008). Tis kind of information can often informthe development of strategic initiatives aimed at making agencies

more effective.

ConclusionsTe first decade of the twenty-first century has seen the UnitedStates involved in two protracted overseas wars that are straining themilitary, a new and urgent concern with homeland security and ter-rorist attacks from within as well as without, the deepest economicrecession in 70 years and unprecedented government bailouts andstimulus funding, state and local governments in dire fiscal straits

just as the need for them is significantly increasing, and polarizingnational politics that have been very divisive with respect to the roleof government in society in general. Over the same period, public

managers have seen continued growth in outsourcing to privatesector contractors and suppliers, the rise of collaboratives to makepolicy as well as deliver public services, the phenomenal growthof e-government service channels, a more insistent customer focuson the part of government agencies, and increased pressure foraccountability and performance from elected offi cials, the media,and the public.

If the coming decade is as turbulent as the one just now ending,drifting into the future on somewhat predictable tides will not bean option. Instead, muddling through could well result in publicagencies being buffeted about by strong winds and battered on therocks. Tus, if agencies are to anticipate new problems and chal-lenges, respond to them effectively, and, to a degree at least, charttheir own course for moving into the future, they will need to thinkand act strategically and be able to manage for results.

o add public value, government agencies must identify appropri-ate goals that are legitimate and politically sustainable and have themanagement and operational capacity to deliver on them effectively(Moore 1995). Clearly, strategic planning is not always aimed atimproving the performance of ongoing programs. Often, it redefin

performance to meet new challenges, but it should always focuson identifying the kinds of results to be achieved and strategies forachieving them. Public agencies are best served by nimble strategiplanning systems that focus very selectively on identifying andresolving the most compelling issues facing them as they continue tmonitor internal and external conditions and scan the environmento discern emerging issues that might require new strategic respons-es. Consistent with this, strategic management must not be seen asa matter of micromanaging to enforce uniformity across operatingdivisions, but rather working to ensure that decisions and actions aall levels are driven by a few fundamental strategies that are criticalfor success in the long run.

However, comprehensive performance management at the operatinlevel still must be oriented in part to advancing an agencys overallstrategy. Tus, I am convinced that moving from planning strategyand measuring the performance of ongoing programs, on the onehand, to implementing strategy and using performance informatioto improve performance, on the other, will be essential for publicagencies to significantly increase their capacity to meet new andunforeseen challenges and create public value over the next 10 yearTis will also require linking strategic management and ongoingperformance management processes more effectively in a reciprocating relationship in which strategizing is aimed largely at definingand strengthening overall performance and performance monitorin

helps inform strategy along the way.

While many leading-edge public organizations do have effective strategic management processes in place, many more agencies at all levelof government fail to utilize the kinds of practices discussed in this aticle to develop and implement strategy and to manage performanceeffectively. ransitioning to comprehensive strategic management anperformance management will be critical for these agencies over thenext 10 years given the rapid pace of change and increased uncertainties facing public administrators at all levels. Tus, strong leadership

will be required to overcome a range of institutional, bureaucratic,and cultural factors that reinforce the tendency to continue managin


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