The Strategy Survival Guide is an on-line resource that will continue to be updated and improved. For the most up to date version please refer to the Strategy Unit’s website: www.strategy.gov.uk The Strategic Capability Team are dedicated to fulfilling the Strategy Unit's remit to work with departments to promote strategic thinking and improve policymaking. They are responsible for the Strategy Survival Guide. [email protected] tel: 020 7276 1895 Strategy Survival Guide Page 1 Strategy Survival Guide Version 2.1 Prime Minister’s Strategy Unit home | strategy development | strategy skills | site index Home The Strategy Survival Guide aims to support strategy development and promote strategic thinking in government. It encourages a project-based approach to developing strategy and describes four typical project phases. It also discusses a range of skills and useful tools and approaches that will help to foster strategic thinking across government. It is offered as a resource and reference guide, and not intended as a prescription or off-the-shelf solution to successful strategy work. The Strategic Capability Team at the Prime Minister’s Strategy Unit exists to support government departments in understanding and applying the content of the guide. Please contact us for further information. Strategy Development Strategy Skills Typical tasks and outputs of each Useful tools and approaches for phase of a strategy project thinking strategically > Site Index - a full index of the guide > Introducing Strategy - an introduction to strategy and strategic thinking > How to Use the Guide - tips to help you find what you need > About Us - background to the Strategy Unit > Register - we’ll inform you when the guide is updated The Strategy Survival Guide is work in progress. The Strategy Unit would welcome your comments and suggestions. Published: July 2004 Last updated: 01.07.2004 Strategy Survival Guide Page 2 Strategy Survival Guide Version 2.1 Prime Minister’s Strategy Unit home | strategy development | strategy skills | site index Site Index Home 1 Site Index 2 Introducing Strategy 5 How to use the Guide 10 About Us 11 Contact Us & Registration 12 Strategy Development 13 Justification & Set Up 14 Task: Justifying the project 15 Task: Clarifying the issues 16 Task: Planning the project 17 Task: Setting up the team 18 Output: Project proposal & plan 19 Management issues 20 Questions to ask 21 Research & Analysis 22 Task: Gathering knowledge 23 Task: Analysing knowledge 24 Task: Reviewing delivery capability 25 Output: Interim analytical report 26 Management issues 27 Questions to ask 28 Strategic Direction Setting 29 Task: Developing guiding principles 30 Task: Articulating a vision 31 Task: Defining strategic aims and objectives 32 Output: Preferred strategic direction 33 Management issues 34 Questions to ask 35 Strategy Survival Guide Page 3 Policy & Delivery Design 36 Task: Developing policy options 37 Task: Detailing policy options 38 Task: Appraising policy options 39 Task: Planing the roll out 40 Output: Final report & delivery plan > template 41 Management issues 42 Questions to ask 43 Strategy Skills 44 Managing People and the Project 45 Recruiting a team > in practice 46 Building a team > in practice 49 Working as a team > in practice 51 Encouraging creativity > in practice 56 Giving & receiving feedback > in practice 61 Developing the plan > in practice 64 Structuring the work > in practice 66 Setting milestones > in practice 68 Managing risks > in practice 70 Defining accountability > in practice 72 Evaluating the project > in practice 74 Managing Stakeholders and Communications 76 Identifying key stakeholders and their issues > in practice 77 Effectively engaging with stakeholders > in practice > template 79 Developing a stakeholder engagement plan > template 82 Drawing up a communications plan > in practice 83 Communication with the media > in practice 85 Evaluating communications 86 Preparing presentations > in practice 87 Structuring the Thinking 90 Issue trees > in practice > template 91 First principles thinking > in practice 94 Systems thinking > in practice 96 SWOT > in practice 101 PESTLE > in practice 104 Creativity techniques > in practice 107 Strategy Survival Guide Page 4 Building an Evidence Base 113 Data types & sources > in practice 114 Surveys > in practice 118 Interviews & focus groups > in practice 126 Modelling > in practice 129 Market analysis > in practice 136 Organisational analysis > in practice > template 142 International comparisons > in practice 146 Benchmarking > in practice 151 Forecasting > in practice 154 Scenario development > in practice 158 Counterfactual analysis > in practice 165 Appraising Options 168 Multi-criteria analysis > in practice 169 Cost-benefit & cost-effectiveness analysis > in practice 174 Rationale for government intervention > in practice 178 Planning Delivery 181 Change management > in practice 182 Institutional change > in practice 186 Designing an implementation plan > in practice 188 Appendix External Links 191 Templates 196 Subject Index 201 Strategy Survival Guide Page 5 Strategy Survival Guide Version 2.1 Prime Minister’s Strategy Unit home | strategy development | strategy skills | site index Introducing Strategy An Introduction to Strategy in Government Strategies help organisations think through what they want to achieve and how they will achieve it. Putting strategies into practice and acting strategically ensures that they are focused on the things that really matter – not buffeted by events or short-term distractions – and are able to allocate their resources accordingly. There is a huge literature on strategy in business and in warfare; strategy in government is similar, but tends to be more complex. It generally involves multiple goals rather than one single bottom line and it is implemented through a wide range of policy instruments, including laws, taxes and services. Far from being a neat linear process, it is shaped by unexpected events and political pressures. It also often needs to be more visible and accountable than strategy in other fields. As a rule, the best strategies in governments and public services are: • clear about objectives, relative priorities and trade-offs • underpinned by a rich understanding of causes, trends, opportunities, threats and possible futures • based on a realistic understanding of the effectiveness of different policy instruments and the capacities of institutions (strategies that work well on paper but not in practice are of little use) • creative - designing and discovering new possibilities • designed with effective mechanisms for adaptability in the light of experience • developed with, and communicated effectively to, all those with a stake in the strategy or involved in its funding or implementation. Strategies vary greatly. Some are very precisely defined and imposed top-down through organisational hierarchies. Others emerge in a more evolutionary and co-operative way from discussions, experiments and learning. In either case, taking a strategic approach should ensure that decisions on strategic direction, policy design and delivery are seen as an end-to-end process of change management, with constant testing, feedback, learning and improvement. In a democracy, the end purpose will be to create public value – services and outcomes that are valued by the public. Policies need to be developed within the framework of a longer-term strategy, taking into account the practicalities of implementation. All strategies need to be adaptable, with quick feedback and effective information flows to respond to new information, and take account of changing circumstances or unexpected events. public and user feedback consultation and engagement High level goals Trends and SSttrraatteeggiicc DDiirreeccttiioonn PPoolliiccyy DDeessiiggnn DDeelliivveerryy OOuuttccoommeess futures Context and Measurement and analysis constraints testing, piloting and continuous learning AAddaappttaabbiilliittyy Strategy Survival Guide Page 6 A Framework for Strategic Direction A strategy needs to provide a clear sense of direction – based on analysis of different strategic choices and their implications. Defining the strategic direction or desired way forward will often involve a vision, together with aims and short, medium and long term objectives that provide a coherent and consistent framework for co-ordinating government activity: • a vision is a statement of aspirations describing a desired future • aims are the outcomes needed to bring about that desired future • objectives are those things that need to be achieved in order to realise these outcomes. An example from a Strategy Unit project is set out below: Strategic Framework - SU Ethnic Minorities and the Labour Market Project n o In ten years’ time, ethnic groups living in Britain should no longer face disproportionate barriers to accessing and si realising opportunities for achievement in the labour market Vi ms Building Employability Connecting People with Work Equal Opportunities in the Ai Workplace • Raising educational attainment • Streamlining outreach • Advising and supporting initiatives employers’ awareness and • Ensuring that key groups are action benefiting from educational • Tailoring labour market es reforms programmes to client needs • Increasing efficacy of existing ctiv • Extending programme flexibility equal opportunity levers e bj • Increasing housing mobility • Increasing transparency and O awareness • Increasing vocational skills • Addressing access to childcare and transport needs In addition to a framework setting out strategic direction, strategies need to provide evidence-based policy recommendations to act as a clear route map of how the objectives will be delivered. Examples of strategies developed across a broad range of government policy areas can be found on the Strategy Unit’s website. The Relationship Between Strategy and Policy The terms strategy and policy are used in many different ways, and sometimes interchangeably. For the purposes of this guide, the following definitions are used: • Strategy is the overall process of deciding where we want to get to and how we are going to get there. • Strategic direction describes the desired future and sets out what needs to be achieved in order to bring it about. It provides the guiding principles that give context and coherence to action. • Policy provides the means of moving in that direction – and often a number of policies need to work together to deliver particular strategic outcomes. Policy design work is concerned with identifying how to achieve strategic objectives, selecting the most suitable policy instruments for doing this, and detailing how these instruments will work in practice. The relationship between strategy and policy is very close, and should be highly interactive. Strategies should be developed together with a realistic idea of how they might be realised, and policies should exist within a strategic framework that explains how they contribute to desired outcomes. Divorcing strategy and policy creates the risk of setting unachievable strategic objectives and allowing policy programmes to develop legitimacy from their longevity rather than their contribution to meeting public needs. Close integration will help to ensure that strategies are implemented using the most suitable policies, and that different policies are not contradictory, but work together towards strategic outcomes. Strategy Survival Guide Page 7 The Relationship Between Strategy and Delivery Strategies and policies that are not deliverable are of little use. Strategy work needs to involve frontline practitioner knowledge from the outset, and proceed grounded in a realistic understanding of delivery capability. Feedback mechanisms are needed from delivery back into strategy and policy design in order to create adaptable learning systems that can evolve in the light of experience and unexpected results. Questions for Strategy Development As the underlying framework that guides government thinking and action, strategy is concerned with asking and answering a number of questions. The diagram below demonstrates that while strategic issues may be highly complex and ambiguous, the questions at the heart of strategy development are searching yet fundamentally simple. This in no way detracts from how difficult it can be to answer these key questions, but provides a valuable anchor at times when the complexity is overwhelming. Where are we What is the Where do we How do we get now and where issue? want to get to? there? are we going? Who do we have to involve - and how? What tools and techniques should we use? The first four questions (across the top of the diagram) cut to the heart of strategy development by establishing an understanding of the world as it is today and determining the desired state of the future. The further two questions (underpinning the process) recognise that effective strategy development can not occur in either an ivory tower or black box, but must occur collaboratively using open and transparent methods and approaches. These questions are closely mirrored by the typical phases of a strategy development project and highlight the importance of the full range of strategy skills. Components of a Strategic Approach In practice, strategic thinking may not be as linear as the above questions suggest, but may involve a more iterative consideration of a number of key components. Vision & Evidence & Values Analysis First Principles Delivery Stakeholders Capability • Vision & Values: a vision of the desired state of the future founded on government’s wider values and principles, that sets priorities, recognises trade-offs and describes the relationship to and fit with strategy in other policy areas. • Evidence & Analysis: an understanding of the current situation, trends and likely states of the future, together with their drivers and causes, and a realistic evaluation of the effectiveness of different policy instruments. This should be based on a broad evidence base including economics, science, social research, statistics etc. and placed within a context of benchmarks and international comparisons. • Stakeholders: a deep appreciation of their views, concerns and perspectives and a plan for how they should be involved in strategy and policy development, and the role they may play in delivery. • Delivery Capability: an evaluation of the delivery system, and the culture and available resources of organisations within it, that highlights potential barriers to change and successful delivery. Strategy Survival Guide Page 8 These four components need to be considered objectively from first principles to identify the real issues, challenge implicit assumptions and question existing approaches. A development in any one of the components may provide the initial impetus for fresh strategic thinking and drive a need to develop thinking in the other components. In the same way, strategy development is often an iterative process with the components developing and evolving in response to each other. Strategic Solution Generation Implicit in adopting a strategic approach is a rational and reasoned process for developing solutions. In contrast to an ad-hoc approach that is likely to result in a more ‘random’ set of solutions, a strategic approach is underpinned by guiding principles and a set of appraisal criteria that frame the generation and appraisal of alternative options. Stage Random ‘solution’ generation Strategic solution generation Initial problem Research & analysis Range of possible solutions Choices and trade-offs Pri eria Oappptiroanisal nciples & Crit nciples & Crit eri Pri a Solution Scattergun policies Coherent solutions The appraisal criteria that should be used for this process are applicable to all decisions about government action, and address the suitability, feasibility and acceptability of each option: • Suitability – do the proposed actions address the key issues and will they be able to deliver desired outcomes? • Feasibility – can the proposed actions be delivered with the potential system capabilities and resources? • Acceptability – is there sufficient political and public support to legitimise the proposed actions? Maintaining a Strategic Perspective The need for strategic thinking extends far beyond the realms of a formal strategy development project. At all stages of policy design and delivery, a strategic perspective is needed to ensure that government action is focused on and capable of meeting the true needs of the public. The questions posed by the three criteria of suitability, feasibility, and acceptability form the basis of such a strategic perspective. Is it Suitable? Strategic Thinking Is it Is it Feasible? Acceptable? Strategy Survival Guide Page 9