Strategic Management

Strategic Management 57.508-201 The Budget as a Policy, Planning and Information Tool Meeting 10 – April 6, 2011

Final Presentations Wednesday April 27th Wednesday May 4th Nina – Danvers Mike – Lowell Career Center Dustin – ? Keith – Cambridge Anthony S – Haverhill Amanda – Peabody Schools • Anthony A – Peabody • Jon – Dracut • Kirsten – Hartford • Jeff – Beverly • Sehrish– Manchester NH • Lianna– Pittsfield • Judy – Middlesex County

Final Presentations Must Include • Mission statement • Description & results of strategic planning process • Choose a budget format • Outline the steps of the budget process • Memo to department heads • Budget message to board / council • Include subsystems of budget execution • Define your fund structure • Describe your accounting controls • Include a capital component • Describe debt management (bond rating, etc.)

Strategic Management Q: What is “strategic management”?

Strategic Management The process of 1) specifying the organization’s mission, vision and objectives; 2) developing policies and plans, often in terms of projects and programs, which are designed to achieve these objectives; 3) allocating resources to implement the policies and plans, projects and programs; then 4) evaluating overall performance progress towards objectives

Mission / Vision Statement It communicates the organization’s core ideology consisting of three components: • Core values to which the organization is committed • Core purpose of the organization • Visionary goals the organization will pursue

Mission vs. Vision Mission Statement Vision Statement Talks about the future Communicates both purpose and values Spells out what the organization wants to be • Talks about the present • Defines the purpose and primary reason for being • Spells out what the organization is about

Strategic Management Six Tasks • Defining the mission & forming the vision • Setting measurable objectives • Outlining the strategy to meet the objectives • Executing the strategy • Evaluating performance • Initiating course corrections

Strategic Management A strategic management system provides the broad framework that encompasses all of the processes of an entire organization operating within an agreed upon set of purposes and interdependent components

Strategic Management “Strategic management is not a clean, step by step process. It is not linear, but a messy, iterative process that requires hard work and dedication from most people in the organization to move it toward the future. It represents a new focus for the organization; a focus on a compelling vision of the future.” Denise Lindsey Wells Strategic Management for Senior Leaders

Strategic Management • Ongoing process • Integrates planning into budgeting & managing • Mission, customer & issue focused • Emphasizes decentralization & shared vision • Translates goals into action • Efficiently uses all resources • Makes the tough choices • Evaluates performance & results • Long range view oriented on the future

Strategic Management Goal-directed decisions and actions in which capabilities and resources are matched with the opportunities and threats in the environment

What’s So Strategic? • A shift in focus from the inputs that are used to run the organization to the outputs and outcomes the organization desires to achieve • A focus on optimizing organizational performance and process quality as keys to delivering quality services • An organizational culture that adapts more easily to change • Longer range thinking about the present and the future

Strategic Components • Writtenstrategic plan • Organizational relationships defined • Inputs and outputs specified • Operational plan • Resource plan (program / performance budget)

Strategic Planning

Strategic Planning • SWOT Analysis & Visioning • Where your organization is • Where you want to take the organization • Goals and objectives • Operational Plan of Execution • How you intend to get there • Action steps • Program budget

STEP Analysis A scan of the external environment in which the organization operates in terms of these factors: • Social • Technological • Economic • Political

Framework Set Goals to Guide Decision Making • Assess community needs, priorities, challenges and opportunities • Identify opportunities and challenges for services & assets • Develop and disseminate broad goals Develop Approaches to Achieve Goals • Develop financial policies • Develop programmatic, operating and capital plans • Develop programs & services consistent with policies and plans • Develop management strategies

Framework Develop Budgets Consistent with Approaches • Develop a process for preparing and adopting a budget • Develop and evaluate financial options • Make choices necessary to adopt a budget Assess Performance & Make Adjustments • Monitor, measure, and assess performance • Make adjustments as needed

Three Kinds of Objectives • Performance • Targets for efficiency and effectiveness • Financial • Targets for resources • Strategic • Targets to strengthen overall position

Crafting the Strategy • Objectives are measurable results • Strategy is how to achieve these results Overall strategy is a blend of intended actions as well as responsiveness to unanticipated developments within the core values

Executing the Strategic Plan • Strategy Implementation • Realistic objectives with appropriate actions • Control and Evaluation • Continuous assessment and adjustment

Strategy Implementation • Organizing • Communicating • Culture building • Motivating • Budgeting • Supervising • Leading

Control and Evaluation Result or Outcome Condition of improvement or well-being for client population Indicator or Benchmark Standard which helps quantify the achievement of a result Performance Measure Measure of how well a program or service system is working

Performance Measures • Public Works: • X miles of streets cleaned per Y dollars • X tons of waste collected per Y dollars • Libraries • X number of books circulated per Y dollars • X number of reference questions answered • Police? Planning? Finance? Education?

Communicating the Vision • Challenges and motivates workforce • Arouses strong sense of organizational purpose • Induces employee buy-in • Galvanizes people to the organization

Why Shared Vision Matters When all employees understand and are committed to the organizations mission and strategic vision, both daily execution and responses to change and adversity are greatly improved

Strategic Management Q: So, why do we need “strategic management”?

Why Strategic Management For Your Organization to Succeed in the Face of: • Increasing demands • Severe financial constraints • Growing complexity of public issues • Growing pressure from the public

Why Strategic Management For Your Employees • Gives everyone a clearly defined role • Makes a difference in performance levels • Provides systematic approach to uncertainties • Coordinates and focuses employees

Why Strategic Management For Your Organization • Crystallizes long-term direction • Reduces riskof rudderless decision-making • Conveysorganizational purpose and identity • Keeps actions of all employees on common path • Avoids mission creep • Helps organization prepare for the future

Budgets: More Than Numbers Improved Performance & Results Accountability through Strategic Management

Strategic Management