Strategic Planning - SP 101 AzGU Course MGT3001 July 9 & 11, 2003

1. MANAGING FOR RESULTS WORKSHOP Strategic Planning - SP 101AzGU Course MGT3001July 9 & 11, 2003

2. Workshop Objectives • Understand Arizona's strategic planning model • Understand basic strategic planning concepts and tools • Understand the use of performance measures • Be able to apply what you learn to strengthen your strategic plan and performance measures • Know the requirements of Arizona’s Budget Reform Legislation

3. Why Conduct Strategic Planning? • Planning for change • Managing for results • Customer support • Adaptability • Promotes communication • Essential for management • Future-oriented • If you fail to plan, you plan to fail

4. Arizona’s Model • Asks and answers the following questions: • Where are we now? • Where do we want to be? • How do we measure our progress? • How do we get there? • How do we track our progress?

5. Arizona’s Model • Asks and answers the following questions: • Where are we now? • Internal/External Assessment • Customer and Stakeholder Identification • Where do we want to be? • Mission • Vision • Principles • Goals • Objectives

6. Arizona’s Model • Asks and answers the following questions: • How do we measure our progress? • Performance Measures • How do we get there? • Strategies • Action Plans • How do we track our progress? • Tracking System

7. Internal/External Assessment Where are we now? • An analysis and evaluation of internal and external data, factors, conditions and issues that affect the organization. • Often referred to as a SWOT analysis: referring to internal Strengths and Weaknesses and external Opportunities and Threats.

8. Internal Assessment • Also called a situation inventory • Identifies strengths and weaknesses • Evaluates the organization's position, performance, problems and potential • Identifies internal critical or strategic issues • Evaluates capacity to respond to issues, problems and opportunities • Motivates improvement

9. Critical Internal Factors • Agency scope • Agency functions • Organizational structure • Resource needs

10. Key Questions • What is the current internal environment? • Is any additional training needed? • Is the technology adequate? • Are all mandated (by statute or law) functions being performed? If not, why not? • How can we use our strengths to overcome our weaknesses?

11. External Assessment • Also called an environmental scan • Analyzes key external elements, forces and issues that affect the environment in which an organization functions • Focuses on opportunities and threats present in the current environment and anticipates changes in the future environment • Identifies external critical or strategic issues

12. Critical External Factors • Demographics--population, unemployment rate, etc. • Economic variables • Impact of federal or local government statutes and regulations • Technological developments • Public policy issues

13. Key Questions • What is the current external environment? • How may the environment differ in the future? • What are the implications of political, economic, legislative, etc. changes for the organization over the planning horizon? • What are the most promising external opportunities? • What are the most immediate threats?

14. Internal/External Assessment

15. Strategic Issues • Issues of critical importance to the organization. • May be internal or external to the agency. • Do not always fall neatly within the boundaries of a particular program; instead, they may impact several programs or the entire agency.

16. Customer • Anyone whose best interests are served by, or who receives or uses the products or services of, an agency, program or subprogram.

17. Internal Vs. External Customers • Internal Customers • Any group or person whose work depends upon other work units or persons inside the same organization. • External Customers • Any user of the organization's products or services.

18. Stakeholder • Any person or group with a vested interest in, or with expectations of a certain level of performance or compliance from, an agency, program or subprogram.

19. Customer/Stakeholder ID Worksheet Expectations Priority Internal Customers External Customers Stakeholders

20. Gaining Customer/Stakeholder Input • Written or phone surveys • Focus groups • Interviews • Comment forms • Board meetings • Public meetings

21. Mission Where do we want to be? • A brief, comprehensive statement of purpose of an agency, program or subprogram.

22. Mission Statement • Answers the following questions: • Who are we? • What do we do? • For whom do we do it? • Why do we do it? • Why are public resources devoted to this effort?

23. Test Question #1 #2 #3 #4 #5 Mission Statement Litmus Test Does it clearly state what business you are in? Can all employees of the organization see their contribution in the mission? Is the mission rarely changing? Can the mission survive changes in administration? Is the rationale for the program’s existence clear?

24. Test Question #1 #2 #3 #4 #5 Mission Statement Litmus Test Will it make sense to the average citizen? Does it answer who we are, what and for whom we do what we do and why it’s important? Is it obvious why we spend public dollars on such an effort? Will you be embarrassed if you see it in the media? Does it articulate the ultimate outcomes you want?

25. Vision & Principles • Vision: a compelling, conceptual image of the desired future. • Principles: core values and philosophies that describe how an agency conducts itself in carrying out its mission.

26. Gap Analysis • The process of examining any disparity or "gap" that exists between the current and desired states. • Current state: identified during the SWOT analysis. • Desired state: identified during the goal setting process.

27. What Is A Gap? Desired State (Where we want to be) Why the Difference? (Gap Analysis) Current State (Where we are now)

28. Key Questions • Are current products and services meeting our customers' needs and expectations? • Are any new products or services needed? • If so, can they be provided within existing resources using redeployment, reallocation and/or reduction of current services and still meet customers' needs? • Are any products or services unnecessary?

29. Key Questions • How do our internal strengths and weaknesses impact the gap analysis findings? • How do our external opportunities and threats impact the gap analysis findings? • How do we deal with these gaps in the strategic plan? Do these gaps in service require their own goal statements?

30. Planning Assumptions • Resources • Demographics • Economic • Policy issues • Government/Legislative • Technological Development

31. Goal • The desired end result, generally after three or more years. • A goal represents the “to be” state, not the action of getting to that state. • If strategic issues were identified during the SWOT analysis, don’t forget to address them in the plan with specific goals. This is especially important if the agency will be asking for additional funds in their budget submittal based on the issues.

32. Test Question #1 #2 #3 #4 #5 Goals Litmus Test Does the goal support the mission? Is it consistent with your legislative authority? Does the goal deal with just one issue? Does the goal represent a desired result that can be measured? Does the goal reflect a primary activity, a strategic direction, a strategic issue or a gap in service? Is the goal challenging, but still realistic and achievable? Does the goal encompass a relatively long period, i.e., three years or longer?

33. Test Question #1 #2 #3 #4 #5 Goals Litmus Test Is there at least one key goal for each program/subprogram, but not more than can be reasonably managed? Is the goal important to management? Is the goal important to policymakers and customers? When taken collectively, will the goals reflect most of the program’s budget? Will someone unfamiliar with the program or subprogram understand what the goal means?

34. Objectives • Specific and measurable targets for accomplishing goals.

35. Developing Objectives • Review mission and goals • Decide the results that are wanted/needed • Set a time frame for achieving results • Build in accountability

36. Criteria for Objectives • Objectives should be SMART • Specific • Measurable • Aggressive but Attainable • Result-oriented • Time-bound

37. The Objectives Stretch Factor • Setting achievable objectives that stretch resources and outcomes requires: • Knowledge of current and future demand • Process and staff capability • Baseline and, if available, historical data • Benchmarking data to know what is possible • Clear idea of actions needed for achievement

38. Test Question #1 #2 #3 #4 #5 Objectives Litmus Test Does the objective reflect specific, desired accomplishments? Can progress toward completion of an objective be measured? Is the objective aggressive and challenging, yet realistic and attainablewithin available resources? Does the objective specify a result rather than an activity? Is there a specific time frame for completion of the objective?

39. Test Question #1 #2 #3 #4 #5 Objectives Litmus Test Have you identified who will be accountable for meeting the objective? Will completion of the objective lead to goal attainment? Is there at least one objective for each stated goal? Will someone unfamiliar with the program or subprogram understand what the objective means?

40. Performance Measures How do we measure our progress? • Used to measure results and ensure accountability. • Evaluate performance • Track progress against plan • Identify improvements • Reward performance

41. Performance Measures • Should be: • Meaningful • Simple • Comprehensive • Credible

42. Categories of Measures • Inputs: Resources needed to provide a particular product or service. • Outputs: Products or services provided. • Outcome: Result of providing service or product. • Efficiency: How effectively are resources being used? • Quality: How good are the services and products and how satisfied are the customers?

43. Output vs. Outcome Output Outcome Discharged patients living independently Patients discharged Is not the same as Reduction in incidence of vaccine preventable diseases Vaccines given Is not the same as

44. Key Questions for Selection of Master List & Budget Measures • Ask the impact questions: • What did the Agency itself accomplish? • Is the outcome for this measure shared with other entities or State Agencies? How much of the outcome is attributed to the Agency? • What is the difference between the actual outcomes and the outcomes that would have occurred if the Agency had not existed? • Can it be compared to another best-practice government entity?

45. Outcome vs. Family of Measures • No one comparison of a single outcome measure with a single performance standard will provide a definitive evaluation of a State Agency or program. • Therefore, a “Family of Measures” may provide a more credible and conscientious picture that is comparable to multiple standards for evaluation of performance.

46. Family of Measures Internal External Input Output Outcome Efficiency Quality

47. Family of Measures:Licensing and Regulation Internal External Input Number of applications Number of complaints Output Number of licenses issued Number of licensed practitioners Outcome Number of disciplinary actions per 100 licensees Efficiency Unit cost per complaint Average days from receipt of complaint to resolution Quality Percent reduction in processing errors Customer rating of service

48. Test Question #1 #2 #3 #4 #5 Performance Measures Litmus Test Does the measure relate to the mission it represents? Does the measure relate to the goal it represents? Does the measure relate to the objective it represents? Is the measure important to management?

49. Test Question #1 #2 #3 #4 #5 Performance Measures Litmus Test Will it be possible to collect accurate and reliable data for this measure? Taken together, do the performance measures accurately reflect the key results of the budget unit, program or subprogram? Is there at least one key performance measure for each goal?

50. Selection Criteria MatrixChoosing “Key” Measures for the Executive Budget