strategic planning

CHAPTER FOUR Clarifying Organizational Mandates and Mission

Three outstanding attitudes—obliviousness to the growing disaffection of constituents, primacy of self-aggrandizement, and the illusion of invulnerable status—are persistent aspects of folly.

—Barbara Tuchman, The March of Folly

This chapter covers Steps 2 and 3 of the Strategy Change Cycle, identifying mandates and clarifying mission and values. Together mandates, mission, and values indicate the public value the organization will create and provide the social justification and legitimacy on which the organization's existence depends.

Public and nonprofit organizations are externally justified. This means that they are chartered by the state to pursue certain public purposes (Rainey, 2009 ), and their legitimacy is conferred by the broader society (Suchman, 1995 ; Frederickson, 1997 ). These organizations must find ways to show that their operations do indeed create public value, or they risk losing the social justification for their existence, legitimacy, and any tax-exempt status they have.

Democratic governments can create public value through a number of overlapping activities, some of which are more appropriate to one level or type of government than another (Moore, 1995 ; Bozeman, 2002 ; Weimer & Vining, 2010 ). These activities include:

· •Providing a constitutional framework of laws and supporting the rule of law—not least by the government itself.

· •Creating open, transparent government.

· •Fostering and relying on the democratic process, including making sure that mechanisms for articulating and aggregating values function in a democratic way.

· •Protecting human rights, human dignity, and the core of subsistence.

· •Ensuring that a long-term, holistic view is taken, and that stewardship of the public interest and the common good are seen as crucial functions of government, albeit shared with other actors and usually subject to contest.

· •Inspiring and mobilizing the government itself and other key entities and actors to undertake individual and collective action in pursuit of the common good (Crosby & Bryson, 2005 ), which includes promoting both within-group social connections (or what Robert Putnam calls “bonding social capital”) and across-group social connections (what he calls “bridging social capital”) (Putnam, 2000 ), and catalyzing activecitizenship in which diverse groups of citizens create programs, projects, products, or services of lasting public value (Boyte & Kari, 1996 ; Boyte, 2004 ).

· •Maintaining a stable economy with reasonable levels of growth, unemployment, inflation, debt, savings, investment, and balance of payments figures.

· •Relying on markets when they can be expected to work, including correcting market imperfections, and freeing, facilitating, and stimulating markets; and not relying on markets when they cannot be expected to work (Bryson & Crosby, 2008 ). Serving this purpose might include:

· •Providing needed public goods that private markets will not provide on their own, or else will provide badly (for example, defense, large infrastructure projects, common spaces, free parks), and ensuring that the benefits of publicly provided goods and services are not inappropriately captured by some subset of the population for whom they are not intended (for example, unnecessarily restricting public access to public lands).

· •Subsidizing activities with positive spillover effects for the general public (for example, K–12 and higher education, basic research, certain economic development activities, block clubs).

· •Taxing or regulating activities with actual or potential negative spillover effects for the general public (for example, commercial and investment banking, food and drug production and distribution, building construction, automobile operation).

· •Addressing problems created by asymmetries in information availability, distribution, or use (for example, licensing or certification programs, product labeling requirements).

· •Addressing problems of loss and uncertainty (for example, governmentally organized or subsidized insurance schemes, the Strategic Petroleum Reserve).

· •Making sure that conservation of resources is emphasized rather than assuming substitutable resources will be found or invented (for example, conserving oil and fossil fuels instead of assuming replacements will be found).

· •Protecting a common heritage when it otherwise might be lost (for example, historic and architectural preservation programs, protecting areas of outstanding natural beauty, memorials to outstanding public service).

· •Providing public goods and services in a cost-effective way (for example, transportation infrastructure and systems, health and social services, police and criminal justice services).

· •Using information and cost-benefit and cost-effectiveness analyses that are as objective as possible to inform public decisions.

· •Making use of civic-minded public servants and professional expertise (Frederickson, 1997 ).

Nonprofit organizations in the United States can create public value by a number of means. The array of types of nonprofit organizations and their specific purposes is extraordinary. Section 501(c)(3) of the Internal Revenue Service code contains the largest number of tax-exempt organizations. They are granted tax concessions because they are presumed to create public value when they:

· •Express the First Amendment right of assembly

· •Promote public welfare directly, rather than privately, as in the case of firms, or of a definable subgroup, as in the case of associations

· •Promote public welfare in a manner that goes beyond government, as in the case of religion, or in a way that substitutes for government, as in the cases of housing and health

· •Serve public purposes at a cost less than government would incur, and therefore there is a savings in taxes foregone

· •Serve public purposes in a charitable way, so that public or community welfare rather than individual welfare is served (Bryce, 1999 , pp. 32, 40)

There are three tests that an organization must pass to be granted 501(c)(3) status (Bryce, 1999 , pp. 40–41, 49–50). The organizational test requires that the nonprofit be organized to improve public welfare, rather than to benefit individuals or owners, by pursuing one or more of eight specific purposes: educational, religious, charitable, scientific, literary, testing for public safety, fostering certain national or international sports competitions, or preventing cruelty to children or to animals. The political test requires that the organization's charter forbid the nonprofit from participating in any political campaign on behalf of a candidate. And the asset test requires that the charter prohibit any distribution of assets or income to benefit individuals as owners or managers, except for fair compensation of services rendered, and must forbid the use of the organization for the personal benefit of founders, supporters, managers, their relatives, or associates.

Nonprofit organizations also can fail in a variety of ways; thus public value can be created by working to avoid the failures. Salamon ( 1995 , pp. 44–48) identifies four categories of voluntary failure:

· •Philanthropic insufficiency—or the sector's “inability to generate resources on a scale that is both adequate enough and reliable enough to cope with the human service problems of an advanced industrial society” (p. 45)

· •Philanthropic particularism—which refers to “the tendency of voluntary organizations and their benefactors to focus on particular subgroups of the population.… As a result, serious gaps can occur in the coverage of subgroups by the existing voluntary organizations” (pp. 45–46)

· •Philanthropic paternalism—in which the “nature of the sector comes to be shaped by the preferences not of the community as a whole, but of its wealthy members” (p. 47)

· •Philanthropic amateurism—in which care that requires professional training and expertise is “entrusted to well-meaning amateurs” (p. 48)

Communities can create public value by promoting a sense of individual and collective identity, belonging, recognition, and security; by providing people a place to live, work, learn, enjoy, and express themselves; by building and maintaining physical, human, intellectual, social, and cultural capital of various sorts; and by fostering a civically engaged, egalitarian, trusting, and tolerant democratic society (Boyte & Kari, 1996 ; Chrislip, 2002 ). Social capital in particular has been shown to have a broad range of positive effects on health, education, welfare, safety, and civic activism (Putnam, 2000 ). Communities are necessary for our existence as human beings, and serving communities provides a justification for our existence as humans (see, for example, Friedmann, 1982 ; Becker, 1997 ; McKnight & Block, 2010 ).

As public problems have increasingly been defined in such a way that they are beyond the competence of single organizations or sectors to solve, collaboration has been looked to as a way to pool competence to mount an effective response. Cross-sector collaboration specifically is seen as a way to systematically harness each sector's unique strengths, while minimizing or overcoming its characteristic weaknesses, in order to ensure that the joint response to challenges is competent to successfully do the job at hand (Bryson, Crosby, & Stone, 2006 ; Bryson & Crosby, 2008 ).

Mandates

Although Step 3 , clarifying mission, is usually more time-consuming than Step 2 , clarifying organizational mandates, Step 2 is no less important. Before an organization can define its mission and values, it should know exactly what it is formally and informally required to do (and not do) by external authorities. Formal requirements are likely to be codified in laws, regulations, ordinances, articles of incorporation, charters, and so forth, and therefore may be easier to uncover and clarify than the organization's mission. In addition, organizations typically must meet a variety of informal mandates that may be embodied in norms or the expectations of key stakeholders, such as the electorate or duly elected representatives. These informal mandates may be no less binding. For example, newly elected officials often talk about the “mandate” they have received from the voters—and if the mandate is real and strong, woe unto those who ignore it. Real clarity, however, about these informal mandates may have to await a stakeholder analysis, discussed in a subsequent section.

An interesting example is provided by the British National Health Service (NHS). The NHS is a national, publicly financed health care system covering everyone within its borders, not just citizens; there are no “uninsureds.” Since the Citizen Charter initiative begun by John Major's Conservative government in the 1990s, the NHS for the various countries and provinces that comprise the United Kingdom (England, Scotland, Wales, and Northern Ireland) has prepared a number of documents that outline rights and responsibilities of patients, the public, and staff and offer a number of commitments. In effect, these statements are both government- and self-imposed mandates of varying force. The idea that patients, clients, customers, or citizens have both rights and responsibilities is worth emphasizing in any situation, such as health care, education, or public safety, where coproduction is a central feature of effective service provision (Osborne & Plastrik, 1997 , 2000 ; Normann, 2000 ).

The latest version of the NHS mandates for England is found in the NHS Constitution, the short version of which is presented in The Handbook to the NHS Constitution for England, 8 March 2010. The constitution restates and reaffirms principles and values on which the NHS had been built (it was founded in 1948) and emphasizes the idea of partnership between the NHS, patients, staff, and the public. The constitution sets out rights to which patients, the public, and staff are entitled; “pledges” which the NHS makes (that is, self-imposed mandates); and responsibilities that the public, patients, and staff owe to one another “to ensure that the NHS operates fairly and effectively” (National Health Service for England, 2010 , p. 2). All NHS bodies and private and nonprofit providers supplying NHS services “are required by law to take account of the constitution” when making decisions and taking action (p. 2). Patients are strongly encouraged to assume the responsibilities outlined for them. (The new coalition Conservative–Liberal-Democratic government is proposing major changes to the NHS, so it is not clear what will happen to its constitution.)

The NHS Constitution for England Handbook begins with what is essentially a statement of mission (National Health Service for England, 2010 ):

The NHS belongs to the people. It is there to improve our health and well-being, supporting us to keep mentally and physically well, to get better when we are ill and, when we cannot fully recover, to stay as well as we can to the end of our lives. It works at the limits of science—bringing the highest levels of human knowledge and skill to save lives and improve health. It touches our lives at times of basic human need, when care and compassion are what matter most.

The principles that guide the NHS are as follows (pp. 3–4):

· •The NHS provides a comprehensive service, available to all.

· •Access to NHS services is based on clinical need, not an individual's ability to pay.

· •The NHS aspires to the highest standards of excellence and professionalism.

· •NHS services must reflect the needs and preferences of patients, their families, and their caregivers.

· •The NHS works across organizational boundaries and in particular with other organizations in the interest of patients, local communities, and the wide population.

· •The NHS is committed to providing the best value for taxpayers’ money and the most effective fair and sustainable use of finite resources.

· •The NHS is accountable to the public, communities, and patients that it serves.

The document goes on to outline a set of patient rights and NHS promises to patients in the areas of: access to health services; quality of care and environment; nationally approved treatments, drugs, and programs; respect, consent, and confidentiality; informed choice; involvement in one's own health care; and the NHS generally in terms of planning, service provision, and decision making, and complaint and redress (pp. 5–8). For example, in terms of access to health services, patients have the right to:

· •Receive NHS service free of charge, apart from certain limited exceptions sanctioned by Parliament

· •Access NHS services

· •Expect your local NHS to assess the health requirements of the local community and to commission and put in place the services to meet those needs as are considered necessary

· •Go to other European Union countries or Switzerland for treatment that would be available to you through your NHS commissioning body

· •Not be unlawfully discriminated against in the provision of NHS services

· •Access services within maximum waiting times

In the same domain, the NHS also commits to:

· •Provide convenient, easy access to services within the waiting times

· •Make decisions in a clear and transparent way

· •Make the transition as smooth as possible when you are referred between services, and to involve you in relevant discussions

In terms of patient and public responsibilities, the constitution argues that since the NHS belongs to everyone, there are things everyone should do to help it work effectively and responsibly. These responsibilities include admonitions to (p. 9):

· •Recognize that you can make significant contributions to your own, and your family's, good health and well-being, and to take some personal responsibility for it

· •Register with a general practitioner's practice, the main point of access to the NHS

· •Treat NHS staff and other patients with respect

· •Provide accurate information about your health, condition, and status

· •Keep appointments or cancel within a reasonable time

· •Follow the course of treatment to which you have agreed and to talk to your clinician if you find this difficult

· •Participate in important public health programs

· •Ensure that those closest to you are aware of your wishes about organ donation

· •Give feedback—both positive and negative—about the treatment and care you have received, including any adverse reactions you may have had

Next the document sets out staff rights and NHS pledges. These are intended to help assure high-quality care and a high-quality workplace (p. 10). This is followed by an articulation of staff responsibilities to the public, patients, and colleagues (p. 11). The document concludes with a statement of NHS values (p. 12). These include valuing:

· •Respect and dignity

· •Commitment to quality of care

· •Compassion

· •Improving lives

· •Working together for patients

· •And the idea that everyone counts

Purpose and Immediate Desired Outcomes

The purpose of Step 2 is to identify and clarify the nature and meaning of the externally imposed mandates, both formal and informal, affecting the organization. Four outcomes should be sought from this step:

· 1.Identification of the organization's formal and informal mandates, including who is mandating what and with what force

· 2.Interpretation of what is required as a result of the mandates (leading perhaps to explicit goals or performance indicators)

· 3.Clarification of what is forbidden by the mandates (which also might lead to explicit goals or performance indicators)

· 4.Clarification of what is not ruled out by the mandates (that is, the rough boundaries of the unconstrained field of action)

It is very important to clarify what is explicitly required, explicitly forbidden, and not explicitly ruled out. Attending to the first two can alert organizational members to what they must or must not do, the key elements of what Simons ( 1995 , p. 6) defines as an organization's “boundary system” meant to set limits on behavior tied to defined sanctions and credible threat of punishment. For example, research on state-imposed local government planning mandates in Florida indicates that much of the variation in local compliance is directly attributable to which mandates the state's department of community affairs has chosen to emphasize (Deyle & Smith, 1998 ). Clearly, not all mandates are of equal interest to both the state and local governments. Whether or not more public value would have been created if they were is unclear. In a time of constrained resources and competing demands, choices no doubt must be made about which mandates to emphasize and which to downplay or try to change, but doing either is not without risk.

By considering what the organization might or should do, organizational members and other key stakeholders can engage in valuable discussions about which mandates are useful, in that they allow for “the responsible exercise of discretion” (Lynn, 2003 , p. 16; Hill & Hupe, 2009 ) and “allow desirable creativity within defined limits of freedom” (Simons, 1995 , p. 178); which mandates may need to be changed; and what the organization's mission ought to be. Too many organizations think they are more constrained than they actually are and, indeed, make the fundamental error of assuming that their mandates and mission are the same. They may be, but leaders and planners should not start out with that assumption.

The Minnesota Department of Transportation (MNDOT) offers an interesting example of the interplay of mandates and mission. In the late 1990s, a vocal state legislator was strongly criticizing the use of existing ramp meters to govern access to freeways in the Twin Cities area. Many professionals in MNDOT thought the organization's mission could be served by studying the impact that turning off the existing ramp meters would have on travel times and accidents in the Twin Cities area. But they did not think they could turn off the meters because of the state's liability laws. Victims of accidents might sue MNDOT on the supposition that turning off the meters had led to the accidents. A 2000 state law mandating MNDOT to do such a study allowed them to turn the meters off, study the results, and then make several readjustments when the meters finally were turned back on (Krause & Milgrom, 2002 ). As a result of a carefully designed study in which ramp meters were turned off for 30 days, MNDOT in fact did make several adjustments to the system. The change in mandates helped MNDOT better pursue its mission and create more public value.

MetroGIS provides another interesting example. Recall that prior to MetroGIS's first formal strategic planning effort, Randall Johnson took the lead on organizing a series of formal and informal discussions and two major forums of seventy-five-plus stakeholders each to explore the issue of whether to pursue a regional GIS system and whether the MC should lead the initiative. A general consensus emerged from these discussions for the idea that there should be a regional GIS system and the MC should take the lead. The discussions and forums in effect created a strong informal mandate to proceed both with strategic planning and with the creation of a regional GIS system.

Desired Longer-Term Outcomes and Process Design and Action Guidelines

There are two potential longer-term desired outcomes of Step 2 . First, clarity about what is mandated—what must be done and not done—will increase the likelihood that mandates will actually be met and public value created (Nelson & French, 2002 ; Piotrowski & Rosenbloom, 2002 ). Research on goal setting indicates that one of the most important determinants of goal achievement is the clarity of the goals themselves. The more specific the goal, the more likely it will be achieved (Nutt, 2002 ; Latham, Borgogni, & Petitta, 2008 ). Second, the possibility of developing a mission that is not limited to mandates is enhanced. It helps people examine the potential purposes of organizational action for creating public value if they know what is not explicitly forbidden.

The process guidelines for this step are straightforward:

· 1.Have someone compile the formal and informal mandates faced by the organization. A straightforward summary in plain English should be produced. If the organization is governmental in nature, it is important not to forget the democratic-constitutional values that legislatures and the courts have been trying to enforce for decades, such as representation, participation, transparency, and individual rights (Piotrowski & Rosenbloom, 2002 ; Hill & Lynn, 2009 ).

· 2.Review the mandates in order to clarify what is required, what is forbidden, and what is allowed. Part of this exercise may include gaining clarity about who is mandating what and with what force. This can provide a major clarification of organizational goals or performance indicators. These goals can then be used, along with goals that might be derived from stakeholder analyses and the mission statement, to identify issues.

· 3.Regularly remind organizational members what the organization is required to do, and forbidden to do, as a way of ensuring conformity with the mandates. In other words, institutionalize attention to the mandates. Certainly strategic plans, annual reports, staff retreats, and orientation sessions for new employees should include a section (perhaps a very brief one) on mandates. Other methods might prove useful as well. Failure to do so can diminish public value and undermine legitimacy. For example, research on federal annual performance plans required by the Government Performance and Results Act has indicated a disturbing failure of those plans to attend to some important mandates, specifically requirements under the Freedom of Information Act. This leads one to wonder if other important mandated elements of creating public value are being ignored (Piotrowski & Rosenbloom, 2002 ).

· 4.Undertake a regular review of the mandates and discuss which seem to be current, which may need to be revised, and which should be dropped. In a review of state-imposed mandates in Minnesota, local government respondents saw a need for dialogue with the state to ensure mandates are reasonable, flexible, adequately funded, and less burdensome in terms of their cumulative impact (Grossback, 2002 ).

Mission

Yogi Berra, the famous New York Yankees baseball player and manager, once said, “You've got to be very careful if you don't know where you're going, because you might not get there.” His maxim emphasizes that without a sense of purpose we are quite literally lost. Mission provides that sense of purpose. In addition, it can be very helpful (although not always necessary or possible) to expand an organization's mission into an early vision of success, which may then guide subsequent efforts at issue identification and strategy development (see Figure 2.1 ). Without a vision of success, organizational members may not know enough or see enough about how to fulfill the mission. Communities, in particular, may find it useful to develop a guiding vision that embodies important purposes and values. They are unlikely to have a mission statement as such, but a guiding vision can provide the sense of purpose, values, and common ground that enables disparate and essentially independent groups and organizations to strive together for the common good (Wheeland, 2004 ).

Mission, in other words, clarifies an organization's purpose, or why it should be doing what it does; vision clarifies what the organization should look like and how it should behave in fulfilling its mission. Chapter Eight discusses constructing a vision of success; for now it is enough to note simply that the foundation of any good vision of success is an organization's mission statement, or a community's statement of purpose and values.

Note the contrast between Yogi Berra's maxim and J.R.R. Tolkien's observation in The Fellowship of the Ring ( 1965 , p. 182), “Not all those who wander are lost.” Tolkien was speaking of people who may look like they are wandering, but who do have a clear sense of purpose. Purposeful wandering is quite different from the mindless wandering to which Yogi Berra alludes. Purposeful wandering also is what Daniel Boone is alluding to in the epigraph opening Chapter Two .

The statement from Barbara Tuchman ( 1984 ) quoted as the epigraph to this chapter makes a different point: any organization that becomes an end in itself doomed to failure. The collapse of the former Eastern Bloc nations and the Soviet Union twenty-some years ago illustrates how self-aggrandizement, illusions of invulnerability, and disregard for constituents' desires can lead to disaster. More recent illustrations are provided by the rapid collapses of dictatorships in Tunisia and Egypt (events propelled in part by advances in information and communication technology that made it easier for opponents to unite and coordinate their actions). Indeed, most planning disasters probably meet Tuchman's criteria for folly (Hall, 1980 ; Nutt, 2002 ).

Purpose and Immediate Desired Outcomes

Ultimately strategic planning is about purpose, meaning, values, and virtue. Nowhere is this more apparent than in the clarification of mission and the subsequent development of a vision of success. The aim of mission clarification is to specify the purposes of the organization and the philosophy and values that guide it. Unless the purposes focus on socially useful and justifiable ends, and unless the philosophy and values are themselves virtuous, the organization cannot hope to command indefinitely the resources needed to survive, including high-quality, loyal, committed employees (Selznick, 1957 ; Burns, 1978 ; Collins & Porras, 1997 ; Rainey, 2009 ). Unfortunately, as Paul Light ( 1998 ) points out, some organizations can plod in ignorance and inertia for some time: “One of the great mysteries of organizational life is how agencies survive year after year without a clue as to their mission” (p. 187).

Step 3 has two main immediate desired outcomes: a stakeholder analysis (if one has not been completed already) and a mission statement. A stakeholder analysis provides useful information and valuable preparation for a mission statement. Agreement on the stakeholder analysis and mission statement by key decision makers should clarify the organization's arenas of action, many of the basic rules of the game within these arenas, the implicit if not explicit goals of the organization, and possible performance indicators. In addition, the agreement on mission—particularly if it is consensual—will itself be a source of power for the organization that can have positive effects on performance (Pfeffer, 2010 ). Much of the power comes from framing and communicating the mission (including through measurable goals) in such a way that employees and other actors can commit to and identify with the organization and its mission (Weiss & Piderit, 1999 ; Wright & Davis, 2003 ). The mission in this case provides a deep source of meaning to those who pursue it (Delbecq, 2010 ). Finally, agreement on an organizational mission that embraces socially desirable and justified purposes should produce legitimacy internally and externally for the organization (Suchman, 1995 ), as well as enthusiasm, and even excitement, among organizational members (Kouzes & Posner, 2008 ).

Longer-Term Desired Outcomes

A number of additional desirable outcomes flow from clarifying and agreeing on the organization's mission. Perhaps the most important is simply that agreement helps fosters a habit of focusing deliberations on what is truly important. Too often key decision makers in a public or nonprofit organization never come together to discuss cross-functional issues or, more important, the organization as a whole. The boards and senior staff of the Minneapolis Park and Recreation Board and the Loft wanted to find time to focus on what was important for their organizations and used strategic planning specifically for this purpose. Similarly, the activists supporting creation of MetroGIS used the first round of MetroGIS strategic planning to create the organization's mission and the main outlines of the organization's architecture and starting initiatives. The organization's policy board used the second round of strategic planning to focus anew on the organization's mission and what was most important for it to do.

Often, if key decision makers do gather—for example, at a staff meeting—most of their time is taken up with announcements or else with discussion of relatively trivial matters. Although such discussions may serve to introduce key decision makers to one another and may provide some of the social glue necessary to hold any organization together, they are relatively useless and may in fact be a colossal waste of everyone's time.

When important issues are not being addressed, it is important to know why. Participants simply may not know how to do so, particularly if serious conflicts might be involved, in which case targeted training might help. Or they may not be comfortable with one another—for example, they may be unsure of one another's motives—and therefore may be fearful of the consequences of raising difficult issues. Team building might be used to build trust and address these fears. Or, avoiding discussing real issues can be a way for senior decision makers to control the agenda and enhance their own power (Benveniste, 1989 ). In this last case, senior personnel might be persuaded of the benefits of more participatory decision making, or else might somehow be persuaded to leave. As Scharmer ( 2009 , p. 415) observes, “The underlying principle here is that energy follows attention[italics in original]. This means that the biggest leverage we have is what we pay attention to and how we attend to a situation.” To be blunt: If you are not paying attention to what is important, what good are you as a leader or follower?

The second important longer-term desired outcome, of course, is the clarification of organizational (or community) purpose, or its strategic intent (Hamel & Prahalad, 1994 ; Eden & Ackermann, 2010 ; Ackermann & Eden, 2011 ). Depending on how this is done, the performance payoffs can be significant. For example, quantitative evidence from public schools in Michigan demonstrates that the existence of a mission statement that is focused and activist and that emphasizes a commitment to measurable achievement is linked to a measurable positive effect on students’ math and reading achievement (Weiss & Piderit, 1999 ). There is case evidence to indicate similar positive measurable impacts of similarly worded mission statements in a number of other public and nonprofit organizations (for example, Bryson, 1999 ; Sawhill & Williamson, 2001 ).

Because defining the mission may be thought of as the central function of leadership, more effective leadership is another outcome (Selznick, 1957 ). Clarity of organizational purpose helps leaders in other ways as well. In particular, it helps articulate the purpose of organizational structures and systems, including the resource allocation system. Agreed-upon purpose provides a kind of premise control (Perrow, 1986 ; Bryant, 2003 , p. 36), or control lever (Simons, 1995 , p. 7) that serves as a criterion against which organizational structures and systems and actions will be judged. In addition, leaders will be helped to guide internal conflict, so that it furthers organizational ends. Leaders are required to guide the play of the game within the structure of the rules, but they also need to change the rules on occasion. Clarity of purpose provides a valuable basis for guiding conflict productively and for understanding which rules help with that task and which need to be changed (Schein, 2010 ).

A key point about managing conflict is that organizational conflicts typically are about something other than what is nominally in dispute. For that reason, their resolution requires the conflict to be reframed at a higher level of abstraction (Watzlawick, Weakland, & Fisch, 1974 ; Schön & Rein, 1994 ; Nadler & Hibino, 1998 ). Terry ( 2006 , 2001 ), for example, describes a hierarchy of human action. Fulfillment is at the top, and is the embodiment of all that is underneath. Then comes meaning, or why people act; then mission, which guides one in a meaningful direction; then power; structures and systems; resources; and finally the givens of existence. He argues that disputes at any level in this hierarchy are usually really about what is at the next level up. Thus, power struggles in general are usually about the purposes the power is to serve. Arguments about organizational structures and systems are really about who is empowered or disempowered by different designs. Disputes over resources are typically about how the use of those resources should be regulated in structures and systems. Conflicts over givens are about what counts as a resource and what is to be discounted, devalued, or ignored. A focus on the purpose and ultimate meaning of organizational efforts—to the extent that there is agreement on them—therefore can frame most of these conflicts in such a way that they facilitate the pursuit and fulfillment of organizational ends.

Agreement on purpose can also help the parties in a conflict to disconnect ends from means and thus be clear about what goals are to be pursued, or problems addressed, prior to exploring solutions. The advantage of doing so is that most conflicts are about solutions; that is, there usually is no agreement or clear understanding about what problems the solutions are to meant to solve (Nadler & Hibino, 1998 ; Nutt, 2002 ; Bryant, 2003 ). Further, the organization cannot really know what problems it ought to address without some sense of the purpose it serves. Once an organization understands its purpose, it can define the problems it is meant to solve and can better understand how to choose among competing solutions. David Osborne and Ted Gaebler based their best-selling book Reinventing Government ( 1992 ) in part on this very point: if governments stick to steering—as noted in Chapter One , the word government comes from the Greek for steering, which means focusing on purpose (and problem definition)—then they are less likely to be a captive of any one approach to rowing (solutions) (see also Osborne & Plastrik, 1997 , 2000 ; Osborne & Hutchinson, 2004 ; Hill & Hupe, 2009 , pp. 123–131, 193–195).

Agreement on purpose therefore gets the organization to pursue what is often a normatively preferable sequence of conflict resolution activities: to agree on purposes, identify problems or issues, and then explore and agree on solutions. The likelihood that successful solutions will be found is increased because the sequence narrows the focus to fulfillment of the mission, but broadens the search for acceptable solutions to include all that would further the mission (Nadler & Hibino, 1998 ). The dangers of jumping to solutions and thereby producing a blunder or debacle are minimized (Nutt, 2002 ).

Agreement on purpose provides a very powerful means of social control. To the extent that the purposes are socially justified and virtuous, agreement will invest organizational discussions and actions with a moral quality that can constrain self-serving and organizationally destructive behavior on the part of organizational members. Said differently, agreement on purpose can lead to a mobilization of organizational energies based on pursuit of a morally justifiable mission beyond self-interest (Suchman, 1995 ; Lewis & Gilman, 2005 ).

Another desired outcome of this step is the explicit attention given to philosophy, values, and culture. Organizations rarely discuss these matters directly. As a result, they are likely to misread their strengths and weaknesses and thus will make mistakes in the internal assessment step to come. Also, without understanding their philosophy, values, and culture, organizations are likely to make serious errors in the strategy formulation step. They may choose strategies that are not consonant with their philosophy, values, and culture and that therefore are doomed to fail unless a well-conceived strategy for culture change is pursued as well (Hampden-Turner, 1990 ; Schein, 2010 ; Johnson, Scholes, & Whittington, 2008 ).

Finally, as a result of answering the six questions that follow, the organization will be well on its way to development of a clear vision of success. Indeed, answers to these questions may provide organizational members with the conception that must precede any actual perceptions of success. In other words, it is conceiving and believing that make seeing possible (Weick, 1995 ).

Stakeholder Analyses

A stakeholder analysis is a valuable prelude to a mission statement, a SWOC/T analysis, and effective strategies. Indeed, I usually argue that if an organization has time to do only one thing when it comes to strategic planning, that one thing ought to be a stakeholder analysis. Stakeholder analyses are so critical because the key to success in the public and nonprofit sectors—and the private sector, too, for that matter—is the satisfaction of key stakeholders. If an organization does not know who its stakeholders are, what criteria they use to judge the organization, and how the organization is performing against those criteria, there is little likelihood that the organization (or community) will know what it should do to satisfy its key stakeholders (Rainey, 2009 ).

An example may prove instructive at this point. The example shows how a misreading of who the key stakeholders are can cause serious trouble for an organization, how a better reading can improve things dramatically, and how building on a series of stakeholder analyses can lead to far greater fulfillment of the mission. The story plays out over almost twenty-five years and comes from the Division of Fish and Wildlife of the state Department of Natural Resources in a Midwestern state. The department (as the state's agent) is one of the major landowners in the United States. It manages a vast area, including water, forests, mineral and land resources, and huge populations of fish and wildlife. The fish and wildlife resources are important to in-state and out-of-state anglers and hunters and to the large recreational and tourist industry that depends on them. A large fraction of the state's people identify themselves as anglers and hunters, while a large number of others enter the state each year to fish and hunt.

You would think that the Division of Fish and Wildlife would be one of the most protected and supported units of this state's government, that legions of interest groups—from the National Rifle Association, to resort-industry groups, to recreational equipment dealer associations—would be continually lobbying state legislators and the governor to maintain, if not increase, public financial support for the division. When our story begins, however, such was most emphatically not the case. Indeed, quite the opposite. The division had been under frequent attack from some key stakeholders—hunters and anglers. They argued that the division saw itself primarily as a regulator and naysayer to these stakeholders. They felt it was completely uninterested in their satisfaction.

The division decided to engage in strategic planning to turn around an increasingly bad situation. One of the first steps was a stakeholder analysis. The most important piece of information to emerge from that analysis was that the professionals in the division operated under the mistaken assumption that, in effect, their prime stakeholders were fish and deer! They felt their job was to regulate anglers and hunters, so that the state's fish and wildlife resources could be protected and managed over the long term.

There would have been little problem with this view if the fish and deer could vote, spend money, and pay taxes. But they cannot. But anglers, hunters, and their families do, along with the owners of resorts and sporting goods establishments. Though the division's maintenance of fish and wildlife resources was obviously one criterion that anglers and hunters used to judge its performance, there were many more as well (such as its ability to provide enjoyable recreational opportunities), and the division was failing in many instances to perform well against them. The result was hostility on the part of these stakeholders and attempts in the legislature to cut the division's budget and curtail its powers. As a result of insights gained from its stakeholder analysis, the division began pursuing several strategies to manage fish and wildlife resources effectively in the long term, while increasing the satisfaction of hunters and anglers (and not simultaneously alienating environmentalists!). The division has in fact dramatically increased support from the sports groups.

But the division and its encompassing department did not stop there. The department embraced strategic planning and began to work at issues that mattered to the department's key stakeholders and developed a synthesis of divisional missions and mandates. By taking a bigger-picture view the department developed a new mission focused on what is now called ecosystem-based management, including working with citizens to protect and manage the state's natural resources (not just those that are state owned), to provide outdoor recreation opportunities, and to provide for commercial uses of natural resources in a way that creates a sustainable quality of life. The new mission has the support of all the major stakeholders (although they certainly do not all support the department on every issue) because it took their interests into account. The mission and the strategies used to pursue it have won the department accolades nationally and internationally for innovative approaches to involving the public and to pursuing the common good. And it all began—at least in part—with a simple stakeholder analysis almost twenty-five years ago.

Resource A presents a variety of stakeholder analyses. In general, the three that are most useful for developing a mission statement are the Basic Analysis Technique, Power Versus Interest Grid, and Stakeholder Influence Diagram. These analyses may have been produced as part of developing an initial agreement, in which case they should be revisited. If these analyses have not been conducted, then now is the time. Here we present them in brief.

The Basic Analysis Technique consists of a minimum of three steps. The first step is to identify exactly who the organization's stakeholders are. Figure 4.1 presents a typical stakeholder map for a government. The stakeholders are numerous (although many organizations have even more).

Figure 4.1. A Stakeholder Map for a Government.

Five additional points should be made about this figure. First, the diagram makes clear that any organization (and especially a government), network, or collaboration is an arena in which individuals and groups contest for control of its attention, resources, and output (Crosby & Bryson, 2005 ; Innes & Booher, 2010 ). A major purpose of a stakeholder analysis is to get a more precise picture of the players in the arena.

Second, it is important to identify stakeholders at the right level of aggregation. For example, in the Park Board case, it is certainly true that citizens are a key stakeholder. In the Loft case, writers are a key stakeholder. And in the MetroGIS case, local governments are a key stakeholder. But saying so does not help much because the citizenry, writers, and local governments as stakeholders really consist of a host of different stakeholders with different stakes or interests in the Park Board, Loft, and MetroGIS, respectively. There is an art to knowing what level of aggregation to pick, and the choice can influence subsequent analyses about how well the organization is doing with its stakeholders and what it needs from specific stakeholders. In general, stakeholders should be differentiated if doing so would make a difference in expectations placed on the organization and the responses it might make (Eden & Ackermann, 1998 ; Ackermann & Eden, 2011 ).

Third, special note should be made of future generations. I believe strongly that organizations (and especially governments) have an obligation to leave the world in as good shape as they found it, if not better. It is important in this era of special interest groups and a strong lurch to the political right that seems to devalue the stewardship function of government to keep this public trust in mind. As Theodore Roosevelt said, “We do not inherit the earth from our ancestors, we borrow it from our children.”

Fourth, it is very important for key employee groups to be explicitly identified. Not all employees are the same. There are different groups with different roles to play who will use different criteria to judge organizational performance. Clarity about these groups is necessary to ensure that organizational responses are sufficiently differentiated to satisfy each group. I worked with a public library that presents an interesting example in this regard. It took considerable encouragement on my part to get the librarians to identify themselves as key stakeholders. Their self-effacing and altruistic view of themselves as public servants was admirable, but misplaced. By definition they are key stakeholders of the organization and their own satisfaction is important to the success of their services. Indeed, one of the issues driving the strategic planning process for the library was the fact that the librarians were experiencing increased stress and even “burnout” as a result of heightened demands on their services. Something had to be done to alleviate the stress. Furthermore, several of the key criteria they use to judge organizational performance relate to the professional standards the library does or does not meet (including, for example, guaranteeing First Amendment protections). In other words, it is usually the professional librarians themselves, not other stakeholders, who hold the organization to exacting professional standards of service.

Fifth, key stakeholders for many organizations and communities actually are likely to be quite distant physically, yet nonetheless must be considered carefully. For example, federal and state governments and distant corporate headquarters of local establishments typically have a significant impact on local communities.

The second step in the analysis is to specify the criteria the stakeholders use to assess the organization's performance. There are two approaches to this task. One is to guess what the criteria are; the second is to ask the stakeholders themselves. The strategic planning team should always make its own guesses, but at some point it may prove instructive and politically useful to ask stakeholders (for example, through surveys, interviews, or group discussions) to state their professed criteria.

The compatibility of strategic planning with many newer governance and management approaches is directly related to the emphasis on addressing key stakeholder needs, particularly of those that might be called “customers.” For example, a hallmark of government reinvention (Osborne & Gaebler, 1992 ; Osborne & Plastrik, 1997 , 2000 ), reengineering, and continuous quality improvement (Cohen, Eimicke, & Heikkila, 2008 ; Berman, 2006 ; Osborne & Hutchinson, 2004 ) is their emphasis on meeting customer expectations. And nonprofit organizations are exhorted by the Drucker Foundation (Stern, 1998 ) to clearly identify their primary and supporting customer needs as part of their organizational assessment efforts.

Why should the team always make its own guesses? First, it is faster. Second, the stakeholders may not be completely honest. In the case of city council members, for example, city employees will usually say a key criterion for this important stakeholder group is whether the performance of city departments enhances their reelection prospects. Council members are unlikely to declare this criterion in public, even though it is important to them. On the other hand, asking stakeholders what their criteria are can be instructive, because the team's own guesses can be wrong (Nadler & Hibino, 1998 ; Normann, 2000 ).

The third step in the process is to make a judgment about how well the organization performs against the stakeholders’ criteria. The judgments need not be very sophisticated. Simply noting whether or not the organization does poorly, okay, or very well against the criteria is enough to prompt a very useful discussion. Topics of discussion should include areas of organizational strength and weakness; overlaps, gaps, conflicts, and contradictions among the criteria; and opportunities and challenges or threats posed by the organization's current performance.

These three steps should help set the stage for a discussion of the organization's mission (or a community's purposes and values). In particular, a stakeholder analysis forces team members to place themselves in the shoes of others—especially outsiders—and make a rather dispassionate assessment of the organization's performance from the outsiders’ points of view. Such activity is one of the best possible ways to avoid the attributes of folly that Tuchman describes. It is also likely to be a necessary precursor of ethical action (Lewis & Gilman, 2005 ). In addition, the stakeholder analysis provides a valuable prelude to the SWOC/T analysis ( Step 4 ), strategic issue identification ( Step 5 ), and strategy development ( Step 6 ).

If time permits, or circumstances demand it, three additional steps may be advisable. The strategic planning team may wish to discuss exactly how the various stakeholders influence the organization (Eden & Ackermann, 1998 ). Many members of the team may not know precisely how the organization is influenced, and the discussion may also highlight the really important stakeholders. The Power Versus Interest Grid and Stakeholder Influence Diagram techniques can help move this discussion forward.

Second, the strategic planning team may wish to discuss what the organization needs from each stakeholder group. I have emphasized the need for the organization to satisfy key stakeholder groups, but it may also be very important to focus attention directly on what the organization needs to survive and prosper. The usual assumption is that if the organization satisfies key stakeholders, it can survive and prosper. But that may not be the case, especially when there is a difference between funders and service recipients (as is often the case for public and nonprofit organizations). A direct focus on what the organization needs to survive may reveal an important strategic issue to address: how can the organization secure the resources necessary to continue pursuit of its mission when it does not already receive those resources from the key stakeholders?

Finally, the team may wish to establish a rough ordering among the stakeholders according to their importance to the organization. The order, of course, might vary with different issues, but the rough ordering will give the team an idea of which stakeholders demand the most attention.

A Power Versus Interest Grid arrays stakeholders according to their power to place a claim on the organization's attention, resources, or output, and according to their interest in the organization's attention, resources, or output. Four categories of stakeholders result: Those with high power and high interest are called players; those with high power and low interest are called context setters, because their power helps set the context, but they are not interested enough to be players. Those with high interest and lower power are called subjects, as they are subject to the power of others. And those with low interest and low power form the crowd (Eden & Ackermann, 1998 ). The mission certainly must take the players and context setters into account in some way, even if the organization's ultimate purpose is to serve the subjects or crowd (Bryson, Cunningham, & Lokkesmoe, 2002 ).

A Stakeholder Influence Diagram begins with a Power Versus Interest Grid. Once stakeholders are located on the grid, arrows can be drawn in to show which stakeholders influence whom. (In tandem, a Power Versus Interest Grid and Stakeholder Influence Diagram can be used to help facilitate and formalize completion of the three final steps in the Basic Analysis Technique.)

The team will have to decide whether or not to circulate the stakeholder analysis (or analyses) outside the strategic planning team. It is primarily just an input to other steps in the process (mission statement, SWOC/T analysis, strategic issue identification, strategy development, implementation), so there may be no good reason for more public discussion of it (especially if a major purpose of the strategic planning effort is to change the power, interest, influence, or other aspects of the organization's current stakeholders).

The Mission Statement

A mission statement is a declaration of organizational purpose. Mission statements vary in length depending on their intended use, but they are typically short—no more than a page, and often not more than a punchy slogan. They should also be targeted, activist in tone, and inspiring. And they should lead to measures that will indicate whether or not the mission is being achieved.

The actual statement should grow out of discussions aimed at answering six questions (a process that is often highly informative, as the late movie mogul Sam Goldwyn clearly realized when he said, “For your information, let me ask a few questions”). The statement should at least touch on most answers, though for some purposes it may be distilled into a slogan. Answers to the six questions (outlined below) will provide the basis for developing a vision of success later in the process.

Developing answers to these questions is a valuable but very demanding process. Several hours (and in some cases days) of discussion by the strategic planning team may be required to reach consensus on the answers, and perhaps additional time for reflection may be necessary. The Park Board, Loft, and MetroGIS all revisited and refined their missions in a deliberative and productive way. The deliberations took time but were ultimately highly consequential in terms of clarifying organizational purposes in light of changed circumstances.

Sometimes the discussions may seem too philosophical or academic to be of much use. If discussions start to get bogged down in grand abstractions or minutiae, by all means move ahead. Assign someone the task of writing up what has been covered so far, including points of agreement and disagreement, and come back for further discussions when the time seems right or when decisions must be reached. Strategic planning should not be allowed to get in the way of useful action. However, it is important to remember that strategic planning is ultimately about purpose, meaning, value, and virtue, and therefore is philosophical at its base. To paraphrase management guru Peter Drucker, strategic planning involves responding to a series of Socratic questions. The six questions that follow structure one of the most important parts of that Socratic dialogue:

· 1.Who are we? If your organization were walking down the street and someone asked it who it was, what would the answer be? The question is one of identity, defined as what organizational members believe is distinct, central, and enduring about their organization (Dutton & Dukerich, 1991 ; Ackerman, 2000 ; Rughase, 2007 ). The answer certainly may need to be more than just what appears on the organization's letterhead, as the name there may not mean much.