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Strategic Planning: Future Vision and Implementation

Strategic Planning: Future Vision and Implementation Program Transcript


NARRATOR: In order for a strategic plan to be successful, proper implementation must occur. Strategic plans and implementation require anticipation of future organizational growth and change. Listen as Dr. Paul Nutt explains the importance of collaboration, cooperation, and coordination

DR. PAUL NUTT: If you don't do strategic management, or don't do strategic planning, or some similar process, in all likelihood, you're going to miss some opportunities and you may not be able to dodge some traps.

Let me give you an example with the Ohio Tuition Trust Authority. The only thing I—you know, I really only worked with them in a voluntary way because unfortunately their board was full of financial types, and financial types, you know, don't see strategic management and strategic planning in the same context as we're talking about it here. It's more a question of everything revolves around capital acquisition, one kind or another.

So, I said, "Well, why don't you just create four scenarios where you're going to ask whether your current arrangements fit those four conditions?" Let's say, tuition, you know, the escalation of tuition, which is really drives the demands on their budget. Let's say it goes up the lowest amount that you could conceivably imagine, which is then three or four percent, I would imagine. And let's say it would go up seven or eight percent, which is maybe the highest you can imagine, and then, let's talk about the market. And, of course, the market didn't do anything but go up in the era then. We talked about that.

But I said, "Let's consider the market either flattening or taking a nosedive." When you look at these four categories, the only category that was planned for was the relatively flat tuition and the relatively healthy stock market. All their plans and all their investment strategy revolved around that assumption.

And I said to the head of this organization, "There are three other possibilities." They said—“Of course, the question now is how likely are they?” And I said, "Well, you know, it isn't—the question isn't revolving around how likely they are, the question is what impact would this outcome have on your plans if you didn't anticipate, you know, what the implications might be."

So let's say the, you know, the stock market booms and the tuition is flat, you're going to have a lot of extra money sitting in these accounts and people are going to say, "Why," and “What are you doing with this? How is this going to be used

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Strategic Planning: Future Vision and Implementation

in the public interest?" They haven't thought about that. What about the other alternative?

You know, tuitions go up dramatically, stock market tanks, you know? All of a sudden, we do not have the funds internally to pay for the obligations that we've acquired. And, in fact, when that happened, what they had to do was to suspend business, literally. They haven't thought about that. What would they do if that happened?

And, of course, then there's the other cross product having to do with modest tuition increases and modest stock market. That creates another scenario that needs to plan for.

By the way, we're talking about it here, the future vision is kind of the ideal scenario, the ideal case for the organization; that is, the people they're going to treat, the resources they're going to have, the staff availability, how they're perceived by the important constituencies, their persona, the market channels, whether they're in place and so on.

I don't—and a particular mix of these ingredients are going to be important for a particular organization at a particular point in time. Case in point was the—with the mental health downsizing. Channels were key, you know, what was going to happen to the channels, what's going to happen to the patient—the severely ill patient population, and how is that going to be mixed with forensic and NGRI? Those were questions that were really key considerations. Collaboration played an absolutely crucial role in this.

You had to have the collaboration in place before the resource sharing could be done in an efficient and effective way. Fortunately, this individual had—prior relationship with correction—head of corrections, so that they were able to facilitate a transfer that kept the service line in place.

The same thing was tried with the youth services that had a different leader; different outcome because the collaborative arrangements had not been in place and they have not been effective. So the collaborative arrangement can actually facilitate a very useful outcome or it can actually lead to a failure. The cooperation that's required to get that done is often very difficult to initiate.

Certain states, in fact, I just saw a study when I was in Cardiff on this and at least 2/3 of the states in United States are not very oriented toward collaboration. This comes in part from the environment they find themselves in. Okay. Smaller is better. Starve the beast. Downsize and what have you and outsource are—the order of the day in the state is very difficult for the—state to be collaborative and forward-looking.

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Strategic Planning: Future Vision and Implementation


[On-screen Text: Creative Strategy]

The strategy is, perhaps, the most mysterious aspect of this whole process. Where does it come from? Right out of whole cloth, the creativity of the people that are in the room. They have their own people in the room; you're not going to get much. You're going to get business as usual, same old, same old.

If you have more creative group and you created a safe space for them, like the dream room at Disney, and new space where you've discredited current practices and say, "It's okay to criticize the way we're doing business today, it's okay to assume that we have more support than we may have.” If you don't make those kinds of arrangements and open the space up for people to think, you're not going to get much in terms of a response.

Now, those are sort of constraints to the process being helpful. In the final analysis, it's the creativity of the people that are there. The process doesn't do anything but trigger the person, ask the right question, so they can fill the space with great ideas.


[On-screen Text: Implementation]

Well, implementation is the—a very tricky aspect of strategy in any organizational context. In the private sector, of course, I can merely—I can sell stock, I can allocate resources, I can lay off whole divisions, and—well, if I don't have a union contract, but I have lots more leeway in how I can allocate resources and put them behind a plan to make them happen. In the public sector, this is very difficult.

We have constituencies, oversight groups; we have clients, client advocates, and a whole mishmash of stakeholders that are out there, all of which, want their needs attended to. And if they're not attended to, they can be counted on to be vocal. Managing this is a long-term process.

Earlier, we talked about a project that I worked on that took downsizing in the state of Ohio that took eight years to fully accomplish. During that period of time, there were lawsuits, there was intense pressure on the CEO to abandon the plan and to generate or allocate resources to people on the basis of who was sort of the squeaking wheel, whoever has the most political leverage, whoever is making the most noise at the moment.

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Strategic Planning: Future Vision and Implementation

It takes an enormous amount of leadership and resiliency to avoid these difficulties. In the strategic process, what we try to do is to anticipate as many of these as we can and to manage them as intelligently as we can before we try to set the strategy in place. We talked about a stakeholder analysis in which we tried to identify who's going to be the—supportive and who's going to be the antagonistic stakeholder. Try to mobilize the one to help us deal with the latter.

This is particularly helpful if they're external agents and if they're not acting in the agency's interest so much but in the public interest. That's a phrase that's gotten largely forgotten recently, and I—I’m hopeful that it'll be resurging. The public interest is really—should be the driving concern of the organization. Sometimes you can make that point effectively with an outside party. Then there's the resource analysis.

As we look across our strategies and we ask ourselves, you know, how are we going to marshal the resources to deal with all of these issues? Perhaps, we're going to have to prioritize in some way. We can do this one this year, do something else next year. Maybe we can try a fee-for-service approach. Maybe we can change the fee structure. Maybe we can get additional reimbursement from agencies that have a relationship with us. And this can oftentimes be negotiated. Well, it's a very difficult process. It takes a long time to work its way through and it's certainly as important as any other aspect of strategic management.


[On-screen Text: Future of Strategic Planning]

When one looks at the future for strategic management and strategic planning, different times produce different results. What I found is hard times make it easier to think in these terms and easy times make it much more difficult. Also, change.

In the public sector, this often revolves around changes in political party or even changes within a party with a new person taking office. The governor, well, for example, some governors are much more proactive than others, and this can change rather dramatically in a four to eight-year time period. They oftentimes sweep out all the department heads. And the new ones come in, are asking questions, "Okay, what do I do next?" So, whenever there's change, there's an opportunity.

I can remember when Clinton came into office, for example. Aid called for the first time ever and asked, “You know, could we actually do some strategic planning, strategic management in our organization?”

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Strategic Planning: Future Vision and Implementation

And I found it'd be rather interesting that I’ve also had similar calls under similar circumstances from the departments of transportation and motor vehicles and— crippled children services and libraries and you name it, universities, various programs within universities, and it almost invariably—the stimulus to do the thinking is either a change in leadership, you know, a change in the environment which can be rather dramatic.

Or, all of a sudden, old practices are out the window for whatever reason, or there's been a technological breakthrough of one kind or another. Computers in the '90s just played havoc with organizations and they found it extremely difficult to survive. But you can't count on getting the support necessary without some external stimulus.

And I’ve actually written rather broadly on this and what I found is that there's a question of need in responsiveness that have to be in balance, in particularly, in public organizations. And if they're out of balance, you're really stuck. For example, we can have a low-need situation in a highly responsive organization. You might say, "Well, what is that in the public sector?"

It's—departments of development in states, there are questions about why they should exist at all. So they're very responsive in a very narrow way to their constituents. And as long as they're—the jobs mantra is out there and driving things, you know, they're going to be continued. They're going to continue investing in them.

So they know the only way they're going to continue as an organization is to manage the individuals in their oversight body to think they're important, so they do whatever it is they're asked to do. So they're very responsive in a very narrow way.

And the other side, you have high-need—low-action organizations and these are bureaucracies that we're all familiar with. The key is to get up the diagonal. Okay, you move from a bureaucratic organization to a somewhat proactive organization that's interested in reallocating resources.

As needs grow and responsiveness grows, they need to think about how they can reallocate to meet those needs. If the needs make a dramatic shift, there has to be a dramatic change in how the organization is postured. This has rarely happened, actually, in the public sector.

When I talk about transformation, which is a radical change of the strategic arrangement that the organization is facing, for example, they radically change their client base, their channels, their competencies, their image. It has to be a radical change. Invariably, that comes from the outside.

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Strategic Planning: Future Vision and Implementation

A case in point might be the highway safety program that I worked on some 40 years ago. The American College of Surgeons had noticed—in those days, if you were injured in an accident and you're laying on the road, they called the local funeral director who drove a hearse up and picked the person up like a sack of potatoes, threw him in the back of the hearse and drove him to the hospital and charged him, of course, for that.

But what the American College of Surgeons have been pointing out for some 20 years was it—that the funeral director did more damage to the individual than the accident did. This was widely known. And we brought it up in front of congress over and over and over again. Nothing had ever been done about it.

All of a sudden, in the early '70s, the American College of Surgeons got people's attention. Partly, it had to do with the environment of the time. There was much more activists. It was partly have to do with an activist leader in the public health department, who is the U.S. public health department, was much more interested in these kinds of issues and was—and there was also money available to fund this. Consequently, you had to put together a whole variety of organizations to deal with this. One organization couldn't deal with it.

There were hospitals that need to be categorized; that is, at what level are they prepared to provide emergency care? Hospitals are resistant to this. They do not want to be categorized. They just as soon have to receive a patient they knew they couldn't treat, to send on to another hospital, and at the risk of that person's life, then to say that they were not a top category hospital. That attitude had to change.

They had to redesign emergency vehicles so that there were these top—so they were tall enough so someone could stand up in them. They put an IV in them and actually work on someone, have—properly equipped, so there's cardiograms and other paddles and what have you for people that are suffering severe trauma, severe situation, one kind or another.

They had to train these people.

There was no—the question was: Who got the resources to do the training? Where should they be trained? What kind of credentialing process? Who's going to be responsible for all of that? The complexity of this had kept this from happening.

And it—the environment changed in the late '60s, early '70s, where more monies were available and money solved lots of problems. You throw the money out there, and all of a sudden, everybody's willing to cooperate. So I was one of the people that brought money in the state of Wisconsin to make a major change to this area, and we actually got the system set up in about two years. And it radically changed the whole outlook.

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Strategic Planning: Future Vision and Implementation

This, of course, went on nationwide, and there was a huge transformational change that took place that affected lots of organizations and demanded collaboration across those organizations. Frankly, what made the difference was money. When the money—if the money had dried up before this has happened, I dare say it wouldn't have happened.

So there's both a question of there sort of has to be a niche developed out there where their need has to be identified and underscored and a willingness to provide responsiveness, which oftentimes is associated with funding, of one kind or another, either a reallocation or new monies or collaboration among other agencies who are willing to share resources.

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