How do governments do in terms of strategic planning and execution? Consider a recent BCG workshop with a group of government leaders.

To begin the debate, we asked for a show of hands: Who among you is aware of your agency’s priorities? A few people raised their hands. We then asked, “Who among you feels that your organization’s strategic planning process has had a significant influence on your work?” Again, only a few.

Our final question is, how many of you believe your organization can – and must – perform better in this area? Everyone raised their hands in response. 

To foresee and negotiate the rising complexity and problems confronting government officials throughout the world, smart preparation and persistent execution are required.

Governments must make the greatest use of limited resources while also mitigating the dangers of economic and political turmoil. Despite these imperatives, public-sector organizations frequently undervalue strategy and seldom succeed at strategic planning and implementation.

As a result, government officials have challenges in changing their organizations’ behavior and driving progress toward the most essential policy goals. 

The key to improving the government’s game on this front is to identify what is impeding effective strategic planning and execution and then address those difficulties straight on.

BCG has built a profound grasp of the hurdles that confront the private sector, as well as an awareness of how they also affect the public sector, as a result of its more than 50 years of operating as a strategy leader.

Among these impediments is a planning system that is overly focused on bureaucratic processes at the expense of outcomes.

Such issues are exacerbated in the public sector by periodic changes in leadership connected to election cycles, entrenched hierarchies and laws, and a risk-aversion culture. 

As a result, we’ve outlined four measures governments may take to remove these roadblocks: establish a strategic culture, utilise the organization’s mission to accelerate action, reform the operational model, and build an execution and learning system. 

It is not about developing the best meeting schedule, KPIs, or mission statements when redesigning the strategic-planning process.

It is about creating a structure that enables agency and department chiefs to establish objectives, allocate proper resources to those priorities, and then hold individuals accountable for results, it is all about resolving real-world issues.

When they accomplish this, government officials discover that they are fighting the correct fights and providing long-term benefit to their constituents. 

The importance of strategic planning in the government

Both private- and public-sector businesses create and implement strategies, whether for corporate development or to meet a federal requirement, via strategic planning and execution.

Organizations use this approach to balance their duties with their resources and to establish strategic priorities. Strategic planning and execution, when done correctly, may effectively account for and manage the multiple factors that impact their plans and programmes, as well as build the crucial linkages inside and among stakeholders, allowing them to work in concert toward vital goals.

The strategy’s long-term and adaptable implementation increases the possibility that the government will keep its commitments, boosting residents’ confidence and strengthening their trust. 

The W-shaped concept is illustrated in Exhibit 1 as a very successful way to strategic planning. (See BCG Focus, April 2016, Four Best Practices for Strategic Planning.) This strategy begins with the defining of the organization’s vision and strategic ambition by leadership.

Following that, the division, field unit, or function leaders are asked a series of direct questions concerning the organization’s major issues in relation to this goal.

In response to these questions, the unit or function leaders propose suggestions or recommendations for dealing with the difficulties.

Management picks recommendations based on their subsequent discussion and allocates responsibility for crafting comprehensive plans for putting those proposals into action to the unit or function leaders. Management is responsible for the plan’s implementation as well as a method for learning and adjusting depending on new facts. 

Increasing Public-Sector Challenges  

In the face of four challenging realities, the necessity for this type of efficient strategic planning and execution process in government is growing. 

First, today’s operational environment is more complicated than ever before due to the scope and rate of change, especially changes driven by emerging technology.

For example, the democratisation and dissemination of modern technology is upending how governments manage security and economic concerns. Second, finding answers to most public-sector concerns would need the participation of more stakeholders—both inside and outside of government—than in the past.

Responding successfully to the hazards presented by infectious illnesses such as the Zika and Ebola viruses, for example, necessitated worldwide coordination inside and across government agencies as well as the commercial sector.

Third, many governments are seeing a steady decline in public trust.

According to a 2017 Pew Research Center poll, only 18 percent of Americans trust the federal government to do the right thing.

Meanwhile, according to a 2015 poll conducted by the Organization for Economic Cooperation and Development, just 43% of residents in its member nations trust their government. Fourth, rising deficits, ageing populations, and the rising cost of government services are putting a strain on many governments’ discretionary expenditures. 

Impediments to Effective Strategic Planning  

In the face of such obstacles, strategic planning is more crucial than ever. However, such planning is typically underestimated and poorly executed in many public and private enterprises.

Many of the challenges are shared by both the government and the business sector.

In many cases, the procedure is too bureaucratic, necessitating repeated revisions and taking much too long. It can also be overly inwardly oriented, neglecting to account for external circumstances or learn from the experiences of other industries or companies.

Furthermore, in far too many situations, strategic planning excludes essential stakeholders who are required for both diagnosing problems and achieving results.

Failure to include midlevel managers is especially troublesome since it might mean that the relevant concerns are not brought to the notice of senior leaders when they establish strategy and that there is low buy-in among the rank and file, resulting in weaker execution.

Finally, there is a misalignment between the strategy and the incentive system designed to encourage strategic plan implementation. 

Of course, public-sector institutions are not the same as private-sector businesses. Some obstacles encountered in the private sector may be increased in the public domain, whilst other concerns encountered in government do not exist in the private sector. 

For starters, government executives—particularly political appointees—generally have a narrower window of opportunity for action than private-sector leaders.

This is due to the rapid turnover of government leaders in many nations.

Not only does a significant majority of the federal government’s most senior political leaders change every four to eight years in the United States, but the typical term of a federal government, Senate-confirmed appointment is just 18 to 30 months. 

At the same time, while many government officials have strong policy backgrounds, many lack the strategic and management skills that come with operating a big and complicated institution.

As a result, it is common for them to transfer responsibility for strategic planning, and they are not necessarily emotionally committed in implementation.

This lack of involvement at the top cascades down, resulting in moderately engaged employees who are not fully dedicated to establishing and implementing the organization’s plan. 

Finally, many government entities do not view risk in the same way that private-sector businesses do.

Public-sector organisations are frequently focused on short-term outcomes and rule and regulatory compliance rather than long-term strategic objectives.

As a result, developing a strategy that can be altered in response to changing conditions or new knowledge is challenging. 

Establishing a strategic-planning process that has impact

Government officials should focus on four essential areas to enhance their strategic planning and execution track record: culture, purpose, operational model, and execution.

(See Figure 2.) Steps done in these areas have an impact on all phases of strategic planning and can improve the whole process. Culture is the most important of the four.

It shapes and is shaped by the other three primary change levers. Changing an organization’s culture will open up opportunities in the other three categories and aid in the implementation of change. 

 Encourage a Strategic Culture 

There are certainly areas of strong strategic planning in government, notably in the defence sector: it is instilled in the military profession.

However, either the culture of too many public-sector organisations does not recognise the benefits of strategic planning, or the leaders of such organisations are not dedicated to the process. 

To enable a successful culture transition, the agency or office’s head must take the lead in strategy planning, middle management must be included from the beginning, and the risk-averse attitude common in government organisations must be addressed. 

“Strategy is ultimately the duty of the top leader,” according to one former senior government official. “You can’t transfer responsibility for change leadership.” Leaders in the public sector must actively drive the effort to establish strategic goals, gain buy-in, align resources, regularly explain the strategy, and hold individuals responsible for implementing the plan.

They should also make it apparent to everyone in the organisation that the strategic planning unit has a clear mandate from the top. 

Senior management must identify important personnel within the business who are responsible for executing policies and programmes and bring them into the process through cross-functional teams to include midlevel management into the strategic-planning process from the outset.

Furthermore, leaders should connect frontline staffers’ day-to-day work to the strategy by emphasising how their roles and responsibilities, as well as the strategic-planning system itself, can help eliminate barriers to achieving important objectives and directly contribute to solving citizens’ real-world problems.

Such actions will foster strategic thinking in employees who will be the future generation of leaders. Furthermore, it will increase buy-in for the approach, increasing the likelihood of effective implementation. 

“If a team is directly involved in formulating the plan, they will feel ownership of it,” said a former head of a key operational directorate within a huge government tax authority.

They will want to make it work if they sense ownership.” 

For the leader of a huge government diplomatic organisation, establishing rank-and-file support to the plan was vital to producing outcomes. When she became the leadership of the business a few years ago, she created and personally managed a strategic-planning process, involving managers from across the firm in the endeavour.

Furthermore, goals were developed to promote agency-wide collaboration across multiple functional and geographic silos.

“This gave us a clear sense of where we were heading, why we were getting there, and what role each group had in attaining our goals,” she said. 

The conservative mentality that certain government organisations instil in their personnel may be a significant hindrance to plan execution.

It is critical to discover ways to reward and protect—rather than punish—those who take fair risks and get less-than-satisfactory results. 

The director of a huge transportation department recognised that risk aversion may stymie the completion of a large infrastructure project that the agency was in charge of.

The team realised that rather than restricting traffic to one lane for several months during construction, the most cost-effective method to handle one aspect of the project would be to totally shut down traffic for few weeks.

The department’s chief was aware that shutting down all traffic would cause a public outcry in the near term, but he was ready to accept that risk.

He saw the long-term public benefit and cost-saving potential that might be realised by expediting the project, and he made it plain to his team that he would own the decision if any of them faced public criticism. 

Make Use of the Organization’s Purpose 

A clear sense of purpose, which comprises of an organization’s timeless reason for being—its mission—and the strategic goals for realising this mission over a given period of time, is a vital component in good strategic planning. Strategic planning and execution enable businesses to achieve their goals by establishing priorities, aligning resources, mobilising, and assessing action. 

The three steps listed below assist in overcoming the impediments to successful strategy planning and execution caused by the organization’s general sense of purpose: 

• Reinforce the organization’s basic mission. In addition to reiterating the fundamental objective, which is often based on legislation, leaders must develop a compelling vision for furthering the mission over a three- to five-year time frame.
• This will offer crucial direction and energy to the business, as well as guarantee that all staff members understand where the organisation is headed. 

• To fulfil the goal, establish clear strategic priorities. This stage may appear clear, but it is rarely simple. “Choosing among top goals is difficult,” a former senior advisor in the United States’ executive branch told us. “Not everything needs to be a priority.
• Prioritization must be merciless.” Staff will play an important role in this area, assisting in framing the underlying conflicts and tradeoffs between these aims. 
• Spread the word about the approach throughout the organisation. Organizational leaders must bring strategy to life for their employees by presenting them with a consistent vivid strategic storey that is relevant to their day-to-day operations.
• This storey should be told with vigour across the organisation: senior executives should convey the plan to their direct reports, who should then communicate it to the employees they supervise, and so on.
• The cascade narrative should demonstrate to employees how their activities, motivated by the new strategy, directly contribute to the organization’s performance.
• Such clarity can go a long way toward increasing the chances of the strategy’s effective execution. 

Consistent messaging proved to be an effective method for rallying employees behind a huge government defence agency’s new agenda.

A range of carefully crafted communications, including a brief “bumper sticker” message, a three-minute elevator pitch, a series of films from senior executives, and thorough documentation and presentations, were prepared to assist drive change.

According to one senior official, the agency’s chief “joked that the strategy bumper sticker statement might wind up on his grave.

” Nonetheless, regular communication was essential.

“It is difficult to overcome cultural opposition to change in the absence of that type of commitment to strategic communications,” she said. 

Change the Operating Model 

Typically, the public-sector operational model—a government agency’s governance, structure, and processes—is hierarchical, rigid, and unadaptable to changing conditions.

Action in three areas can remove these obstacles, allowing for a more effective and efficient operating model: 

• Communication and Collaboration with External Stakeholders. To acquire the required resources and support for the strategic objectives, government officials should establish a clear framework for engaging with, for example, appropriators, authorizers, budgeting agencies, the office of the president or prime minister, citizens, and industry. 
• Risk management must be integrated into the strategic planning process. Strategic planning and risk management must be integrated in order for the organisation to anticipate and plan for the full range of potential problems and opportunities that may arise during execution.
• The fundamental hazards in many situations are related to a lack of statutory power, resource restrictions, and weak or reluctant external partners.
• And successful risk management necessitates an examination of the firm’s whole interconnected portfolio of programmes, rather than addressing simply issues contained within silos or considered to be external to the organization. 
• Processes are being modified to support the strategy. New initiatives, policies, and the methods by which their effectiveness is measured and resources are distributed should be directly related to the organization’s strategic goals.
• The usage of agile teams—groups comprised of individuals from throughout the business and built for quick experimentation and adjustment—can be a significant tool in the creation and implementation of these programmers and policies. (See “Taking Agile Way Beyond Software,” a July 2017 BCG article.) Such groups can quickly determine which projects are successful and which are not.
• Furthermore, the definition of success for each strategic aim should be explicit, with precise performance targets, indicators, and milestones specified for tracking progress.
• Leaders must also guarantee that the allocation of resources and talent, as well as the decision-making process, are guided by the organization’s strategic aims.
• According to the leader of the previously mentioned huge diplomatic organization, this is more often than not the exception in government.
• “The plan is not perceived as something that helps us gain resources,” she said in many circumstances. The plan and budget requirements have virtually little in common.” 

Leaders in the previously mentioned major defense organization not only devised many channels to convey the strategy, but they also devised a mechanism to guarantee that strategic goals were backed with the required resources.

During the budgeting process, one military department reduced purchases for equipment needed to achieve a critical strategic goal.

The goal was to reduce spending in order to invest in updating other traditional capabilities.

Senior defense organization leadership, armed with a clear awareness of the objectives, authorized the department to fund strategically vital equipment while leaving the department to choose how to offset the expenses of other, less crucial initiatives. 

Create an Execution and Teaching System 

Agencies that lack crucial tools and data that may be used to monitor success are unable to change direction in response to new information.

Furthermore, when strategy is not incorporated into frontline staff’s day-to-day operations, employees may become too focused on projects that are unrelated to the organization’s strategic aims. 

The capacity to execute and alter the plan effectively is dependent on three factors: the correct data, a structure that values responsibility and aligns incentives, and the flexibility to react where necessary.

Frontline managers’ engagement and dedication are important to success in all three areas. 

The necessary data comprises not just upfront information about what works in terms of programmers and initiatives—statistics that may drive the initial strategic-planning process—but also timely and action-promoting data during the execution phase.

Such data can be obtained from both internal and external sources.

Internal data may be gathered as a consequence of monthly strategy “pulse checks” with personnel, quarterly or annual strategic reviews with top management, and programmer assessments.

External data can and, in many situations, should contain information on the real-world impact of certain projects.

Data must be available, trustworthy, and timely in order to make an impact.

According to a top executive of a multinational financial and tax agency, it’s critical to “measure what matters—and movement will happen on items you measure.” 

Accountability and incentives, the second component, are important to successful implementation.

Leaders should conduct evidence-based progress assessments with key management on a regular basis, including officials with direct responsibility of programmers that support each strategy aim.

The meetings should Centre on programme performance statistics and allow for in-depth discussions that include ideas for enhancing performance and managing risk.

These meetings should be held more frequently and in more depth than the annual or quarterly strategy reviews that many government departments and agencies now hold.

Simultaneously, the business should establish clear and valued incentives, such as official and informal prizes and recognition, for people who adopt new habits and contribute the most to attaining goals. 

The most efficient government organisations recognise that without accountability and the correct incentives, even the finest strategic plan will likely never become a reality.

One significant organisation in charge of managing most of the government’s real estate holdings had fortnightly meetings at which officials reported on progress on strategic targets.

According to the agency administrator, the “repeatable rhythm” of reporting kept the staff focused on those goals. Meanwhile, a public-housing and finance organisation linked management performance assessments to the achievement of the agency’s strategic objectives.

This necessitated the identification of the appropriate indicators for tracking progress toward the objectives, as well as the implementation of a credible and timely review process that incorporated that information. 

The third component, the capacity to monitor performance in a way that assists the organisation in adapting, can result in two sorts of changes.

For starters, statistics on the progress of key strategic objectives can assist the business in changing the manner it is executing its current plan.

The strategic objectives may not change, but how the company attempts to attain them may.

The second step is to revise the plan itself. Only by regularly stepping back to analyse whether or not things have altered in the general operational environment will the necessity for such a transition become apparent.

Such an examination may demonstrate that the assumptions upon which the original plan was built have changed, necessitating a rethinking of the approach. 

Government agency and department heads throughout the world can acknowledge that, as public-sector executives, they are trying to succeed in an unusually difficult moment.

Political instability is the norm, and technology is changing the way society works. 

In such a climate, government institutions must step up or risk becoming irrelevant to the population they serve. Because trust has eroded and must now be rebuilt, governments will be obliged to make significant changes in how they prepare and execute policy.

Government officials must implement a strategic-planning process that identifies and drives decision-making that supports those goals.

Taking actions in the four areas we’ve identified—culture, purpose, operational model, and execution—can help governments transition from endless cycles of planning to outcomes delivery.