Section 5

Intr oduction to
Str ategic
Management
Susan Scr ibner
Section 5
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Tabl e o f Co nte nts
Figu r e 5.1. Fa cets of Str a tegic Ma n a gem en t . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5- 2
Figu r e 5.2. Str a tegic Ma n a gem en t of On e St a ge of t h e Policy Process . . . . . . . . . . . . . . . . . 5- 4
Ta ble 5.1. Five Fa cets of Str a tegic Ma n a gem en t . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5- 3
Bibli ogr a ph y . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5- 5
An n ex 5- A. Str a tegic Pla n n in g a n d Str a tegi c Ma n a gem en t . . . . . . . . . . . . . . . . . . . . . . . . . . 5- 6
Section 5
Intro ducti o n to Strate gi c
Manage me nt
Hea lth policy r efor m s, even on es th a t h a ve been a ppr oved, decreed, or sign ed in to la w, wil l n ot
n ecessa r il y be im plem en t ed a s i n ten ded wit h ou t th e im petu s a n d gu ida n ce of policy ch a m pi-
on s. Th e policy pr ocess, a s expla in ed a n d dia gra m m ed in th e in tr odu ction to th is toolkit ( Sec-
tion 1, especia ll y Figu re 1.1) , i n clu des th e followin g st a ges: policy form u l a t ion a n d legitim a -
tion , con st itu en cy-bu ildin g, r esou r ce m obil iza tion , im plem en ta tion design a n d orga n iza tion a l
str u ctu r in g, a n d pr ogr ess a n d im pa ct m on itor in g. However, pr oposed r efor m s a re n ot likely to
progr ess th r ou gh th ese sta ges wit h ou t som eon e m a n a gin g or sh eph er din g th em .
For th ose wh o wa n t to pa r ticipa te in a n d fu r th er th e process of h ea lth sector r efor m , str a t egic
m a n a gem en t pr ovides a n effective a ppr oa ch . Str a tegic m a n a gem en t is a pr ocess for developin g
a n d en a cti n g pla n s to r ea ch a lon g- ter m goa l th a t ta kes in to a ccou n t in t er n a l va r ia bl es a n d
exter n a l fa ct ors. Str a tegic m a n a gem en t en com pa sses a n in t egr a ted, fu tu r e- ori en ted m a n a ge-
r ia l per spect ive th a t is
ou twa r dly focu sed
for wa r d- th in kin g
per for m a n ce- ba sed ( see Ki ggu n du 1996) .
Str a tegic m a n a ger s iden tify lon g- r a n ge ta rgets, sca n th eir opera ti n g en vir on m en ts, eva lu a t e
th eir or ga n iza ti on ’s str u ctu r es a n d resou r ces, m a tch th ese to t h e ch a l len ges th ey fa ce, iden tify
sta keh older s a n d bu il d a llia n ces, pr iori tize a n d pl a n a ction s, a n d m a ke a dju stm en ts to fu lfill
per for m a n ce objectives over tim e.
Br in kerh off ( 1991 a n d 1994) ch a r a cteri zes str a tegi c m a n a gem en t a s l ookin g ou t , l ookin g
in , a n d lookin g a h ea d. “Lookin g ou t” m ea n s explor in g beyon d th e bou n da ri es of you r or ga n i-
za tion to set fea si bl e objectives, i den ti fy key sta keh older s, a n d bu il d con st itu en cies for ch a n ge.
“Lookin g in ”im plies cr itica l ly a ssessin g a n d str en gth en in g you r syst em s a n d str u ctu r es for
m a n a gi n g person n el, fin a n ces, a n d oth er essen t ia l r esou r ces. Fin a lly, “looki n g a h ea d”en ta ils
m eldin g you r str a tegy wit h str u ctu r es a n d r esou r ces to r ea ch you r policy goa ls, wh il e m on it or-
in g you r pr ogr ess a n d a dj u stin g you r a ppr oa ch a s n eeded.
5-2 Po licy Too lkit fo r Str en gth ening Health Secto r Refor m
Ba la n cin g str a tegic m a n a gem en t’s ou twa rd- , i n wa r d-, a n d forwa r d- lookin g fu n cti on s h elps
you develop a vision a n d a str a tegy for wh er e a n d h ow to m ove h ea l th sector r efor m for wa r d.
Ba la n cin g th ese differ en t per spectives is th e essen ce of m a n a gin g st ra tegica lly ( Br in ker h off
1991) .
Str a tegic m a n a gem en t com pr ises five key fa cets: goa l- sett in g, a n a lysis, str a tegy for m a ti on ,
str a t egy im plem en ta ti on , a n d str a tegy m on itor in g ( see Figu r e 5.1) . Th ese a r e th e in tegr a l ele-
m en ts th a t, wh en a pplied togeth er, di st in gu i sh str a t egic m a n a gem en t fr om l ess com pr eh en sive
a ppr oa ch es, su ch a s oper a tion a l m a n a gem en t or lon g- ter m pla n n in g. Str a tegi c m a n a gem en t
is a n itera ti ve, con tin u ou s pr ocess th a t i n volves im por ta n t in tera ction s a n d feedba ck a m on g th e
five key fa cets, wh ich a r e expla in ed in m or e deta il in Ta ble 5.1.
Fi gure 5 . 1 . Face ts o f Strate gi c Manage me nt
Goal-setting
Analysis
Strategy
Formation
Strategic
Management
Strategy
lmplementation
Strategy
Monitoring
Intr o duction to Str ategic Man agement 5-3
As m en ti on ed, you ca n u se str a t egic m a n a gem en t to h elp m ove h ea l th sector r efor m s
th r ou gh th e va r i ou s sta ges in th e pol icy pr ocess. Th e fr a m ewor k of th e policy sta ges ca n h el p
you deter m in e you r loca ti on in th e pol icy process a n d i den ti fy t a sks t o be don e. By a pplyin g a
str a t egic m a n a gem en t a ppr oa ch to ea ch su bsequ en t sta ge of th e policy process, you ca n fu r th er
im plem en ta t ion of h ea lth sector r eform s. Con sider ea ch sta ge of th e policy cycle fr om a str a te-
gic per spective, ba la n cin g th e lookin g-ou t, looki n g- in , a n d looki n g- a h ea d i ssu es. I n so doin g,
you ca n effectively in t egr a t e a st r a t egic m a n a gem en t a ppr oa ch in t o th e policy cycle. As a n
exa m pl e, Figu r e 5.2 il lu str a tes h ow you m igh t str a t egica ll y m a n a ge you r r eform s t h r ou gh th e
policy for m u la tion a n d legitim a tion sta ge.
Tabl e 5 . 1 . Fi ve Face ts o f Strate gi c Manage me nt
GoaI-Setting Goal-setting enables you to articulate your vision: identify what needs to be accomplished, define
short- and long-term objectives, and relate them to what your organization needs to do. A "mission
statement¨ summarizes your purpose and goals in terms easily understood by both staff and external
stakeholders.
AnaIysis Analysis guides you to collect and consider information so that you fully understand your situation.
Assess external environments and internal situations to identify the strengths and weaknesses of your
organization and the opportunities and threats you face as you seek to reach your goals.
Strategy Formation To determine a strategy, you reflect, prioritize, develop options, and make decisions. Review the results
of the analyses, identify the issues that you and your implementing partners need to address, and
prioritize them in terms of their urgency and magnitude. Use these results to design alternative
strategies and plans that address the key strategic issues.
Strategy ImpIementation To implement your strategy, assemble the necessary resources and apply them. Put the chosen plans
into practice, marshal the resources and commitments necessary for moving ahead, tap existing
capacity and/or build new capacity, and seek to achieve results.
Strategy Monitoring Monitoring allows you to check your progress toward achieving your goals and assess whether any
changes in the environment necessitate alterations to your strategy. Modify plans and actions to adjust
to the impact of changes in the operating environment. Effective monitoring allows you to react and
anticipate. Monitoring also feeds back into analysis, strategy design, and implementation in the
immediate term and into goal-setting over the longer term.
5-4 Po licy Too lkit fo r Str en gth ening Health Secto r Refor m
Fi gure 5 .2 . Strate gi c Manage me nt o f One Stage o f the Po l i cy Pro ce s s
Constituency
Building
Constituency
Building
PoIicy
FormuIation and
Legitimation
PoIicy
FormuIation and
Legitimation
Resource
Mobilization
Resource
Mobilization
lmplementation
Design and
Organizational
Structuring
lmplementation
Design and
Organizational
Structuring
Progress/lmpact
Monitoring
Progress/lmpact
Monitoring
Goal-setting
Analysis
Strategy
Formation
Strategic
Management of
Policy Formulation
and Legitimization
Strategy
lmplementation
Strategy
Monitoring
= primary linkage
= secondary linkage
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Goal-Setting: Your goals might be to 1) have a community leader speak publicly on behalf of the
policy to create legitimacy, and 2) have someone from the health sector reform team list the
resources and actions that will be necessary to implement the policy.
Analvsis: You might evaluate your stakeholders to see who is likely to favor the policy and, of
those supporters, who has the respect of the community.
Strategv Formation: You could identify 1) a supportive community leader and ask him or her to
speak for the policy and 2) additional information and resources needed to develop the policy
details.
Strategv Implementation: You could 1) arrange for a presentation or media interview with the
community leader and 2) attempt to collect information and other resources.
Strategv Monitoring: You should assess whether your efforts at legitimation and policy
definition were successful enough to allow you to focus most of your time and energy on
constituency-building tasks, or whether you need to continue with policy formulation and
legitimation.
Intr o duction to Str ategic Man agement 5-5
Bi bl i o graphy
Br in kerh off, Derick W. 1994. “Looki n g Ou t, Lookin g I n , Lookin g Ah ea d.” PA Tim es. vol. 17, n o.
12, 11.
_ _ _ _ _ . October 1991. “Lookin g Ou t, Looki n g I n , Lookin g Ah ea d: Gu idel in es for Ma n a gin g
Developm en t Pr ogr a m s.” Wor kin g Pa per No. 1. Wa sh in gt on , DC: I m plem en tin g Poli cy
Ch a n ge Pr oj ect, for US Agen cy for I n t er n a tion a l Developm en t.
Kiggu n du , Moses N. 1996. “I n tegr a tin g St ra tegic Ma n a gem en t Ta sks in to I m pl em en ti n g Agen -
cies: Fr om Fir efigh t in g to Pr even t ion .” Wor ld Dev elopm en t vol. 24, n o. 9: 1417–1430.
5-6 Po licy Too lkit fo r Str en gth ening Health Secto r Refor m
Anne x 5 - A
Strate gi c Pl anni ng and Strate gi c
Manage me nt
By Ben ja m in L. Cr osby
1
The follow in g is a n ex cer pt fr om Cr osb y, Ben ja m in L. 1 9 9 1 . “Str a tegic Pla n n in g a n d Str a -
tegic Ma n a gem en t: Wha t Ar e They a n d How Ar e They Differ en t?”Techn ica l N ote N o. 1 .
Pu b lished b y the Im plem en tin g Policy Cha n ge Pr oject, Ma n a gem en t Sy stem s In ter n a -
tion a l, In c. , for the US Agen cy for In ter n a tion a l Dev elopm en t.
Why Strate gi c Manage me nt?
Str a tegic pla n n in g a n d m a n a gem en t a r e m or e th a n a set of m a n a ger ia l tools. Th ey con stitu te a
m i n d- set, a n a ppr oa ch t o lookin g a t th e ch a n ges in th e in t er n a l a n d extern a l en vir on m en t th a t
con fron t th e m a n a ger. Usi n g pla n n in g a n d m a n a gem en t tool s str a tegica ll y, t h en , i n volves
essen t ia lly a wa y of t h in ki n g, a m en t a l fr a m ewor k or a ppr oa ch , a s well a s a set of a n a l ytic tools.
For st ra tegic m a n a gem en t to be effectively u sed th e m a n a ger m u st devel op a stra t egic m en ta lity
or ou tl ook. Th e pr oblem for th e con su lta n t is h ow to h el p th e m a n a ger a cqu ir e th a t m en ta lit y.
The Strate gi c Appro ach
Th e str a tegic a ppr oa ch or m en ta lit y con sists of fou r m a in elem en ts:
Fir st , th e str a tegi c a ppr oa ch is or ien ted towa rd t h e fu tu r e. I t recogn izes th a t th e en vir on m en t
will ch a n ge. I t is a lon g ra n ge ori en ta ti on , on e t h a t tr ies to a n ticipa te even ts r a t h er th a n sim -
ply rea ct a s th ey occu r. Th e a ppr oa ch lea ds th e m a n a ger to a sk wh er e h is/ h er orga n iza tion
wa n ts to be a fter a cer ta in per iod, wh a t i t will n eed to get to wh er e it wa n ts, a n d h ow t o devel-
op str a tegies a n d t h e m ea n s to get t h er e, a n d fin a l ly, h ow to m a n a ge th ose str a tegies to
a ch i eve th e or ga n iza ti on ’s goa ls a n d objectives. It is r ecogn ized th a t th e fu tu re ca n n ot be
1. Ben ja m i n L. Cr osby i s a Di r ector of MSI ; h e h olds a Ph .D. fr om Wa sh i n gt on Un iver si ty i n St . Lou is, Missou r i,
a n d m a n a ges th e I m pl em en tin g Pol icy Ch a n ge pr oject.
Ann ex 5-A 5-7
con t roll ed, bu t th e a r gu m en t ca n be m a de th a t by a n tici pa t in g th e fu tu re, or ga n iza t ion s ca n
h el p to sh a pe a n d m odify th e im pa ct of en vir on m en ta l ch a n ge.
Secon d, th e str a tegi c a ppr oa ch h a s a n extern a l em ph a sis. I t t a kes in t o a ccou n t sever a l com -
pon en ts of th e exter n a l en vir on m en t, in clu din g tech n ology, politics, econ om ics a n d th e so-
cia l dim en sion . Str a tegic t h in ki n g recogn izes t h a t ea ch of t h ese ca n eith er con str a in or fa cil-
ita te a n or ga n i za tion a s it seeks to im plem en t pol icy. Polit ics wil l det er m in e th e policies th a t
a re to be im plem en ted, econ om i cs will deter m in e t h e orga n iza tion ’s level of resou r ces, a n d
socia l fa ctor s m igh t well deter m in e wh o th e or ga n iza ti on ’s ben eficia r ies will be. I n pa r ticu -
la r, str a tegic th in kin g r ecogn i zes a n d em ph a tica lly ta kes in to a ccou n t politi cs a n d th e exer -
cise of polit ica l a u th or ity. Ma n a gers a r e n ot fr ee to do a n yth in g th ey decide. Ma n a ger s m u st
be sen sitive to th e n eeds a n d respon d to dem a n ds of con stitu en ts over wh om th ey h a ve l ittle
or n o con tr ol. Am on g th ose con st itu en ts, politica l a ct or s a r e per h a ps th e m ost i m por ta n t.
Th ir d, th e st ra tegic a ppr oa ch con cen tr a tes on a ssu r in g a good fit bet ween th e en vir on m en t
a n d t h e orga n i za tion ( in clu di n g i ts m issi on a n d object ives, str a tegies, str u ctu r es, a n d r e-
sou r ces) a n d a tt em pt s to a n ticipa te wh a t will be r equ ir ed t o a ssu re con tin u ed fit. Un der con -
dition s of r a pid polit ica l, econ om i c a n d socia l ch a n ge, str a tegi es ca n qu i ckly becom e ou t-
m oded or n o lon ger serve u sefu l pu r poses; or th e r esou r ces tr a di tion a lly r equ ired by th e
orga n iza tion to pr odu ce i ts goods a n d ser vi ces m a y su dden l y becom e u n a va ila ble. Th e st ra -
tegic a pproa ch r ecogn izes th a t to m a in ta in a close fit with th e en vir on m en t, th e differ en t el-
em en t s of t h e orga n i za tion will n eed to be con tin u ou sly r e- a ssessed a n d m odified a s th e en -
vir on m en t evolves.
Fin a lly, th e str a tegic a ppr oa ch is a pr ocess. I t i s con t in u ou s a n d recogn izes th e n eed to be
open to ch a n gin g goa ls a n d a ctivi ties i n l igh t of sh i ftin g cir cu m sta n ces wi th in th e en vi ron -
m en t. It is a pr ocess th a t r equ ir es m on it orin g a n d r eview m ech a n ism s ca pa ble of feedin g in -
for m a ti on to m a n a ger s con t in u ou sl y. Str a tegi c m a n a gem en t or pl a n n in g a r e n ot on e- sh ot
a ppr oa ch es, th ey a r e on goin g.
Wh en a ll ta ken toget h er, t h ese a ttitu des a n d beh a vi ors a r e r ea lly a wa y of a ppr oa ch i n g or
th i n kin g a bou t h ow t o m a n a ge or h ow to im pl em en t poli cy ch a n ge. Str a tegic m a n a gem en t ( or
pla n n i n g) is n ot som eth in g th a t ca n be a ppli ed on ly on ce a n d t h en for got ten a bou t or ign ored.
I n t h a t sen se i t is m or e th a n a t ool ; i t is a m en ta l fr a m ework.
The Strate gi c Manage me nt Pro ce s s
Wh a t does a str a tegi c m a n a gem en t pr ocess l ook like? Th e a pproa ch descr ibed below is su g-
gested a s a gu ide:
1. Agreem en t on a n d in itia ti on of th e str a tegic m a n a gem en t pr ocess.
2. I den tifica tion a n d cla r ifica tion of th e or ga n iza tion ’s m ission , object ives, a n d cu r r en t
str a t egies.
3. I den tifica tion of th e or ga n iza tion ’s in tern a l str en gth s a n d wea kn esses.
5-8 Po licy Too lkit fo r Str en gth ening Health Secto r Refor m
4. Assessm en t of th e th r ea t s a n d oppor tu n ities fr om th e extern a l en vi ron m en t.
5. I den ti fica tion of key con stitu en t s/ st a keh older s a n d th eir expecta tion s.
6. I den ti fica tion of th e key str a tegic issu es con fr on ti n g th e or ga n i za tion .
7. Design / a n a lysi s/ sel ection of str a tegy a ltern a tives a n d option s to m a n a ge i ssu es iden tified
in step 6.
8. I m plem en ta tion of st ra tegy.
9. Mon it or in g a n d review of t h e str a t egy’s per for m a n ce.
Th er e i s m u ch sim ila r ity in th e a pproa ch descri bed h er e a n d th a t of ot h er s ( see Appen di x
On e for a descr iption of th r ee) . I f on e wer e t o stop a fter Step n u m ber 7, th e pr ocess wou ld be
sim pl y a str a tegic pla n n in g exer cise. Fr equ en tl y, th is is exa ctly wh er e th e pr ocess does stop, espe-
cia ll y wh en m a n a gem en t a n d th e st ra tegic pl a n n in g fu n cti on s h a ve been de- lin ked. Th is
occu rs wh en th er e i s n o a ttem pt t o develop a str a tegi c m en ta lity a m on g lin e m a n a gem en t;
in stea d, th e or ga n iza tion a ttem pts to set u p a specia l depa r tm en t , di vision , or “gu r u ” for str a te-
gic pl a n n i n g r a th er th a n in tegr a te th e fu n cti on s in to n or m a l l in e m a n a gem en t. Wi th ou t th e
expr essed lin ka ge it is often difficu lt for th e lin e m a n a ger to see th e va lu e of th e str a tegic pla n ,
a n d t h er e will th erefor e be less i n ter est a n d i n cen tive i n str a tegi ca lly m a n a gin g. I n con tr a st, if
th e str a tegic a pproa ch i s em ployed, or th e or ga n iza tion is im bu ed with a str a tegic m en ta lity,
th en str a tegi c pla n n in g will be don e a s pa r t of th e cou r se of n or m a l ( str a tegi c) m a n a gem en t
fu n ction s.
Ste p One : Agre e me nt o n the pro ce s s .
Th e fi rst step i n t h e str a t egic m a n a gem en t process is to get a gr eem en t— n ot on ly to ca r ry ou t
th e pr ocess bu t a lso t o get a gr eem en t on h ow a n d wh en a n d by wh om it will be ca r r ied ou t.
Sin ce th e st ra tegic m a n a gem en t pr ocess is n ot a on e- sh ot exercise, com m i tm en t to th e l on g-
h a u l is vita l; with ou t com m it m en t, th e exercise wi ll be ster ile a n d likel y r ega r ded a s a wa st e of
tim e.
Wh o sh ou ld be in clu ded in th e st ra tegic m a n a gem en t pr ocess? At lea st th r ee differ en t t ypes of
in dividu a ls sh ou ld be con si der ed for i n clu sion : th e or ga n iza t ion ’s top decision - m a kers a n d
th ose offici a l s wh o wil l h a ve dir ect r espon sibilit y in im plem en ta tion of policy; t h ose wh o h a ve a
m a j or st a ke in th e ou tcom e of th e policy, wh eth er fr om with in or ou tside th e or ga n iza t ion ,
wh et h er su ppor ti ve or oppositi on a l, clien ts or resou rce su ppl ier s; a n d th ose with speci a l ized
kn owledge th a t ca n a dd to t h e a n a lysis of t h e policy to be decided or im plem en ted. Alth ou gh r el-
a tively br oa d i n volvem en t in th e pr ocess sh ou ld be en cou r a ged, ca re m u st be ta ken t h a t su ch
grou ps n ot be expa n ded to th e poin t of i n ca pa cit y t o m a ke a gile deci si on s.
How sh ou ld th e pr ocess be in itia ted? Fir st , a gr eem en t t o ca r r y ou t a n d com m i tm en t to th e
process of str a tegi c m a n a gem en t m u st be obta in ed from on e or m or e of th e or ga n iza tion ’s key
decision m a ker s. On ce su ch a gr eem en t a n d com m itm en t is a ccom plish ed, th en deci si on s a bou t
wh a t sh ou ld be con sider ed a n d wh o sh ou ld be in volved ca n be a ddr essed. I f issu es a r e com plex
a n d t h er e is a n eed to i n volve a rela tively wide spectr u m of a ctor s a n d sta keh older s, t h en wor k-
Ann ex 5-A 5-9
sh ops m igh t be con sider ed. I f th e i ssu es a r e less com plex or fewer a ctor s n eed to be in volved,
th en di rect con su lt a t ion s or sm a ll grou p a r ra n gem en ts m igh t pr ove m or e efficien t.
Ste p Two : Ide nti fi cati o n and cl ari fi cati o n o f the o rgani z ati o n’s
mi s s i o n, o bje cti ve s and curre nt s trate gi e s .
On ce a n or ga n iza tion h a s a gr eed to en ga ge in a str a tegic pr ocess, t h e fir st ta sk i s to deter m i n e
wh a t a n d wh er e t h e orga n i za tion is. Wh a t a re th e n eeds t h a t th e or ga n iza tion a ttem pts to sa t-
isfy, wh ose n eeds a r e th ey, a n d wh a t i s th e va lu e of sa tisfyin g th ose n eeds? All t oo often or ga n iza -
tion s devel op a ser vice or a pr odu ct a n d th en fa il to per iodica lly exa m i n e wh et h er or n ot t h a t
produ ct a ctu a lly sa tisfies a dem a n d or wh et h er sa ti sfa ction of t h a t dem a n d a ctu a l ly m a tter s.
Wh o a r e th e people th a t com pose th e or ga n i za tion , wh a t a r e t h ei r va lu es, a n d wh a t n eeds does
th e or ga n iza ti on sa tisfy for t h em ? ( I n r esou r ce- poor en vir on m en ts, a gen cies th a t sa tisfy on ly
m a r gin a l or per iph er a l dem a n ds a r e vu l n er a ble to bu dget cu ts, a bol ish m en t, or a bsor pt ion by
oth er orga n iza tion s.) Wh a t a r e th e objectives of t h e orga n i za tion a n d h ow wel l do t h ey m esh
with th e n eeds a n d dem a n ds of clien ts, sta keh older s a n d con st itu en ts? Wh a t str a tegies does th e
orga n iza tion em ploy to a ch ieve th e objectives it h a s set for itself? Is th e or ga n iza tion bei n g
a sked to m a ke fu n da m en ta l ch a n ges in wh a t it does, or in th e ki n ds of clien ts i t ben efit s? If so,
wh a t a re th ose ch a n ges?
At th is poin t, Lou ise Wh it e, wh ose fr a m ewor k is in cor por a ted in t h e IPC [ Im plem en tin g Pol-
icy Ch a n ge] pr oject pa per, a r gu es t h a t th e policy in qu estion sh ou ld be exa m in ed wi th r espect to
its com pa tibi lity with t h e orga n iza tion ’s m ission , objectives a n d str a tegy. To a ccom plish th is i t i s
n ecessa r y to sta t e th e obj ectives of th e policy, th e n a tu r e of t h e ser vice or a ct ivity in ten ded, t h e
ben efits t o be pr odu ced a n d th e ben eficia ri es, a n d descr ibe th e com plexi ty of th e policy. ( Wh it e
1989)
Cla r ifi ca tion of t h e m ission , objectives, a n d str a tegies is fu n da m en ta l to i n iti a t ion of th e
str a t egic pr ocess. I t a m ou n ts t o a sta tem en t of wh er e th e or ga n iza tion i s, wh a t it does a n d h ow it
goes a bou t its bu si n ess. It sh ou l d a lso h elp cla r ify wh ich policies or dem a n ds ca n be fa cilita ted
by t h e orga n i za tion a n d wh ich wil l be im peded.
Ste p Thre e : Ide nti fi cati o n o f the o rgani z ati o n’s i nte rnal s tre ngths
and we akne s s e s .
On e wa y t o exa m in e th ese i s to look a t th e or ga n iza tion ’s r esou r ce ba se ( skil l ba se, ca pita l or
fin a n cia l r esou r ces, et c.) Does t h e or ga n iza t ion h a ve th e wh erewith a l t o a ch ieve it s sta ted obj ec-
tives or to pu t i n to m otion it s str a t egies? Wh a t a r e th e levels of in ter n a l resou r ces possessed by
th e or ga n iza ti on ? How a va i la ble a r e th ey?
An a lysis of r esou r ces by itself i s n ot su fficien t, th e or ga n iza tion m u st a lso l ook a t it s t a sk per -
for m a n ce. Wh a t ta sks does it do wel l, wh ich does it n ot? Th is wil l give a better idea of h ow th e
orga n iza tion ’s r esou rces a r e or ga n i zed a n d h ow effectively th ose r esou r ces a r e pu t to u se. An
orga n iza tion m a y well h a ve excellen t r esea r ch skill s, bu t if its pri m a r y ta sks a re in ser vice del iv-
er y, th en su ch skil ls m a y be m or e a wea kn ess th a n a st ren gth . However, on e sh ou ld n ot a u to-
5-10 Po licy Too lkit fo r Str en gth ening Health Secto r Refor m
m a t ica lly m a ke th e a ssu m ption th a t sin ce idle ca pa city exists, it sh ou ld be dispen sed wi th . Su ch
ski lls m a y well be qu ite u sefu l if th e or ga n iza tion sh ou ld n eed to m a ke ch a n ges in or der to be
m or e com pa t ible with its en vi ron m en t.
I n a dditi on t o skills a n d r esou r ces, oth er elem en ts of th e in ter n a l or ga n iza ti on n eed to be
exa m in ed: wh a t is t h e n a tu r e of th e or ga n iza tion a l cl im a t e ( a r e th er e clea va ges, a r e t h ey con -
flictive?) , h ow a da pta ble a r e th e pa r tici pa n ts ( wou ld th ey r ea dily ta ke on n ew ta sks, h ow l on g
h a ve th ey been doin g th e sa m e th in g?) , wh a t is th e n a tu r e a n d flexibili ty of th e or ga n iza t ion a l
str u ctu r e ( is it r igid, h a ve sign ifica n t ch a n ges been m a de in th e pa st , a n d wh a t h a s been th e
r ea ction ?) , is th er e a n in for m a l st ru ctu re ( h ow does i t wor k a n d is it m ore cogen t th a n th e for -
m a l str u ct u r e?) , wh a t is th e n a tu r e of t h e in cen ti ve st r u ctu re ( i s it design ed to en cou r a ge in n o-
va tive beh a vior, ca n i t r ecru it a n d m a in ta in a su fficien tly h igh level of per son n el?) ? Wh ich ele-
m en ts fa cilit a te a n d wh i ch im pede perfor m a n ce of th e or ga n iza tion ’s ta sks a n d wh ich m igh t
fa cil ita te or im pede or ga n iza tion a l ch a n ge?
Ste p Fo ur: As s e s s me nt o f thre ats and o ppo rtuni ti e s i n the e xte rnal
e nvi ro nme nt.
Wh il e t h er e is fr equ en t ly a ten den cy on th e pa r t of m a n a ger s to focu s on th e i n ter n a l dim en -
sion s of th e or ga n iza ti on , pol icy ch a n ge a n d th e oft en vola tile n a t u r e of politi cs in cou n tr ies
u n der goin g m a jor policy ch a n ges r equ ir es con sciou s explor a t ion of th e en vir on m en t ou tside
th e or ga n iza ti on .
Polit ica l, econ om i c, socia l, a n d t ech n ologica l ch a n ges will in flu en ce th e dir ection a n d
sh a pe of a n orga n iza tion ’s poli cies a n d objectives. Wh a t a r e th e m a j or tr en ds t h a t ca n be
detected in ea ch of th ese a r ea s th a t will h a ve som e bea r in g on th e a ct iviti es of th e or ga n iza t ion ?
How m igh t m a cro- econ om i c m ea su r es bein g in sti tu ted a ffect t h e fin a n cia l resou r ces of th e
orga n iza tion ? Wh a t is th e n a tu r e of poli tica l su pport for th e poli cy u n der con sidera ti on ? How
politica l ly st a bl e is th e cu rr en t regi m e? I s policy lea dersh i p a bou t to ch a n ge? Will key officia ls
with in th e ca bin et be ch a n ged a n d wh a t will th a t m ea n to th e developm en t a n d im pl em en ta -
tion of th e pr oposed policy ch a n ge? To wh a t exten t h a ve th e govern m en t’s pr im a r y pol itica l coa -
liti on s begu n t o ch a n ge? Does th is si gn ify im pen din g ch a n ges i n poli cy pr ior it ies? How effective
is th e poli tica l opposit ion ? Wh a t r ole do in ter n a tion a l for ces or a ctor s pla y in th e det er m i n a tion
of policy? To wh a t exten t h a s th e socia l com position of th e or ga n iza tion ’s pri m a r y clien tel e
grou p ch a n ged? Ha s it ou tgr own th e r esou r ces of th e or ga n iza tion ? Ha ve its n eeds ch a n ged over
th e yea rs?
An im port a n t fa ctor in t h e or ga n iza ti on ’s ext er n a l en vir on m en t i s i ts bu rea u cr a tic a n d i n sti-
tu t ion a l settin g. Is th e or ga n iza ti on a u ton om ou s? Or i s it lin ked t o a m in istr y, or m u st it coor di-
n a te its a ction s with oth er en t ities a n d wh a t is th e n a tu r e of th ose m ech a n ism s? Ar e oth er orga -
n iza tion s i n volved in th e sa m e a ctivi ty, wh a t a r e th eir r oles? Ar e th er e in cen tives for
cooper a tion ?
Ann ex 5-A 5 -1 1
Ste p Fi ve : Ide nti fi cati o n o f ke y co ns ti tue nts and s take ho l de rs ,
the i r e xpe ctati o ns and re s o urce s .
Th e expecta tion s a n d dem a n ds of con st itu en ts a r e key in gr edien ts for decision s a bou t wh a t a n
orga n iza tion will do a n d h ow i t goes a bou t ca r r yin g ou t its ta sks. Sta keh ol der s or con sti tu en ts
a re th ose wh o h a ve a dir ect i n terest in a n d a re ca pa ble of in flu en cin g i n som e m ea su re th e ou t-
com es or a cti on s of th e or ga n iza tion . Sta keh ol ders pr ovide th e pri m a r y ba se of pol itica l su ppor t
for th e or ga n iza t ion , a n d i n a si gn ifi ca n t wa y a r e its r a ison d’êtr e. A r a th er wide ra n ge of a ctor s
m i gh t be in clu ded: com pet itor s, ben eficia r ies, dir ector s, em pl oyees, politi ca l pa r ties, con su m -
er s, in ter n a ti on a l don or s, etc. Wh a t do t h ese pa r ticu la r grou ps wa n t fr om t h e or ga n iza t ion ? Ar e
th ey sa ti sfied with th e cu r r en t a r r a y of ser vices a n d level of per for m a n ce? Ar e th eir in t er ests sh ift-
in g? I n wh i ch dir ecti on ? An d if so, will th e or ga n iza t ion be a ble to r ea ct fa vor a bly?
I n exa m in in g th e in t er ests of st a keh older s, a ca u tion a r y n ote is in or der. Th er e ca n be a
tem pta tion to tr y t o con sider ever y a ct or wh o m igh t h a ve som e in ter est or in flu en ce in th e orga -
n iza tion . Th a t tem pta t ion ou gh t to be a voided a n d th e a n a l yst sh ou ld ta ke ca r e to a ssu r e th a t
on ly th ose th a t ca n h a ve a rea listic a n d r ea son a bly sign i fica n t im pa ct a r e con si dered in th e
sta keh older a n a lysis.
Ste p Si x: Ide nti fi cati o n o f ke y s trate gi c i s s ue s .
Th e in for m a ti on gen er a ted by th e pr ecedin g steps sh ou ld iden tify a set of fu n da m en ta l qu es-
tion s or key problem s r ega r din g th e fi t of th e or ga n iza ti on wit h i ts en vir on m en t. Th ese pr ob-
lem s m igh t con cer n th e or ga n iza tion ’s m ission , i ts pr odu cts or services, its clien ts, fin a n cin g
m ech a n ism s, m a n a gem en t, or r el a t ion sh ip to cer ta in sta keh older s. Str a tegic issu es a r e th e
pri n cipa l pr oblem s th a t m u st be dea lt with effecti vely or th e or ga n iza tion ca n expect u n desir -
a ble r esu lts. Th e effect ive tr ea tm en t of st r a tegic issu es ca n sign i fy fu n da m en ta l ch a n ge in h ow
th e or ga n iza ti on goes a bou t it s bu sin ess. Su ch issu es m a y gen er a te con flict with in th e or ga n i-
za tion sin ce th eir r esolu t ion will pr odu ce win n er s a n d loser s both in ter n a ll y a n d ext er n a lly. Th e
orga n iza tion m u st be pr epa r ed to dea l wi th th a t con fl ict.
I n iden t ifyin g str a tegic i ssu es or pr oblem s, ca r e m u st be ta ken in specifyin g exa ctly wh a t t h e
problem or issu e is, wh y it is a pr oblem for th e or ga n iza tion , a n d th e or ga n iza tion a l con se-
qu en ces of i n a ction . All too often in su fficien t a tt en ti on is given to pr oblem iden tifi ca tion r esu lt-
in g in m i sa ll oca ted r esou rces a n d lost oppor tu n i ties. I t i s a lso im port a n t t o determ in e wh eth er
or n ot th e or ga n iza ti on ca n do a n yth in g a bou t th e pr oblem — if n ot, it is n ot a n issu e. Ma n a g-
er s m u st a lso r ecogn i ze th a t it wi ll be im possible t o ta ckle a l l issu es a t on ce; th erefor e, pr oblem s
sh ou ld be i den tified a ccor di n g t o sh or t- , m ediu m - or lon g- r u n im port a n ce a n d t h e u r gen cy of
a ction n eeded. Ma n a gers will fi n d t h a t en ergy expen ded in pr obl em a n d issu e iden tifi ca tion a n d
cla r ifica tion will h a ve pa yoffs in th e developm en t of str a tegies for th eir tr ea t m en t.
5-12 Po licy Too lkit fo r Str en gth ening Health Secto r Refor m
Ste p Se ve n: De s i gn, anal ys i s , and s e l e cti o n o f s trate gy al te rnati ve s
and o pti o ns to manage i s s ue s i de nti fi e d i n Ste p 6 .
On ce issu es a n d pr oblem s h a ve been iden tified, str a tegies to solve t h ose pr oblem s n eed t o be
iden tified. Gen er a l ly, m or e th a n on e option for dea lin g wi th th e pr oblem will be iden ti fied; th en
option s m u st be exa m in ed for th eir com pa ra ti ve via bilit y, fea sibility, a n d desir a bi lity. Ca n th e
str a t egy wor k fr om a pr a ctica l a s well a s th eor etica l st a n ce? I s th e orga n iza tion ca pa bl e of ca r r y-
in g ou t th e str a tegy? I s th e str a t egy a ccept a bl e to t h ose ca r ryin g it ou t a n d t o th ose t o wh om it is
dir ected? Does th e or ga n iza tion h a ve th e h u m a n a n d m a ter ia l resou rces, does it h a ve th e
kn ow- h ow n ecessa r y, a n d is th e a ppropr ia te or ga n iza tion a l str u ctu r e a va ila ble for im plem en t-
in g th e str a tegy? Will th e str a tegy a ccom plish wh a t t h e m a n a ger wa n ts a n d ben efit th ose
in t en ded? Ca n th e str a tegy be su sta in ed, a n d ca n i t a da pt t o th e pr ojected ch a n ges in th e en vi-
r on m en t? I s flexibili ty bu il t in to th e st ra t egy? Ca n th e n ecessa r y r esou r ce ba se be su sta in ed over
th e life of th e str a tegy?
Desir a bility h a s to do wit h t h e fit of or ga n iza t ion a l a n d en vir on m en ta l va lu es a n d objectives
with th e str a tegy. I s th e str a tegy com pa tible with th e i m plem en tin g in sti tu ti on ’s m i ssion or it s
fu n da m en ta l obj ecti ves, a n d/ or wit h th e m issi on a n d objectives of colla bor a tin g or ga n iza tion s?
I s th e str a tegy ta r geted to th e m ost a ppr opri a te ben eficia r ies? I s i t com pa tible with th e l ega l a n d
bu r ea u cra t ic settin g? How well will th e str a tegy a dju st to for eca st tr en ds in th e m ediu m a n d in
th e lon g ter m ? How wil l key sta keh ol der s be a ffected, h ow com pa tible is t h e st ra t egy wi th th ei r
va lu es a n d expecta t ion s?
Ste p Ei ght: Impl e me ntati o n o f the s trate gy.
I m plem en ta tion of a str a tegy is n ot a n a u tom a tic process; th er e a r e two m a jor pa r ts to th e pr o-
cess. Th e fi rst step i s th e developm en t of a n a cti on pla n , wh ich is a sta tem en t of wh a t, wh o,
wh en , a n d h ow th e a ct ion s n ecessa r y t o ca r r y ou t t h e st ra tegy wi ll be don e. Per for m a n ce goa ls
a n d obj ecti ves wi ll a lso be specified. Mu ch of t h e in for m a tion n eeded to devel op th e a ction pla n
will h a ve been gen er a ted in Step Seven .
Th e secon d pa rt of im plem en ta tion con sists of a ction s a im ed a t m a rsh a lin g a n d a pplyin g
r esou rces. I n th e con text of policy ch a n ge th ese a ction s m a y con sist of ( bu t a re n ot lim ited to) ,
ch a n ges in orga n iza tion a l stru ctu res, sh ifts a n d recla ssifica tion of person n el, th e esta blish m en t of
n ew rou tin es, ta sks, a n d procedu res; in sta lla tion of n ew in cen tive system s; retoolin g produ ction
for n ew pr odu cts or services; m a rketin g of n ew ser vices or crea tion of dem a n d a m on g n ew ben efi-
cia ries or con su m ers; developm en t of n ew fin a n cin g m ech a n ism s; orga n izin g coa lition s to m a in -
ta in politica l, bu dgeta ry, a n d ben eficia ry su pport; a n d developin g colla bora tive m ech a n ism s with
coopera tin g orga n iza tion s. It sh ou ld be n oted th a t th e m a n a ger s’ ta sk is m ore th a n ju st th e in ter-
n a l opera tion of h is orga n iza tion , th ey m u st a lso m a n a ge its fit with th e en viron m en t.
Ste p Ni ne : Mo ni to ri ng and re vi e w o f pe rfo rmance .
Str a tegic m a n a gem en t a ssu m es con t in u a l ch a n ge. Th er efor e m ech a n i sm s m u st be developed
for m on itor in g a n d a n a lyzin g t h e per for m a n ce of th e or ga n iza tion with r espect to a ch ievin g th e
Ann ex 5-A 5 -1 3
goa l s a n d objectives set in th e a ct ion pl a n . As th e en vir on m en t u n der goes ch a n ges, a s m in i st er s
ch a n ge, election s occu r, or bu dgets go u p or down , pr ior iti es will a lso ch a n ge. Resou rce fl ows
m a y be u n even . Al l of th ese el em en ts ca n a l ter perfor m a n ce, pr ior iti es, a n d th e desi ra bili ty of
cer ta in policies. I f th e or ga n iza tion wa n ts t o m a i n ta in a good “fi t”wit h t h e en vir on m en t, it
m u st fi rst be a ble to tr a ck th ese ch a n ges in order to a dju st.
Th e m on it or in g pr ocess sh ou ld be con ti n u ou s, r egu la r, a n d ca pa ble of feedin g in to th e deci-
sion - m a kin g pr ocess. Th e m a n a ger sh ou ld develop con trol m ech a n ism s to ga u ge th e efficien cy
of r esou r ces u sed a n d i m pa ct m ech a n ism s to ga u ge th e effect iven ess of its a ct ion s. Fin a lly, it is
vita l th a t th e m on it orin g pr ocess be tim ely a n d u sa ble.
Appe ndi x One : Di ffe re nt Appro ache s to Strate gi c Pl anni ng
and Manage me nt
Mu ch a tt en ti on i n t h e litera tu r e h a s been devot ed to st ra t egic m a n a gem en t a n d str a tegic pla n -
n in g— bu t wi th m ost em ph a si s on th e pr iva te sector. Never th eless, in th e la st sever a l yea r s,
th ere h a s been a gr owin g in terest a n d litera tu r e ( eg., Rin g a n d Per r y, 1985, a n d Sa m u el Pa u l,
1983) on a ppl ica tion s in th e pu bli c sector. Th r ee recen t a ppr oa ch es a r e br iefly descr ibed in th is
a ppen dix.
Two recen t books on str a t egic pla n n in g a n d str a t egic pu bl ic m a n a gem en t illu stra t e th e over -
la p bet ween th e two con cepts. Ea ch develops a str a tegic “pr ocess” con sisti n g of sever a l steps.
Dr a wi n g on Nu t t a n d Ba ckoff ( 1987) , Bozem a n a n d St ra u ssm a n ( 1990) ou t lin e six steps for
pu tti n g str a tegic m a n a gem en t to work. Th ese st eps a m ou n t to a ba sic fr a m ewor k for str a tegic
m a n a gem en t:
1. Dea lin g with h istory: a n a n a l ysis of th e h istor y of t h e orga n i za tion , it s m ission a n d its
m a n da t e.
2. Stock Ta kin g: a n eva l u a tion of t h e orga n iza tion ’s cu r r en t in ter n a l fin a n cia l, or ga n iza -
tion a l, a n d h u m a n r esou r ces.
3. Eva l u a tin g I ssu es: i den ti fica ti on of th e sign ifica n t issu es th a t will a ffect th e perform a n ce
or ca pa city of th e or ga n iza ti on .
4. Developin g St r a tegies: devel opm en t of str a t egic a lter n a ti ves t o r espon d t o a n d m a n a ge
th e issu es iden t ified.
5. Assessin g Fea sibility: eva lu a ti on of th e ca pa city of th e orga n iza tion to ca r r y ou t th e str a te-
gic a l ter n a ti ve with in th e con text.
6. I m plem en ta tion : t h e a ctu a l ca r r yin g ou t of t h e st ra tegy sel ected.
I t is ea sy to r ecogn ize sever a l pa r a l lels between Bozem a n a n d Str a u ssm a n a n d th e eigh t- step
process for str a tegic pla n n in g la id ou t by Joh n Br yson ( 1988) :
1. I n iti a t in g a n d a gr eein g on a str a tegic pla n n in g process.
2. I den tifyin g or ga n iza tion a l m a n da tes.
5-14 Po licy Too lkit fo r Str en gth ening Health Secto r Refor m
3. Cla r ifyin g or ga n i za tion m ission a n d va lu es.
4. Assessin g th e ext er n a l en vir on m en t oppor tu n iti es a n d th r ea ts.
5. Assessin g th e i n ter n a l en vir on m en t: st ren gth s a n d wea kn esses.
6. I den ti fyin g th e str a tegic issu es fa cin g a n orga n iza tion .
7. Form u l a t in g st ra tegies to m a n a ge th e issu es.
8. Esta blish i n g a n effecti ve orga n iza tion a l vision for t h e fu t u r e.
Lou ise Wh ite ( 1989) esta blish es a sligh tly sh or ter bu t sim ila r str a tegic pr ocess:
Step 1. Agr ee on a pr ocess for developin g a n im plem en ta tion st ra tegy.
Step 2. Ma p or a ssess th e situ a tion ( th is in clu des a n a lysis of th e ext er n a l a n d in ter n a l en vi-
r on m en ts, th e con ten t of th e policy, a n d sta keh older expecta tion s a n d r esou r ces) .
Step 3. I den t ify th e str a tegic issu es.
Step 4. Design a n im pl em en ta ti on str a tegy.
Step 5. Design a pr ocess for m on i tor in g r esu lts a n d m a kin g on goin g a dju stm en t s.
Wh ere do th ese “pr ocesses” di ffer ? I s i t r ea ll y on ly a t th e en ds of ea ch pr ocess? Br yson con -
clu des with th e form u l a tion of str a tegies a n d t h e esta blish m en t of a n effective or ga n iza ti on a l
vision for th e fu tu re; Bozem a n a n d Str a u ssm a n con clu de t h e process with im plem en ta tion of
th e st ra tegies for m u la ted. Pla n n er s in Bryson ’s m odel, a r e n ot dir ectl y r espon sible for th e im ple-
m en ta ti on of wh a t th ey h a ve pl a n n ed, except in sofa r a s th ose sa m e per son s a lso will be ta sked
with im plem en ta tion ( n ot a ll or ga n i za tion s ca n rea di ly sepa r a te th e pla n n in g a n d m a n a ge-
m en t fu n ction s) . Bu t in a ll fa ir n ess, Br yson is a da m a n t i n i n sistin g th a t th e a lter n a tives devel-
oped to cope wi th st ra tegic issu es be both wor ka ble a n d a ccepta ble. Assu r in g th a t cou l d well be
con sider ed ta n t a m ou n t t o im plem en t a t ion .
Wh it e, on t h e oth er h a n d, goes fu r th er th a n ei th er of th e ot h er t wo. Wh er ea s Bozem a n a n d
Str a u ssm a n en d wit h “im plem en t a tion s,”Wh ite con cl u des h er m odel of str a t egic m a n a gem en t
with su ggestion s for th e developm en t of m ech a n i sm s for m on itor in g to feed th e on goi n g pr o-
cess of a dju st m en t a n d cor rection s. Th is la st st ep i s a vita l on e, a n d deser ves em ph a si s. Th e LDCs
u n der goin g a dju stm en t ten d t o be ch a r a cteri zed by en vir on m en ta l vola ti lity— t o a ssu m e t h a t a
sin gle str a tegy is n ot su bject t o eit h er r evision or m odifica tion ( a n d often r a th er extr em e r evi-
sion or m odifi ca tion ) wou l d be sh ort [ - si gh ted] . Th er efor e, m ech a n ism s to m on itor th e or ga n i-
za tion ’s con tin u in g fit with th e en vir on m en t a s well a s pr ogr ess towa rd obj ecti ves a r e cr itica l.
An oth er differ en ce li es in ea ch ’s tr ea tm en t of th e extern a l en vir on m en t. Wh it e a n d Br yson
pu t con sider a ble specifi c em ph a sis on t h e en vir on m en t in th e steps th ey descr ibe a s pa r t of th e
str a t egic process. Bozem a n a n d Str a u ssm a n cert a in ly r ecogn i ze th e im port a n ce of t h e exter n a l
en vir on m en t a s ca n be seen in th e foll owi n g excer pts fr om th eir wor k:
On e pu r pose of st ra tegic m a n a gem en t is to m edia te between th e orga n iza tion a n d t h e
en vir on m en t .
Ann ex 5-A 5 -1 5
Pu bl ic m a n a gem en t n ecessa r ily r equ ir es a t ten tion to th e or ga n iza t ion ’s en vir on m en t
beca u se th e in flu en ce of exter n a l politica l a u t h or ity em a n a tes from th e en vi ron m en t
[ for th is r ea son , effecti ve pu blic m a n a gem en t requ ir es a tt en ti on t o str a t egy.
...a n exter n a l per spective em ph a sizin g n ot a da ptin g to t h e en vir on m en t] bu t a n ticipa t-
in g a n d sh a pin g of en vir on m en ta l ch a n ge. Str a tegi c pu bl ic m a n a gem en t a dds a n a ddi -
tion a l in gr edien t: str a tegic th in kin g m u st be cogn iza n t of th e exercise of politica l
a u th or it y.
However, u n like eith er Wh ite or Bryson , Bozem a n a n d Str a u ssm a n do n ot descr ibe a specifi c
step for a n a l ysis of th e exter n a l en vir on m en t with in th ei r r ecom m en ded fr a m ewor k. An a lysi s of
th e en vir on m en t is left a s a n im plicit ta sk. Th e da n ger of th is a ppr oa ch i s th a t su ch a n a l ysis
m i gh t sim ply be over looked a s bein g t oo h a r d to do or a s bei n g too ten u ou s t o a dd a n yth in g.
Given t h e im pa ct of th e en vir on m en t on pu blic or ga n iza ti on s, explicit a n d direct a n a lysis is
im per a t ive.
Not su r pr isin gly, th e fa ct th a t bot h a ppr oa ch es em ploy t h e ter m “str a tegic” gives th e two a
grea t dea l in com m on . St ra tegy, or t h e str a t egic ou tlook sign ifies a for wa r d lookin g m en ta lit y.
Str a tegy does n ot con cer n t h e pa st except for th e lesson s a n d in pu t t h a t ca n be extr a ct ed fr om
pa st exper ien ce. Str a tegy con cer n s th e fu tu r e, a n d to th e exten t th a t th e fu tu re is u n kn own , th e
grea ter it s u n cer ta in ty. Ta sks th a t con cer n th e ver y sh or t r u n a r e gen er a lly n ot gri st for t h e st ra -
tegic m ill. Th e fu r th er th e h ori zon of tim e in volved in th e ta sk, th e gr ea ter t h e level of u n cer -
ta in t y. I n a sm u ch a s str a tegy in volves th e fu tu r e, a n d pa rt icu l a r ly th e m id- t o lon g- r u n fu tu r e,
u n cer ta in ty t h en becom es a pa r t of th e str a tegic pr oblem . Th e str a t egy m ou n ts to a bet th a t th e
fu t u r e wi ll evolve in a pa r ticu la r wa y a n d t h a t th e m a n a ger ’s pa r ticu la r vision of th e fu tu re
im plied i n th e selection of a st ra tegy wil l be th e cor r ect on e.
5-16 Po licy Too lkit fo r Str en gth ening Health Secto r Refor m
Re fe re nce s
Ba r r y Bozem a n a n d Jeffr ey D. Str a u ssm a n , Pu b lic Ma n a gem en t Str a tegies: Gu id elin es for
Ma n a ger ia l Effectiv en ess. Oxfor d: Jossey- Ba ss Pu blish ers, 1990.
Joh n M. Br yson , Str a tegic Pla n n in g for Pu b lic a n d N on pr ofit Or ga n iz a tion s. Oxfor d:
Jossey- Ba ss Pu blish er s, 1988.
Ha yes, Rober t H., “Wh y Str a tegi c Pla n n i n g Goes Awr y.,” The New Yor k Tim es, Apri l 20, 1986.
Nu tt , P.C., a n d Ba ckoff, R.W. “A Str a t egic Ma n a gem en t Pr ocess for Pu bl ic a n d Th ir d-Sector
Or ga n iza tion s.” Jou r n a l of the Am er ica n Pla n n in g Associa tion , 1987, 53, pp.44–57.
Pa u l , Sa m u el, Str a tegic Ma n a gem en t of Dev elopm en t Pr ogr a m m es: Gu id elin es for Action .
Gen eva : In ter n a t ion a l La bor Office, Ma n a gem en t Developm en t Ser ies, No. 19, 1983.
Rin g, P.S., a n d Per r y, J.L., “Str a tegic Ma n a gem en t in Pu blic a n d Pri va te Orga n iza tion s: I m pl i-
ca tion s of Disti n cti ve Con texts a n d Con str a in ts.” Aca d em y of Ma n a gem en t Rev iew,
1985, 10, pp.276–86.
Lou ise G. Wh ite, Ma n a gin g Policy Refor m in the LDCs. Bou lder, Color a do: Lyn n e Rein n er
Pu bl ish er s, 1990.
_ _ _ _ _ _ _ _ , “I m plem en t in g Policy Ch a n ges” ( u n pu bl ish ed pa per a t ta ch ed to USAI D Proj ect
Pa per for Im plem en tin g Policy Ch a n ge Pr oject.) Septem ber, 1989.
Ann ex 5-A 5 -1 7
I PC Techn ica l N otes is a pu b lica tion of the U. S. Agen cy for In ter n a tion a l Dev elopm en t
( USAID) Im plem en tin g Policy Cha n ge Pr oject ( # 9 3 6 - 5 4 7 0 , Con tr a ct # AEP- 5 4 7 0 - I- 0 0 -
5 0 3 4 - 0 0 ) , w hich is m a n a ged b y the Agen cy ’s Glob a l Bu r ea u , Cen ter for Dem ocr a cy a n d
Gov er n a n ce. The Cen ter for Dem ocr a cy a n d Gov er n a n ce is USAID’s foca l poin t for d em oc-
r a cy a n d gov er n a n ce pr ogr a m m in g. The Cen ter ’s r ole is to pr ov id e USAID a n d other d ev el-
opm en t pr a ctition er s with the techn ica l a n d in tellectu a l ex per tise n eed ed to su ppor t d em o-
cr a tic d ev elopm en t. It pr ov id es this ex per tise in the follow in g a r ea s:
Ru le of La w
Election s a n d Politica l Pr ocesses
Civil Soci ety
Gover n a n ce
Th e Cen ter pu bli sh es a n u m ber of tech n i ca l docu m en ts design ed to in dica te best pr a cti ces, les-
son s l ea r n ed, a n d gu idelin es for pr a cti tion er con sider a tion . Th ey a r e a lso in ten ded t o stim u l a te
deba te a n d discu ssion . For fu r th er in form a tion r ega r din g t h ese Cen ter- specific pu bli ca tion s,
plea se con ta ct th e Cen t er ’s In for m a ti on Un it a t ( 202) 661- 5847.
Th e IPC pr oject ’s con t ra ct tea m con sists of Ma n a gem en t Syst em s I n t er n a tion a l ( pri m e con tr a c-
tor ) ; Abt Associa tes I n c.; a n d Developm en t Alter n a t ives. Th e I PC Pr oject Office i s loca t ed a t MSI ,
600 Wa ter Str eet, S.W., Wa sh in gton , D.C., 20024. Teleph on e: ( 202) 484- 7170; Fa x: ( 202)
488- 0754.
US Agency for International Development
1300 Pennsylvania Avenue, NW, Washington, DC 20523-5900
Tel.:202.712.5859 ˆ Fax: 202.216.3262
Pan American Health Organization
525 23rd Street, NW, Washington, DC 20037-2895
Tel.:202.974.3832 ˆ Fax: 202.974.3613
Partnerships for Health Reform
Abt Associates Inc.
4800 Montgomery Lane, Suite 600, Bethesda, MD 20814-5341
Tel.:301.913.0500 ˆ Fax: 301.652.3916
Family Planning Management Development
Management Sciences for Health, Inc.
165 Allandale Road, Boston, MA 02130-3400
Tel.:617.524.7799 ˆ Fax: 617.524.2825
Data for Decision Making
Harvard School of Public Health
665 Huntington Avenue, Boston, MA 02115
Tel.:617.432.4610 ˆ Fax: 617.432.2181
The Latin America and Caribbean Regional Health Sector Reform Initiative is a joint effort of the following organizations:
Latin America and Caribbean Regional Health Sector Reform Initiative website:
http://www.americas.health-sector-reform.org

Section 5

,QWURGX.WLRQ WR 6WUDWHJL. 0DQDJHPHQW
Table of Contents
Figure 5.1. Facets of Strategic Management . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5-2 Figure 5.2. Strategic Management of One Stage of the Policy Process . . . . . . . . . . . . . . . . . 5-4 Table 5.1. Five Facets of Strategic Management . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5-3 Bibliography. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5-5 Annex 5-A. Strategic Planning and Strategic Management . . . . . . . . . . . . . . . . . . . . . . . . . . 5-6

even ones that have been approved. Strategic management encompasses an integrated. “Looking in” implies critically assessing and strengthening your systems and structures for managing personnel. and progress and impact monitoring. resource mobilization. especially Figure 1. However. future-oriented managerial perspective that is outwardly focused forward-thinking performance-based (see Kiggundu 1996). constituency-building. proposed reforms are not likely to progress through these stages without someone managing or shepherding them. or signed into law. looking in. and build constituencies for change. as explained and diagrammed in the introduction to this toolkit (Section 1. “looking ahead” entails melding your strategy with structures and resources to reach your policy goals. match these to the challenges they face. strategic management provides an effective approach. and looking ahead. while monitoring your progress and adjusting your approach as needed. will not necessarily be implemented as intended without the impetus and guidance of policy champions. and make adjustments to fulfill performance objectives over time. Brinkerhoff (1991 and 1994) characterizes strategic management as looking out. evaluate their organization’s structures and resources. scan their operating environments. and other essential resources. finances.1). The policy process. identify stakeholders and build alliances. includes the following stages: policy formulation and legitimation. decreed. identify key stakeholders. prioritize and plan actions. . Strategic management is a process for developing and enacting plans to reach a long-term goal that takes into account internal variables and external factors. “Looking out” means exploring beyond the boundaries of your organization to set feasible objectives. implementation design and organizational structuring. Strategic managers identify long-range targets. Finally. For those who want to participate in and further the process of health sector reform.Section 5 Introduction to Strategic Management Health policy reforms.

1. These are the integral elements that. continuous process that involves important interactions and feedback among the five key facets. which are explained in more detail in Table 5. Balancing these different perspectives is the essence of managing strategically (Brinkerhoff 1991).PSOHPHQWDWLRQ 6WUDWHJ\ )RUPDWLRQ . Figure 5.1).5-2 Policy Toolkit for Strengthening Health Sector Reform Balancing strategic management’s outward-.1. distinguish strategic management from less comprehensive approaches. when applied together. Strategic management is an iterative. and forward-looking functions helps you develop a vision and a strategy for where and how to move health sector reform forward. analysis. strategy implementation. Strategic management comprises five key facets: goal-setting. such as operational management or long-term planning. Facets of Strategic Management *RDOVHWWLQJ 6WUDWHJ\ 0RQLWRULQJ $QDO\VLV 6WUDWHJL. and strategy monitoring (see Figure 5. inward-. strategy formation. 0DQDJHPHQW 6WUDWHJ\ .

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“Looking Out. no. 1994. Derick W.” World Development vol.” Working Paper No. vol. for US Agency for International Development. October 1991.Introduction to Strategic Management 5-5 Bibliography Brinkerhoff. “Looking Out. Washington. Looking Ahead. 9: 1417–1430. Looking Ahead: Guidelines for Managing Development Programs. 24. 12. Moses N. 11. Looking In. “Integrating Strategic Management Tasks into Implementing Agencies: From Firefighting to Prevention. no. DC: Implementing Policy Change Project. 17. Kiggundu. 1. 1996. Looking In. .” PA Times. _____.

and manages the Implementing Policy Change project. . The approach leads the manager to ask where his/her organization wants to be after a certain period. one that tries to anticipate events rather than simply react as they occur. the strategic approach is oriented toward the future. 1991. involves essentially a way of thinking. It recognizes that the environment will change. and how to develop strategies and the means to get there. Crosby1 The following is an excerpt from Crosby. The problem for the consultant is how to help the manager acquire that mentality. It is recognized that the future cannot be 1. he holds a Ph.. what it will need to get to where it wants. Using planning and management tools strategically.D. and finally. Missouri. Louis. Why Strategic Management? Strategic planning and management are more than a set of managerial tools. a mental framework or approach. They constitute a mind-set. as well as a set of analytic tools. It is a long range orientation. For strategic management to be effectively used the manager must develop a strategic mentality or outlook. Inc. then. Crosby is a Director of MSI. how to manage those strategies to achieve the organization’s goals and objectives. Benjamin L. Management Systems International. “Strategic Planning and Strategic Management: What Are They and How Are They Different?” Technical Note No. for the US Agency for International Development. from Washington University in St. 1. Published by the Implementing Policy Change Project. Benjamin L. The Strategic Approach The strategic approach or mentality consists of four main elements: First.5-6 Policy Toolkit for Strengthening Health Sector Reform Annex 5-A Strategic Planning and Strategic Management By Benjamin L. an approach to looking at the changes in the internal and external environment that confront the manager.

Strategic management or planning are not one-shot approaches. the strategic approach has an external emphasis. Managers must be sensitive to the needs and respond to demands of constituents over whom they have little or no control. In that sense it is more than a tool. Among those constituents. It takes into account several components of the external environment. economics and the social dimension. strategic thinking recognizes and emphatically takes into account politics and the exercise of political authority. Politics will determine the policies that are to be implemented. It is continuous and recognizes the need to be open to changing goals and activities in light of shifting circumstances within the environment. Identification and clarification of the organization’s mission. Under conditions of rapid political. It is a process that requires monitoring and review mechanisms capable of feeding information to managers continuously. political actors are perhaps the most important. The strategic approach recognizes that to maintain a close fit with the environment. economic and social change. it is a mental framework. strategies. Finally. The Strategic Management Process What does a strategic management process look like? The approach described below is suggested as a guide: 1. and current strategies. structures. including technology.Annex 5-A 5-7 controlled. strategies can quickly become outmoded or no longer serve useful purposes. . Agreement on and initiation of the strategic management process. the strategic approach is a process. these attitudes and behaviors are really a way of approaching or thinking about how to manage or how to implement policy change. Third. but the argument can be made that by anticipating the future. economics will determine the organization’s level of resources. 2. they are ongoing. organizations can help to shape and modify the impact of environmental change. or the resources traditionally required by the organization to produce its goods and services may suddenly become unavailable. Strategic thinking recognizes that each of these can either constrain or facilitate an organization as it seeks to implement policy. Identification of the organization’s internal strengths and weaknesses. In particular. objectives. politics. and resources) and attempts to anticipate what will be required to assure continued fit. 3. Managers are not free to do anything they decide. the different elements of the organization will need to be continuously re-assessed and modified as the environment evolves. Second. Strategic management (or planning) is not something that can be applied only once and then forgotten about or ignored. and social factors might well determine who the organization’s beneficiaries will be. the strategic approach concentrates on assuring a good fit between the environment and the organization (including its mission and objectives. When all taken together.

The first step in the strategic management process is to get agreement—not only to carry out the process but also to get agreement on how and when and by whom it will be carried out. then strategic planning will be done as part of the course of normal (strategic) management functions. In contrast. those who have a major stake in the outcome of the policy. the organization attempts to set up a special department. Assessment of the threats and opportunities from the external environment. whether from within or outside the organization. Monitoring and review of the strategy’s performance. and those with specialized knowledge that can add to the analysis of the policy to be decided or implemented. Implementation of strategy. This occurs when there is no attempt to develop a strategic mentality among line management. then work- . There is much similarity in the approach described here and that of others (see Appendix One for a description of three). Step One: Agreement on the process. then decisions about what should be considered and who should be involved can be addressed. Identification of the key strategic issues confronting the organization. 5. Once such agreement and commitment is accomplished. 8. Without the expressed linkage it is often difficult for the line manager to see the value of the strategic plan. If issues are complex and there is a need to involve a relatively wide spectrum of actors and stakeholders. instead. agreement to carry out and commitment to the process of strategic management must be obtained from one or more of the organization’s key decision makers. or the organization is imbued with a strategic mentality. if the strategic approach is employed. Frequently.5-8 Policy Toolkit for Strengthening Health Sector Reform 4. care must be taken that such groups not be expanded to the point of incapacity to make agile decisions. Who should be included in the strategic management process? At least three different types of individuals should be considered for inclusion: the organization’s top decision-makers and those officials who will have direct responsibility in implementation of policy. whether supportive or oppositional. the exercise will be sterile and likely regarded as a waste of time. Identification of key constituents/ stakeholders and their expectations. Although relatively broad involvement in the process should be encouraged. Design/analysis/selection of strategy alternatives and options to manage issues identified in step 6. especially when management and the strategic planning functions have been de-linked. How should the process be initiated? First. Since the strategic management process is not a one-shot exercise. clients or resource suppliers. and there will therefore be less interest and incentive in strategically managing. division. or “guru” for strategic planning rather than integrate the functions into normal line management. commitment to the longhaul is vital. 9. 6. without commitment. If one were to stop after Step number 7. this is exactly where the process does stop. the process would be simply a strategic planning exercise. 7.

Who are the people that compose the organization. and strategies is fundamental to initiation of the strategic process. what are those changes? At this point. It amounts to a statement of where the organization is. agencies that satisfy only marginal or peripheral demands are vulnerable to budget cuts. objectives and current strategies. objectives and strategy. To accomplish this it is necessary to state the objectives of the policy. and what needs does the organization satisfy for them? (In resource-poor environments. objectives. argues that the policy in question should be examined with respect to its compatibility with the organization’s mission. However. Step Two: Identification and clarification of the organization’s mission. Step Three: Identification of the organization’s internal strengths and weaknesses.) What are the objectives of the organization and how well do they mesh with the needs and demands of clients. whose needs are they. what it does and how it goes about its business. capital or financial resources. One way to examine these is to look at the organization’s resource base (skill base. the first task is to determine what and where the organization is. An organization may well have excellent research skills. (White 1989) Clarification of the mission. Once an organization has agreed to engage in a strategic process.) Does the organization have the wherewithal to achieve its stated objectives or to put into motion its strategies? What are the levels of internal resources possessed by the organization? How available are they? Analysis of resources by itself is not sufficient. then direct consultations or small group arrangements might prove more efficient. Louise White. stakeholders and constituents? What strategies does the organization employ to achieve the objectives it has set for itself? Is the organization being asked to make fundamental changes in what it does. whose framework is incorporated in the IPC [Implementing Policy Change] project paper. What tasks does it do well. which does it not? This will give a better idea of how the organization’s resources are organized and how effectively those resources are put to use. then such skills may be more a weakness than a strength. and what is the value of satisfying those needs? All too often organizations develop a service or a product and then fail to periodically examine whether or not that product actually satisfies a demand or whether satisfaction of that demand actually matters. What are the needs that the organization attempts to satisfy. etc. or absorption by other organizations. one should not auto- . It should also help clarify which policies or demands can be facilitated by the organization and which will be impeded. what are their values. the benefits to be produced and the beneficiaries. but if its primary tasks are in service delivery. the organization must also look at its task performance. and describe the complexity of the policy. abolishment.Annex 5-A 5-9 shops might be considered. If the issues are less complex or fewer actors need to be involved. or in the kinds of clients it benefits? If so. the nature of the service or activity intended.

Such skills may well be quite useful if the organization should need to make changes in order to be more compatible with its environment. What are the major trends that can be detected in each of these areas that will have some bearing on the activities of the organization? How might macro-economic measures being instituted affect the financial resources of the organization? What is the nature of political support for the policy under consideration? How politically stable is the current regime? Is policy leadership about to change? Will key officials within the cabinet be changed and what will that mean to the development and implementation of the proposed policy change? To what extent have the government’s primary political coalitions begun to change? Does this signify impending changes in policy priorities? How effective is the political opposition? What role do international forces or actors play in the determination of policy? To what extent has the social composition of the organization’s primary clientele group changed? Has it outgrown the resources of the organization? Have its needs changed over the years? An important factor in the organization’s external environment is its bureaucratic and institutional setting. policy change and the often volatile nature of politics in countries undergoing major policy changes requires conscious exploration of the environment outside the organization. what is the nature and flexibility of the organizational structure (is it rigid. While there is frequently a tendency on the part of managers to focus on the internal dimensions of the organization. have significant changes been made in the past.5-10 Policy Toolkit for Strengthening Health Sector Reform matically make the assumption that since idle capacity exists. are they conflictive?). and technological changes will influence the direction and shape of an organization’s policies and objectives. or must it coordinate its actions with other entities and what is the nature of those mechanisms? Are other organizations involved in the same activity. how long have they been doing the same thing?). economic. can it recruit and maintain a sufficiently high level of personnel?)? Which elements facilitate and which impede performance of the organization’s tasks and which might facilitate or impede organizational change? Step Four: Assessment of threats and opportunities in the external environment. other elements of the internal organization need to be examined: what is the nature of the organizational climate (are there cleavages. how adaptable are the participants (would they readily take on new tasks. Is the organization autonomous? Or is it linked to a ministry. In addition to skills and resources. and what has been the reaction?). what is the nature of the incentive structure (is it designed to encourage innovative behavior. what are their roles? Are there incentives for cooperation? . it should be dispensed with. Political. is there an informal structure (how does it work and is it more cogent than the formal structure?). social.

These problems might concern the organization’s mission. consumers. it is not an issue. management. There can be a temptation to try to consider every actor who might have some interest or influence in the organization. All too often insufficient attention is given to problem identification resulting in misallocated resources and lost opportunities. or relationship to certain stakeholders. Step Six: Identification of key strategic issues. The information generated by the preceding steps should identify a set of fundamental questions or key problems regarding the fit of the organization with its environment. why it is a problem for the organization. financing mechanisms. . Managers will find that energy expended in problem and issue identification and clarification will have payoffs in the development of strategies for their treatment.or long-run importance and the urgency of action needed. its clients. That temptation ought to be avoided and the analyst should take care to assure that only those that can have a realistic and reasonably significant impact are considered in the stakeholder analysis. care must be taken in specifying exactly what the problem or issue is. and the organizational consequences of inaction. international donors. The organization must be prepared to deal with that conflict. therefore. will the organization be able to react favorably? In examining the interests of stakeholders. employees. their expectations and resources. The effective treatment of strategic issues can signify fundamental change in how the organization goes about its business. a cautionary note is in order. It is also important to determine whether or not the organization can do anything about the problem—if not. Managers must also recognize that it will be impossible to tackle all issues at once. political parties. In identifying strategic issues or problems. Stakeholders provide the primary base of political support for the organization. Such issues may generate conflict within the organization since their resolution will produce winners and losers both internally and externally. problems should be identified according to short-. What do these particular groups want from the organization? Are they satisfied with the current array of services and level of performance? Are their interests shifting? In which direction? And if so. Strategic issues are the principal problems that must be dealt with effectively or the organization can expect undesirable results. its products or services.Annex 5-A 5-11 Step Five: Identification of key constituents and stakeholders. medium. and in a significant way are its raison d’être. etc. directors. A rather wide range of actors might be included: competitors. The expectations and demands of constituents are key ingredients for decisions about what an organization will do and how it goes about carrying out its tasks. Stakeholders or constituents are those who have a direct interest in and are capable of influencing in some measure the outcomes or actions of the organization. beneficiaries.

when. more than one option for dealing with the problem will be identified. analysis. Implementation of a strategy is not an automatic process. does it have the know-how necessary. and beneficiary support. who. Step Nine: Monitoring and review of performance.5-12 Policy Toolkit for Strengthening Health Sector Reform Step Seven: Design. there are two major parts to the process. and selection of strategy alternatives and options to manage issues identified in Step 6. Much of the information needed to develop the action plan will have been generated in Step Seven. Can the strategy work from a practical as well as theoretical stance? Is the organization capable of carrying out the strategy? Is the strategy acceptable to those carrying it out and to those to whom it is directed? Does the organization have the human and material resources. organizing coalitions to maintain political. Generally. how compatible is the strategy with their values and expectations? Step Eight: Implementation of the strategy. retooling production for new products or services. Therefore mechanisms must be developed for monitoring and analyzing the performance of the organization with respect to achieving the . and developing collaborative mechanisms with cooperating organizations. The second part of implementation consists of actions aimed at marshaling and applying resources. then options must be examined for their comparative viability. tasks. In the context of policy change these actions may consist of (but are not limited to). It should be noted that the managers’ task is more than just the internal operation of his organization. changes in organizational structures. Performance goals and objectives will also be specified. and desirability. Strategic management assumes continual change. which is a statement of what. development of new financing mechanisms. budgetary. shifts and reclassification of personnel. Is the strategy compatible with the implementing institution’s mission or its fundamental objectives. Once issues and problems have been identified. and can it adapt to the projected changes in the environment? Is flexibility built into the strategy? Can the necessary resource base be sustained over the life of the strategy? Desirability has to do with the fit of organizational and environmental values and objectives with the strategy. they must also manage its fit with the environment. The first step is the development of an action plan. strategies to solve those problems need to be identified. and procedures. and how the actions necessary to carry out the strategy will be done. the establishment of new routines. feasibility. and/or with the mission and objectives of collaborating organizations? Is the strategy targeted to the most appropriate beneficiaries? Is it compatible with the legal and bureaucratic setting? How well will the strategy adjust to forecast trends in the medium and in the long term? How will key stakeholders be affected. marketing of new services or creation of demand among new beneficiaries or consumers. and is the appropriate organizational structure available for implementing the strategy? Will the strategy accomplish what the manager wants and benefit those intended? Can the strategy be sustained. installation of new incentive systems.

It is easy to recognize several parallels between Bozeman and Straussman and the eight-step process for strategic planning laid out by John Bryson (1988): 1. Implementation: the actual carrying out of the strategy selected. 3. Stock Taking: an evaluation of the organization’s current internal financial. it is vital that the monitoring process be timely and usable. 1983) on applications in the public sector. elections occur. Identifying organizational mandates. and human resources. 6. regular. Developing Strategies: development of strategic alternatives to respond to and manage the issues identified. Resource flows may be uneven. organizational. Three recent approaches are briefly described in this appendix. priorities will also change.. The manager should develop control mechanisms to gauge the efficiency of resources used and impact mechanisms to gauge the effectiveness of its actions. Ring and Perry. in the last several years. its mission and its mandate. as ministers change. Assessing Feasibility: evaluation of the capacity of the organization to carry out the strategic alternative within the context. The monitoring process should be continuous. Initiating and agreeing on a strategic planning process.Annex 5-A 5-13 goals and objectives set in the action plan. Nevertheless. Dealing with history: an analysis of the history of the organization. priorities. Appendix One: Different Approaches to Strategic Planning and Management Much attention in the literature has been devoted to strategic management and strategic planning—but with most emphasis on the private sector. and Samuel Paul. 5. These steps amount to a basic framework for strategic management: 1. Bozeman and Straussman (1990) outline six steps for putting strategic management to work. As the environment undergoes changes. Drawing on Nutt and Backoff (1987). 1985. or budgets go up or down. Evaluating Issues: identification of the significant issues that will affect the performance or capacity of the organization. 4. All of these elements can alter performance. Finally. . 2. there has been a growing interest and literature (eg. Each develops a strategic “process” consisting of several steps. If the organization wants to maintain a good “fit” with the environment. it must first be able to track these changes in order to adjust. 2. Two recent books on strategic planning and strategic public management illustrate the overlap between the two concepts. and capable of feeding into the decision-making process. and the desirability of certain policies.

Step 2. Therefore. except insofar as those same persons also will be tasked with implementation (not all organizations can readily separate the planning and management functions).” White concludes her model of strategic management with suggestions for the development of mechanisms for monitoring to feed the ongoing process of adjustment and corrections. Where do these “processes” differ? Is it really only at the ends of each process? Bryson concludes with the formulation of strategies and the establishment of an effective organizational vision for the future. Design an implementation strategy. Whereas Bozeman and Straussman end with “implementations. Planners in Bryson’s model. Design a process for monitoring results and making ongoing adjustments. Step 3. Clarifying organization mission and values. 5. 7. 6. goes further than either of the other two. Step 4. . Bozeman and Straussman conclude the process with implementation of the strategies formulated. Bozeman and Straussman certainly recognize the importance of the external environment as can be seen in the following excerpts from their work: One purpose of strategic management is to mediate between the organization and the environment. Step 5. 8. Identifying the strategic issues facing an organization. White. This last step is a vital one. are not directly responsible for the implementation of what they have planned. Another difference lies in each’s treatment of the external environment. Bryson is adamant in insisting that the alternatives developed to cope with strategic issues be both workable and acceptable. The LDCs undergoing adjustment tend to be characterized by environmental volatility—to assume that a single strategy is not subject to either revision or modification (and often rather extreme revision or modification) would be short[-sighted]. Establishing an effective organizational vision for the future. Map or assess the situation (this includes analysis of the external and internal environments. But in all fairness. Assuring that could well be considered tantamount to implementation. Assessing the external environment opportunities and threats. mechanisms to monitor the organization’s continuing fit with the environment as well as progress toward objectives are critical. and stakeholder expectations and resources). Formulating strategies to manage the issues. on the other hand. Identify the strategic issues. Assessing the internal environment: strengths and weaknesses. the content of the policy. Louise White (1989) establishes a slightly shorter but similar strategic process: Step 1. White and Bryson put considerable specific emphasis on the environment in the steps they describe as part of the strategic process. Agree on a process for developing an implementation strategy.5-14 Policy Toolkit for Strengthening Health Sector Reform 3. 4. and deserves emphasis.

Bozeman and Straussman do not describe a specific step for analysis of the external environment within their recommended framework. Strategy. . or the strategic outlook signifies a forward looking mentality. and to the extent that the future is unknown. However.Annex 5-A 5-15 Public management necessarily requires attention to the organization’s environment because the influence of external political authority emanates from the environment [for this reason. Tasks that concern the very short run are generally not grist for the strategic mill. The further the horizon of time involved in the task. the fact that both approaches employ the term “strategic” gives the two a great deal in common. Given the impact of the environment on public organizations. Strategic public management adds an additional ingredient: strategic thinking must be cognizant of the exercise of political authority. unlike either White or Bryson. effective public management requires attention to strategy. uncertainty then becomes a part of the strategic problem. the greater its uncertainty. the greater the level of uncertainty. Strategy concerns the future. Analysis of the environment is left as an implicit task.an external perspective emphasizing not adapting to the environment] but anticipating and shaping of environmental change.. Not surprisingly. and particularly the mid. The danger of this approach is that such analysis might simply be overlooked as being too hard to do or as being too tenuous to add anything. .to long-run future.. The strategy mounts to a bet that the future will evolve in a particular way and that the manager’s particular vision of the future implied in the selection of a strategy will be the correct one. Inasmuch as strategy involves the future. Strategy does not concern the past except for the lessons and input that can be extracted from past experience. explicit and direct analysis is imperative.

Geneva: International Labor Office. Strategic Management of Development Programmes: Guidelines for Action. “Why Strategic Planning Goes Awry. 19. 1983. 1987. April 20. John M... Oxford: Jossey-Bass Publishers. No.. .L. and Perry. “Implementing Policy Changes” (unpublished paper attached to USAID Project Paper for Implementing Policy Change Project. 1990. Robert H. Bryson. Oxford: Jossey-Bass Publishers.” The New York Times. Straussman. R. Samuel.W. pp. 1990. Management Development Series. Public Management Strategies: Guidelines for Managerial Effectiveness. Paul. 1985. Boulder. 53. Strategic Planning for Public and Nonprofit Organizations. 1986.) September. Hayes. Ring.C. P. pp. P. Louise G. White. ________. and Backoff. Nutt. 10. “A Strategic Management Process for Public and Third-Sector Organizations.” Academy of Management Review.276–86. 1988.S.44–57. “Strategic Management in Public and Private Organizations: Implications of Distinctive Contexts and Constraints.” Journal of the American Planning Association.. Managing Policy Reform in the LDCs. 1989.. Colorado: Lynne Reinner Publishers. J.5-16 Policy Toolkit for Strengthening Health Sector Reform References Barry Bozeman and Jeffrey D.

. It provides this expertise in the following areas: Rule of Law Elections and Political Processes Civil Society Governance The Center publishes a number of technical documents designed to indicate best practices. S.S. Washington.Annex 5-A 5-17 IPC Technical Notes is a publication of the U. lessons learned. Agency for International Development (USAID) Implementing Policy Change Project (#936-5470. D. and guidelines for practitioner consideration. Abt Associates Inc.C. . Center for Democracy and Governance.. please contact the Center’s Information Unit at (202) 661-5847. 600 Water Street. Contract #AEP-5470-I-005034-00).W. and Development Alternatives. Telephone: (202) 484-7170. The IPC project’s contract team consists of Management Systems International (prime contractor). Fax: (202) 488-0754. which is managed by the Agency’s Global Bureau. They are also intended to stimulate debate and discussion. The IPC Project Office is located at MSI.. For further information regarding these Center-specific publications. The Center for Democracy and Governance is USAID’s focal point for democracy and governance programming. The Center’s role is to provide USAID and other development practitioners with the technical and intellectual expertise needed to support democratic development. 20024.

974. MD 20814-5341 Tel.3916 Family Planning Management Development Management Sciences for Health. Boston.0500 ˆ Fax: 301.432.americas.524.:301.4610 ˆ Fax: 617. DC 20037-2895 Tel. 4800 Montgomery Lane.7799 ˆ Fax: 617. MA 02115 Tel.974.3613 Partnerships for Health Reform Abt Associates Inc. MA 02130-3400 Tel. Suite 600.org . NW. NW.3262 Pan American Health Organization 525 23rd Street.health-sector-reform.The Latin America and Caribbean Regional Health Sector Reform Initiative is a joint effort of the following organizations: US Agency for International Development 1300 Pennsylvania Avenue. 165 Allandale Road.:617.:202.2825 Data for Decision Making Harvard School of Public Health 665 Huntington Avenue. Boston. Inc.712.5859 ˆ Fax: 202.913.:202. Washington.432.2181 Latin America and Caribbean Regional Health Sector Reform Initiative website: http://www.652. DC 20523-5900 Tel. Washington. Bethesda.3832 ˆ Fax: 202.216.:617.524.

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