AASHTO SCoQ Presentation 052407 Draft v10 Present

So, What’s the Big DealAbout Strategic Planning?: 

So, What’s the Big Deal About Strategic Planning? J. Woody Stanley, DPA, CQM Strategic Initiatives Team Federal Highway Administration & Jeff Roerden, MSOD Productivity Services North Carolina Department of Transportation

Advice from Harry TrumanSource: Ralph Keyes, 1995: 

Advice from Harry Truman Source: Ralph Keyes, 1995 “Keep working on a plan. Make no little plans. Make the biggest one you can think of, and spend the rest of your life carrying it out.” “You can always amend a big plan, but you can never expand a little one. I don’t believe in little plans. I believe in plans big enough to meet a situation which we can’t possibly foresee now.”

Purpose: 

Purpose Strategic Planning is not enough! Strategic Management is key to improving organization effectiveness. Discuss state-of-practice and present a strategic management model for discussion.

Acknowledgements: 

Acknowledgements We are grateful to Tony Kane and David Dubov from AASHTO for assisting with our on-line survey. Tony distributed the survey and David programmed the survey instrument. We are also grateful to the 75 members of the SCoQ and SCoP who responded to our on-line survey.

Acknowledgements: 

Acknowledgements Thank you to the following individuals for agreeing to be interviewed so we could learn more about strategic planning in their states: Jill Reeder, Doug Zimmerman, Christine Reilly, Susan Mortel, Polly Kent, Mara Campbell, Larry Jones, Jay Styles, Leonard Evans, Steve Wall, Debbie Royal, Steve Simmons, Tonia Ramirez, Bob Melore, Daniela Bremmer

Definitions: 

Definitions Strategic Planning A disciplined effort to produce fundamental decisions and actions that shape and guide what an organization is, what it does, and why it does it (Bryson, 1995) The process of clarifying mission and vision, defining major goals and objectives, and developing long range strategies for moving and organization into the future in a purposeful way (Poister, 2004)

Definitions (cont.): 

Strategic Management The art and science of formulating, implementing, and evaluating cross-functional decisions that enable an organization to achieve its objectives (David, 2001). The larger process that is responsible for the development of strategic plans, the implementation of strategic initiatives, and the ongoing evaluation of their effectiveness (Poister, 2004). Definitions (cont.)

Survey Results – Does your department or agency have a strategic plan?: 

Survey Results – Does your department or agency have a strategic plan?

Survey Results – What is the cycle for updating your strategic plan? : 

Survey Results – What is the cycle for updating your strategic plan?

Survey Results – When was your strategic plan last updated?: 

Survey Results – When was your strategic plan last updated?

Survey Results – Useful for managing the organization during transition?: 

Survey Results – Useful for managing the organization during transition?

Survey Results – Useful for negotiating with the legislature?: 

Survey Results – Useful for negotiating with the legislature?

Survey Feedback – Useful for managing the organization during transition?: 

Survey Feedback – Useful for managing the organization during transition? “The current administration is putting a great deal of emphasis on the document, causing it to be looked at in more detail and importance.” “We have just gone through an administrative transition (Jan 07)...there is uncertainty as to how the new administration will embrace the business plan, let alone the process it represents.” “Our Director has been in position only about 2 years and our current strategic plan has been in existence only about 1 year. We expect that the strategic plan will play an even larger role in management decisions as time goes by and the plan matures.”

Simple Change ModelAdapted from: Richard Beckhard & Reuben Harris, 1987: 

Simple Change Model Adapted from: Richard Beckhard & Reuben Harris, 1987

Effective Change ManagementSource: Thomas Cummings & Christopher Worley, 2001: 

Effective Change Management Source: Thomas Cummings & Christopher Worley, 2001

Strategy Change Cycle Source: Bryson, 1995: 

Strategy Change Cycle Source: Bryson, 1995 Initiate and agree upon a strategic planning process Identify organizational mandates Clarify organizational mission and values Assess the organization’s external and internal environments to identify strengths, weaknesses, opportunities, and threats Identify the strategic issues facing the organization Formulate strategies to manage these issues Review and adopt the strategic plan or plans Establish an effective organizational vision Develop an effective implementation process Reassess strategies and the strategic planning process

Strategy Change Cycle Source: Bryson, 1995: 

Strategy Change Cycle Source: Bryson, 1995

Strategic Management Cyclein Arizona State GovernmentSource: Governor’s Office of Strategic Planning and Budgeting, 1998: 

Strategic Management Cycle in Arizona State Government Source: Governor’s Office of Strategic Planning and Budgeting, 1998

Strategic Management Processin a State DOTSource: Georgia DOT, 2006 Strategic Plan: 

Strategic Management Process in a State DOT Source: Georgia DOT, 2006 Strategic Plan

Strategic Management ProcessThomas L. Wheelen & J. David Hunger, 2004: 

Strategic Management Process Thomas L. Wheelen & J. David Hunger, 2004

Strategic Management ModelThomas L. Wheelen & J. David Hunger, 2004: 

Strategic Management Model Thomas L. Wheelen & J. David Hunger, 2004

Strategic Decision-Making ProcessThomas L. Wheelen & J. David Hunger, 2004: 

Strategic Decision-Making Process Thomas L. Wheelen & J. David Hunger, 2004

Recent Best Practices in State DOTsSource: Poister, NCHRP Synthesis, 2004: 

Recent Best Practices in State DOTs Source: Poister, NCHRP Synthesis, 2004 Focus on corporate level issues & priorities Develop unit plans within corporate framework Encourage widespread participation Maintain customer orientation with systematic feedback and measures Adopt measurement systems with outputs and outcomes tied to goals Establish numerical targets within specified timeframes Proactively use performance measures Obtain top management commitment Develop project level action plans consistent with strategy Identify owners for objectives, initiatives, measures and action plans Include individual level objectives in performance appraisals Communicate importance and commitment to goals Allocate resources to strategic initiatives Review and update plans periodically

Strategic Management in State DOTsSource: NCHRP Synthesis Study, Poister, 2004: 

Strategic Management in State DOTs Source: NCHRP Synthesis Study, Poister, 2004

Current Situation in State DOTsSource: Executive’s Guide to Organizational Improvement, Table 5.7, 2006: 

Current Situation in State DOTs Source: Executive’s Guide to Organizational Improvement, Table 5.7, 2006 Survey of 45 State DOTs 38 have Vision, Mission, and Values statements 34 have Strategic Plans 37 have a process to review organizational performance 26 have a process to monitor their performance 24 are able to link performance to budget In addition… 72% strongly agree or agree that “strategic planning greatly influences our direction, priorities, resource allocation, and goals.” 50% strongly agree or agree that “we have effective practices and processes for translating strategic plans and goals into operating plans.”

Proposed Elements of a Strategic Management Model (Based on Fred David (2001) and Wheelen & Hunger (2004): 

Proposed Elements of a Strategic Management Model (Based on Fred David (2001) and Wheelen & Hunger (2004)

A. Strategy Formulation: 

A. Strategy Formulation Identify Leadership Direction and/or Policy Input and Guidance Make Planning Assumptions and Gather Public/Stakeholder Input Development of a Strategic Plan within Context of Other Planning and Related Management Activities

Identify Leadership Direction and/or Policy Input and Guidance : 

Identify Leadership Direction and/or Policy Input and Guidance Identify the reasons for creating a plan and/or process Set a direction and create a vision (i.e. What do we want to become?) Define the mission and setting L/T goals or objectives (i.e., What is our business? What are our values and priorities?)

Survey Results – Who is involved in setting organization goals / objectives? : 

Survey Results – Who is involved in setting organization goals / objectives?

Michigan DOT Strategic Plan: 

Michigan DOT Strategic Plan

Make Planning Assumptions and Gather Public/Stakeholder Input : 

Make Planning Assumptions and Gather Public/Stakeholder Input Balance stakeholder and customer (user) needs Assess internal capabilities needed to implement plan Assess external opportunities and threats

Survey Results – Methods used to gather input from partners and the public: 

Survey Results – Methods used to gather input from partners and the public

Impressions from Interviews – Gathering input: 

Impressions from Interviews – Gathering input MI DOT – partnered with public libraries for survey OH DOT – used Quality of Worklife surveys for employees and telephone surveys and focus groups for public input VA DOT – used employee focus groups and annual leadership conference

Opportunities/Threats AnalysesSource: WA DOT 2007-2011 Business Directions : 

Opportunities/Threats Analyses Source: WA DOT 2007-2011 Business Directions

Develop a Strategic Plan within Context of Other Planning and Related Management Activities : 

Develop a Strategic Plan within Context of Other Planning and Related Management Activities Coordinate with other planning and customer-centered processes underway Recognize broader stakeholder policy goals and priorities – see responses to question Identifying Key Corporate Level Issues and Strategies or Tactics in Response

Survey Results – Strategic Plan integration with the Long Range Plan: 

Survey Results – Strategic Plan integration with the Long Range Plan

Survey Results – Is the Strategic Plan mandated?: 

Survey Results – Is the Strategic Plan mandated?

Interesting survey results – Negotiating with the legislature: 

Interesting survey results – Negotiating with the legislature States reporting that their strategic plan is mandated by law are more likely to report their strategic plan is useful for negotiating resources with the legislature.

Impressions from Interviews – Policy direction: 

Impressions from Interviews – Policy direction WA DOT – 5 Policy goals in statute AZ DOT – Critical issues based on DOT’s strategic issues TX DOT – Developed 4 overarching strategies PA DOT – Based on the PA Mobility Plan

Statewide Transportation Policy GoalsSource: Washington State Legislature, SSB 5412, 2007 : 

Statewide Transportation Policy Goals Source: Washington State Legislature, SSB 5412, 2007 Preservation: to maintain, preserve, and extend the life and utility of prior investments in transportation systems and services Safety: to provide for and improve the safety and security of transportation customers and the transportation system Mobility: to improve the predictable movement of goods and people throughout Washington State Environment: to enhance Washington's quality of life through transportation investments that promote energy conservation, enhance healthy communities, and protect the environment Stewardship: to continually improve the quality, effectiveness, and efficiency of the transportation system.

Discussion: Other Useful Practices?: 

Discussion: Other Useful Practices?

B. Strategy Implementation: 

B. Strategy Implementation Develop and Align Business or Action Plans to Strategies (at multiple distinct hierarchical levels). Allocate Resources (i.e., Funding, Staff, IT) to Deploy Plan

Develop and Align Business or Action Plans to Strategies (occurs at distinct hierarchical levels) : 

Develop and Align Business or Action Plans to Strategies (occurs at distinct hierarchical levels) Identify objectives, measures with targets, and actions for each strategic response (assign to owners) Communicate and align objectives and actions throughout all organizational levels Link results to individual performance and accountability

Survey Results – Who uses the plan?: 

Survey Results – Who uses the plan?

Impressions from Interviews – Who uses the plan?: 

Impressions from Interviews – Who uses the plan? OH DOT – Cascading plans to district level GA DOT – Strategy Map MO DOT – Cross-functional teams MI DOT – Cross-functional teams

Strategy Map[Source: Georgia DOT, May 2007]: 

Strategy Map [Source: Georgia DOT, May 2007]

Allocate Resources (Funding, Staff, IT) to Deploy Plan : 

Allocate Resources (Funding, Staff, IT) to Deploy Plan Identify needed changes from baseline levels Set priorities among strategies based on available resources Redistribute resources as needed to achieve objectives Provide incentives to more efficiently use resources

Impressions from Interviews – Resource allocation: 

Impressions from Interviews – Resource allocation OH DOT – Districts carry forward savings in funds from previous year TX DOT – shifting more resources to maintenance as a result of recent trends VA DOT – looking at overall needs in terms of staffing levels and functions AZ DOT – Conducted training on strategic planning and budgeting simultaneously WA DOT – OFM involvement

Discussion: Other Useful Practices?: 

Discussion: Other Useful Practices?

C. Strategy Assessment and Evaluation: 

C. Strategy Assessment and Evaluation Establish Means for Feedback, Monitoring, and Reporting (i.e., Performance Measures) Link Organizational Performance and Individual Accountability Evaluate Program Effectiveness and Describe Benefits

Establish Means for Feedback, Monitoring, and Reporting (i.e., Performance Measures) : 

Establish Means for Feedback, Monitoring, and Reporting (i.e., Performance Measures) Meet frequently with owners to assess progress Monitor results (i.e., performance measures) on a routine basis Report progress and results to all employees and stakeholders

Survey Results – Is progress being measured?: 

Survey Results – Is progress being measured?

Survey Results – Methods for reporting progress: 

Survey Results – Methods for reporting progress

Survey Results – Frequency of reporting to leadership / senior managers: 

Survey Results – Frequency of reporting to leadership / senior managers

Survey Results – Frequency of reporting to line employees: 

Survey Results – Frequency of reporting to line employees

Impressions from Interviews - Feedback, Monitoring and Reporting: 

Impressions from Interviews - Feedback, Monitoring and Reporting OH DOT – OPI with quarterly reviews VA DOT – Dashboard with quarterly updates TN DOT – Measurement Report (TMR) GA DOT – Agency and District-level scorecards with monthly updates PA DOT – Agency scorecards and District dashboards with monthly updates WA DOT – Gray Notebook with quarterly updates

Organizational Performance Index (OPI)Source: Ohio DOT 2006-07 Business Plan: 

Organizational Performance Index (OPI) Source: Ohio DOT 2006-07 Business Plan

Tennessee DOT Measurement ReportSource: Furnished by Tennessee DOT: 

Tennessee DOT Measurement Report Source: Furnished by Tennessee DOT

Link Organizational Performance and Individual Accountability: 

Link Organizational Performance and Individual Accountability Communicate goals and objectives and explain how managers, teams, or individuals are expected to support the goals Gather employee input to ensure expectations are fairly presented and their success is being recognized and rewarded

Survey results – Is there a process in place to make corrections?: 

Survey results – Is there a process in place to make corrections?

Impressions from Interviews – Corrective action and accountability: 

Impressions from Interviews – Corrective action and accountability AZ DOT – merit pay for performance in statute VA DOT – asks District Executives for corrective action GA DOT – individual ratings not tied to outcome measures WA DOT – “all” are responsible for success and failure

Evaluate Program Effectiveness and Describe Benefits: 

Evaluate Program Effectiveness and Describe Benefits Routinely and/or periodically assess effectiveness of projects and programs Assess and explain project and program benefits in terms that others can understand. Gather stakeholder feedback to validate findings

Survey Results – Frequency of reporting to board members: 

Survey Results – Frequency of reporting to board members

Impressions from Interviews – Reporting to the public: 

Impressions from Interviews – Reporting to the public MO DOT – Makes results available online in Tracker software. Smooth Roads Initiative resulted in a 25% increase in pavement smoothness as good-rated ride. TX DOT - “Public” Strategic Plan is used to make the case for change and increases in funding WA DOT – Gray Notebook “Lite” is written for legislators and the public to provide a snapshot of progress.

MO DOT Smooth Roads InitiativeSource: “Smooth and Unrestricted Roads and Bridges” Tracker Report, April 2007 : 

MO DOT Smooth Roads Initiative Source: “Smooth and Unrestricted Roads and Bridges” Tracker Report, April 2007

WS DOT Gray Notebook “Lite”Source: Washington DOT Web Site: 

WS DOT Gray Notebook “Lite” Source: Washington DOT Web Site

Discussion: Other Useful Practices?: 

Discussion: Other Useful Practices?

Performance LeadershipSource: Robert Behn, 2006: 

Performance Leadership Source: Robert Behn, 2006

Performance LeadershipSource: Robert Behn, 2006: 

Performance Leadership Source: Robert Behn, 2006

Performance LeadershipSource: Robert Behn, 2006: 

Performance Leadership Source: Robert Behn, 2006

Summary: 

Summary Evolution from Strategic Planning to Strategic Management There is a need to think systemically Comprehensive Strategic Management Model Strategy Formulation Strategy Implementation Strategy Assessment and Evaluation We can learn from each other

Questions? Comments?: 

Questions? Comments?

So, What’s the Big DealAbout Strategic Planning?: 

So, What’s the Big Deal About Strategic Planning? J. Woody Stanley, DPA, CQM Jeff Roerden, MSOD Strategic Initiatives Team Productivity Services Federal Highway Administration North Carolina DOT Woody.Stanley@dot.gov JRoerden@dot.state.nc.us (202) 366-9070 (919) 807-0612