Day 3: Links between strategic management and performance management

Transcription

1 Day 3: Links between strategic management and performance management Virpi Einola-Pekkinen

2 Performance prism is the official structure of strategy implementation (=performance management) in Finnish state administration Social effectiveness targets (outcomes) Social effectiveness Social effectiveness: outcomes Operational performance Operational efficiency Outputs and quality management How operations and use of finances have influenced the development of effectiveness -economy - productivity - profitability - cost-recovery rate -commodities and public goods - service ability and quality Operational results (outputs) subject to impact by the management Human resources 2

3 MoF roles in implementing Government s Programme and its own strategy Part of Government advisor and designer of economic policy guider and developer of public administrator Strategic leader of its administrative branch strategy formulator performance contractor Leader of the MoF organisation and work community managing processes managing personnel managing competencies

4 is mostly about Performance Management implementing strategies managing processes leading personnel negotiating agreeing contracting steering, evaluating, measuring...

5 Links between strategic and performance management MoF Common strategy-basis Agency Strategy-level - long term targets Operational level - annual action plans Performance contracts Structures supporting strategic and operational management Strategy-level - long term targets Operational level - annual action plans 5

6 Strategies are implemented through management and leadership Ministry Targets Setting the targets, negotiating the targets both on functional and personal level Agencies Strategy Targets Units DIALOGUE Implementation plans Targets Action plans Individuals Targets DIALOGUE Actions DIALOGUE Evaluating the outputs and outcomes, giving feedback, guidelines etc.

7 Challenge is to be proactive and farreaching One year - five years ten years? Strategy discussions -> strategy documents -> checking in yearly contracts Personnel planning

8 Performance management - challenges strategic management horizontal thinking and working process management decentralization centralization measuring (outputs outcomes effectiveness)

9 Strategic performance management - what is needed Visioning / proactive management Sharing and engaging management Open discussion and dialogue Owners to main processes

10 Currently identified development targets in Performance Management system More horizontality More common commitment More agility & flexibility More space for innovations

11 Working together to sustain success OECD s Public Governance Review of Finland

12 OECD : Collective commitment, strategic insight and resource flexibility needed in Finnish public governance Finland has a strong track record in responding to difficult economic situations. Finland s recovery from the 1990s recession demonstrates the ability of public governance to be a key player in promoting economic development and service provision. Finland may now be facing its biggest challenge, however. This means strategic agility in public administration must be further improved, and calls for far clearer collective commitment in the whole of government.

13 Preparing the public administration for continuous change Finland entered the global economic crisis with a relatively strong fiscal situation. It has a strong competitive environment, a qualified workforce, and a deserved reputation for good governance. Yet, as with many other OECD countries, it realises that preparation for the future is essential to maintaining its global standing. While this effort needs to be strategically driven by the centre, it requires the commitment of the public sector as a whole, and increasingly, it requires a whole-ofgovernment vision and horizontal ways of working.

14 To strengthen its strategic insight, Finland needs Stronger horizontal linkages across central government and improved planning and foresight capacity from a whole-ofgovernment perspective. Reinforced leadership at all levels of government is required in order to be able to communicate and implement a common vision and collective commitment. Coordination and steering of overall government objectives and solutions need to be fostered. Finland s budget system should be revised to allow resources to be allocated more flexibly according to changing demands and priorities.

15 Strategic agility Strategic agility is the ability of the government and public administration to anticipate and flexibly respond to increasingly complex policy challenges, and to determine at what level action is needed (i.e., at a whole-of-government level or at a devolved local or sector level). The OECD has adapted the work of Doz and Kosonen [2008] for use in a public sector context in order to identify three necessary components for developing strategic agility: Strategic insight is the ability to understand and balance government values, societal preferences, current and future costs and benefits, and expert knowledge and analysis, and to use this understanding coherently for planning, objective setting, decision making, and prioritisation. Collective commitment is adherence and commitment to a common vision and set of overall objectives, and their use to guide public actors individual work, as well as co-ordination and collaboration with other actors (both inside and outside of government and across levels of government) as needed to achieve goals collectively. Resource flexibility is the ability to move resources (personnel and financial) to changing priorities if and as needed; to identify and promote innovative ways to maximise the results of resources used; and to increase efficiencies and productivity for both fiscal consolidation and re-investment in more effective public policies and services.

16 Strategic agility on national level? Yves Doz and Mikko Kosonen, Fast Strategy, Wharton School Publishing, 2007 Strategic sensitivity Collective decision making and commitment Mutual dependency via shared targets & agenda (based on government program ) From debate to dialogue culture Strong general management skills via rotation & executive education Leadership Unity Seeing and framing opportunities in a fresh way as they emerge Continuous foresight activity involving key decision makers Open & cross-sectoral strategy processes feeding in Government Program Enhancing cross-sectoral dialogue via rotation & executive education Fast and efficient resource allocation & redeployment across sectors Resource Fluidity Dissociating results from resource ownership Cross-sectoral programs as the main vehicle for change, sectors running ongoing operations & providing resources for programs Modular process and IT-systems based on open architectures