Strategic Planning and Performance Measurement

Governing for Results andAccountabilityPat DusenburyStrategic Planning andPerformance MeasurementThe Urban InstituteAugust 2000This is the fourth report result-ing from the Urban Institute’sGoverning-for-Results andAccountability Project, an exam-ination of performance manage-ment that looks at strategicplanning, program budgeting,and citizen involvement in thestates. The Urban Institute teamconducted extensive discus-sions in North Carolina,Minnesota, Florida, Oregon, andTexas. UI will issue a final reporton the study in Fall 2000.overnment has adopted the private sector’sstrategic planning approach to help set priori-ties and allocate scarce resources in a changingenvironment. Too often, however, public-sectorstrategic planning is an event—or worse, just adocument. A state’s strategic plan is presented with muchfanfare and then just fades away. Or an agency prepares astrategic plan to meet executive or legislative mandates butdoes not use the plan to direct agency activities. Strategic planning is a continuous process that requiresconstant feedback about how the current strategies areworking. The market tells the private sector how it is doing.Profit levels, return on investments, and sales trends letbusinesses know when they need to adjust their strategies.Performance measurement provides the public sector withcomparable information.Strategic planning looks ahead toward desired goals;performance measurement looks back at achievements.Combined, strategic planning and performance measure-ment form a circle—a continuous process of governing-for-results (figure 1).The strategic plan defines the performance to be meas-ured, while performance measurement provides the feed-back that keeps the strategic plan on target. The connectionstrengthens both processes:GThe strategic plandefines the performanceto be measured, whileperformance measure-ment provides the feed-back that keeps thestrategic plan on target. 2Performance measurement relies on spec-ified end outcomes—not just activities,but the results of those activities. Thestrategic plan’s goals and objectives focusperformance measurement on outcomesand help define appropriate performanceindicators. Strategic plans must regularly revisit and“truth test” goals, objectives, and outcomemeasures. Circumstances change. Periodicreporting of performance indicators pro-vides the information necessary to guideadjustments in strategic plans. This infor-mation keeps strategic plans on target andable to accommodate environmentalchanges.Among the most innovative and effectiveprograms encountered during our site visits werethose that integrated strategic planning and per-formance measurement. The examples describedbelow are from Florida, Oregon, and Minnesota—and they are diverse. One involves all state agen-cies; another is a program within a state agency.Two of the programs target environmental issues—one is a state agency, while the other is a multi-agency, public-private partnership involving allthree levels of government. The programs’ perspec-tives vary on exactly howstrategic planning andperformance management are integrated, but eachdemonstrates the power of integrated strategic plan-ning and performance management to supportresults-based governance.STATE OF FLORIDA Florida Statute 186.002, enacted in 1984,requires Florida’s executive departments to pro-duce five-year agency strategic plans (ASPs) thatalign with the State Comprehensive Plan.Agencies must update their ASPs annually,including an internal assessment of (a)programstrengths and weaknesses and (b)opportunitiesand threats likely to affect program goals. Administrators interviewed during the sitevisit agreed that some agencies quickly saw theadvantage of strategic planning and performancemanagement,while others did not (theDepartment of Transportation was an early con-vert, and an example from that agency is describedin more detail below). Only when the ASPs werelinked to the budget process, using performanceindicators, did all agencies take the strategic plan-ning requirement seriously. The connection between strategic planningand performance measurement has improved theunderstanding and use of both processes. Forexample, the Department of Law Enforcement’s2000–2004 ASP restates several goals from the1999–2003 version by using measurable terms.The phrase “Provide quality, useful, and compre-hensive information to prosecutors and courts”has become “Increase the amount, quality, andscope of information provided to prosecutors andcourts.” The revised goal enables the departmentto quantify performance and track progress.The Department of Community Affairs CoastalManagement Program (CMP) is another goodexample