·
5 minute read
(Updated April 2024)
Implementing strategic management can help public sector organisations improve day-to-day decision-making, assess problems and set measurable goals to determine success.
In fact, 75% of successful organisations have a system in place to inform and manage their strategy.
Strategic management can provide benefits and challenges in the public sector, but what is it and how can it potentially help your organisation?
In this post, you'll learn what strategic management is, why it's useful in the public sector and how to overcome the challenges of using strategic management.
Jump Straight to:
- What is Strategic Management in the Public Sector?
- What are the Benefits of Strategic Management in the Public Sector?
- The 5 Stages of the Strategic Management Process
- What are the Challenges of Strategic Management in the Public Sector?
What is Strategic Management in the Public Sector?
Strategic management in the public sector is a management system that focuses on planning, implementation and measurement. This form of management focuses on an organisation’s resources and how they can be best utilised to reach certain objectives.
In the public sector, examples of strategic management could be identifying targets, realigning financial and human resources or reorganising leadership to see the execution of specific goals.
For example, a school or college may have noticed a reduction in interest from potential new students. A strategy could be to distribute funds to focus on a recruitment drive or marketing.
For an effective strategy, ensure you set measurable goals to determine success and know how to achieve them.
What are the Benefits of Strategic Management in the Public Sector?
Crafting a strategy can give employees a clear structure and measurable goals to work towards. It also enables senior management to focus on an organisation’s bigger picture and take a step back from solely concentrating on day-to-day issues.
A good strategy provides a framework for all decision-making in a public sector organisation. From the distribution of funds to day-to-day decisions, setting a clear goal can provide a focus for all employees.
Strategic analysis of an organisation is also a great way to identify strengths, weaknesses and opportunities. Public sector organisations can set targets to address problems, enhancing their value within the community.
Look to form your strategy by understanding current issues, analysing external factors and looking ahead to the future. Then, translate your plan into measurable goals aiming toward your target.
A notable example of a public sector strategy is the UK government’s aim for the country to become ‘net-zero’ by 2050. To execute the strategy, measurable and financial goals have been established.
These goals include ending the sale of new petrol and diesel cars from 2030, £1 billion of support to electric vehicle supply chains and £1.3 billion towards electric vehicle charging facilities across the UK.
As well as these main aims, the strategy will feed down to more local levels of government. Local goals might include how infrastructure will adapt to accommodate the increase of electric vehicles.
The 5 Stages of the Strategic Management Process
When it comes to the process of strategic management, there are usually five key stages that are universally acknowledged by organisations and experts. These stages are goal setting, analysis, strategy development, strategy implementation and evaluation.
1. Goal Setting
The purpose of goal setting is to understand and establish your organisation's vision. This should clarify what your organisation wants to achieve and why. Once you know this, you can create the individual goals that need to be achieved in order to reach these objectives.
This stage consists of identifying three key factors:
- Short term goals
- Long term objectives
- Identify the process of how to accomplish your objective
During this process, it is important that your goals are detailed, realistic and always follow the values of your vision.
2. Analysis
This stage is the most important as it will inform the next two steps.
In this stage, you should gather as much information and data relevant to accomplishing your vision. The main focus of the analysis should be to understand the needs of your organisation, its strategic direction and identify initiatives that will help your organisation grow.
You should also analyse any external and internal factors that may affect your goals and objectives.Analytical tools such as a SWOT analysis will help to identify the strength and weaknesses, and the opportunities and threats.
3. Develop the Strategy
To develop your strategy, first you must review the information revealed from your analysis.
Determine if your organisation has the right resources (team, technology, equipment, budget etc.) to achieve the set objectives and goals, how exactly it will achieve them and which resources will be used for each goal. This is called resource allocation. Resource allocation is an important process of strategic planning where available resources are strategically assigned to an initiative for maximum impact.
Also, you should identify any areas where your organisation may need external assistance.
Prioritise issues in order of how important they are to your success, and then develop a strategy to address each issue.
4. Implement the Strategy
During this stage, employees within your organisation must be made clear of their responsibilities and how exactly they contribute towards the overall goal.
A performance management process might come in handy here. The goal is to help employees develop their skills to enable them to perform better in their roles while also accomplishing the strategic goals of the organisation.
Read our blog to learn How to Monitor Staff Performance at your organisation.
Furthermore, it is essential to secure the necessary resources and funding for the strategy at this stage. Once the funding is secured and the employees are prepared, the plan can be put into action.
5. Evaluate
The final stage of strategic management is to evaluate the overall effectiveness of the strategies implemented. This should be an ongoing process where internal and external issues are consistently reviewed, and corrective actions are made where necessary. If after the changes are made, the plan is still unsuccessful or stagnant, you should go through the strategic management process again and reevaluate.
You should measure the progress of the strategy by comparing the actual results against your plan and goals.
A continuous improvement methodology should be implemented to ensure that organisational processes are continually refined to increase efficiency, quality, and user satisfaction.
What Are the Challenges of Strategic Management in the Public Sector?
Strategic management can be complex. In a 2012 survey, just 2% of leaders were confident that they would achieve 80-100% of their strategy’s objectives. This shows it has been a challenge for quite a while.
Even in private-sector companies, implementing a strategy can present difficulties. While 80% of leaders believe their companies are good at crafting a strategy, just 44% say they’re effective at implementing one.
Strategy success can depend on either innovation or investment, both of which can be hard to implement or obtain. These two factors can also provide risks, so there may be resistance to this within the public sector.
It can also be challenging to focus on the future. Strategic management requires organisations to predict the future environment, so political or governance changes can significantly impact strategy.
Despite the challenges, a clear, effective strategy remains a productive way to align employees toward company objectives and measure success. By outlining measurable targets, an effective strategy can influence all levels of an organisation and lead to positive outcomes in the public sector.
This all starts by honing your skills as a leader — our new handbook can help with that.
Become a More Effective Leader in Your Organisation Today
Our Leadership Handbook provides strategies to lead your team to success. It details the benefits of a high-performing team, what makes a good leader and much more — full of tactics and techniques to help you become a more effective leader.
To download your free copy, click the button below.
