Strategic Management in the Public Sector: Concepts, Models, and Processes

Author(s): Theodore H. Poister and Gregory D. Streib

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Source: Public Productivity & Management Review, Vol. 22, No. 3 (Mar., 1999), pp. 308-325
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 STRATEGICMANAGEMENT
IN THE PUBLIC SECTOR
Models,andProcesses
Concepts,

THEODORE H. POISTER
GREGORYD. STREIB
GeorgiaStateUniversity

Effective publicadministration intheage ofresults-oriented management requires

publicagenciestodevelopa capacityforstrategic management, thecentral manage-
mentprocessthatintegrates allmajoractivities andfunctions anddirects themtoward
advancingan organization's strategic agenda.Strategic management is concerned
withstrengthening thelong-term viability andeffectiveness ofpublicsectororganiza-
tionsin termsofbothsubstantive policyandmanagement capacity.It integrates all
othermanagement processes toprovide a systematic,coherent, andeffective approach
to establishing,
attaining, monitoring, andupdating an agency'sstrategic objectives.
Strategic is
management integrative in nature in thesenseof (a) focusing attention
acrossfunctional divisions andthroughout variousorganizational levelson common
goals,themes, andissues;(b) tying internal management processesandprogram ini-
todesiredoutcomes
tiatives intheexternal environment; and(c) linking operational,
tactical,
day-to-day decisionstolongerrunstrategic objectives.Particularly giventhe
dynamic politicalandinstitutional environment within whichmanypublicagencies
operate,an effective strategicmanagement capabilityis essentialformaintaining or
strengtheningthefitbetween theorganization anditsexternal stakeholders andman-
agingforresultswithina clearlydefined context ofmission,mandates, values,and
vision.
Strategicmanagement has beenaddressedin thepublicadministration literature
(Koteen,1989;Nutt& Backoff, 1992;Rabin,Miller,& Hildreth, 1989;Steiss,1985)
butbynomeansas extensively as hasitsmostcritical component, strategic planning,
orothermanagement approaches suchas totalquality management. However, a more
recentarticlebyVinzant andVinzant (1996a)goesa longwaytoward refocusing ap-
propriateattention on theroleofstrategic management inthepublicsectoranddis-
cussingimplementation issuesandstrategies inan instructive manner.
Thepurposeofthepresent articleis toraiseawarenessofthecentralimportance
of strategicmanagement in government, definethecriticalelementsin a holistic
modelof strategic management, discussthestrategic management process,and

PublicProductivity Review,Vol.22 No. 3, March1999 308-325

& Management
( 1999Sage Publications,
Inc.
308
 Streib
Poister, MANAGEMENT 309
/STRATEGIC

clarifytherelationshipbetweenstrategic
managementand othermanagement pro-
cesses. Briefexamplesdrawnfroma fewstateandlocal governmentunitsare pre-
sentedto illustrate management
strategic conceptsandprocessesand makingthem
moreaccessibletopracticing publicmanagers.

inGovernment
ManagingStrategically
In theongoingrushofactivities,
competing demandsforattention, andthepressof
day-to-day decisions,focusingona viableandresponsive agendaas thecen-
strategic
tralsourceof direction, and priorities
initiatives, is of fundamental importance.A
strongstrategicmanagement capabilityis essentialbecauseitprovidesbotha short-
termanda long-term senseofdirectionfora governmental toitsinter-
agencyrelative
nalandexternal environments,whichcouldbe shifting Changesinsocie-
continually.
talneeds,politicaltrends,intergovernmental relations, andcitizen
fiscalconditions,
expectationsarelikelytoalterthemixofprogrammatic andresource
responsibilities
requirements facinglocal governments. Anticipating these possiblysubstantial
changesandadapting tothemproductively requiresthetypeofforward-looking, flexi-
ble,andeffective responsesthata strongstrategic management capacitycan helpto
provide.

STRATEGICPLANNINGANDSTRATEGICMANAGEMENT
Although management
strategic oftenis discussedas anextension ofstrategicplan-
ning,andthetwotermsoftenareconfusedandusedinterchangeably, theyarebyno
meanssynonymous. Strategicplanninghas beendefinedas "a disciplinedeffort to
producefundamental decisionsandactionsthatshapeandguidewhatanorganization
is,whatitdoes,andwhyitdoesit"(Bryson,1988,p. 5). It blendsfuturistic thinking,
objectiveanalysis,and subjectiveevaluationof goals and priorities to chartfuture
coursesofactionthatwillensurethelong-run andeffectiveness
vitality oftheorgani-
zation.In contrastto themoreclosed-system of traditional
orientation long-range
planning andconventionalprogram planning, planning
strategic is a "bigpicture" ap-
proachthat

* is concerned withidentifyingandresponding tothemostfundamental issuesfacingan

organization;
* addressesthesubjectivequestionofpurposeandtheoftencompeting valuesthatinflu-
encemissionandstrategies;
* emphasizestheimportance ofexternaltrendsandforcesas theyarelikelyto affectthe
agencyanditsmission;
* attempts bytakingintoaccounttheconcerns
realistic
tobe politically andpreferences of
internalandespeciallyexternal stakeholders;
* reliesheavilyontheactiveinvolvement ofsenior-level managersandsometimes elected
assistedbystaffsupport
officials, whereneeded;
* requiresthecandidconfrontation ofcriticalissuesbykeyparticipantstobuildcommit-
menttoplans;
* is actionorientedand stressestheimportance of developingplansforimplementing
strategies;and
310 PPMR/March1999

* focuseson implementing theorganization

decisionsnowso as toposition for
favorably
thefuture.

Strategic management sharesthesesameattributes, butitis a muchmoreencom-

passingprocessthatis concerned withmanaging anorganization ina strategic manner
on a continuing basis.Strategic planningis a principal element butnottheessenceof
strategic management, whichalso involvesresourcemanagement, implementation,
andcontrol andevaluation (Halachmi, Hardy, & Rhoades,1993,p. 165;Steiss,1985,
p. 9). VinzantandVinzant(1996b)characterize strategicplanning as thecornerstone
ofstrategic management, buttheygoontosaythat"successful implementation ofstra-
tegicmanagement requires an assessment oforganization capacitiesin suchareasas
managerial capability, powerstructure, culture,leadership, andorganizational struc-
ture"(p. 203). Strategic management mustprovidea processfordeveloping strategic
plansandupdating themperiodically, whichmayinvolvea "strategic planning sys-
tems"approachlayereddownthrough functional divisions andoperating units,butit
also mustprovidethemeansforensuring thatstrategic plansareimplemented and
monitored effectively.
Koteen(1989)defines strategicmanagement as a broadconcept that"embraces the
entire setofmanagerial decisions andactionsthatdetermine thelong-run performance
ofanorganization" (p. 18),whereas Toft(1989)portrays itas "anadvancedandcoher-
entformof strategic thinking, attempting to extendstrategic visionthroughout all
unitsoftheorganization, encompassing everyadministrative system" (p. 6). Strategic
management doesnotoccurwhentopexecutives micromanage operations toensure
uniformity; rather,itoccurswhendecisionsandactionsatalllevelsaredriven bya few
fundamental strategiesorpoliciesthatarestrongly endorsed as beingcriticalforim-
proving an agency'sperformance overthelongrun.A strategically managedpublic
agencyis oneinwhichbudgeting, performance measurement, humanresource devel-
opment, program management, andother management processes areguidedbya stra-
tegicagendathathasbeendeveloped witha buy-in from keyactorsandcommunicated
widelywithin theorganization andamongexternal constituencies. Strategic manage-
mentis concerned withimplementing strategiesandmeasuring performance as wellas
monitoring trendsand identifying emergingissues thatmightrequirestrategic
responses.
Strategicplanning hasgainedwidespread currency ingovernment. Agencymanag-
ersnowviewitas a valuabletoolforcharting future directions inchanging andsome-
timesturbulent environments. Whatwasanexciting newtoolforpublicmanagers15
yearsagohasbecomeorthodox publicmanagement. A recent survey ofstateagencies
foundthat60% of themreportusingsome formof strategic planning(Berry&
Wechsler, 1995).Similarly, a 1993survey ofmunicipal managers foundnearly 60% of
therespondents indicating thattheirjurisdictionsusedstrategic planning, withnearly
40% usingitona citywide basisandtheother 20% usingitinselecteddepartments or
programs (Poister& Streib,1994).
Governmental unitshavebeenslowertoimplement full-fledged strategic manage-
mentprocesses, inpartbecausetheyrequirea substantial investment intimeandre-
sourcesas wellas a sustained commitment overtime.However, as publicmanagers
haverecognized thattheimplementation ofstrategies andtheongoing management of
 Streib
Poister, MANAGEMENT 311
/STRATEGIC

anagency'sstrategicagendaarejustas important as theinitialplanning,theyhavebe-

guntoembrace the concept
holistic ofstrategicmanagement. Moreover, manypublic
agenciesarenowbeingrequiredtodevelop a strategicmanagement capacity.At the
federallevel,theGovernment Performance andResultsActof 1993(GPRA) requires
federalagenciestodevelop(a) strategic5-yearplansthatidentify goals,and
missions,
objectivesanddescribehowtheywillbe achieved;(b) annualperformance plans,tied
to proposedbudgets, thatalso identifyindicatorsformeasuring theoutputs,service
levels,andoutcomesproducedbyeachprogram; and(c) annualperformance reports
comparing actualprogram performance topreviously setgoalsandobjectives.Most
stategovernments have passed similarlegislation(Broom,1995; Melkers& Wil-
loughby, 1998),andstatewide programs suchas OregonBenchmarks, TexasTomor-
row,andMinnesotaMilestones, led bya centralized
typically budgetorplanningof-
fice,bothrequireandassistoperating departments in developing theirownstrategic
management capacity.

IMPLEMENTINGSTRATEGIES
publicmanagers
As effective know,organizationsmoveintothefuture bydecisions
andactions,notbyplans.Ifplansarenotimplemented ina verypurposefulway,then
willnottakehold,no matter
thestrategies howcompelling theplanning
orinspiring
process.Strategicmanagement mustprovidefortheimplementation of strategies
throughvehiclessuchas actionplans,thebudgeting process,theperformance man-
agementsystem, changesin organizational
structure,andprogram andprojectman-
agement.Theseandother"management levers"areusedbyeffective manag-
strategic
erstodrivemacro-level downintotheirorganizations
strategies toensurethatmajor
decisionsaredesignedto advancethesestrategiesor,attheveryleast,areconsistent
withthem.

The Role ofStrategicManagement

management
Strategic is nota linearprocessof planning,implementation,and
evaluation.
Rather,itentailsmanaginga publicagencyfroma strategic
perspectiveon
an ongoingbasistoensurethatstrategicplansarekeptcurrentandthattheyareeffec-
tivelydrivingothermanagement processes.Strategicmanagement requiresthe
following:

1. continualmonitoringof the"fit"betweentheorganization and its environmentand

external
tracking andforcesthatarelikelytoaffect
trends thegovernmental jurisdiction
or agency;
2. shapingandcommunicating tobothinternalandexternal audiencesa clearvisionofthe
typeoforganizationthegovernmental unitis strivingtobecome;
strategic
3. creating agendasatvariouslevels,andinall partsoftheorganization,anden-
suringthattheybecomethedriving forceinall otherdecisionmaking;and
4. guidingallothermanagement processesinanintegrated manner tosupport andenhanice
agendas.
thesestrategic

The overallpurposeofstrategic
management commitment
is todevelopa continuing
tothemissionandvisionoftheorganization
(bothinternally the en-
andin authorizing
312 PPMR/March1999

Labor Custoner/Constituent
Relations Interfaces
Internal
Communications PiulicRelations

Organizational Intergovernmental
Culture Relations

Resources
Human Legislative
Development I
Values . Agenda
MiLssion
Performance Vision Pmgram Planning
Management 0 4 andEvaluation

Budgting and P
Piogram and Project
FinancialManagement Management

Administrative >< t 4 k-. r -; ServiceDelivery

Piocesses
Precesses ~~~~~~~Systems
Organizational Performance
Structure Measurement

Figure1. A Proposed Management

Strategic Model

nurture
vironment), a culture
thatidentifies themissionandvision,
withandsupports
andmaintaina clearfocusontheorganization's all itsde-
agendathroughout
strategic
cisionprocessesandactivities.

A STRATEGIC MANAGEMENT MODEL

Figure1 presentsa modelofstrategic management thatmightbe usefulformany

publicmanagers. Atitscorearetheunderlying valuesthataremostimportant tothe
agency,itsmissionwithin thegovernmental systemandthecommunities orconstitu-
enciesitserves,anda visionofwhattheagencyshouldlooklikeinthefuture. Forstra-
tegicmanagement tobe successful,theremustbe a sharedcommitment tothevalues,
mission,andvisionbothwithin thegovernmental unitoragency(including electedof-
ficialsorappointedexecutives, and
managers, employees)
professional andamongthe
relevant stakeholders.
external Thus,an importantpartof strategic
management en-
and
tailsdeveloping refining a clearsenseofvalues,mission,and vision and working
tobuildandmaintain widespread ownership ofthem.
Aroundtheouterringofthemodelarea number ofmanagement responsibilities
thatmustbe coordinated intermsoftheirstrategicimplicationstodevelopa strategic
management capacity.Thesefunctions,whicharemeanttobe illustrative rather
than
exhaustive,areorganized roughly inaccordancewiththecompeting valuesmodelof
organizationalperformance (Quinn& Rohrbaugh, 1981).The elements showninthe
 Poister,
Streib/STRATEGIC MANAGEMENT 313

upperrightquadrant ofthemodelall concernexternal relations including customer/

constituent interfaces,publicrelations, intergovernmental relations,anda legislative
agenda.In thelowerrightquadrant aremanagement responsibilitiesconcerning the
programs and servicesprovidedbytheagencyor governmental unitincluding pro-
gramplanning andevaluation, servicedelivery systems, program andprojectmanage-
and
ment, performance measurement. Thelowerleftquadrant ofthemodelconcerns
internalmanagement functions including performance management, budgeting and
financialmanagement, administrative processes, andorganizational structure.Theup-
perleftquadrant containshumanrelations elements concerning humanresources de-
velopment, organization culture, internalcommunications, andlaborrelations.
As indicatedin Figure1,thereis a two-directional relationship betweenall these
elementsandthevalues,mission,andvisionthatareatthecoreofthestrategic man-
agementprocess.Thismodelis bestthought ofas a constellation ofkeymanagement
functions revolving aroundthecorevalues,mission, andvisionofanypublicsectoror-
ganization. Theforcethatkeepstheminorbitconsistsofthestrategies thatarebeing
formulated, assessed,implemented, andevaluatedon an ongoingbasis.Forexample,
strategicmanagers mustbe concerned withtherelationships betweenexternal stake-
holdersandtheorganization's values,mission,vision,andstrategies. Externalrela-
tionsmustbe conducted withaneyetosoliciting inputforstrategic planning orupdat-
ing as well as buildingcooperative relationshipsforimplementing and evaluating
strategies. The strategic management teammustensurethatitsvisionandstrategies
arecommunicated effectively toexternal constituencies tobuildandmaintain public
supportforthedepartment or agencyand itsstrategic agenda.Also, theremustbe
mechanisms andprocessesinplaceforsoliciting andassessingfeedbackfromthese
externalstakeholders, including customers andconstituents, themediaandpublicat
large,othergovernmental unitsandjurisdictions, andtherelevant legislativebodies,to
monitor trends andforcesandtoanticipate changesintheagency'senvironment that
mightaffect itspoliciesortheabilityto serveitsmission.
Regarding thelowerrightquadrant ofthemodel,programs, projects, andservice
deliverysystems often are the vehicles used forimplementing strategicplans.On the
otherhand,thecurrent statusofprograms, projects,andservicesonanynumber ofdi-
mensions suchas priorities, targeting,quality,andefficiency andeffectiveness oftenis
a criticalconsideration intheidentification ofstrategicissuesandthedevelopment of
strategies. Thus,thestrategic management processmustensurethatsystems forpro-
gramplanning andevaluation, servicedelivery,program andprojectmanagement, and
performance measurement aredriven bytheagency'svalues,mission,andvisionand
thatstrategizing at variouslevelsis informed by thefeedbackprovidedby these
systems.
Similarly, thosewho areresponsible forstrategic management mustensurethat
budgeting andfinancialmanagement systems, performance management, and other
administrative processesare designedto facilitate theimplementation of strategic
plansand to reinforce thefocuson strategy throughout thegovernmental unit.De-
signedandusedappropriately, thesesystems also canprovideinformation thatis in-
dispensableforfurther strategic planning, assessment, andevaluation. Strategicman-
agersalso needtobe awareofthelinkagesbetweenstrategy andstructure. Theymust
recognizethatpurposeful structuring can facilitate
strategy implementation andthat
314 PPMR/March1999

thereporting relationships
inherent instructurecouldfacilitate
orimpedethefeedback
ofinformation thatcouldbe vitalforfurther strategic
planning andevaluation.
Finally,in theupperleftquadrant of themodel,thestrategic management team
mustbe criticallyconcerned withthehumanresources andtheinternal relationalas-
pectsoftheagencyorjurisdiction. A primary challengeforstrategicmanagers is to
monitor theorganizationalclimatecontinually andtonurture a culture
thatis respon-
sivetopurposeful changeandattuned tothevalues,mission, andvisionthatareatthe
coreoftheprocess.Strategic managers also needtoestablish performance manage-
mentsystems andhumanresource development programs thatareconducive toimple-
menting newstrategies in termsofbothmotivation andcapabilities.Moreover, suc-
cessfulstrategicmanagement requiresthe development and dissemination of
innovations andencourages theflowofusefulfeedback frommanagers andemploy-
ees regarding andeffectiveness
theviability ofstrategies.
Thesecommunication chan-
nelsalsocanbeusedto"sell"newinitiatives anddevelopa strong sharedcommitment
andtheirunderlying
to strategies premises throughout theorganization.

THE GEORGIA DEPARTMENT OF ADMINISTRATIVE SERVICES

To a largeextent, strategicmanagement is concerned withmanaging thesevarious

functions in a coordinated fashion atthehighest levelsso thattheywillcomplement
andreinforce eachotherinmovingthepublicorganization in a particulardirection.
of
Forexample,theGeorgiaDepartment Administrative Services(DOAS) is a large,
multifunctional agencythatprovides a widerangeofsupport services,from "bluecol-
lar"servicessuchas motor vehiclerentalsandmailandcourier services,tohigh-tech
servicessuchas localareanetwork support,datacommunications networks, anda dis-
tancelearning program, tootheroperating departments inthestategovernment. Under
Commissioner DottyRoach,DOAS has revieweditsstrategic prioritiesand deter-
minedtostrengthen customer serviceandincreasecustomer satisfactionas itsprinci-
pal strategic direction,reinforcing a commitment madeunderformer Commissioner
Dave Evansas theagencywas beginning to "reinvent"itselfby replacing itsself-
conceptas a largely regulatory department witha visionofa customer serviceagency.
Withanoverarching visionofmaking thedepartment "thebestbusinessrunbya gov-
ernment," strategic thathavebeenundertaken
initiatives tomovefaster andfurther in
thisdirection workthrough manyofthemanagerial elements showninFigure1.
Forexample,DOAS hassubstantially reorganized bycreating a newInformation
Technology (IT) unitthatconsolidates theformer Telecommunications andComputer
Servicesdivisionstoprovidecustomers witha "seamlessweb"oftheseofteninter-
relatedservices.Rather thantheservice-based sectionsinthepriorstructure, thenew
IT unitis functionally organized aroundtechnology research anddevelopment, prod-
uctmanagement, servicedelivery,andcustomer accountmanagers toprovide thecen-
tralpointofcontact forallIT services.Eachcustomer agencywillworkwitha specific
accountrepresentative, whowillhandleservicerequests andinterface withthetechni-
cal unitstodesigninformation andtelecommunications systems tomeetthecustom-
ers'needs.Furthermore, thevarious"helpdesks"thatprovide support forIT services
havebeenstreamlined ina morecustomer-friendly fashion.
 Streib/STRATEGIC MANAGEMENT
Poister, 315

Moregenerally, DOAS is emphasizing frequent and structured interactions with

customers to betterunderstand whatcustomer agencieswantandneedfromthede-
partment, theirevaluation ofcurrentservices,andsuggestions forimproving service
delivery.Whereasin thepast mostcustomercommunications arose aroundcom-
plaints,thedepartment now uses a numberof forumssuch as customeradvisory
groupsandconferences, focusgroups,andperiodicsurveys tosolicitcustomer input
andfeedback ina largenumber ofprogram areasona regular basis.Thecustomer con-
ferences, andinsomeprogram areascustomer training programs, alsoprovideDOAS
withan opportunity toprovidecustomers withinformation regarding theseservices,
department operations,andwhatcustomers canexpectfrom thedepartment inparticu-
larserviceareas.
DOAS hasusedothermanagement leverstoadvancethisoverallcustomer service
strategy.To providecustomer agencieswithgreater flexibilityintheirpurchasing op-
erations,forexample,thedepartment developeda legislative proposaltoraisethelevel
of"delegatedauthority" fromthepreviously existing $5,000limitso thatstateagen-
cies can nowmakepurchases ofupto$50,000incostontheirown.Theinstitution of
plastic"purchasecards"is another innovation thatis enablingstateagenciestomake
neededpurchasesmoreefficiently. Withtheimplementation oftheseandotherpro-
gramchanges,thedepartment's purchasing unitis nowemphasizing itstraining and
consulting services forcustomer as
agencies opposed to itsformer primary roleas pur-
chasingagent.
Throughout itsoperations, DOAS has beenusingqualitymanagement principles
andtechniques toimprove themechanics ofservicedelivery. Forexample,thedepart-
ment'scentralofficesupplyfunction has totallyreconfigured itswarehouse, reengi-
neeredworkprocesses, andforged moreproductive relationshipswithsuppliers toim-
prove the qualityof serviceto the state agencies,school districts,and local
governments itserves.Theresulthasbeena dropintheaverageshipping timeofitems
tocustomers from5 daysto2 dayswhileatthesametimeimproving theaccuracyof
shipments and theaccompanying documentation. At present, DOAS also is reengi-
neering itsservicedelivery mechanisms tocreatea department-wide orderfulfillment
processthatis designedto simplify theordering processforcustomers anddramati-
callyshorten turnaround timeinresponding torequestsforproducts orservices.
One moreexampleofa programmatic initiativeto strengthen customer servicein
DOAS concerns thestate'sworkers'compensation program. As therisingcostofrisk
management hasresulted inmuchgreater visibilityinrecentyears,thedepartment has
evaluatedits programand plannedsubstantial changesin itsapproachto workers'
compensation. Perhapsmostimportant, thedepartment hasidentified employeeswho
areinjuredonthejob as primary customers oftheprogram inaddition totheemploy-
ingagency.Thiswillresultinmorecarefulattention beingpaidtotheneedsofinjured
employees andtheimplementation ofanaggressive return-to-work program designed
to substantially reducethenumber ofemployeeworkdays thatarelostduetoon-the-
job injuries.In addition, DOAS is planning a transitiontoa managedcareapproachto
themedicalservicesprovidedto injuredworkers in theinterests ofbothimproving
serviceandreducing costs.
Undergirding thesestructuraland programmatic initiativesare the humanre-
sourcesandculturalchangesthathavebeentakingplace at DOAS. Although Roach
316 PPMR/March1999

hasbrought ina fewkeyindividuals fromoutsidethedepartment, shehasfilledmost

high-level managerial positions bypromoting peoplefromwithinwhohaddemon-
strateda commitment andtheability tostrengthen customer service.Thefocusoncus-
tomer is a
service principal theme inweekly meetings ofthetopleadership team,peri-
odicretreats involving a broader base ofmanagers, and communications issued bythe
commissioner. All thishas helpedto engender an organizational culture prizes
that
qualityandcustomer service.Thisis reinforced bythedepartment's useofthestate's
newperformance management system, GeorgiaGain,whichusesa management by
objectives (MBO)-typeapproach forproviding direction forindividual managers and
employees andevaluating theirperformance basedontheextent towhichtheyachieve
personalized objectives.AtDOAS now,manyoftheseobjectives refertoqualityand
customer service.
Coordinating thismultiplicityofstrategies,whichhavebeeninitiated at different
timesandsometimes falltodifferent managers toimplement so as tomaximizetheir
impactonimproving customer is thejob ofstrategic
satisfaction, management. Many
oftheseactivities arebeingpursued inparallel,often bydifferentindividuals indiffer-
entpartsoftheorganization, buttobeeffective theyneedtoform a coherent whole.By
settingtheseinitiatives up as specificprojectswithrealistic actionplans,identifying
themas critical responsibilitiesofvarioussenior-level managers, tracking progressin
theseareasona regular basisintopleadership teammeetings, andidentifying prob-
lemsearlyon andresolving themeffectively, thecommissioner andleadership team
constantly attend totheseinitiativestoensurethattheyarebeingpursued relentlessly
tostrengthen DOAS's performance intheneartermandthelongrun.

The StrategicManagementProcess
Essentially,strategicmanagement is a vehicleforproviding forward-looking lead-
ershipregarding themostfundamental issuesofconcern toanorganization anditsen-
vironment ina verypurposeful, systematic, andeffective manner. Attheheartofthe
processis "thecollectivemanagement ofa strategicagendathatchangesas anorgani-
zation'sproblems andopportunitieschange.Effective strategic management requires
intensive,continuous, and collectiveinvolvement of seniormanagement" (Eadie and
Steinbacher, 1985,p. 425).
Effective strategicmanagement requires theformation ofa strategic management
grouptoprovide leadershipfortheprocess.Typically, themakeup ofthisgroupwillin-
cludethechiefexecutive, top-linemanagers, andkeyexecutive staffmembers. In a
smallmunicipal forexample,
jurisdiction, thestrategic management groupmight con-
sistofthemayor orthecitymanager andtheheadsofseveraloperating departments. In
a largeurbancounty government withnumerous operating the
departments, strategic
management teammight includethecounty manager, thedeputy managers whoover-
seeclusters ofoperating departments, and theheads ofstaffunitssuch as planning and
finance.Inmanystate and federal the
agencies, strategic management group includes
thesecretary, commissioner, oradministrator alongwiththeheadsofthemajordivi-
sionsorbureaus. Whereasstrategicmanagement is properlya linemanagement func-
tion,thestrategic management groupoftenwillrequirestaffsupport fromvarious
 Poister,Streib/STRATEGIC MANAGEMENT 317

areastogather andsynthesize relevant information, analyzeoptions, formulate plans,

andevaluatestrategies.
Itis theresponsibilityofthestrategic management teamtoprovidethestructure for
developing andupdating strategicplansandforguiding theirimplementation inall ar-
eas. Becausestrategic management is a continuous process,thestrategicmanagement
groupshouldmeetona regularbasistodiscussstrategies, monitor progress,
evaluate
effectiveness,andgenerally maintain a collectivefocuson thestrategic agenda.This
includesidentifying newlyemerging strategicissues,gaugingproblems andopportu-
nitiesas theydevelop,modifying strategies, andproviding directionandcontrolover
implementation planstoadvancethestrategic agendaeffectively. Periodically,itmay
resultin thedevelopment ofnewstrategic initiatives.
The strategic management processalso mayinvolvea strategic planningsystems
approachin whichplanning effortsat variouslevelsarecentrally coordinated within
theframework ofan organization-wide ora jurisdiction-wide strategic
planning pro-
cess.Forexample,a city'sstrategic management groupcoulddevelopanoverallstra-
tegicplanthatidentifies strategicgoals and objectives, theoutlineof strategies for
achieving them,andtheassignment ofimplementation responsibilities.
Although de-
partment headsandcertain otherstaff officershavebeeninvolved inthiseffort,
thefo-
cus appropriatelyhasbeenoncitywide issuesandstrategies. Withtheadoptionofthis
overallplan,thestrategic management groupmightwelldirecttheoperating depart-
mentstoformulate theirownstrategic plans,whichrespond tomandates established in
theoverallplanandalso addressstrategic issuesattheirownlevel.
Atthesametime,thecity'soverallplanmight haveestablished goalsfora few"key
resultsareas"thatcrossdepartmental linessuchas therevitalization ofseveralsatellite
retailandcommercial centers orthe"reengineering" ofthejurisdiction's
procurement
processes.The strategic management groupmightthenconvenecross-departmental
taskforcesor actionteamsto formulate morespecificstrategies forachievingthese
goalsandtodevelopplansfortheirimplementation. Inaddition, thestrategic
manage-
mentgroupmight be requiring, reviewing, andapproving actionplansformovingboth
thedepartmental andcitywideinitiatives forward. Overtime,thestrategic manage-
mentgroupalso wouldbe monitoring theresultsofall thisactivity,assessingnewis-
sues,andstructuring planupdateefforts as mightbe necessary.
In additionto strategic planningactivities, the strategicmanagement process
clearlyrequiresa commitment tousingtheorganization's decisionprocessestofocus
attention andeffort onthestrategic agendatoachievestrategic goalsovertime.Thus,
thestrategic management process,as illustrated inFigure2,placesheavyemphasison
implementation as wellas on planning. To ensurethatstrategic planswillindeedbe-
comethedriving forcebehindoperating-level decisionsandactivities inan organiza-
tion,thestrategicmanagement teammustdevelopprocessesforallocating resources,
managing people,andmeasuring performance thataregearedtomovingthestrategic
agendaforward.
Oncestrategic planshavebeenadopted,thenecessary resourcesforimplementing
themmustbe identified and committed. As indicatedin Figure2, some typeof
results-orientedbudgeting system inwhichfunding canbe tiedtoparticular programs,
projects,oractivitiesanddirectly relatedtoplannedoutputs andimpactscanfacilitate
theallocationof budgetsso as to maximizetheirimpactin advancingthestrategic
318 PPMR/March1999

~~~~ R~~~~esults
Strategic ~~~Oriented
PlanningBugtn

External Internal
Monitoring Monitoring

Strategic Performance
Measurement Management

Figure2. The StrategicManagementProcess

agenda.Such a budgeting processcan be usedtoensurethatspecificstrategic initia-

tivesareadequatelyfundedandtoprovideincentives fordirectingongoingprograms
to support thestrategic agendawherever possible.
Similarly, strategicmanagement requiresassigningimplementation responsibili-
tiesforstrategic tospecificindividuals
initiatives andorganizational unitsandholding
themaccountable fortheresults.AnMBO-typeperformance management system, for
example,can be usedto incorporate lead andsupport regarding
responsibilities par-
ticularstrategic in performance
initiatives contractsforspecificsenior-level manag-
ers,oftenmembers ofthestrategic management groupthemselves. Theseindividuals
can,inturn, usetheperformance management processtolinktheseresponsibilities to
theirsubordinate managers, andso on downthrough theranks,withtheirefforts on
thesetasksweighingin heavilyin annualperformance appraisals,recognition pro-
grams,andtherewardssystemin general.By incorporating strategicplansintothis
typeofperformance management process,thestrategicmanagement groupcanestab-
lishclearlinesofaccountability forimplementing andmanagers
strategies, atalllevels
oftheorganization becomepersonally investedin advancingthestrategic agenda.
Finally,itis essentialthatthestrategicmanagement processincludetheidentifica-
tionand tracking of validmeasuresoftheorganization's performance in achieving
strategicobjectives.To theextent thatthesestrategicobjectivesrelatedirectlytoim-
provement intheperformance ofongoingprograms oractivities,
appropriate mea-
suresmay alreadybe imbeddedin existingperformance monitoring systems,but
qualitatively newstrategic oftenwillrequireneworadditional
initiatives performance
measures.Periodically tracking suchmeasureswillallowthestrategic management
 Poister,
Streib/STRATEGIC MANAGEMENT 319

groupnotonlytotieresults tobudgetallocationsbutalso,moreimportant, totrackthe

agency'sprogress in achievingstrategic
objectives. Thisresults-oriented feedbackis
criticalforconfirming success,revisingnextsteps,and/ordevelopingalternative
strategies.
Whereasthiscyclicalprocessusuallyoccursinsequential stepsonanannualbasis,
perhapswithsomeelements recurringmorefrequently onshorter cycles,thestrategic
management groupshouldconstantly be involvedwiththeoverallprocessthrough
monitoring boththeinternal organizationanditsexternal environment on an ongoing
basis,as indicatedinFigure2. Thisinvolveskeepinginformed abouttrends andissues
regarding thepoliticalandgovernmental arenas,partnering andcompetitive organiza-
tions,customers, andotherstakeholders
constituents, as wellas ongoingservicedeliv-
eryandconcerns ranging fromadministrativeprocesses, organizational
climate, inter-
nalcommunications, andthelikeas theyrelatetostrategic issuesandinitiatives.The
internalmonitoring maybe accomplished inpartthrough regularmanagement infor-
mationsystems, periodicemployeesurveys, andotherstructured datacollectionef-
butitalso takesplaceless systematically
forts, through informal
debriefings, conver-
sations,site visits,brownbag lunches,and "management by walkingaround."
Similarly, theexternal"intelligencegathering"is likelytorequiresynthesizing infor-
mationfroma variety of sourcesincluding publishedreports, professionalassocia-
tionsand "industry" groups,customerfeedback,advisorycommittees, and inter-
actionswitha variety ofexternalstakeholders.Whereasa structured processinvolving
thestepsshowninFigure2 is essential, an agency'sstrategic managerscan be truly
strategicintheirthinking anddecisionsonlyiftheyreallyunderstand whatis goingon
in theirorganization anditsenvironment.

THE PENNSYLVANIA DEPARTMENT OF TRANSPORTATION

Withtheadvantageofremarkable inleadership
continuity through threeverydif-
ferentgubernatorial thePennsylvania
administrations, Department ofTransportation
(PennDOT) has been able to strengthen itscapacityforstrategic management and
makeitthedriving forcefordecisionsmadethroughout thisagencyofsome 12,000
employees.FormerSecretary ofTransportationTomLarsoninitiated strategic
plan-
ningatPennDOT,createda strategic management committee (SMC), andtiedittothe
budgetprocesssome 15 yearsago (Poister& Larson,1988),andhistwosuccessors
havebroadenedanddeepenedtheprocessalongtheway.
Whereasstrategic planningoriginallywaslimited tothetopmanagement team,the
mostrecentroundofstrategic planning2 yearsago (ledbycurrent SecretaryofTrans-
portationBrad Mallory)involved150 PennDOTmanagersand 50 externalstake-
holdersincluding representativesfrommetropolitan planning federal
organizations,
agencies,privatetruckingcompanies,anda contractors association.Thiseffortpro-
duced eightstrategic goals gearedto "MovingPennDOT Forward,"emphasizing
themessuchas "maintenance first,"
intermodalism, customer-drivenservicedelivery,
strategic
leveraging ofavailableinvestment funds,andtheuse ofleading-edge tech-
nologyandwritten inbroadformso thattheyapplytoall transportation modesandall
partsofthedepartment.
320 PPMR/March
1999

PennDOT'sSMC consistsofthesecretary, sixdeputysecretaries, thedirector of

policy,thelegislative affairsdirector, thecommunications andcustomer servicedirec-
tor,thepresssecretary, andthechiefcounsel.Whereasthedepartment's Executive
Committee, whichincludestheseindividuals alongwitha fewothers, meetsforan
houreachMondaymorning fora moreoperationally oriented staff meeting, theSMC
hasa half-day meeting onceeachmonth. Thisgroupreviews progress onongoing stra-
tegicinitiatives,discusses"hot"issuesfacingthedepartment, reviewsspecialreports
andproposals brought byvariousdivisions, andmakesPennDOT'smostfundamental
decisionsregarding bothsubstantive policyandmanagement strategies.
The SMC providesguidelines fortheannualbudgetprocessanddetermines the
budgetthatis forwarded totheGovernor's BudgetOfficeandeventually tothestate
Inpreparing
legislature. thebudget, centralofficebureaus present proposals totheir
re-
spectivedeputy secretaries whilethe67 highway maintenance unitspresent proposals
totheirrespective district engineers. Thedeputies, inturn, present budget proposalsto
thesecretary andthedeputy secretary foradministration, andthe11district engineers,
whoseorganizations accountforthegreatmajority ofPennDOT'semployees andac-
tivity,
present their budget proposals totheentire SMC. Thesepresentations arebased
largelyondemonstrating whattheseunitsaccomplished inthepreceding yearinterms
of advancing PennDOT'sstrategic goalsandshowinghowtheirproposedbusiness
plansarekeyeddirectly to theinitiatives involved in "MovingPennDOTForward."
Majorissuesthatariseintheinternal hearings withthesecretary areforwarded tothe
SMC tobe resolvedbeforetheentire budget is In
package pulledtogether. pastyears,
budget proposals havebeen"sentbacktothedrawing board"becausetheyfailedtoad-
hereto thedepartment's strategic buttheprocesshasbeendeeplyinstitu-
priorities,
tionalizedbynow,andbudget proposals dotendtobehighly responsive tothestrategic
goals.Currently, theSMC is emphasizing theneedforoperating unitstohavea means
ofmonitoring progress alongtheselinesandrevising businessplansthroughout the
yearaccordingly.
Regarding performance management, thedeputysecretaries andotherexecutives
developsetsof specialinitiatives on a quarterly basisthataredesignedto advance
"MovingPennDOTForward." Thesequarterly initiatives, whicharearrayed around
thedepartment's strategic goalsandobjectives, arenegotiated as short-term perfor-
mancecontracts withMallory, whoholdstheseindividuals accountable forcompleting
theseplannedactions.Theexecutives, inturn, drillresponsibilities fortheseprojects
downthrough thesenior- andmiddle-level managers whoreport tothem, usingthede-
partment's MBO process,andtheir performance ontheinitiatives is incorporated into
theannualprocessofappraising individual managers' performance.
PennDOTmonitors theperformance ofitsongoing programs, quarterly initiatives,
andlongerterm projects inadvancing thestrategic planthrough a monthly progressre-
portthatis designed exclusively forthispurpose. Theprogress report, whichis distrib-
utedtoall seniormanagers, is organized according tothedepartment's eightstrategic
goalsandemploys a mixofproject milestone, program accomplishment, andoutcome
measurestotrackperformance intheseareas.Thisreport is reviewed inthemonthly
SMC meetings, andtherelevant sectionsarereviewedbytheindividual executives
withtheirrespective staffs,withproblems notedandcorrective actionstaken.The
progressreport is supplemented bya moredata-intensive statisticaldigestthatis used
 Poister,
Streib/STRATEGIC MANAGEMENT 321

tomonitor operationsandtheperformance ofongoingprograms ingreaterdetailona

monthly basis.This statistical
digestis usedprimarily
bythedeputysecretaries, bu-
reauchiefs,district
engineers,andcountymaintenance managersto tracktheopera-
tionstheysupervise,butbecausemanyofthedepartment's strategicinitiatives
arein-
tendedto improveservicedelivery qualityandroutineprogram performance, these
dataalso servein somewaysto trackPennDOT'sprogress in pursuing itsstrategic
agenda.

THE CITY OF CHARLOTTE

TheCityofCharlotte, NorthCarolina,is intheprocessofdeveloping an approach

to strategic management thateventually willincorporate all theelementsshownin
Figure2. As an organizing toolforintegrating variousperformance criteria initsstra-
tegicmanagement process,Charlotte is usingthebalancedscorecard (BSC) modelde-
velopedbyKaplanandNorton(1992,1993).Createdoriginally forprivate sectoruse,
theBSC modelfocusesonperformance froma customer perspective, aninternal pro-
cess perspective, anda learning organization perspectivein additionto thefinancial
perspective. Whereasthetoolinitially was developedas a meansoflinkingvarious
of
types performance measures to providea balancedpicture ofa company'sperfor-
2
mance, yearsago Charlotte the
beganusing fourperspectives as a framework forin-
tegrating goalsandobjectives, strategies,andperformance measuresacrossthebroad
spectrum ofcityoperations.
Charlotte's BSC processis beingled by CityManagerPam Syfert, assistedby
budgetandevaluation staffmembers, buttheactiveinvolvement ofthecitycouncilhas
beencriticaltoitssuccessso far.Figure3 showsthecitycouncil'spriorities fromeach
ofthefourperspectives. Clearobjectivestatements havebeendevelopedforeach of
thesepriorities, and "lead" and"lag" performance measureshavebeenidentified to
trackintermediate resultsandoutcomes, The customer-oriented
respectively. priori-
tiesreflect desiredpolicyoutcomes, whereastheprioritiesfrom theotherperspectives
arefurther linkedtotheseoutcomes todefinethematic packagesatthecorporate level.
Forexample,thecommunity safety themefocusesoncrimeprevention andincreasing
thepublic'sperception ofsafety byleveraging cityandcommunity resources tofight
crimemoreeffectively. All citycouncilprioritiesconcerned withexpanding non-city
funding, improving productivity,increasing positivecontactsin thecommunity, en-
hancingmanagement capabilities,closingtheskillsgap,andachieving a positiveem-
ployeeclimateareseenas beingessentialelements ofan overallstrategy to increase
community safety.
Whereasthecitycouncilfeelsownership ofthesecorporate priorities andobjec-
tives,thecitymanagerand administrative structuretakeownership of thestrategic
management process,whichatthispointstillis a workinprogress. Withthecitycoun-
cil's prioritiesestablished,eachdepartment orbusinessunithasbeenchargedwithde-
velopinga 1-yearbusinessplaninsupport ofthecorporate objectives. Thesebusiness
plansareintended toclarifythelinkagesbyaddressing thefollowing questions:"What
do youdo,whatprograms do youhave,andwhatstrategies canyoudeveloptosupport
ourcorporate andobjectives?"
priorities As one oftheunitstopilotthisprocess,the
CharlotteDepartmentof Transportation (CDOT) has developeda strategically
322 PPMR/March1999

0
Custo- ' I
I1 1
1~~~~~~~~P
.
F1g 1tmco ' I C

@h3m @T
Qam Om
'LLI -I=
~ ~
Linag Moe Refecin the.
Fiur3. Corporate-Leve
_III"11r *1
Chrot Cit Coni' Pr.Iorities
.... ....

>amhou~~~~~~~~~~~b 4 _
A

baiWale,staei hih-mpac proras ovaius

initiativs,objcivs and1f i
visions
aongwithattendanperformance----
measures.-Figure-4shows-CDOT's-obje---
Figure3. Corporate-Level theCharlotteCityCounclas Priorities
LinkageModel Reflecting

targetedfiscal1998businessplanorganized aroundtheBSC framework. Designedto

advancethecitycouncil'spriority ontheavailabilityofsafeandconvenient trane,por-
theplanidentifies
tation, thedepartment's missionandvision,strategic "rudders"or
basicvalues,strategic
initiatives, andhigh-impact
objectives, programs ofvariousdi-
visionsalongwithattendant performance measures. Figure4 showsCDOT's objec-
tivesand lead and lag performance measuresorganizedaroundthe fourBSC
perspectives.
Charlotte's
planningdepartment recently
developed anannualcycleforincorporat-
ingthe BSC plansandmeasures intothecity'soverallperformancemanagement pro-
cess.Withdepartmental business plansinplace,thecityintendstodrillresponsibility
forthemdowntotheoperating level.Through itsmanagement byresultssystem,per-
formance targetsandappraisalsforindividuals(or,insomecases,forgroupsorteams)
willbe tiedtothecity'soverallstrategic
plan.Atthispoint,therearenoformal links
betweentheBSC planning processandCharlotte's budgetingprocess,buttheinten-
tionistogradually from
transition thecurrent
lineitembudget toresults-based
budget-
ingbybuilding BSC objectivesandperformance measuresintothebudgetsystem.At
thatpoint,thecityofCharlotte shouldhavea comprehensive strategicmanagement
system inplace.

Conclulsion
Thisarticlehas soughtto raiseawarenessof thecrucialimportance
of strategic
in
management government and to overview
thecritical and
concepts components of
management
strategic in
processes publicagencies.A model the
reflecting integrative
 Poister,Streib/STRATEGIC MANAGEMENT 323

_ . ecilve Lead Measure Lag Measure

Cli Mlrrntatnr
Irensporstelon
system C-1 RepslrReeponso:repair trponseaction C-1 HighQuaitySreta: corrrtdotnoflone
C-1 TravelSpeed:averge erovel speedby mus a 90 raltng
C2 Operatethrbrnspodifton
system altiy and sected ocaltn C-2 Safety:
cOy-wde scoded rate;no.of
C-2Commute Timeovw 1
rg cornrnuiolim NghackrA boNstons
C-3 Developtie iranspoistlon
system onselectedcoeds C-3 Basic Mobiity:avetablyoipubrb

j
C-2 On-Thme Busie: pujbItranton-itm Ircane
Sr optimal
C-4 Delsrmrnr dteign
sysetm C-3 Progromnttroducad: neetyIrtroducad C-4 PlanProgress:% complete on2015
p5015,
p1ogtrams, orprogram speAcalhins TransporatlonPlan
servIce
C-5 nmprove quy C-5 Responesveness: % ofcitzenco ploints
endrequoestsresolvedia theCDOTlevel

fodlg
VF-Expsidnon-C")y F-i FundingLeverag*:dolarovausfrom
_F-F2 Coets:coalscompuredlo olher nov-Capsources
F 2 Mxobovanfloost mun1cpalles saior compelltlon F-f NowFunding
andprelate Soorce: dolorvaluv
mu
irom
vinocos notpreviouslyavatoblo

1-1(ntehkrucsrt cpacity 1-i CapitalInvestment-

$ alocatedtocapital I-1 CapacityRatilon:ncremntatl
capacity
hrltargetd
proleOcs ares bulA vs requirdby201fPlan
-2loScuroe
luretgerv-cepartne 1-2levoatg*fundlnglsarvoco partners:
new 1-2No.ofPaneras nurnbwi partnoers
vfundinghsouocapartners
Identliled 1-3SIrsetMaitnenance Cost:coslAns ml,
1-3krerrvoproducdvity 1-3CoatperUnitcostperunl 1-3Transit Passenge Costcost/pasgor
1-3Competitiveoutclng daofBdgetbid
conactswkhCononuniy 1-3Problem
t-4Incrseaspositive sootee& sctlon
identification- 1-4Customor
Surveys:survey
_-4 Customer Communications: no,'typobq concvr serice*quality resuls

Li idreoa sadomaled
ktemaiJon
systems L-1ITInfrotrntclume
cornpiul
rlalsoine L- Intformolon Access:efraleg
dalXsbtscrot COOT ih(foAtnwon
oval"b vs.uswroqukomrftni
f sd tem
L-2Enhbnce hology L-2Inform Tools:st e#gic
r
atlon
vatibl vs. userrequtrarnntl
tools
L-3 CloseSte bCes
gap L-3 SkiRgIdentifled: hr
keyekbbIdentfled L-3 SkiteTransfer:.kE evidencehrltsk
siatogckfnctions or)ob pedoemance
L-4 Empoww
empoyees L-4 EmployeeCtimateSurvoy:rosolsof 1-4 Employee GoalAtlignmnt lralning
I
emplteeysutrvy carer dtvekVmoas d wnth Mission

Figure4. CharlotteDepartmentofTransportationLead and Lag Measures

Note.CDOT = Charlotte IT = information
ofTransporation;
Department technology.

natureofstrategic management waspresented, andtheessentialelements ofa generic

strategic
management processwerediscussed.A fewreal-world exampleswerepro-
videdinbrieftoillustratethemodelandtobringtheprocessalivetopublicmanagers.
Inresponsetogrowing demandsforpublicaccountability, fiscalconservatism, and
increasedlegislativeoversightas wellas professional
imperativesforproactive leader-
ship,improved performance, anda customer serviceorientation,
publicmanagement
scholarsandpractitioners havebeencoalescingforquitesometimearoundthetheme
ofmanaging forresults.
Thisarticlearguesthatinpublicagenciesofanysizeandcom-
itis impossibletomanageforresultsinthelongorshortrunwithout
plexity, a well-
developedcapacityforstrategic management. Indeed,on a macrolevel,strategic man-
agement,withits emphasison developing and implementing a strategic agenda,is
synonymous withmanaging forresults.
Whereastreatments ofmorespecifictoolssuchas strategicplanning, performance
measurement, qualityimprovement, workprocessreengineering, and results-based
budgeting havebeenmoreprevalent in thepublicadministrationliterature,
strategic
management is thecentral
integrativeprocessthatgivestheorganization a senseofdi-
rectionandensuresa concerted efforttoachievestrategicgoalsandobjectives. A stra-
tegicallymanagedpublicagencyis one in whichbudgeting, performance manage-
ment,humanresourcedevelopment, program management, and othermanagement
processesareguidedbya strategic agendathathasbeendevelopedwitha buy-in from
324 PPMR/March1999

keystakeholders andcommunicated widelywithin theorganization andamongexter-

nalconstituencies.
Publicmanagers havea number ofleversat theirdisposalforinfluencing people
andprograms andbringing aboutorganizational change, buttheycannotbeusedeffec-
tivelywithout a clearsenseofmission, values,vision,andoverallstrategy. Themodel
presented inFigure1 conveys theessenceofstrategic management as theintegrative
forcethatguidesanddisciplines a widearrayofmanagement processestomoveina
unifieddirection ina number ofdifferent arenas.Thetwo-directional flowofinfluence
andsensitivity between anagency'sstrategic agendaandtheconstellation ofprocesses
and associatedstakeholders surrounding itreflectsthedynamicnatureof strategic
management. As portrayed inFigure2,strategic management is aniterativeprocessin
whichplanning generates a strategic agendathatmustbe notonlyimplemented but
also evaluatedandupdatedthrough continued external andinternal monitoring.
Strategic management in thepublicsectoris concerned withstrengthening the
long-term healthandeffectiveness ofgovernmental unitsandleadingthemthrough
positivechangetoensurea continuing productive "fit"withchanging environments.
However, strategicmanagement shouldnotbe confused withleadership itself.Strate-
gicmanagement willnottransform otherwise poorleaders,andpublicmanagers who
lackleadership skillswillfinditverydifficult to implement effective strategic man-
agement processes. Rather,strategic management provides a vehiclethatskilledlead-
erscanuse toinvolvestakeholders increating a visionfortheagency, buildcommit-
mentto strategic objectives,and focusorganizational resourcesand energieson
advancing theagency'sstrategic agenda.Theabilities toidentify emerging issuesand
their
understand implication for the organization,craftviable and
strategies mobilize
support forthem,communicate a visionforthefuture in a compelling manner, and
buildteamsandauthentic relationships thatwillbe conducive tobringing aboutde-
siredorganizational changeall areessentialformanaging publicagenciesstrategi-
cally.Thus,strategicmanagement supports goodleadership andmayprovide a context
fordeveloping leadershipskills,butbasically, ittakesgoodleaderstocreateeffective
strategicmanagement processes.
Morethananyother singleapproach inthepublicmanager's toolkit,strategic man-
agement is themostfundamental, andthemostcritical, processforproducing results
in thechallenging andincreasingly competitive environment in whichmostpublic
managers work.Manygovernmental unitsandagencieshavesomeofthepiecesin
place,butrelatively fewactuallyhavedevelopedfull-fledged strategicmanagement
systems thattruly integrateall majorfunctions andmanagement processesanddirect
themtoward defining andadvancing anorganization's strategic agenda.Thus,public
managers whoarecommitted toresults-oriented management willhavetogetserious
aboutdeveloping an effectivecapacityforstrategic management intheiragencies.

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TheodoreH. Poisterisaprofessorofpublic intheSchoolofPolicyStudies

administration
He haspublishedwidelyintheareasofpublicmanagement
at GeorgiaStateUniversity.
andevaluationresearch,andhehas conducted
appliedresearchandconsultingprojects
fornumerous publicandnonprofitorganizations.
Gregory D. Streibis a professor
intheDepartment
ofPublicAdministrationand Urban
He haspublishedwidelyin
Studies,SchoolofPolicyStudies,GeorgiaStateUniversity.
theareas oflocal government andpublicmanagement.His current
projectsincludethe
development ofassessment instrumentsforlocal
governmentmanagersanda study ofthe
privacyissuesraisedbystateimmunization registries.