Strategic Planning
Making Strategic and Operational Planning Matter
What is the key to driving an organization's performance to world-class levels?
No solution, by itself, guarantees improved organizational performance. But imagine if all managers and employees in your organization:
- Understood exactly how work flowed through their business processes. Managers and supervisors could understand where work was adding the most value, and where fixing process problems could yield the best business results.
- Had an accurate performance measurement system. The best systems would help managers and employees understand if processes were delivering the results required, or if corrective action were needed.
- Could directly link employees' day-to-day activities to long-term strategic goals, so all effort in your organization could be coordinated to reach the desired result.
- Were able to identify the best-performing work units. They could study best practices in use in those work units and use them in teams struggling with performance problems.
- Could rely on a proven, practical problem-solving guide that would help them improve results. Teams would lose less time trying to understand how to fix problems, and be better equipped to find solutions that really work.
At the Florida Department of Revenue, we believe these are keys to a strategic planning and leadership system that can unlock effective organizational performance.
Starting with fundamentals
In 2004, we conducted an extensive review of all 59 of the Department's business processes. What's a business process? Business processes start with inputs from suppliers and end with outputs that achieve outcomes for customers. In between, work flows through a series of repeatable steps during which value is added to a product or service. Managers should understand all steps in a process, and how several processes form a value chain to deliver a service or product.
This simple concept acquires enormous power when managers and employees can accurately measure how steps in a process add value.
Fine-tuning measures
Part of our 2004 review of business processes included reviewing and revising DOR's longstanding system of performance measures, a job that required months. Why spend so much effort on this work? Because it's vital. We believe that you can't effectively manage what you don't measure.
Once you have valid, meaningful measures, the numbers will tell their story. You can set performance targets, then know when and how to improve processes if targets aren't met. You can understand where value and costs are added. You can see how competitors stack up, and use these insights to correct your competitive weaknesses and exploit your strengths.
Planning strategy, managing processes
When we understand our business processes we can prioritize and develop strategies to achieve real breakthroughs in performance. Sound data from well-designed business processes also help DOR recommend three- to five-year goals to elected decision-makers, allowing them to select the goals that DOR will achieve.
Guided by elected officials' choices, DOR will create annual operating plans that break down these three- to five-year goals into annual increments. These annual performance targets will show managers, supervisors and employees exactly what they have to shoot for over the course of a year. Each operating program's annual plan will be further divided into quarterly, monthly, or weekly performance targets.
When results don't meet targets, the next step is to take corrective action. Managers can plan corrective action to pinpoint efficient solutions if they have practical training in problem-solving tools and quality management techniques.
A tradition of performance excellence
Fortunately, DOR doesn't have to invent such tools and techniques. For decades, managers have learned from business theorists such as Joseph Juran and J. Edward Deming, who pioneered early forms of quality management after World War II. In the 1990s, theorists Thomas Davenport and Michael Hammer introduced the concept of reengineering business processes – revising work and introducing technology to drive radical progress in performance.
Soon leading companies began schooling managers in quality management techniques, including Motorola's famous "Six Sigma" training. General Electric Chief Executive Jack Welch credited Six Sigma with saving his company $2 billion over three years. Such tools helped boost U.S. productivity and push the U.S. economy into world leadership.
Studying management tools invented in the private sector and using them in public service is part of DOR's culture. In 1998, DOR won the Governor's Sterling Award, the state's leading quality-management award. Since then, we have strengthened our commitment and expanded our understanding of how to manage in a modern business process system. DOR now trains some managers in the KBL problem-solving methodology – what our executive director, Jim Zingale, calls "Six Sigma Lite."
Better measures, better management
In the past year, DOR has taken significant steps to create more effective planning systems. In some organizations, strategic plans are destined to gather dust on shelves. At DOR, our strategic plans are helping us produce results that make a real difference in the lives of taxpayers and child support clients.
