Written evidence submitted by Jim Scopes,
former Director of Strategy at HMRC
SUMMARY
1. Main points are as follows:
— Strategy should be clear about the outcomes
to be achieved—including international and defence strategy.
— Previous UK National Security Strategies
have been primarily concerned with responses to existing threats
rather than setting-out future goals; more "plans" than
"strategies".
— The Coalition's programme for government
offers a helpful broad strategic framework. However, it will be
important that the business plans of key departments are aligned
with each other and agencies outside government to ensure delivery
of the identified outcomes.
— The capacity for strategic thinking in
UK government has improved but there is further to go. Current
recruitment, reward and promotion mechanisms favour reactive (problem-solving)
behaviour rather than proactive (strategic) approaches.
— It would be helpful for government to
increase the challenge function inside government, and this would
be possible at little or no cost, for instance through the use
of "red teams" from other departments.
— Placing budgets with outcomes is worth
closer consideration.
— We need to continue learning from other
countries.
BACKGROUND
2. I am currently director and co-founder
of a sourcing advisory company. Previously, I was director of
strategy at HM Revenue and Customs, working to David Varney. I
am an associate of the National School of Government and through/with
them continue to run training programmes on strategy development
and strategic thinking for civil servants across Whitehall. What
follows are my personal observations based on that experience.
Question 1: what do we mean by "strategy"
or "grand strategy" in relation to foreign policy, defence
and security functions of government in the modern world?
3. For me, a "strategy" must
be clear about what it seeks to achieve—in other words the
outcomes. The UK tends to be somewhat more cautious about describing
its long term international goals than some other countries—for
instance, the USA and France. In my view, the first two UK National
Security Strategies mostly focused on identifying current threats
and possible UK (immediate) responses to those threats, rather
than describing a vision of the desired future world or a set
of goals to help bring that world about. That appears to me to
be more of a "plan" than a "strategy".
4. The most effective strategies are
those that offer clarity of vision or purpose. That clarity helps
to mobilise all those who must work to achieve the strategy's
goals; without this, such mobilisation is inevitably impaired.
As I say above a purely reactive `strategy' is, arguably, not
a strategy at all—it is a plan.
5. Clearly, achieving goals in an international
context is complicated by greater levels of uncertainty and constraints
on influence of even a powerful nation. This does not negate the
need for strategic thinking—rather it suggests the need
for wide understanding of the context (drivers, trends and events),
caution in framing the ambition in terms of goals (though that
is still needed) and frequent iteration between that ambition
and implementation.
Question 2: Who holds the UK "strategic concept"
and how is it being brought to bear on the Strategic Defence and
Security Review?
6. This is not entirely clear to me; however,
I believe that the National Security Council holds the UK "strategic
concept" for security, defence and international matters.
Question 3: Do the different government departments
(eg Cabinet Office, Number 10, FCO, MoD, Treasury) understand
and support the same UK strategy?
7. My understanding of the work of the National
Security Council is that, in part, it is intended to ensure that
this is the case. The Coalition programme for government is also
helpful in providing some clarity across government on the Government's
overall strategy. The previous government's Public Service Agreements
(PSAs) for the spending period 2008-11 were intended to encourage
departments to work together to achieve shared goals, for instance
on PSA 30: "Reduce the impact of conflict through enhanced
UK and international efforts". However, in common with other
PSAs, the lack of alignment between accountability for resources
(which continued to rest with individual departments) and accountability
for achievement of PSA outcomes (which rested with PSA boards)
compromised effectiveness. The same issue may well arise under
the new administration: the role of enhanced Departmental Boards
and of departmental business plans will be important in driving
the work of each department. However, where issues cut across
departmental boundaries (as in national security, defence, international
development and international relations), it will be important
that there is strong alignment between departmental business plans.
Question 4: What capacity exists for cross-departmental
strategic thinking? How should government develop and maintain
the capacity for strategic thinking?
8. Increased capacity for cross-departmental
strategic thinking would help government to achieve desired outcomes
in a range of complex areas. This is true not only in national
security, defence, international development, international relations
and climate change, but also in public health, justice, migration,
community development, housing, children and family policy. All
of these rely on collaboration across the system, both inside
government and beyond government, and in the past have sometimes
seen departmental strategies which are poorly aligned with each
other and other delivery agents outside government. The development
of capacity depends on two elements:
(a) individual and organisational ability
to think, plan and act strategically; and
(b) individual and organisational appetite
to work strategically.
9. Looking first at ability; a comprehensive
range of tools and approaches are available to officials and ministers,
including drivers and trend analysis, modelling, scenario-building,
visioning, option appraisal, delivery mapping and so on. There
are a number of web-based tools and guides offered by the Strategy
Unit in the Cabinet Office (particularly the well-used "Strategy
Survival Guide" http://interactive.cabinetoffice.gov.uk/strategy/survivalguide/index.htm),
and Foresight's Horizon Scanning Centre in GO-Science http://www.bis.gov.uk/go-science/foresight/horizon-scanning-work.
The National School of Government, with whom I work, also offers
training programmes as well as links to private sector and third
sector providers through their Strategy Exchange website (www.nationalschool.gov.uk/strategyexchange).
Evaluation evidence suggests that all these sources have contributed
to increased familiarity with strategic thinking tools and increased
confidence in their application.
10. However, in my view, this increased
individual ability quickly withers unless it is reinforced
by organisational appetite for strategic thinking and strategic
working. Organisations, including governments, foster strategic
appetite when there is a clear and sustained demand from ministers,
boards and the wider Civil Service leadership for such thinking.
Sadly—despite the inclusion of this competence in Professional
Skills for Government—there remains a heavy bias towards
"problem solving". The Civil Service recruits for these
latter skills, incentivises performance and promotes individuals
based on them. Little wonder then that strategic thinking ends
up being side-lined or ignored. The result? An encouragement of
reactive rather than proactive behaviour—to "firefight"
rather than prevent fires breaking out. At it's worst, this can
mean senior managers allow crises to happen so that they can bring
their problem-solving skills to bear and be rewarded/promoted
as a result.
Question 5: What frameworks or institutions exist
or should be created to ensure that strategic thinking takes place
and its conclusions are available to the Prime Minister and Cabinet?
11. As mentioned above and in my personal
experience at HMRC—strategic appetite amongst senior leadership
is key. Permanent Secretaries, boards and ministers should be
more demanding for strategic thinking from their staff. In my
view, the FCO's approach to strategy in 2007-08 is worthy of closer
examination, because the Department took a series of measures
to increase strategic capability. These were driven in no small
measure by the demands made by the then Foreign Secretary. My
fear is that the existing civil service leadership will continue
to recruit and promote in their own image—valuing skills
that tend towards "fire fighting" and the seeking of
"quick wins". In my view, ensuring "... that
strategic thinking takes place and its conclusions are available
to the Prime Minister and Cabinet" requires institutional
change that embraces recruitment, performance and reward structures.
Question 6: How is UK strategy challenged and
revised in response to events, changing risk assessments and new
threats?
12. I believe that there is scope for more
challenge in the system of strategy development in government
generally. As indicated above, the rewards for officials are largely
for adherence to process and for conformity. Challenge is often
unwelcome, even when that challenge is to offer lessons from the
past or from other countries or sectors. At board level the enhanced
role of Non Executives may help to encourage challenge, but staff
throughout departments need to be encouraged to think for themselves
and to see the value of (and "market" for) such thinking.
Strategy units with access to the permanent secretary and Board,
as when I was at HMRC, can provide challenge and stimulus at the
right level. But this depends on senior-level—permanent
secretary (and ministerial)—sponsorship. There should be
much greater use of "Red Teams" to question strategies
and policies, drawn from across government (and therefore at minimal
cost to the taxpayer) and encouraged to test ideas rigorously.
13. Challenge has often been left to consulting
firms, who are commissioned to strengthen existing strategies
or to develop alternative strategies. This can be unhelpful, not
simply because of the cost to the taxpayer but because it can
be too easy for a Department to dismiss the ideas of outside consultants
and leave strategies unimplemented. Although many departments
have developed scenarios—sometimes with the help of consultants,
sometimes through work with the Strategy Unit, Foresight or the
National School of Government—my experience is that the
scenarios are too often not used in a way that helps the Department
to anticipate and track emerging risks, threats and opportunities.
In some cases the scenarios simply `sit on a shelf'. Scenarios
can be regularly reviewed/updated and used as a mechanism to track
changes to risks and identify new threats. They could/should then
be used systematically and routinely by senior managers and departmental
boards to test and challenge the work of their departments.
Question 7: How are strategic thinking skills
best developed and sustained within the Civil Service?
14. As intimated above, good work has been
done to date to improve strategic thinking ability; for example
through the Strategy Unit, the National School of Government and
Foresight and through a combination of secondments, training and
project work. But it is not enough. So far only the supply side
of the equation has been addressed. It is generally preferable
to pull on a string rather than to push on it. Again as indicated
above, government needs to ensure that greater recognition and
reward is given to strategic thinking. For me that means institutional
change. Until the civil service are able to construct a performance
and reward system that focuses on longer term outcomes (not only
their identification for setting direction, but also subsequent
evaluation to measure delivery) I believe the service will continue
to struggle to sustain strategic thinking skills.
Question 8: Should non-government experts and
others be included in the Government's strategy making process?
15. Yes. Most strategic thinking tools are
ideal for framing discussion at community level, or with wide
and often competing groups of experts. This can enrich thinking
and ensure that silo-based "group think" is avoided
and other perspectives included. Whilst at HMRC I tested and enriched
our understanding of HMRC drivers through involvement of cross
government and external experts and stakeholders. Web-based tools
can also allow participation from a wider community; a successful
example is the FCO's use of www.avaaz.org.
Question 9: How should the strategy be communicated
across government and departmental objectives made consistent
with it?
Question 10: How can departments work more collaboratively
and coordinate strategy development more closely?
16. Taking these questions together, I think
it is helpful for governments—as for other organisations—to
have an overarching strategy. A good example is the Scottish Government's
strategy, accompanied by its accountability website "Scotland
Performs http://www.scotland.gov.uk/About/scotPerforms. This strategy
offers "line of site from a set of high level outcomes through
objectives to indicators which are then monitored and made public.
Similarly, Every Child Matters is a good example of a sectoral
strategy that helped to bring together the activities of many
parts of the public sector to achieve better results for children.
Increasingly, departments will be working towards cross-cutting
outcomes (for example, "healthy children). If this is articulated
in a high level strategy it becomes easier to see where and how
collaboration adds value. Staff and public engagement in development
of the strategy is an important factor in ensuring the strategy
is meaningful to those who have to implement it, and in ensuring
there is life in the strategy beyond its publication. Too many
strategies end up `on the shelf' through lack of such engagement.
Timing strategy work well is also important—for instance,
by keeping strategic reviews quite short and focused, and timed
with events like the run-up to spending reviews or business planning
cycles.
Question 11: How can reduced resources be appropriately
allocated and targeted to support delivery of the objectives identified
by the strategy?
17. It is essential to align resources with
strategic objectives. In times of crisis—such as the current
fiscal deficit—if anything it is more important than ever
to be strategic. That means being clear about the priority of
desired outcomes and then allocating money and other resources
based on that prioritisation. This is not only helpful in terms
of marshalling limited resources appropriately, but also in signalling
that the strategy is real—not simply a document. Focusing
on what the organisation is trying to achieve (the outcomes),
rather than more narrowly on organisational activity or process
(what it does) can also help to release more innovation
in delivery, including low cost and no cost options.
18. There is some evidence that allocating
money to outcomes (or results) is helpful. The Government of the
Netherlands appointed a number of programme ministers in the last
Dutch administration, who had a significant budget to achieve
outcomes but did not have a line ministry or department, and there
is some evidence that this approach was successful in achieving
improved outcomes. Putting money against outcomes and tracking
whether the programme is working creates the equivalent to the
"bottom line" in a for-profit business.
Question 12: Do other countries do strategy better?
19. The UK is recognised as having done
some very good work on strategy in recent years. However, a number
of other countries have used strategic approaches to achieve major
transformations in their economies, societies and in their global
standing. Among the better-known examples are Singapore, Finland
and the United Arab Emirates. The Canadian Government's fiscal
consolidation of the mid 1990s was a strategic process, based
on a thorough assessment of future priorities. The key question
is not whether a process was conducted "correctly" or
whether the documentation was attractive, but whether the strategy
made a positive difference to the wellbeing of a nation's population
and/or to the nation's position in the world (ie on outcomes).
The answer to this question will never be entirely straightforward,
but there is good evidence that more strategic approaches help
countries to achieve those broader outcomes, and that the UK could
and should learn from that experience.
September 2010
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