Who does UK Grand Strategy?

Written evidence submitted by Jim Scopes, former Director of Strategy at HMRC (GS 04)

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 (e.g. 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 2008-2011 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 2007-8 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 nineteen-nineties 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 (i.e. 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