Public Administration CommitteeWritten evidence submitted by Argenti Systems Ltd (ST 20)

Contents

Introduction.

Response to the Issues & Questions paper.

Profiles of authors.

Introduction

1. For nearly 50 years, “The Argenti Process of Strategic Planning” has been successfully applied across the world by many varied and complex organisations. At the heart of the Argenti method lies the fundamental truism that all organisations are created for a purpose. It is therefore essential for that purpose to be very carefully defined and for effective methods of empirically measuring its attainment also be in place.

2. There is no doubt in our minds that the proliferation of government organisations, and the myriad of so-called strategies that they have produced over many years, has mitigated against effective strategic planning. Strategies are worthless unless they can be linked directly into a stated purpose and measured against a verifiable performance indicator. These indicators are an essential precondition for any successful strategic planning process; they permit those who are responsible for designing the strategies to calculate the chances of them achieving the purpose and they allow those responsible for governance to monitor progress towards this topmost aim of their organization.

3. We believe that very few government organizations come anywhere near these essential criteria. We will elaborate further on this concept as we deal with each question below.

4. We believe that the other key to successful strategic planning is the identification of a very limited number of issues; in our experience there are seldom more than half a dozen issues that will have a significant effect on the long term performance of any organisation. An ability to identify, and concentrate on, the development of a very few but effective strategies that address these few, hugely significant issues, is fundamental to success. We urgently challenge the conventional government wisdom that more is better and we recommend a deliberate move towards fewer decisions, but far more focussed on the long term. Lesser issues, the tactical ones, should be delegated elsewhere (thus, incidentally, reducing the size of government).

5. A necessary component of any management activity is a wide understanding of the terminologies used. In our concept of strategic planning, and throughout this response, we use the following definitions.

The Governing Board

“The body responsible for defining the purpose of their organisation, identifying its Intended Beneficiaries, its performance targets and the performance measurement indicator. In addition, promulgating the rules of conduct that must be observed by all members of the Organisation”. (For a nation this body might be The Cabinet).

Policy

“Policies’ is the collective noun for the above list of governance criteria set out by the Governing Board”.

Strategies

“A strategy is one of several major, long range decisions, or courses of action, determined by the management of an organisation, and approved by the Governing Board, to deliver the level of national performance required by the Board.

Intended Beneficiaries

“Intended Beneficiaries are the people for whom the organisation exists. They are its raison d’etre (compare “Stakeholders”).

Stakeholder

“Any person who has any relationship with an organization. Many stakeholders can affect or be affected by an organization”.

Beneficiaries Performance Indicator

“The BPI is the indicator that measures how well an organization is performing for the Intended Beneficiaries (compare “MPI”).

MPI’s or KPI’s

“A Management Performance Indicator is any metric which measures how effectively a manager is running their part of an organization. KPI is a Key Performance Indicator”.

6. We accept that the processes of government are complicated. To facilitate more effective strategic management it would be ideal, over time, to restructure the activities of government into smaller and more dynamic organisations. This would have the advantage that the purpose, the beneficiaries and the performance indicators would be more readily defined.

7. We suggest that each of these organizations would require their own Governing Board to concentrate on issues of governance and monitoring the satisfaction of the Intended Beneficiaries whilst, separately, the Chief Executive and the executive management concentrate on delivering the level of performance set by the Board.

8. We would now like to address the specific issues on your questions paper. In formulating these replies we have avoided any attempt to deal with some of the detail contained in your questions where we have insufficient data or knowledge on which to formulate a meaningful response. We have endeavoured to frame our replies based upon our experience of implementing Argenti Strategic Planning initiatives.

Response to the Issues and Questions Paper

1. Do we in the UK have a broad enough concept of national strategy in government?
Where is there a failure to be coherent?
Where in government are tensions on issues around global public goods and domestic versus international aspects of policy resolved?
Is the term “national strategy” (or “grand strategy”) the most helpful way to describe the requirement?

1.1 As experienced practitioners in strategic planning processes and the development of strategic plans for organisations in both the public and private sector we would have to say “No” to this question. Successive UK Governments have failed to grasp the concept and relevance of a National Strategic Plan and, as the Press would put it, they:

Shuffle the deck chairs on the sinking ship.

Engage in fire-fighting.

Make up policy on the hoof.

Avoid big decisions.

Make 20% across the board reductions without due regard to the impact on our long term prosperity.

1.2 A National Strategy needs to tackle the big issues; once the big decisions are made, the strategic direction becomes clear and all the minor issues fall into place. In the quest to define the UK National Strategy we believe you should start the strategic planning process with the “Purpose Sequence”. This is a series of questions which may be briefly summarised as follows:

For whose benefit does the UK government exist?

What benefit do these people expect from it?

How will you measure the benefit that you deliver to them?

What level of performance would they consider satisfactory?

What level of performance would they consider unsatisfactory?

1.3 By answering these questions a basis for formulating appropriate strategies is provided as are the criteria for determining if the strategies are working—that is, whether the desired benefits are being delivered.

1.4 In our view Governments of all persuasions should have a National Strategy Document which sets out answers to each of these questions, incorporating their particular political philosophies and priorities for the government as a whole. This document should be initiated and approved as official government policy and reflect only those items of very substantial importance to the nation over a very long horizon. This should form the basis for individual subordinate organisations or departments to develop detailed, tactical, action plans for their particular contribution to the whole.

2. To what extent is Government strategy based on evidence?
What are the means of gathering evidence and the methods of analysis?
What are the habits and culture, the institutional barriers and systemic incentives that inhibit strategic thinking or thinking systematically about the future?
What are some of the longer-term institutional and organisational innovations that could be introduced?
What are the requirements for secrecy for government strategic thinking on all strategic issues?

2.1 Government produces a range of statistics and economic indicators that purport to inform and satisfy the demands for accountability to the public. However much of this information and most of these statistics are national MPI’s or KPI’s rather than BPI’s. For example, GDP receives much attention, but while GDP is an essential indicator for governments to know, what the citizen wants is Net Income per head. GDP has risen in recent decades; NIpH has fallen for most citizens.

2.2 To engender a more easily understood and wider acceptance of a UK National Strategy we believe there is a case for defining and agreeing targets for a National BPI. It would be the job of a “UK National Strategy Team” to define and monitor this target.

2.3 Strategic plans, by their very nature, are “sensitive” to the reactions of the people or countries they affect. It might also be the responsibility of the UK National Strategy Team to decide what can be discussed in an open forum and what cannot. Politicians represent the people and they respect those politicians who tell the full truth and offer solutions. However, the final decision must be made by the Prime Minister.

3. Are there examples of policy-making programmes or processes that illustrate effective strategic thinking and behaviour within Whitehall?

3.1 We have seen many examples of strategic plans from both the public and private sectors which contain elements of effective strategic thinking. Our main criticism with many of these is that they conflate strategic plans with action plans. There is a widespread tendency to think that if one lists all the things that are wrong with an organisation, the more the merrier, then this is the basis for a good strategic plan. The opposite is true: Get the big things right and the small things fall into place: start with the small things and you will never even see the big ones. Additionally, many of these plans are weak on specifics and tend not to have well-defined and measurable targets that can be empirically monitored.

3.2 We strongly believe that strategic planning is all about the small number of issues that will have a major impact on an organisation. The good strategic plan has a robust set of defined and measurable strategies that are designed to deliver the stated corporate targets.

3.3 Generally the best organisations in the private sector develop a Corporate Strategic Plan ie a top level plan for the whole organisation. This sets out (1) its overall corporate purpose and (2) defines a performance objective for each subsidiary or functional operation. The subsidiary and or operational Directors then develop their own strategic plans to meet the stated corporate requirement:

3.4 In the absence of a National Strategic Plan Ministers and civil servants in charge of the various Departments will develop strategies that are not informed by the bigger picture and therefore may not be fully aligned to the UK national interest.

4. How well has the government fulfilled its own commitments in the National Security Strategy, the Strategic Defence and Security Review and its response to the PASC report “Who does UK Grand Strategy”?

4.1 We are not qualified to answer this question.

5. How effectively does the Government assess the UK’s national interests and comparative advantages or assets, including industries as strategic assets; and how does the Government reach decisions to protect and promote them?
How do different government departments work together?
Given the centrality of public spending restraint, how well does the Comprehensive Spending Review reflect and enhance coherent emergent strategy?

5.1 We have the impression that the government of most advanced nations set their own standards and targets without direct reference to other nations. For example, we can only judge the British NHS meaningfully by reference to the health services of other peer nations. France happens to be a close comparator for population, GDP, defence requirements, and so on. “No nation is an island”—not even the UK which happens to be one. National targets can only be set by relating them to other similar nations. How rapidly is the health of the average Briton growing versus the average French person?

5.2 If the UK does not have a top target in its National Strategic Plan then it is virtually impossible to undertake a rational and logical evaluation of the impact of an event or a decision on this indicator.

6. Who is doing the strategic thinking on the UK’s role in an uncertain 21st century?
What are the different roles of citizens, social movements, business, civil society and academia in developing an emergent view and national discourse of what the UK is about, including on the UK’s role in the world, our values and interests?
How do developments in cyber, technology and social media affect all these discussions?
How can government bring the public into more of a conversation with policy makers?
How can government bring the public into more of a conversation with policy makers?

6.1 There is no shortage of views on national topics; this could be a valuable resource, although, if anything, there is a plethora of views from all branches of society. The problem is people are not always aware of “the bigger picture” and often dwell on the detail and get lost in the minutiae of facts and figures. In other words topics are often discussed in isolation without due regard to the impact on society as a whole.

6.2 While it is obvious that the initiate should come from the top—the PM should lead the UK Strategy Team—there are numerous sources for ideas and opinions. From the top think-tanks—of which we have a great many—to the average person. Much interest, indeed excitement could be aroused if this was carefully thought out and well organised. It might even set alight The Big Society!

6.3 A National Strategy that fired the imagination of the populace would encourage people to have constructive discussions on the implications of varying the Strategy in this way and that and would also allow them to assess the impact the Strategy or variations of it would have on their life styles. (A warning, however: 50 years ago George Brown’s National Plan became a laughing stock.)

7. What is the role of the UK government in leading, enabling and delivering strategic thinking?
Are there roles that need to be conducted by the UK government alone?
Should the Government enable cities and regions, businesses and civil society, diaspora and social movements, and mutuals to play a greater role in making, shaping and delivering policy?
What is the role of the UK government in leading, enabling and delivering strategic thinking?

7.1 See Comments above

Are there roles that need to be conducted by the UK government alone?

7.2 Yes, the Government should initiate it and ensure it runs a smooth course to the end result. Great care must be taken to explain what it is, what the questions are, who is going to ask them, who will be invited to answer them…almost to infinity. A major national project that could be an inspiration—or a flop.

Should the Government enable cities and regions, businesses and civil society, diaspora and social movements, and mutuals to play a greater role in making, shaping and delivering policy?

7.3 The process of defining the strategies to achieve the national BPI will involve debate and discussion with all the interested organisations and groups. It is the responsibility of Government to obtain views and build them in to their national strategies. Great care must be taken to avoid making the plans for towns and other national organizations at the same time as the National Plan—see above where we warned about doing a plan for the big strategic issues at the same time as tactical ones.

8. What are the skills that the Civil Service need to develop to build on existing strategic capacity? What are the relevant institutional, structural, leadership, budgeting and cultural reforms that are needed to support Ministers and the Civil Service?

8.1 We doubt whether the British civil service needs any additional skills. Strategic planning itself is not difficult, not hi-tech, must be kept simple—we have suggested that a strategic plan requires no more than about half a dozen top strategies. If it has more than this it risks becoming not a strategic plan but a mixture of strategic and tactical plans which we hold to be fatal. The professional (and academic) planners love to pretend how clever they are; it is a myth. A complex strategic plan is an oxymoron.

8.2 However, strategic plans have to be based on forecasts just like any plan and since strategic plans stretch far into the future they are far more risky than tactical short-range plans—in the jargon, there are far more “Black Swans”. Providing this is understood we guess that, with help from suitable think-tanks and experts, this should not stump the top level civil servants. It might be otherwise lower down.

9. What can we learn from what other countries, both in terms of what they do in strategic policy making and how they perceive the UK?

9.1 See the Danish model.

http://www.ebst.dk/file/23319/entrepreneurship_review_dk.pdf

Their Globalisation Strategy has cross party support and is monitored by OECD. If every OECD member country had a Globalisation Strategy then we could compare performance and make adjustments to ensure that the UK can compete with the world’s best. However, this is essentially an economic strategic plan; we have been discussing a corporate strategic plan which covers all the strategic areas relevant to an organization.

Profiles

John Argenti, MA—Chairman, Argenti Systems Ltd

After obtaining his degree in PPE at Oxford, John worked on the production side of Fisons (an international chemical conglomerate), ending up as their youngest Operations Manager. He was then appointed their corporate planning manager in 1963 but following the publication of his first book on in 1968 he became an independent consultant advising companies around the world on strategic issues. Among his numerous clients were a Paris fashion house, a Mexican steel conglomerate, a Spanish bank, an Australian conglomerate and many companies in UK. But also many non-profits including charities, government organizations, finance institutions, etc, etc.

He has written eight books, several of them on strategic planning, but also “Corporate Collapse” and “Your Organization: What is it for?” which still attract extensive attention (see his references in Google Scholar). He is Chairman of Argenti Systems Limited which designed the Argenti methodology for Strategic Planning which has a worldwide following. He was a co-founder of the Strategic Planning Society in 1967. He has lectured in 19 countries around the world on his various specialist subjects. He was awarded the Annual Management medal by the Malaysian Management Society, was a visiting lecturer at Monash University, Melbourne and is on an editorial board at Macquarie Graduate School of Management.

Barry Harrison BSc, Managing Director, Argenti Systems Ltd

An engineering graduate of the University of Salford with 25 years experience in industry working for multi national engineering and manufacturing conglomerates. Specialised in project management in the food processing, oil and gas sectors in the UK and overseas.

Became Business Development Manager of a management consultancy company specialising in IT and Change Management projects. This consultancy worked with the UK Government at the start of Margaret Thatcher’s contracting out campaign. They developed a tendering process for organisations to manage activities within Government departments that were considered to be non-strategic.

In 1987 formed Applied Technology, a management consultancy focussed on technology transfer. Working with the University of Manchester’s Total Technology Department, Applied Technology assisted organisations in the take up of new technology and developed a series of software products for industry and commerce.

In 2005 Barry was appointed Managing Director of Argenti Systems Ltd. Barry has facilitated strategic planning projects for ZESCO the Zambian Electricity Supply Company on behalf of the Zambian Government and the World Bank; Alstom, the worlds leading energy solutions and transport company and provides support on strategy issues to the worldwide Argenti Partner network.

Jaanuary 2012

Prepared 20th April 2012