ARCHIVED - Internal Audit of Strategic Plan Development Process
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In section 3.1 we set out leading practices for strategic planning to be used as criteria for
assessing TBS strategic plan development efforts. We have also provided a brief
summary of the strategic planning process at TBS during 2002-03 and 2003-04.
We find the TBS strategic planning process meets certain elements of leading practices. However,
we have identified several areas where improvements would enhance the strategic planning process.
Specific details on the effective practices and areas for improvement are identified in
Sections 3.3 through to Section 3.7. Our overall recommendations are presented in
Section 4.0.
The following process flow summarizes the major process components of a strategic planning
process.[2]
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Following are definitions of the Strategic Planning Criteria[3] aligned with the process flow:
- Planning to Plan: This first step represents the advance work necessary
before the actual planning process can begin. In this step, each organization
agrees internally on the overall strategic planning effort and on key planning steps to be
undertaken. An effective body is in place to oversee the effort and
to ensure that the support and commitment of key decision makers exists. Key
stakeholders are identified and their level of participation determined. The form
and timing of reports are defined during this step.
- Mandate: Each organization is influenced by constitutional and/or
legislative mandates. At an early stage in the process, agencies should review and
evaluate the role and significance of these mandates as they pertain to day-to-day business and
future activities.
- Mission and Vision: An organization's mission, in tandem with its mandate,
provides its raison d'être. Clarifying the purpose of an organization can
eliminate a great deal of unnecessary conflict in an organization and can help channel
discussion and activity productively. The vision provides a description of what
the organization should look like once it has successfully implemented its strategies and
achieved its full potential. Stakeholders are identified and their criteria for
judging how well the organization has performed are understood. A stakeholder
analysis is a way for an organization's decision makers and planning team to be immersed in the
politic surrounding the organization, providing invaluable information to identify strategic
issues and developing effective strategies.
- Environmental Assessment (External and Internal): External and internal
assessment is an evaluation of key factors that influence the organization. A
detailed evaluation of trends, conditions, opportunities and obstacles directs the development
of each element of the strategic plan. With this information, a risk assessment is
performed to identify the organization's strengths, weaknesses, opportunities and threats (SWOT).
This type of assessment is both quantitative and qualitative in nature.
- Strategic Outcomes/Measures: Strategic Outcomes are end points or public
benefits that are important to the stakeholders and for which a level of success can be
determined. Outcome measures are quantifiable information that indicates the
degree to which the desired outcomes are achieved. Strategic thinking and acting
are more important than the actual output. Effective strategy formulation can be
top down and/or bottom up. Overall strategic guidance is given at the top and
detailed strategy formulation and implementation occurs deeper in the organization.
- Results/Measures: Results are specific targets for improved performance
designed to indicate the success or impact of a program or approach. An
organization's business operations are determined through results (what level of success does an
organization want to achieve) and strategies. Measures of results are quantifiable information
that address whether or not program activities are achieving the desired goals. Alternative
strategies should be evaluated against agreed upon criteria prior to selection of specific
strategies to be implemented. It is important to discuss and evaluate strategies
in relation to key stakeholders. Allocation of resources (budgeting) and
quantification of services and products (outputs) are tied to implementation of strategies.
- Review and Adoption of Strategies: Strategies explain how the
organization's objectives will be accomplished. Part of an organization's adoption
of the plan should be the formal approval by senior management and the board (if one exists).
- Action Plans: Action plans describe how strategies will be implemented
and, specifically, who is responsible for doing what and when tasks will be completed.
- Budget: Operational planning and budgeting processes should be linked to
the action plans.
- Legislation/Policy: Legislation or policies may result from an
organization's strategic planning process, often providing authorization for needed programs or
defining the scope of organizational responsibility in addressing a critical issue. Legislation
also can take the form of a new mandate, which must be assessed at the outset of the planning
process and incorporated into an organization's plan.
- Monitor against benchmarks and Key Performance Indicators: Agencies
evaluate their outcome and objective measures and strategies annually, or more frequently if
data collection cycles permit, to track progress toward key outcomes and objectives. In
the evaluation process, agencies assess the effectiveness and efficiency of their operations and
make adjustments in strategic plans, use of resources, and operating procedures to improve
results.
- Reassess strategies and the strategic planning process: It is important to
review the strategies and the strategic planning process as a prelude to a new round of
strategic planning. This can take place as part of the ongoing implementation
process. Attention should be focused on strategies and whether they should be
maintained, replaced or terminated. The strategic planning process should also be
examined, its strengths and weaknesses noted, and modifications implemented to improve the next
round of strategic planning.
The following sections report findings for strategic planning criteria 1- 7 included in the scope
of this audit.
Overview
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The TBS strategic planning process has been primarily a bottom-up exercise led by the TBS
Strategic Policy and Planning Directorate for fiscal years 2002-03 and 2003-04. The
Secretary and the business line leaders provided some direction on key priorities. Outputs
from the process were distributed and discussed at the TBS Executive Committee retreats and more
broadly distributed at the TBS Town hall events. The key process activities are
illustrated in Figure 1[4] below.
Process Enablers and Outputs
Participants in the TBS strategic planning process included:
- Strategic Policy and Planning Directorate – coordinated the strategic planning process;
- Secretary and Business Line Leaders – involved with the strategic planning process by
providing overall direction and review of the results;
- Strategic Planning Network – made up of representatives from all Branches and Sectors and
supported the work of the three Business Line leaders; and
- Executive Committee – reviewed output from strategic planning process and discussed at ExCo
retreats.
Process documentation was facilitated by the use of data gathering templates.
Final deliverables from the process included the Strategic Planning and Results
Framework and linkages to other TBS planning and reporting activities including business line
plans and the Report on Plans and Priorities (RPP).
Audit findings in the following sections highlight effective activities performed by TBS and
areas for improvement from the current process.
Leading practices research indicates that conduct of preparation work is essential prior to
beginning the planning process. Key requirements include:
- An effective policymaking body is in place to oversee effort;
- Support and commitment of key decision makers exists;
- Each organization agrees internally on the overall strategic planning effort and on key
planning steps to be undertaken;
- Form and timing of reports is defined;
- The key stakeholders are identified and their level of participation determined; and
- The role, functions and membership of the strategic planning team are defined.
Activities performed by TBS consistent with leading practices
We have observed effective practices at TBS to support the Planning to Plan activities. These
are summarized as follows:
The Treasury Board Secretariat ("TBS") established a Strategic Policy and Planning
Directorate operating under the guidance of an Assistant Secretary.
A Strategic Planning Network was established with members from across all business lines in TBS.
The network defined its mandate as:
- Act as a sounding board, for all matters related to strategic planning issues, including the
planning cycle and the environmental scan.
- Participate in the fleshing out of the TBS Strategic Planning and Results Framework,
including key results, performance measures, priority initiatives/activities and the associated
resources.
- Foster integration of branch and sector planning with the TBS results-based corporate
strategic planning process.
The Planning Network prepared information, such as the templates for the risk profiles, to be
used in the strategic planning process.
Internal key stakeholders were identified and represented in the Planning Network.
Variances from leading practices
We have observed the following areas for improvement to support effective Planning to Plan
activities.
Roles of the key stakeholders not clearly defined
The link between the roles of the Strategic Policy and Planning Directorate and the senior
executives' strategic planning activities was not clear. Although strategic priorities
have been communicated from the top, these have not been clearly adopted in the planning effort and
documentation produced by the planning team. It should be noted that for 2003 – 2004
the priorities were communicated late in the process at the October ExCo retreat.
- The strategic planning process appears to have been primarily a bottom-up approach that did
not clearly link with the strategic priorities at the senior executive level;
- The analysis performed by the Planning Network did not meet the needs of senior executives for
their strategic planning activities; and
- The material prepared by the Planning Network was primarily provided as background material
for the ExCo Retreats.
Not all key external stakeholders were identified or consulted as part of the environmental scan
and strategic planning process.
Key elements of strategic planning process were not clear
Key elements of the strategic planning process were not clear to many of those involved in the
strategic planning effort. There was no common understanding of:
- Who was the client of the process?
- Who was the audience?
- Who were the key stakeholders?
- What was the final output?
- What was the impact of the process?
The output from the strategic planning process was not well defined. Strategic
planning process templates were not designed and discussed with business line leaders in advance of
planning efforts. Senior managers viewed it as more of a "form filling"
exercise completed at the middle management level representing a detailed tactical analysis of
current activities.
Strategic planning not well integrated with other TBS planning activities
Although common data was used for the TBS RPP and business plan, there is not always a clear link
between the strategic planning process and the other related planning processes in the organization:
- The people responsible for these processes are different and the timing was not well aligned.
- There appears to be confusion among the various planning and reporting processes in terms of
how they integrate and what would be the most effective practice.
- The activities to prepare the various planning documents seem to take place in parallel rather
than being interdependent.
Role and functions of Planning Network not effective
The Planning Network was not used to its maximum potential:
- The members of the Planning Network were not given an indication at inception of the amount of
effort that would be required during the strategic planning process;
- The Planning Network was not consulted at inception on issues such as the format of the
templates, or to map out the steps required in the process;
- The Planning Network lacked structure and met on an irregular basis. Time and
other constraints prevented the Strategic Policy and Planning Directorate from using it
effectively;
- The Planning Network was used mostly as a tool for communicating guidelines and requirements
of the process and to complete the documentation used in the process; and
- The Planning Network lacked formal authority from senior executives.
Leading practices research indicates that each organization is influenced by constitutional
and/or legislative mandates. An organization's mission provides its raison d'être.
Key requirements include:
- At an early stage in the process, review and evaluate the role and significance of mandates as
they pertain to day-to-day business and future activities;
- Clarifying the purpose of an organization can eliminate a great deal of unnecessary conflict
in an organization and can help channel discussion and activity productively;
- The vision provides a description of what the organization should look like once it has
successfully implemented its strategies and achieved its full potential;
- Stakeholders are identified and their criteria for judging the organization's performance are
understood; and
- Attention to stakeholder concerns is critical. A stakeholder analysis is one way
for an organization's decision makers and planning team to be immersed in the politic
surrounding the organization, providing invaluable information to identify strategic issues and
developing effective strategies.
Activities performed by TBS consistent with leading practices
We have observed that the mandate and vision were adopted from applicable legislation, Results for Canadians
and other government pronouncements.
Variances from leading practices
We have observed areas for improvement to support effective Mandate, Mission and Vision
activities. These are summarized as follows:
Lack of clear vision and stakeholder analysis
The strategic planning process was not effective in driving a consistent and clear vision:
- Cohesiveness (linkages) across business lines is not strong ("stovepipe
orientation"); and
- The management team has seen considerable turnover and as a result has not been able to focus,
as a team, on addressing the broad mission and vision of TBS nor to discuss strategic
alternatives.
There is no evidence in the documentation that a structured external stakeholder analysis was
conducted.
TBS Strategic planning does not support a changing environment
Strategic planning and direction setting does not appear to plan for flexibility and uncertainty
although the TBS environment is very dynamic and subject to change.
Some examples of TBS' changing environment are:
- Being able to respond to the "crisis of the day" is a regular function of TBS but
not addressed in the vision.
- The reorganization of December 12 has impacted TBS operations and the mandate has been
refocused.
Leading practices research indicates that external and internal assessments identify factors that
influence an organization and should be considered as part of the strategic planning process. An
effective environmental assessment should have the following elements:
- A detailed evaluation of trends, conditions, opportunities and obstacles directs the
development of each element of the strategic plan;
- With this information a risk assessment is performed to identify the organization's strengths,
weaknesses, opportunities and threats (SWOT); and
- The assessment should be both quantitative and qualitative in nature.
Activities performed by TBS consistent with leading practices
We have observed the following effective practices at TBS to support the Environmental Assessment
activities.
External scan activities were conducted:
- There was an environmental scan performed during the first cycle of the strategic planning
process (September 2002). The scan was performed by looking at factors at the
national level, the government level and internal to TBS.
- A second scan was conducted in two parts during the second cycle (July 2003 and September 2003).
Some external parties were consulted (e.g., chairs of regional councils and members of
academic advisory panels).
A risk assessment component was included in the second scan.
Information related to the environmental scan was put into context by business lines in
conducting the strategic planning process.
The Environmental Scan was included as background material for strategic planning participants
(Planning Network, Business Line Leaders, ExCo).
Variances from leading practices
We have observed the following areas for improvement to support effective Environmental
Assessment activities.
Environmental scanning not effectively incorporated into strategic planning
Environmental scan activities were not well structured and cohesive:
- The Secretary, business line leaders and Strategic Planning and Policy Directorate conducted a
number of independent scanning activities; and
- Generally, it appears that key external stakeholders (e.g., TB Ministers, key departments)
were not consulted for the risk assessments or environmental scan.
- Environmental scans conducted by TBS were not effectively incorporated into the strategic
planning process:
- It was not obvious "how" the environmental scan was used to influence strategic
outcomes or any other aspect of the strategic planning process;
- It was not evident "who" may have analyzed the environmental scans and incorporated
the results into the strategic plans;
- There was no reference to the environmental scans in the risk assessment templates; and
- There was no reference to the environmental scans in the Guidelines for Business Line Leaders.
Lack of TBS-wide integration and analysis
The internal assessment lacked cross-business line analysis:
- Planning Network members were not given an opportunity to collaborate on various issues and
share best practices;
- There were time constraints as well as a lack of internal resources/skills to perform the
environmental scan;
- The Planning Network was not asked for input to the environmental scan or to analyze the
results as a collaborative team;
- Completion of the risk profiles/templates by the various business lines, was not consistent
across business lines; and
- There was little focus on the Corporate Administration business line.
Leading practices research indicates that strategicoutcomes are end points or public benefits
that are important to the stakeholders and for which a level of success can be determined. Key
requirements for effective results and measures include:
- Outcome measures are quantifiable information that indicates the degree to which the desired
outcomes are being achieved;
- Results are specific targets for improved performance designed to indicate the success or
impact of a program or approach;
- An organization's business operations are determined through results (what level of success
does an organization want to achieve) and strategies;
- Strategic thinking and acting are more important than the actual output;
- Effective strategy formulation can be top down and/or bottom up. Overall
strategic guidance is given at the top and detailed strategy formulation and implementation
occurs deeper in the organization;
- Alternative strategies are evaluated against agreed upon criteria prior to selection of
specific strategies to be implemented;
- It is important to discuss and evaluate strategies in relation to key stakeholders; and
- Allocation of resources (budgeting) and quantification of services and products (outputs) are
tied to implementation of strategies.
Activities performed by TBS consistent with leading practices
We have observed effective practices at TBS to support Results and Measures activities. These
are summarized as follows:
- TBS senior management met with the Secretary during a series of round tables to discuss issues
facing TBS;
- Strategic outcomes and results were reviewed at the ExCo retreat with the business line
leaders and assistant secretaries;
- Strategic outcomes are documented and communicated in the Strategic Planning and Results
Framework and the Report on Plans and Priorities; and
- The Planning Network played a key role in establishing the outcomes by business line.
Variances from leading practices
We have observed the following areas for improvement to support effective Results and Measures
activities.
Output from strategic planning does not drive towards TBS-wide measurable outcomes
The strategic outcomes and results are not quantifiable:
- The strategic outcomes and results are too broad – certain terms such as "sound
financial performance", "excellence" or "measurable improvement" are
not readily measurable; and
- There is a lack of results with specific targets for improved performance designed to indicate
the success or impact of a program or approach. During the course of the audit we
were unable to find any documents that described the strategies TBS was planning to use to
achieve the strategic outcomes and results.
- The strategic planning process was not successful in gaining cross-business line integration:
- There was a lack of cross-business line integration in evaluating strategies, outcomes and
results planned for TBS. Further, there was limited opportunity to have
discussions from the perspective of TBS as a whole; and
- A large portion of the planning effort was done in stovepipes. There is a
general consensus that there is a roll-up of business line plans but not a strategic direction
for TBS as a whole.
Leading practices research indicates that part of the organization's adoption of the plan
should include formal approval by senior management and the board (if one exists). Key requirements
for effective review and adoption include:
- Other implementing groups or organizations are also likely required to approve the plan and
strategies in order for implementation to proceed effectively.
- Drafts are typically reviewed by planning team members, key decision makers, governing board
members and at least a few selected outside stakeholders.
Activities performed by TBS consistent with leading practices
We have observed effective practices at TBS to support the Review and Adoption of Strategic Plan
activities. These are summarized as follows:
- The business line leaders and assistant secretaries discussed the planning documentation
annually at the ExCo Retreat. This represented an opportunity to take stock of
TBS' direction as a whole and to identify directions for business lines for the next planning
period.
- The Strategic Policy and Planning Directorate provided background information for the ExCo Retreats
that was obtained from the Planning Network.
- The Strategic Planning and Results Framework was distributed to employees through a TBS Town
Hall, which took place in April 2003.
- The Report on Plans and Priorities (RPP) for 2003‑04 was based on this framework
and was tabled in Parliament and posted on the TBS website.
Variances from leading practices
We have observed the following areas for improvement to support effective Review and Adoption of
Strategic Plan activities.
No formal adoption or approval of strategic plan
There is not a clear indication of a formally approved TBS Strategic Plan that communicates the
vision, risks, priorities, strategies, plans and resources for TBS as a whole for the upcoming 3 - 5
year period. The TBS RPP and business plan were not considered
strategic documents by most interviewees.
Executive Committee Retreats not effective in developing the strategic plan
The October 2003 ExCo retreat received mixed feedback with respect to strategic planning and
priority setting:
- A lot of effort was put into preparation of material for the ExCo retreat but there was
limited presentation or recognition of the material;
- The agenda for the meeting included having each business line leader present their priorities
and plans. This did not occur;
- This was primarily an information sharing session as opposed to a decision-making forum; and
- The retreat took place too late in the process to establish TBS priorities for purposes of the
strategic planning process.
Other findings
We were told that the planning approach within the Chief Information Officer Branch, while not
linked to an overall TBS strategic plan, was well integrated within the Branch and that the
strategic objectives flowed through business plans and operational plans and was supported by
financial and other reporting systems. Since this was beyond the scope of the audit,
we did not validate this information but senior management may want to look more closely to see if
this would be a suitable model for the entire Secretariat.
The strategic planning process was consistent in many ways with the leading practice criteria for
strategic planning. Some areas where the process was not consistent with leading
practices have also been identified in the previous sections.
Based on an analysis of the leading practice criteria, the TBS strategic planning process did not
result in the production of a formal strategic plan. Key elements expected to be part
of a strategic plan are not present, such as:
- There is no formally adopted or approved strategic planning document;
- The output from the strategic planning process does not identify TBS-wide measurable outcomes
with strategies for achieving them; and
- The strategic planning process was not successful in gaining cross-business line integration.
The results of the strategic planning process do not provide adequate direction for TBS to drive
operational planning, resource allocation, results setting or development of implementation
strategies.