1、 2023 Boston Consulting Group1Strategy has started playing an important role in the public sector.It is used by a growing number ofgovernment organizations in different countries,across domains,and at the local,regional,andnational levels.Weve witnessed a shi in perception:though practitioners and o

2、bservers longregarded“being strategic”as a private-sector endeavor in most countries,they now increasinglyrecognize that it is also an important approach for government.A new paradigm in publicadministration has emerged:the modern government as a“strategic state.”A New Approach to Strategy forGovern

3、ment AgenciesJULY 28,2023 By Martin Reeves,Vincent Chin,and Robert Van Der VeekenREADING TIME:15 MIN123 2023 Boston Consulting Group2In fact,aer classic bureaucracy,professional rule,New Public Management,and a plethora of otherapproaches to governing,the strategic state is becoming the dominant phi

4、losophy for what goodgovernment looks like.The United Nations Development Programme and the Organization forEconomic Co-operation and Development(OECD),for example,have adopted this paradigm and useit as a basis for analyzing and advising governments across the world.The chief characteristics of a s

5、trategic state are leadership from the center(with the revival of grandstrategy and whole-of-government orchestration),responsiveness to the voices and choices of citizens,a mission to create public value,transparency in setting and pursuing objectives,a focus onimplementation,and broad collaboratio

6、n with public,private,and international partners.Pioneeringstrategic states,such as Singapore,South Korea,Japan,and the Scandinavian countries,have shownthat embracing some or all of these elements can indeed greatly improve the delivery of public value.Empirical evidence indicates that investing in

7、 strategic capabilities helps publicagencies improve performance.Empirical evidence indicates that investing in strategic capabilities helps public agencies improveperformance.As John Bryson,professor emeritus of public affairs at the University of Minnesota,observed,strategy has become commonplace

8、in government“because it works.”Yet many strategicstates remain in a stage of infancy.Most governments still use strategy only sparsely,budgets areoen unaffected by changes in strategic direction,and many civil servants still see strategy asprimarily an exercise in filling out templates rather than

9、as a genuine reorientation of theorganization.Yet the need for governments to step up their strategy game is growing urgent,with a confluence ofcrises at their door.Even as they continue to deal with the lingering effects of COVID-19,inflation andeconomic downturn are presenting new challenges.Struc

10、tural problems that have long simmered inthe background,such as climate change,depleting resources,and demographic change,are rapidlybecoming more imminent.At the same time,the resources available to government are dwindling.Theyears of capital and labor abundance have come to an end,owing to rising

11、 interest rates,demographicaging,and increasingly fierce competition for talent.Geopolitical tensions are on the rise andmultilateralism is at an all-time low.Many democratic governments are facing a crisis of legitimacy,which is causing political gridlock that further undermines the ability of thes

12、e governments tostrategize and act decisively.45678910 2023 Boston Consulting Group3Public agencies need to do more with lessand they are struggling to make it work.Trust in government is historically low.As a result,public agencies need to do more with lessand they are struggling to make it work.Tr

13、ustin government is historically low.The Edelman Trust Barometer,a survey of more than 36,000respondents in 28 countries,found that in 2020 only 65%of people trusted their government;this figurefell to 52%in 2022.For comparison,trust in businesses and NGOs was relatively stable during thesame period

14、.Other evidence,such as a May 2022 Pew Research Center survey of US adults,suggeststhat this sharp decline is driven not by decreasing trust in politicians(that trust has always been low)but by a drop of confidence in civil service.To navigate this era of complexity,uncertainty,and scarcity,and to r

15、estore the publics confidence,governments need to accelerate their progress toward becoming strategic states.In our experience,three principal challenges stand in their way:Overcoming these challenges will result in a revitalized and more effective praxis of strategy.Going Beyond“Strategy as Plannin

16、g”Strategy used to be more straightforward:one would analyze a situation,set goals,make an enduringplan to achieve them,and then execute that plan.The strategy would be reasonably stable in the longterm,and with systematic efforts,goals could be met.This conceptualization of strategy as long-term pl

17、anning is still deeply entrenched in government today.In some cases,it is hardcoded into legislation.For example,the Government Performance and ResultsAct in the US requires public agencies to submit five-year outlooks,run an annual planning cycle,andwork with fixed performance metrics.The Turkish S

18、trategic Planning Guide requires agencies tosubmit a five-year estimated cost table.In other cases,the focus on long-term planning is engrained11Going beyond“strategy as planning”Choosing the right strategic approaches for each agencys environmentUsing strategy to bridge the gap between policy and i

19、mplementation12 2023 Boston Consulting Group4in the institutions,procedures,and cultures of organizationsfor example,in the measures used toevaluate the performance of managers.While the perception of strategy as planning is still dominant in government,it is oen a poor fit fortodays public agencies

20、.Four developments have reshaped the context for strategy and have led to newopportunities and risks that strategic approaches need to take into consideration.THE FOUR DEVELOPMENTSAgencies need to reckon with an increasingly unpredictable world.Developments in technology,globalization,and other area

21、s have drastically increased the connections among different geographiesand across economic,social,and natural systems.Local shocks ripple through these systems toproduce global effects,and agencies are consequently exposed to a much broader variety ofdisruptions.Additionally,the exponential acceler

22、ation of technological change has sped up thecadence of disruption;as a result,change is more sudden,significant,and constant than ever before.Taken together,the increased incidence of and exposure to disruptions has led to an era of persistentmultidimensional uncertainty.Under these conditions,plan

23、s can rapidly become obsolete.Agencies faced with such circumstances need a strategic approach that enables them to adapt quicklyto unexpected change.The accelerating rate of disruption has also led to increased malleability of the context.Asstructures are continuously changing,governments have grea

24、ter opportunities to influence them andto rewire different aspects of society.Consider the smart city.Historically,cities had few tools available to direct traffic flowslimited,forexample,to road signs and traffic controllers.Today,geospatial data allows local governments to readtraffic flows in rea

25、l time and prevent congestion with automated interventions such as closing roads,adjusting traffic lights and speed limits,and updating itineraries in the navigation systems of cars.Inother words,traffic in cities has become much more malleable.In this and other malleableenvironments,the strategic a

26、pproach should not just be to plan against an anticipated future but alsoto envision and shape that future.The confluence of unpredictability and malleability leads to a greater imperative forcollaboration.A fast-changing and malleable world offers governments much greater and morevaried ways to sha

27、pe society,but they cannot deliver on this on their own.Public-private ecosystemsare emerging as a new strategic approach because they can reshape society on a large scale underuncertain and dynamic conditions.The need for collaboration is further reinforced by the increasing interdependence of the

28、public andprivate sectors.Planetary boundaries and resource shortages are presenting new collective constraintsthat public and private organizations need to grapple with together,while advances in communicationand data technologies allow them to coordinate more frequently and more precisely and at h

29、igher13 2023 Boston Consulting Group5levels of complexity.In the words of professors of public administration Jan Kooiman and Martijn vanVliet(both early observers of this trend),“Complexity,dynamics,and diversity has led to a shrinkingexternal autonomy of the national state combined with a diminish

30、ing internal dominance vis a vissocial subsystems.”Indeed,we see that public and private domains are converging in practice as more companies areengaging in corporate statesmanship,while governments with dwindling resources rely on publicprivate partnerships to provide social goods.Many public agenc

31、ies now find themselves operating indomains they cannot control through their own actions;rather,they can only influence them byorchestrating a network of partnersin other words,steering instead of rowing.This development,which has also been described as going“from government to governance,”changes

32、the premise ofagency strategy.The resources of many governments are under pressure.Agencies operating in policy domainsthat receive less political priority will oen receive less funding and therefore will need to useregenerative strategies to maintain viability and relevance.BEYOND“STRATEGY AS PLANN

33、ING”The developmentsincreasing uncertainty,malleability,interdependence,and scarcitycreate a needfor new strategic approaches.While“strategy as planning”is still useful in some specific situations,agencies can no longer default to it unquestioningly.Choosing the Right Strategic Approaches for EachAg

34、encys EnvironmentIncreases in unpredictability,malleability,interdependence,and scarcity are broad societal trends,buttheir effect is not uniform across domains.Some domains,such as road maintenance,remainrelatively stable and predictable;others,such as cybersecurity,are highly volatile and uncertai

35、n.Agencies seeking to use strategy effectively need to differentiate their strategic approach based on therequirements of their specific environment.The different strategic approaches,already applied in theprivate sector,are summarized in Exhibit 1.141516 2023 Boston Consulting Group6To choose an ap

36、proach that works well in each environment,an agency needs to break free of itstraditional methods.The five strategic approaches that are optimal in different situations eachrequires entirely different capabilities,processes,and tools.That means it is ineffective for an agencyto default to a traditi

37、onal planning process;rather,it should choose the strategic approach andprocess based on the requisites of the environment.THE FIVE APPROACHESClassical.Agencies operating in environments with low unpredictability and low malleability shouldfollow a classical approach to strategy.In the absence of ma

38、lleability,the agency should focus onoperating within rather than reinventing its domainand given the predictability of the environment,such operations can be planned.The essence of a classical approach is to analyze,plan,and execute.Examples of agencies well suited to a classical approach could inc

39、lude tax agencies,railroadoperators,the prison system,and water authorities.To succeed with a classical approach,it will be important to have a strong administrative center,acyclical planning process,clear targets,and rigorous performance management.Innovation is oenlimited and focused on specific n

40、eeds.Discretion at the frontlines is restricted.Agencies with a classicalstrategy oen focus on scale and vertical integration to deliver a service or product at low cost.2023 Boston Consulting Group7Adaptive.Agencies that face a highly unpredictable,nonmalleable environment should follow anadaptive

41、approach to strategy.Long-term planning is senseless in the face of volatility and uncertainty.Strategies should instead focus on building resilience to withstand crises and change.The essence ofan adaptive approach is to vary,select,and scale.Agencies that may benefit from an adaptive strategyinclu

42、de immigration centers,disease control agencies,cybersecurity teams,organized crimedepartments,and financial market regulators.Adaptive agencies should steer clear of long-term plans,fixed goals,and overly detailed performancemetrics.Instead,it is important to deploy time-limited,bespoke teams;use s

43、cenario-basedapproaches;and foster a disruptive culture.Teams at the frontlines should have a high degree ofdiscretion to respond to signals in real time.Open communication from leadership is essential tocontinuously re-align the organization around emerging priorities.Civil service rules should tak

44、e abackseat to allow for the exploration of new,unorthodox solutions.Strong feedback mechanisms arerequired,such that experimental solutions found to work well are funneled back to the core anddisseminated across the organization.A successful example of an adaptive approach can be found among the po

45、lice forces in Victoria,Australia.By around 2003,local criminal organizations had grown more sophisticated;they startedshiing operations into various kinds of crime,such as fraud,drugs,armed robbery,and extortion insearch of lucrative ventures with a low chance of being caught.Victorias law enforcem

46、ent agencystruggled to respond.Its traditional,classical,silo model,with centralized divisions specialized indifferent areas of crime,proved to be a handicap:it allowed for efficiency but made it hard to adapt tothe new fluidity of organized crime.No team had the mandates,expertise,and resources to

47、followcriminal organizations across their activities and target them holistically.In response,the police forces went through a major reorganization to improve their adaptiveness toshiing patterns of crime.The reorganization focused on fostering collaboration across squads,including periodic rotation

48、s of staff,temporary interdisciplinary teams,and new training activitiesbeyond specialist skills.Although initially controversial,the new focus on cross-team collaboration andthe open exchange of information significantly improved the police forces ability to quickly adapt tocriminals changing tacti

49、cs.Visionary.Agencies that operate in a relatively predictable and malleable environment should follow avisionary approach to strategy.The approach can be summarized with the words of Peter Drucker:“The best way to predict the future is to invent it.”A visionary strategy is relevant to agencies in a

50、 position to single-handedly reshape their domain.Theessence of a visionary approach is to envisage,build,and persist.Examples of agencies where avisionary strategy may be appropriate are spatial planning offices,housing authorities,publicinvestment banks,and coordinators of development aid.17 2023

51、Boston Consulting Group8Visionary agencies should focus on harnessing the imagination of employees and partners.This can bea tricky process,especially in large organizations.Employees are typically rewarded for following adominant narrativebecause it gives a higher likelihood of getting projects app

52、roved,receiving praisefrom colleagues,or getting a promotion.And,by following the narrative,they in turn reinforce it.Thisvicious cycle is detrimental to the ability of public agencies to creatively envision different futures fortheir domains.The visionary approach is aimed at breaking the cycle.It

53、is important to seek out surpriseto moveoutside of your own organization and involve innovators,such as entrepreneurs,civil society figures,and younger generations,in the strategy process.The analyses that serve as inputs for the strategyshould focus more on anomalies than on established trends so t

54、hat there is attention for newerdevelopments and alternative courses of action.Aer an initial phase of divergence,the organization needs to coalesce around a new vision for thefuture that is coherent,rigorous,and concrete.Over time,the strategic vision can be remolded througha dialectic process,but

55、changes should be infrequent and purposeful to avoid confusing employeesand partners.The visionary approach requires a deliberate process that is best managedprofessionally through a dedicated strategy unit.This unit takes care of the process side,while allowingcivil servants with subject matter exp

56、ertise to participate from a content perspective.A successful example of a visionary approach is found in e-Estonia.When Finland decided in 1992 toreplace its analogue telephone exchange with digital connections,it offered the old system to theformer Soviet state Estoniawhich at the time had no tele

57、phone system at allfor free.Estoniarefused,instead deciding to leapfrog its telephone development by building its own digital network.Itentered a multiyear process to envision the digital future,together with companies and citizens,resulting in the Principles of Estonian Information policy.Part of t

58、he strategy was to invest heavily in public-private partnerships to build modern ITinfrastructure and design digital public service delivery.To entrench the vision and give it long-termstability regardless of the political climate,Estonia legislatively codified the decision to invest 1%of itsGDP in

59、IT annually.E-Estonia led to a surge of digital capabilities in the country.The country went onto repeat this early success multiple times with programs such as X-Road and e-Residency.Today,Estonia is considered a global leader in digital government.Collaborative.Agencies that navigate malleable but

60、 highly unpredictable domains require acollaborative approach to strategy.The purpose,similar to the aim of the visionary approach,is toreshape the domain.In the face of a highly dynamic and unpredictable environment,however,it isntfeasible for an agency to cra and realize a vision on its own.Instea

61、d,the focus should be on orchestrating a public-private ecosystem that relies on a diversenetwork of partners to experiment with new solutions under changing circumstances.The essence of a18 2023 Boston Consulting Group9collaborative approach is to engage,orchestrate,and evolve.Agencies for which a

62、collaborativeapproach can work well include public health departments,climate and sustainability offices,anddigital government centers.A collaborative strategy requires a strong strategic center that continuously interacts with a widevariety of partners and providers.To successfully implement a coll

63、aborative strategy,procurementregulations should be relaxed so that the agency can collaborate within a constantly evolvingecosystem.Scouting for new partners should be a continuous endeavor.Avoid overly specific taskdescriptions upfront;instead,allow partners to develop their own innovative approac

64、hes to solveproblemsand pay them for results rather than fixed activities.To ensure the ecosystems vitality,focus on collaboration among participants,for example,with community building and data sharing.Rapid progress in digital platform technologies in recent years has greatly facilitated such ende

65、avors.A successful example of a collaborative approach can be found in the testing,inspection,andcertification(TIC)sector.In many countries,a government agency communicates a clear vision for thesupervision of all sorts of things,such as food quality and elevator safety,and captures that vision inde

66、tailed testing and inspection protocols.It then accredits a network of TIC companies to executethese protocols so that the government does not need to execute them itself.This allows for muchmore scale and flexibility in delivery.New testing and inspection needs arise constantly andunpredictably as

67、companies design new products and services that require supervision and becausenew areas of regulation,such as cybersecurity and sustainability,emerge.TIC companies play a key role in addressing these needs quickly by developing new approaches(oento sell certificates that are not yet legally require

68、d but may help their customers signal theirtrustworthiness to the market).New approaches that work well may eventually funnel back into thetesting and inspection protocols.This collaborative approach to supervision has oen worked muchmore successfully than a classical approach.Many data privacy auth

69、orities,for example,arestruggling to achieve effective oversight because they primarily rely on their own organizations forexecution.Regenerative.Agencies that face an especially harsh environment with restricted resources shouldadopt a regenerative approach to strategy.When the external circumstanc

70、es are so challenging thatyour current way of operating cannot be sustained,decisively changing course is necessary not only tosurvive but also to secure another chance at thriving.Decisive change oen requires scaling down theservices and activities to the core,economizing to free up budget,and then

71、 investing in key initiatives tofuture-proof the organizationfor example,by transitioning to digital service delivery.The essence ofthe approach is to react,economize,and reinvest.Elder-care institutions,which face financial strain inthe light of an aging population and lengthening lifespans,are one

72、 type of agency that may find aregenerative strategy effective.More broadly,this approach applies to any agency that has facedsignificant budget cuts or declining relevance and clout.2023 Boston Consulting Group10A regenerative strategy requires decisive and hierarchical leadership.It is essential t

73、o respond swilyto triggers because an agency operating above its budget will find it harder and harder over time tofind funds for strategic investments.When looking to cut costs,act on three levels:scrutinize internaloperations for efficiency,making use of the creativity and knowledge of employees t

74、hroughout theorganization;adjust the portfolio of operations by downsizing to the core activities;and work withexternal partners such as suppliers to identify cost-saving opportunities for them and translate thosefindings into renegotiated contracts.While cost cutting is important,it should not be t

75、he sole focus:remain alert to opportunities to investin the long-term robustness of the agency.Denmark,Singapore,and Malaysia recognized,forexample,that investing in digitization programs for public service was essential to improve long-termeffectiveness as well as cost-efficiency.Lastly,proactively

76、 engage in a continuous dialogue with political leadership on the consequences andrisks of budget cuts.Restoring budget should not be a goal in and of itself in all casesthere arelimited fiscal resources that require regular redistribution across agencies to reflect new developmentsand political pri

77、oritiesbut it is important to communicate the consequences of cost cuts to politicalleadership when co-creating a strategy with a regenerative focus.THE APPROACHES AT WORKExhibit 2 summarizes the ways to implement the various approaches.Note that within an agency,multiple approaches may need to co-e

78、xist,given that different teams or departments operate indifferent environments.This can lead to significant organizational challenges and require that rules,structures,and processes within those teams be differentiated.Further,environments can changerapidly,so continuous vigilance is required to en

79、sure that a particular strategic approach remainsappropriate for an agency and its departments.2023 Boston Consulting Group11Using Strategy to Bridge the Gap Between Policy andImplementationFor each of the five strategic approachesclassical,adaptive,visionary,collaborative,andregenerativesuccess dep

80、ends not only on the ability to choose the right approach but also onentrenching it in everyday practices,processes,and behaviors.Ultimately,what matters is not thewisdom of the strategy but the consequences of its implementation.Good strategy is both extrospective and introspective.On the one hand,

81、it is a method to understandyour environment and determine how to change its course;in a public-sector context,this is oenreferred to as policymaking.The extrospective aspect of strategy is closely intertwined with the politicalprocess,as the political agenda is a key premise for setting objectives.

82、On the other hand,goodstrategy is also introspective:it recognizes that the agency responsible for execution is not a black boxbut a complex system with distinct strengths and weaknesses,which can be remolded.Designing theorganization so that it can execute on a policy is called implementation.19 20

83、23 Boston Consulting Group12The execution gap is a thorny,well-documented problem in strategy.The execution gapthe difference between strategic objectives that are defined and those that aresuccessfully implemented and achievedis a thorny,well-documented problem in strategy.Typicalsolutions focus on

84、 either the extrospective side(how objectives are set)or the introspective side(howthe organization is set up for execution).For example,while setting objectives,the execution gap canbe addressed by committing visibly and collectively to a clear organizational identity and purposearound which you st

85、reamline a portfolio of activities.It can be attacked on the implementation sideby integrating strong change management practices,such as monitoring progress with the rightmetrics,establishing evolvable plans,and balancing autonomy and control in the organizationalhierarchy.Yet to diagnose the execu

86、tion gap as either a failure of policymaking or a failure of implementationmisses a crucial point:the criticality of the interaction between the two.A very common feature ofgovernment is the separation of those who make policy from those who implement it.As a result,theextrospective and introspectiv

87、e parts of strategy adhere to different cycles and are formulated bydifferent people through different processes.There is usually some cross-pollination,but the level ofinteraction is oen insufficient to create true and ongoing alignment.This incongruence between the extrospective and introspective

88、parts of strategy is much less of aproblem in the private sector.Indeed,empirical studies find that the execution gap is significantly andconsistently larger in government than in companies.Large-scale surveys found that 47%of private-sector managers believe that their organization is good at implem

89、enting strategy,while only 21%ofpublic managers believe the same.See the sidebar,“Why Are Policymaking and ImplementationDisconnected in Government?”The disconnect between policymaking and implementation has deep roots.Theideological fathers of the modern state,as among them Woodrow Wilson and MaxWe

90、ber,argued for a purposeful separation.2021WHY ARE POLICYMAKING AND IMPLEMENTATION DISCONNECTED INGOVERNMENT?2023 Boston Consulting Group13In his landmark essay“The Study of Administration,”Wilson introduced the politics-administration dichotomy,which says that civil servants should steer clear of p

91、oliticsand policy,and politicians should not concern themselves with implementation.Weber,in his magnum opus Economy and Society,argued that public administrationshould be guided by bureaucratic principles such as specialization,expertise,hierarchy,formal procedures,impersonality,and meritocracy.The

92、se principles allow agovernment agency to scale up while preserving values such as competence,accountability,and integrity.However,these bureaucratic principles are strictlyintrospective and pay no attention to the environment of the agency.Furthermore,theprinciples prescribe how an agency should be

93、 organized but say nothing about whatobjectives it should seek to achieve.In Webers view,the latter should be the strictprerogative of politicians.Despite the rising popularity of strategy in recent decades,policymaking andimplementation remain disconnected.The idea of strategy has been introducedse

94、parately into the spheres of policymaking and implementation,with vastly differentcontexts,objectives,and practices,and it has since developed in separate directions:22 The Roots of Extrospective Strategy.The roots of extrospective strategy(policymaking)are in national planning.During the first half

95、 of the 20th century,a shi took place toward more coherent programs of government action,whichwere typically called policies or plans.National plans grew famously popular inCommunist countries,such as the Soviet Union and China,but they also verymuch flourished in their capitalist counterparts.Franc

96、e,for example,started itsfirst National Plan in 1947 and continued with new installments for decades.TheUS saw a variety of grand plans,such as the Marshall Plan and Johnsons GreatSociety.Planning went out of vogue during the turbulence of the 1980s,and thefall of the Soviet Union is oen regarded as

97、 the death of planning.Butextrospective strategy survived in various forms.Todays government ministriesdevelop an array of extrospective strategieswhich they may call plans,policies,strategies,or agendasfor all sorts of domains:from youth crime tocybersecurity,and from innovation hubs to urban desig

98、n.Grand national strategy,for example to achieve economic growth or to decarbonize the country,is alsoused to great effect in many places,such as Singapore,Saudi Arabia,and theEuropean Union.2023 Boston Consulting Group1422 Joyce,P.,Strategic management in the public sector,2015To unlock the full po

99、tential of strategy,public-sector leaders should abandon the idea thatpolicymaking and implementation mustor even canbe separated and instead commit to a moreholistic approach.Strategy can serve as a bridge between policy and implementation.The aspiration isto co-create holistic strategy that balanc

100、es policy objectives and executive capabilitiesandcontinuously rebalances them in a dynamic environment.When policymaking and implementationmutually reinforce each other,modern strategy provides an excellent tool to diminish the executiongap.In the words of Jenny Stewart,an honorary professor of pub

101、lic policy at the University of NewSouth Wales,“Potentially,the idea of strategy can productively politicize the managerial,andmanagerialise the political.”We do not claim that the execution gap can be fully explained as a broken interaction betweenpolicymaking and implementationother causes,such as

102、 political pressures to overpromise or a lackof funding,may also play a role.But good strategy has the potential to resolve such discrepancies byproviding an explicit space for their collision and harmonization.It puts the differences between the The Roots of Introspective Strategy.In the face of th

103、e financial crises of the1980s,there was a growing sentiment that many public agencies were fat,slow,and inefficient and should be made more“business like.”Margaret Thatcher andRonald Reagan first put this idea into practice.They championed a sweeping waveof“managerialization”in the public sector,an

104、d countries all over the world soonfollowed.This managerialization was characterized by the introduction of manynew tools and ideas,such as the centralization of power,viewing citizens ascustomers,performance management,KPIs,incentives,rigorous planning,budget discipline,internal competitionand stra

105、tegy.The ideas of New PublicManagement,as the paradigm soon came to be known,were based on aprincipal-agent view of organizations:Employees did only what their superiorsrequired of them and would shirk responsibility wherever and whenever theycould.In this paradigm,strategy is understood to be a man

106、agerial tool.Itfunctions as a contract between the leadership of an agency and its variousteams,and this contract stipulates what should be delivered,by when,and at whatcost.Employees are held accountable for the output they deliver but bear noresponsibility for the outcomes.When conceptualized in t

107、his way,strategy is usefulto manage the cost-efficiency of civil service,but not its effectiveness in creatingpublic value.23 2023 Boston Consulting Group15policymaking and implementation perspectives on the table early,rather than waiting for them tomaterialize down the road.The disconnect between

108、policymaking and implementation creates myriad problems:What does it take to put holistic strategy across policy and implementation into practice?There is nosilver bullet,but in our experience a number of interventions can help:Civil servants resort to deploying“tactics of control.”In the absence of

109、 an explicit space fordiscussing the executive implications of policy,civil servants have little choice but to resort totactics of control to manage their own accountability.In extreme cases,the civil service protectsitself by keeping elected officials in the dark or by purposely setting unambitious

110、 output objectives.Executive expertise does not inform policy.Executive agencies can contribute more to policythan just executive concerns;the men and women in the field are also closest to the citizens andtypically have valuable insights into their problems,opinions,and needs.Policymaking is strong

111、erwhen these insights are incorporated.Political dilemmas are le to executive agencies.When policy does not concern itself withimplementation and vice versa,many of the tactical choices that need to be made rapidly will lackpolitical guidance.But details can matter greatly.Citizens deal not with the

112、 idea that wasoriginally conceived in the mind of the politician or policy advisors but with the actual tools andservices that spring from it.Many political tradeoffs and dilemmas emerge only in theimplementation phase:For example,do we prioritize the speed of the operation or the attentionto detail

113、s?Do we opt for a consistent treatment of citizens or create room to address individualneeds?Executive agencies and policymakers think on different timescales.Politicians typically seekto achieve results before the next election cycle,whereas civil servants oen remain with anagency for years or even

114、 decades.This means these two groups are incentivized to think and acton different timescales.While strategy does not take this divergence of incentives away,it doesforce the different perspectives to collide and harmonize.Synchronize the strategy cycle with the political cycle.The start of an elect

115、ed officials tenurenaturally invites political and strategic reorientation,as this person will be eager to make her orhis mark.To ensure a holistic approach,executive agencies should synchronize their strategiccycles with the political calendar when possible.Ensure that the strategy and budgeting pr

116、ocesses are linked.Strategy is worth only as muchas the changes it effects.The proof of the pudding is in the budget and the outcomes.To ensurethe necessary level of participation on both the policy and executive sides,changes in strategyneed to have direct implications for budget allocations and im

117、pact metrics.2023 Boston Consulting Group16Creating the Strategic StateHow do you move toward a new approach to strategy that is aligned with the needs of yourenvironment while bridging policy and implementation?The specific steps toward improving yourapproach to strategy are not universal but requi

118、re a close look at the starting point of yourorganization.As chess grandmaster Max Euwe said,“Strategy requires thought,tactics requireobservation.”What is clear,however,is that all agencies need a much broader set of capabilities to succeed atstrategy today than was necessary to succeed at planning

119、 in the past.Senior civil servants should knowhow to implement each of the five strategic approaches discussed earlier and recognize which one touse in a given scenario.They also need to face organization-related challenges that arise when leadingan agency whose departments require different approac

120、hes to strategy.Consider a police force:theorganized crime unit may require an adaptive approach;the traffic police,a classical approach;andthe youth crime department,a collaborative approach.Governments seeking to step up their game in strategy need to enable their agencies to succeed withdifferent

121、 strategic approaches.That could mean,for example,that civil service rules need to berewritten to allow certain agencies more flexibility and room for experimentation while others shouldstay focused on consistency of outputs.It should also be reflected in training programs and HRdecisions,where expe

122、rience with various strategic approaches becomes a key metric in the promotionand placement of senior civil servantsin addition to their domain expertise.Involve executive agencies in setting political agendas.In many countries,important policydecisions are made during political negotiationsfor exam

123、ple,while building a coalition ofparties that will form the new cabinet aer elections.Senior civil servants of executive agenciesshould have a seat at the table,or at least a role in the process,so that they can voice concernsand provide expert input.Think big,start small,scale fast.When designing h

124、olistic strategy,it is tempting to address bigproblems with big solutionsbut this oen proves ineffective.It is indeed important to thinkbroadly about the challenges that a government faces and the coherent set of solutions needed toaddress them.But agencies cannot execute on grand programs of action

125、 without first developingthe enabling competencies that are conditional to success.And while political priorities may shirapidly,implementation cannot.Good holistic strategy is selective and disciplined:It starts with asmall number of key catalytic initiatives that take into account the organization

126、al constraints ofthe executive agency.Over time,the agency can invest in the acquisition and development of newcompetencies that fit its strategic approach(that is,competencies to plan,adapt,envision,collaborate,or regenerate)so that the agency can gradually expand its organizational constraintsand

127、scale up its solutions.2023 Boston Consulting Group17Finally,elected officials in strategic states need to understand that there is no longer a one-size-fits-allplaybook for directing agencies in their portfolio.They need to cooperate with each agency to craholistic strategy tailored to its environm

128、ent.The word strategy stems from the Greek words stratos(army)and agos(leader),which together mean“generalship of the army”thus,the concept of strategy originated in a public sector organization.Forcenturies,the notion of strategy played no significant role in government,but the paradigm of thestrat

129、egic state is gradually reviving its use.It is time for governments to advance to the next stage:learning how to deploy new strategic approaches beyond planning,choosing the right strategicapproaches based on the requisites of the environment,and using holistic strategy to bridge the gapbetween poli

130、cymaking and implementation.The BCG Henderson Institute is Boston Consulting Groups strategy think tank,dedicated to exploringand developing valuable new insights from business,technology,and science by embracing thepowerful technology of ideas.The Institute engages leaders in provocative discussion

131、 andexperimentation to expand the boundaries of business theory and practice and to translate innovativeideas from within and beyond business.For more ideas and inspiration from the Institute,please visitour website and follow us on LinkedIn and Twitter.AuthorsMartin ReevesMANAGING DIRECTOR&SENIOR P

132、ARTNER,CHAIRMAN OF THE BCG HENDERSONINSTITUTESan Francisco-Bay AreaVincent ChinMANAGING DIRECTOR&SENIOR PARTNER;VICE CHAIR,PUBLIC SECTOR PRACTICESingaporeRobert Van Der VeekenPROJECT LEADERNew York 2023 Boston Consulting Group18 ABOUT BOSTON CONSULTING GROUPBoston Consulting Group partners with lead

133、ers in business and society to tackle their most importantchallenges and capture their greatest opportunities.BCG was the pioneer in business strategy when it wasfounded in 1963.Today,we work closely with clients to embrace a transformational approach aimed atbenefiting all stakeholdersempowering or

134、ganizations to grow,build sustainable competitive advantage,and drive positive societal impact.Our diverse,global teams bring deep industry and functional expertise and a range of perspectives thatquestion the status quo and spark change.BCG delivers solutions through leading-edge managementconsulti

135、ng,technology and design,and corporate and digital ventures.We work in a uniquely collaborative1E.g.,Ferlie,E.,Ongaro,E.,Strategic management in public sector organizations,20152E.g.,Poister,T.,Streib,G.,Elements of strategic planning and management in municipal government,2005;Jimenez,Strategic Pla

136、nning and the fiscal performance of city governments during the great recession,20133Joyce,P.,Strategic management in the public sector,20154Hood,C.,A public management for all seasons,19915See for example:https:/www.oecd.org/gov/towards-a-more-effective-strategic-and-accountable-state-in-kazakhstan

137、-9789264284005-en.htm6E.g.,Proeller,I.,Strategic management for the state:international approaches in comparison,20077Bryson,J.,The future of public and nonprofit strategic planning in the United States,20108See,for example,gaps in the use of strategy in France and Germany,respectively:Fouchet,R.,Lo

138、pez,R.,TheFrench government and long-term planning,2015;Plamper,H.,Strategic management in German governments,20159See,for example,OECD,Poland:Implementing Strategic-State Capability,2013,and OECD,Estonia:Towards aSingle Government Approach,201110 Joyce,P.,Strategic management in the public sector,2

139、015;Bryson,J.,The future of public and nonprofit strategicplanning in the United States,201011 Pew Research Center,Survey of US adults,May 202212 State Planning Organization,Republic of Turkey,Strategic Planning Guide for Public Administrations,200613 See for example Bloom,N.,Ahir,H.,Furceri,D.,Visu

140、alizing the Rise of Global Economic Uncertainty,202214 Kooiman,J.,Van Vliet,M.,Governance and public management,199315 Osborne,D.,Gaebler,T.,Reinventing government:how the entrepreneurial spririt is transforming the publicsector,199216 Lo,C.,Going from government to governance,201717 For a more elab

141、orate case study,see Kamener,L.,Reeves,M.,and Chua,J.,The adaptive public-sector agency,201018 Velmet,A.,The blank slate e-state:Estonian information society and the politics of novelty in the 1990s,202019 Favaro,K.,Defining Strategy,Implementation,and Execution,201520 Leinwand,P.,Mainardi,C.,Kleine

142、r,A.,5 ways to close the strategy-to-execution gap,201521 Rollinson,R.,Houghtby-Haddon,N.,Strategy implementation in the public sector,201923 Stewart,J.,The meaning of strategy in the public sector,2004 2023 Boston Consulting Group19model across the firm and throughout all levels of the client organ

143、ization,fueled by the goal of helping ourclients thrive and enabling them to make the world a better place.Boston Consulting Group 2023.All rights reserved.For information or permission to reprint,please contact BCG at .To find the latestBCG content and register to receive e-alerts on this topic or others,please visit .Follow BostonConsulting Group on Facebook and Twitter.