2.2.2. Other countries

а) strategic goals and priorities definition, project management place in the strategic planning

An illustrative example of harmonized strategic planning unit work inside the government may be demonstrated on the case of New Zealand.

During the period of administrative reforms the State Services Commission considered the rationale for highlighting selected departmental objectives. The justification had to be national priorities, and it followed therefore that the process of setting departmental priorities should have been preceded by a process of establishing the government's priorities for the public service as a whole—tentatively called strategic result areas (SRAs). These might reflect government's medium-term priorities.

The Prime Minister gave his own attention to better organizing the Cabinet's strategizing in the lead-up to the budget. He established an annual pattern of bringing ministers to his residence at Premier House where, supported by key officials, they sought to thrash out priorities and create a framework of agreement which would guide the subsequent budget process and proof it against late runs. The impact of this process was to more deliberately engage all ministers in putting a policy front-end on the annual and three-year budget policy.

The Treasury reacted cautiously to the new arrangements lest they disturb the budgeting and purchasing disciplines. It was, however, interested in a better framework around the budget process for allocating envelopes of budget to areas of priority; better connecting the budget with the chief executives' performance agreement; and exploring the possibilities of multi-year budgeting for some departments.

Once it was evident that the strategic processes had Prime Ministerial support, the Treasury became involved—seeing the emerging framework as having potential value in each of these areas. The planning 'technology' adopted was one of providing support for decision-making rather than planning per se. The idea was that strategizing occurs not through a detailed plan at a fixed point in time, but through a stream of decisions by a range of players over a period of time as the future unfolds. What was needed was a 'strategic conversation' which would encourage busy decision-makers, both elected and appointed, to take time out on a regular basis to think long and wide about what was important about the direction of public policy. It was supportive of democratic process because it was aimed at strengthening, not pre-empting, political decision making.

The key idea was that a critical element in coherent government policy was the understanding amongst the key players of the intended direction of the whole. It aimed at a sense of joint cause amongst the political and administrative leaders that could then inform their operational decision-making and the role of senior public servants in supporting it.

'This way of looking at organizational objectives is developed in Eccles and Nohria (1992). "First attached to 'Future directions in public management in New Zealand: towards strategic management' delivered by Howard Fancy and Alex Matheson at the 'Public Sector Convention', Wellington, November 1995.

The most significant change in the way of conducting relations amongst the three central agencies occurred in late 1993, when a finely balanced election result motivated the three central agency heads to set up a regular weekly meeting to co-ordinate interregnum issues. This meeting obviously met a greater need because it is now a weekly fixture in which the heads of DPMC, SSC and Treasury, together with a few of their senior staff, discuss strategic and management issues in a relatively informal setting. The strategic management system drew the central agency heads into a government performance management process which more closely links strategy, budget and management. The State Services Commissioner now sits with his two central agency counterparts when he has formal sessions with chief executives on their departments' performance against KRAs and their proposals for these for the following year. The Department of Prime Minister and Cabinet draws on the Treasury and the SSC in the annual process of developing SRAs—and increasingly the Treasury and DPMC work together in support of the ministerial deliberations on the budget strategy.

By 1994, departments and ministers, after almost a decade of reform, were disposed to be suspicious of initiatives from central agencies—especially those which might encroach on their autonomy. However, from the outset the strategic management process was well received by the Prime Minister, many ministers and chief executives and their departments. The reasons seem to have been that:

• By being high-level, medium term and result-oriented, the new objectives did indeed provide the missing link between national vision and the annual departmental management processes.

• The process provided a structure for the Prime Minister's leadership of and consultation with his cabinet colleagues in putting a better-articulated policy frontend on the budget process.

• It engaged chief executives in reflection on the big picture—there was something about the exclusive focus of the previous arrangements on the short-term and measurable that left chief executives frustrated.

• It provided both a forum for high-level interdepartmental co-ordination and a rationale for priority setting for individual departments.

• The process was handled in a relatively informal way by the chief executive of the Department of Prime Minister and Cabinet (DPMC).

• It gave a stronger role to DPMC (historically that would have been resisted, but at the end of a period of severe downsizing this development was welcomed as a counter-weight to Treasury).⁵⁵

b) priority projects initiation, projects analysis and selection, portfolio formation

Canadian experience proposes a clear structure of project consideration and assessment.

Ministers have responsibility for initiation, administration of projects in support of the mandated programs of their departments. Project initiation is a result of running a one- or two-stage procedure. Outcomes of the evaluation of organizational project management maturity may be used for assessing the project proposals. The result of the assessment decides whether the project will be implemented this year, re-examined next year, or rejected. Project risk evaluation is a component of project initiation. Such evaluation may be performed twice: within the first assessment the most important risks are identified and mitigation plans are developed. The second evaluation includes evaluation of anti-risk measures that are applied as a result of the first evaluation. The initiation process may consist of one or two steps. The two-stage start-up process is one in which decisions about the project are taken as a result of two assessments, each of which may lead either to transition to the next phase or to rejection. The first evaluation is usually related to compliance with the strategy, the second to business effects of the proposed project. The one-step process is one in which there is only one decision on project initiation. This does not mean that there are no well-defined components within this process, but the execution of each such component does not end with a formal decision being made.

Is any group of resources and activities, and their related direct outputs, undertaken pursuant to a given objective or set of related objectives and administered by a department or agency of the government. Distinguished from a project, which has a specific objective, activity, beginning and end, a program may include various projects at various times.

The ordered set of such verifications is called the "gateway review process." This process as we have seen has been defined by the British Office of Government Commerce (OGC 2007) and has been implemented, among other places, in Australia at the federal level, in Texas, in New Zealand, and in Canada. Major projects and programs must pass through six gates:

0. Strategic Assessment - The gate for programs only. Verification that the program is needed and that is likely to achieve its objectives.

1. Business Justification - Verification that business requirements can be satisfied. Is it possible to finance the project? Determination of the effects which will be gained for invested money.

2. Delivery strategy -Verification that the production or purchasing strategy planned for the project is appropriate for achieving project results. Verification of implementation plans or of tender documentation.

3. Investment decision - Another verification whether the project is still needed, the funds exist, the implementation plans are appropriate, and the investment decision is appropriate to the current situation.

4. Readiness for service - Verification that the organization is ready to implement project products.

5. Operations review and benefits realization -Verification that the project products are used properly and the business results have been achieved. Passing each gate is a result of the review.

c) projects implementation, analysis and estimation of projects and strategy implementation

In Norway the Ministry of Finance initiated the development of an obligatory Quality Assurance Scheme in 2000, with mandatory external assessment of projects, performed by consultant companies, before the financing decision by Parliament. This was mandatory for all state-financed projects over NOK 500 million/£42 million, excluding Oil and Gas. The goal was to ensure improved quality-at-entry. It was a bottom-up process within the Ministry, with Peder Berg as a driving force. The decision to introduce this governance framework was made by the Prime Minister’s Office. In 2005 there was a second generation of the framework, reflecting the need to do something at an earlier stage. The same entity is responsible for the governance framework across all sectors, with few exceptions. For both generations of the QA Scheme the intention was to establish a system where politics and administration is well divided, with the interplay between these two sides well understood. There are two gateways: QA1 focuses on the rationale of the project. It covers the early choice of concept and strategy, and the decision to initiate project pre-planning, using a compulsory dossier of four documents, and looking at many alternatives. QA2 considers the decision to finance the project, looking at one alternative only, and controlling the Project Management Plan, with several sub-documents and a focus on cost. QA1 and QA2 provide a tool for control from the top from Parliament to Government, than Ministries and Agencies). Vertical integration stops at the agency-level and the private sector is not addressed. There are several coordination Forums where the Ministry of Finance gathers key interested people for discussions, often resulting in common understanding and definition of terms and professional standards. The Concept Research Programme supports the development of the regime and studies the practices of the agencies and consultants. As soon as the new framework was introduced in 2005, the need to develop new common definitions and guidelines was evident.

As we previously described the history of OGC in the UK it is reasonable to point out here that Norway and the UK experiences aimed to include transparency, being open to scrutiny, and particularly candid about the basis for decision-making. Also included were learning, willingness to change, the setting of common, high professional standards and political anchoring of the framework on a high level, or non-political QA/Gateway review. The process of development, however, was genuinely different. In Norway the initiating process was bottom-up, as was the implementation of the improvement. In the UK both processes were top-down, as was the implementation of the management system. Different strategies were chosen: Norway breaking with tradition and introducing a new arrangement, the UK building on tradition. The Norwegian framework is mandatory; the OGC framework works by influence. The Norwegian framework is a bottom-up process of learning from cases, transferring experience to other sectors and building ‘‘the new profession”. The UK OGC and MoD frameworks, to some extent, are a top-down introduction of a common ‘‘quality system”, the Centres of Excellence representing the ‘‘new profession”.⁵⁶

d) administrative support of strategic planning

In Canada in a monthly basis, the Major Projects Management Office, in collaboration with the other relevant federal entities, will report the status of the major resource projects within the regulatory system at that time, and governed by this Cabinet Directive, to the Minister of Natural Resources and those Ministers involved in the regulatory process, and to the members of the Major Projects Deputy Ministers' Committee and any other involved Deputy Heads. Biannually, the Major Projects Management Office will provide information on the progress of this initiative and on the achievement of time lines to the Minister of Natural Resources and other appropriate regulatory ministers in support of their reporting responsibilities to Cabinet.

These reviews were implemented in Canada as part of a new expenditure management system announced in 2007. The new strategic review process was a clear attempt to improve on the ad hoc approach to expenditure management that had been a feature of the beginning of the decade and earlier (Lindquist 2006b). This policy required that all program expenditures of government be reviewed on a four-year cycle, such that, in any one year, twenty-five per cent of program spending was reviewed. For departments identified for strategic review, their budgets were automatically cut by five per cent of program expenditures. However, a portion could be returned to the department if ministers were persuaded by a sufficient business case. Strategic reviews asked fundamental questions about the programs: Are they efficient and effective? Are they still required? Do they align with government priorities? To assist ministers in assessing the impact of the cuts, independent experts were required to analyze and comment on review proposals. The first four-year cycle of strategic reviews yielded $8.5 billion in savings over seven years, with $1.8 billion ongoing or $11 billion in savings over seven years with $2.5 billion in ongoing savings including Department of National Defence expenditures (Canada, Department of Finance 2011). The strategic review process had identified opportunities to increase the efficiency and effectiveness of operations, and to focus on core roles.⁵⁷

In the Management Accountability Framework (MAF), Treasury Board’s expectations are defined by ten elements of good management, including public service values, governance and strategic direction, people, citizen-focused service, learning, innovation and change management, and risk management. Each department’s performance in these areas is assessed annually; these assessments are a mix of quantitative and qualitative measures and indicators backed up by objective criteria and factual lines of evidence. This assessment is used as one input for determining the performance pay of deputy ministers by the Clerk of the Privy Council, and these assessments often inform the management improvement agenda for the following year. Deputy ministers now pay significant attention to improving the rankings of their departments. There is dialogue between the department and TBS officials about the rankings, but ultimately the ranking is a TBS decision. Perhaps more important than this somewhat mechanistic ranking is the annual, day-long collective discussion of the results among deputy ministers, led by the clerk and the secretary of the Treasury Board. ⁵⁸