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Is Strategic Planning Useful for International Organizations?

4 June 2023

By Katja Hemmerich


Three women and one man sitting at an office table with a computer and planning documents.

This week, the UNDP/UNFPA/UNOPS Executive Board holds its annual session and will hold interactive dialogues with the Executive Directors of UNDP, UNFPA and UNOPS respectively on their annual reports. UNICEF will do the same a week later and UNWomen a week after that. These organizations, like most international organizations invest significant time and resources in developing strategic plans and then updating stakeholders on their implementation through annual reports.


So this week, our spotlight asks the question: is the investment in strategic planning worth it?

The short answer is yes. While there is virtually no research on the impact of strategic planning on international organizations, there is a wealth of research focused on strategic planning in the public sector. That research indicates that strategic planning generally has a positive impact on enhancing organizational effectiveness - if certain challenges can be managed in the strategic planning process, as we outline below. Many of these challenges will be familiar to our readers, and several UN organizations are finding ways to tackle them. We define strategic planning as a process of analyzing the organization’s mission, mandate and values as well as its internal and external environment to identify strategic issues and formulate a strategy, goals and plans to address them. It is, therefore, a managerial approach focused on enhancing an organization’s capacity to actually achieve defined strategies, goals, and plans. International organizations, like all public organizations exist in a pluralistic context with multiple internal and external interests that all need to be met.


As a result, strategic planning processes are often more complex in public than private organizations. Interestingly, although resource pressures are a key issues for all public organizations, strategic planning processes that were focused on efficiency gains were considerably less successful than strategic planning that was focused on organizational effectiveness and demonstrating social benefits. The pluralistic complexity of public sector strategic planning leads to the first common challenge: an overemphasis on the design phase of the strategy at the expense of execution of the strategy. Typically this consists of failing to allocate the appropriate resources and capacity to strategy execution, and a lack of sustained attention on managing implementation of all elements of the strategy. Given the proliferation of strategic planners in international organizations (and an apparent absence of anyone who refers to themselves as a strategy manager), these pitfalls are likely to be a concern in international organizations as well. This is where the annual reports of executive heads - which are common amongst UN agencies, funds and programmes and generally focused on implementation of the strategic plans - are a useful tool to sustain attention on strategy execution both within the organization and with its executive board. Conversely, progress reporting that is not aligned with, or guided by an organization’s strategic plan, is likely to reflect - and enable - the management’s lack of focus on strategy execution. The complexity of interests also means that stakeholder involvement in the process can be challenging. While participatory approaches are helpful in fleshing out the multiplicity of interests and different perspectives on strategic problems and solutions, managing all those stakeholders throughout the process can be particularly difficult. A review of 31 empirical studies of strategic planning in different organizations demonstrated that tactical consideration of which stakeholders to involve at each stage of the process are more successful in designing effective strategic plans. This means avoiding just involving senior leadership in the process, and also avoiding trying to include everyone all the time. A key to success is to aim for having the right people at different elements of the process who can generate a series of different options for decision-makers to actively consider and debate before making a final decision on the strategy. A third challenge typical of public sector strategic planning - which has significant organizational impact - is the definition of performance indicators. The issue here is more complicated than just KISS (Keep It Simple Stupid!). Several different studies have shown that when indicators are too focused on short term goals and operational or output related deliverables, rather than outcomes (which are harder to quantify and measure) that it negatively impacts the organization’s performance and culture. Performance measures are generally monitored not only by the management of an organization but also by accountability mechanisms, which is how they can influence organizational culture. Researchers examining Swedish public agencies found that an overabundance of short term operational performance measures stimulated an inward focus making the organizations more reactive than proactive and outward looking. Strategic foresight and the ability to proactively anticipate and address external changes was helped through a greater balance with longer term outcome indicators. Other studies have demonstrated that overemphasis on achieving performance indicators at all costs can lead to a culture of blame avoidance and intolerance of mistakes, which impedes the ability of organizations to learn:


“It is not surprising that where there is little tolerance for error due to performance measurement, openness to problems and incentives to taking initiative—all of which are important for learning—are reduced. In other words, performance measurement inevitably imposes limitations on public organizations’ ability to learn—and, as such, their capacity for delivering sustainable change by formulating and implementing savvy strategies.” - The learning organization: a key construct linking strategic planning and strategic management, pg. 262


This does not mean that there should be no performance measures. Rather, the discussion of their achievement and any shortfalls, for instance in annual reporting, should examine what organizational learning is taking place instead of considering it purely as an accountability issue. An interesting example of how to do this is UNICEF’s formative evaluation in 2022 of its ‘Positioning for the Strategic Plan (2022-2025)’. The aim was to start learning at an early stage where UNICEF needed to adapt in order to achieve its strategic plan, and the results were discussed with the Executive Board in January 2023. So for those practitioners overwhelmed by what seems like a never-ending cycle of creating strategic plans and reporting on their implementation through annual reports and other mechanisms, research demonstrates that you are contributing to greater effectiveness of your organization. This positive impact on your organization’s performance can be enhanced by ensuring a balanced approach to strategy design and implementation as well as to operational goals and outcomes and their related indicators, with a tactical approach to stakeholder involvement.

Suggested discussion questions For those involved in this week’s discussion of the annual reports at the UNDP/UNFPA/UNOPs Executive Board or other upcoming discussions, we suggest the following discussion questions:

  1. Are there elements of the strategic plan not covered in the annual report? If so, why were those elements excluded?

  2. Is the organization able to demonstrate equal progress in implementing short term or operational goals and long term outcomes?

  3. What organizational learning is taking place as the organization implements its Strategic Plan?

  4. Is implementation of the Strategic Plan enhancing or inhibiting strategic foresight in the organization?

 

  • The Executive Board of UNDP/UNFPA/UNOPs holds its formal annual session from 5-9 June 2023. It has an ambitious agenda covering annual progress reports, oversight reports, specific evaluations and country programme documents in addition to updates on development system reforms.


  • UNWomen's Executive Board is updated on the unallocated resources of the organization on 9 June 2023.


  • UNHCR's Executive Committee holds another quarterly informal briefing on 7 June 2023 on the Global Compact on Refugees (GCR) focused on GCR initiatives and pledges, and modalities for participation in the Global Refugee Forum.


  • . The FAO Finance Committee will hold its 196th session on WFP Finance Matters from 5-7 June 2023. It will review various reports of External Auditors, the Inspector General and the Independent Oversight Advisory Committee.


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