Public Administration Review,
July-August 1998 v58 n4 p353(7)
State strategic planning: suggestions from
the Oregon experience. Gerald R. Kissler; Karmen N.
Fore; Willow S. Jacobson; William P. Kittredge; Scott L.
Stewart.
Author's Abstract: COPYRIGHT 1998 American Society
for Public Administration
Oregon developed two strategic plans for the entire state
over the past decade. Its experience suggests that strategic
planning can be a valuable process in helping a state adjust
to a major economic and social transformation. Comparing the
processes used to develop the two plans suggests that policy
makers should (1) include university faculty and students in
the process because it will bring new ideas to the public
debate; (2) analyze benchmarks and other information to
address myths and outdated beliefs; (3) use a bottom-up
approach because it engages the public, increases awareness of
the complexity and interrelatedness of the region`s issues,
and generates new insights into the status of the state; and
(4) insist that every major research finding be linked to a
recommendation and benchmarks because it leads to a more
logical plan and a better way to determine whether the state
is moving in the right direction.
Full Text: COPYRIGHT 1998 American Society for
Public Administration
Strategic planning "is, very simply, a method for aligning
an organization with its environment," according to Meising
and Andersen (1991). It is a management tool that has been
used in the private sector for years as a systematic process
for relating the organization to changes in the environment.
Strategic planning processes typically involve assessing
strengths and weaknesses, identifying opportunities and
threats, determining where the organization should be going,
and then establishing goals, strategies, and tactics for
getting there.
However, critics have questioned the value of strategic
planning (for example, Mintzberg, 1994). Hamel (1996) has
argued that strategic planning processes are too costly and
time-consuming for today's fast-paced, competitive environment
in the corporate world. Strategic planning processes produce
plans, not necessarily strategies that make a difference.
Fortune magazine reports that, by downplaying the planning
process, some corporations, such as Nike, Amgen, and
Harley-Davidson, have created "killer strategies" or strategic
initiatives that led to market dominance (Hamel, 1997). Hamel
(1996) suggests that the key is to shift the emphasis from
"planning" to strategizing.
Even if the critics are correct about the limited
effectiveness of strategic planning in the private sector, it
might still be a valuable management tool in the public sector
where the pace of change is slower and where inclusive
processes are essential for widespread acceptance. Indeed,
Bryson emphasizes the value of strategic planning in public
and nonprofit organizations because it "can help facilitate
communication and participation, accommodate divergent
interests and values, foster wise and reasonably analytic
decision making, and promote successful implementation" (1995,
5). On the other side of the issue, Miller, Rabin, and
Hildreth (1987) have argued that agreement will not last long
enough for planning to be done in the public sector.
In spite of such concerns, most authors have urged the
public sector to adopt strategic planning as a rational and
future-oriented management technique for improving government
agencies (Behn, 1980; Bryson, 1988; Bryson, 1995; Meising and
Andersen, 1991; Nutt and Backoff, 1992). In fact, their advice
is being followed. Berry and Wechsler (1995) found that six
out of the ten government agencies responding to their
national survey were doing strategic planning and another one
in ten said that it intended to do so in the future. They
concluded that strategic planning has been "a successful
public sector management innovation."
In addition to the use of strategic planning by pubic
agencies, some governors have initiated processes that
produced plans for the entire state. Rather than the Soviet
style, ten-year plans or attempts at social engineering on a
grand scale, these state strategic plans have provided a
general framework for public policy development. Because other
states may consider developing their own plans, this article
will (1) describe the strategic planning process used in
Oregon, one of the leading states, (2) indicate the parts of
that process that are most valuable, and (3) offer suggestions
for future plans.
How Were Oregon's Strategic Plans Developed?
The state of Oregon has developed two strategic plans over
the last decade, using somewhat different processes. In this
section of the article we will present the dramatic changes in
context that led to the original plan issued in the late 1980s
and the update in the mid-1990s.
For most of this century, Oregon's economy was heavily
dependent upon extraction and manufacturing industries.
Working in the forests harvesting trees, in the fields loading
grain, or in the boats catching fish was the dominant way of
life for many Oregonians. Many other jobs in rural Oregon were
dependent upon natural-resource-based industries, and even
Portland, the state's major metropolitan area, was a
distribution hub for goods produced in rural portions of the
state. With the downturn in the forest products industry in
the early 1980s, Oregon's natural resource-based economy went
into a long and deep recession. Incomes fell, statewide
unemployment reached double digit levels, and many people left
the state.
The Original Strategic Plan
By the mid-1980s, there were signs of modest improvement in
Oregon's economy. Even though the unemployment rate was
declining, per capita incomes were still about 10 percent
below the national average--a particular concern to then
Governor Neil Goldschmidt. In order to lift the state out of
the doldrums of the early 1980s Governor Goldschmidt asked
more than 150 business and community leaders to help write a
strategic plan for the state, l The plan they drafted,
entitled Oregon Shines: An Economic Strategy for the Pacific
Century, was released in 1989 (hereafter referenced as Oregon
Shines I).
The planning process they adopted included some regional
meetings but was driven primarily by a series of committees
that worked on detailed recommendations in designated problem
areas. The plan they created described three strategic
initiatives: (1) a superior workforce, (2) an attractive
quality of life, and (3) an international frame of mind. In
the following year the state legislature adopted several of
the plan's recommendations. For example, the legislature
addressed its concerns about the workforce by adopting
legislation and funding programs in the following areas: the
adoption of sweeping school reform, the support of
school-to-work transition programs, the creation of a
Workforce Quality Council to coordinate retraining programs,
and the funding of community college professional/technical
programs. The state legislature also created the Oregon
Progress Board to monitor benchmarks to determine if the state
was moving toward the Oregon Shines I vision.
The state of Oregon has received several awards for being
one of the early adopters of benchmarking. The National
Governors Association featured the Oregon Benchmarks in its
1993 policy paper on the redesign of state government. In 1994
the Oregon Benchmarks system was selected as one of the ten
winners of the annual Innovations in Government awards
presented by the Ford Foundation and the Kennedy School of
Government at Harvard. Oregon has not only been an
award-winning leader in the adoption of these innovations, it
has also sustained its commitment to the concept through two
changes in administration.
In the years following the release of Oregon Shines I the
state's economy experienced a truly remarkable turnaround. By
1995 the state's industry mix was more diversified,
unemployment was at historic lows, and population growth was
twice the national average. Oregon's economy was so strong
that it did not participate in the 1991 national recession.
Public policy in Oregon changed as a result of its
strategic plan but it would be a considerable overstatement to
attribute this remarkable turnaround solely to its public
policy choices. In a report prepared for the governor's Oregon
Shines Task Force, the Office of Economic Analysis (1996)
attributed much of the state's recovery to external factors,
such as (1) U.S. monetary policy and (2) the downturn in
California's economy.
Oregon's above-average forest products and capital goods
sectors contracted in response to high interest rates in the
early 1980s and benefitted from the more favorable interest
rates in the 1990s. California's defense sector ballooned
during the Star Wars years and collapsed when the Cold War
ended. With California's economy "in the tank," Oregon
attracted new businesses and new citizens who moved into the
state with a good education and the disposable income to help
spur the state's economy.
This economic recovery, however, was not experienced evenly
around the state. Some parts of the state, particularly rural
communities that were dependent upon the old-style
manufacturing and extraction jobs, found themselves unable to
recruit new businesses, leaving many in their communities
without work (Kissler and Tryens, 1997). In addition, many of
the best jobs in the metropolitan areas went to the newcomers
from out of state, who were better educated and had more
experience than native Oregonians.
An Updated Plan
Recognizing that the economy had turned around and that
other things had changed since Oregon Shines I was released in
1989, Governor John Kitzhaber formed a 46-person task force in
April of 1996 to recommend changes to the state's strategic
plan. The strategic planning process used in 1996 (hereafter
referenced as Oregon Shines II) differed in several ways: (1)
significant university involvement, (2) analysis of Oregon
Benchmarks to determine measurable progress toward the state's
goals, (3) a bottom-up approach involving ten regional
meetings held throughout the state, and (4) the adoption of
broad recommendations rather than specific strategies and
tactics. After describing these four aspects of the process we
will evaluate them and relate our recommendations to them.
University Involvement: One of the goals of the Progress
Board has been to involve more faculty and students from the
state's universities in its various projects. Examples of
these collaborations include research at Oregon State
University on the root causes of poverty and the ongoing
support for several Progress Board activities provided by the
Center for Population Research and Census at Portland State
University.
Consistent with its goal of greater university involvement,
the Oregon Progress Board asked Professor Gerald Kissler and
his graduate students from the Public Policy and Management
program at the University of Oregon, the authors of this
article, to lead the regional information-gathering meetings,
analyze data, and draft much of the governor's task force
report. When the work of the task force was presented to the
Progress Board near the completion of the project, the
executive director indicated that this project had been a
model for the incorporation of university faculty and students
in state policy work.
Analysis of Oregon Benchmarks: Analysis of progress made
towards the three goals in Oregon Shines I was a joint effort
of the University of Oregon team and the Progress Board staff.
Some of the more important economic findings from our analysis
of the Oregon Benchmarks and other data included the
following:
* Oregon companies have been creating tens of thousands of
good professional and managerial jobs but Oregonians are not
qualified for them.
* Oregon's economy is more diversified but not in the
technology sector.
* Oregon is a net importer of high-end professional
services.
* Industry spending on research and development (R&D)
as a percent of gross state product (GSP) is well below
average and suggests that the state is not well positioned for
twenty-first-century competitiveness.
* While rural Oregon has experienced a painful loss of jobs
in its natural resource-based industries, this state's
experience is not unique. In fact, per capita incomes in rural
Oregon continue to be higher than the national average for
nonmetropolitan counties in the United States.
A Bottom-Up Approach: Prior to each of the regional
meetings, University of Oregon students gathered information
about major trends, community issues, and local initiatives by
talking to knowledgeable individuals in the region and asking
them to complete a short questionnaire. They also scanned
local newspapers for relevant stories and reviewed state
reports on trends in the region.
A worksheet containing information collected prior to the
regional meeting was used to guide a small group process that
was the primary information-gathering tool. Participants were
asked to (1) modify the information on the worksheet, (2)
identify local initiatives that would address trends and
issues, (3) suggest statewide strategies and actions, and (4)
synthesize their ideas into a new vision for Oregon. Having
completed this individual process, participants were engaged
in a facilitated dialogue with others at their table. Finally,
a spokesperson reported on the group's discussion to the
reassembled gathering.
The governor's task force valued the comments and
suggestions from the community leaders who attended the
regional meetings but they also wanted to check the pulse of
the general public. Therefore, we looked at several polls and
commissioned focus groups on what "quality of life" means to
Oregonians.
Broad Recommendations Rather Than Specific Tactics: We
started the process intending to update an economic plan but
the regional meeting participants wanted a broader vision that
addressed social issues and environmental concerns. The
consensus of these regional meetings formed around three new
goals for Oregon Shines II: 1) quality jobs for all
Oregonians, 2) safe, caring, and engaged communities, and 3)
healthy, sustainable surroundings.
Oregon Shines I contained hundreds of specific
recommendations but what endured were the general concepts,
rather than the specific tactics. Drawing upon past
experience, we decided to include only general strategies in
Oregon Shines II and to relate them to the new economic,
social, and environmental goals. For example, the general
strategies for the economy were to improve education and
training, and to increase the competitiveness of Oregon
business in the global economy. The strategies for the social
goals were to minimize preventable social costs and build
strong communities that support families and help restore
hope. In the environmental area the strategies were to develop
a better understanding of the underlying issues and to utilize
a cooperative visioning process to work toward consensus in
order to avoid confrontation and costly litigation.
Is the Strategic Planning Process Valuable?
The governor's task force was in operation for almost one
year and the pace of activities left us with less time than we
would have liked for evaluation. In the months following the
release of Oregon Shines II we have had an opportunity to
reflect on our contributions, but admittedly from a biased
point of view.
The Process Itself
Even though the Progress Board's staff had continued to
speak to service clubs and work with community progress boards
since the release of Oregon Shines I, Governor Kitzhaber felt
that it was time to reinvigorate the process. Oregon has not
escaped voter cynicism and the general loss of trust in
government. Therefore, one very important function of Oregon's
strategic planning process was to demonstrate that state
leaders were doing something to address the major issues and
concerns of citizens through a participatory process.
In contrast with the 1989 process, this approach included a
larger number of citizens from a wider range of backgrounds in
more parts of the state. However, our process was less
effective in engaging business leaders than its predecessor
had been. Still, there has been support for strategic planning
and benchmarking from the business community.
The governor's task force was chaired by Fred Buckman, CEO
of PacifiCorp--a midsized Fortune 500 company in the utilities
industry. Speaking on behalf of the business leadership, Mr.
Buckman (1996) remarked at the final governor's task force
meeting:
I want to say just a couple of words about the importance
of Oregon Shines to the business community. And
I want to say it in the context of someone who is a
relatively
new Oregonian .... I admit to being quite enamored
by the fact that Oregon was willing to step out and
actually write down what it intended to achieve and
then to measure its performance against those goals ....
From a business person's perspective I find it very
refreshing and reassuring that in a place we choose to do
business that there is on the radar screen fairly hard
measures of what it is we are trying to achieve.
The Findings
We believe that the analytical work will lead to better
informed public policy if the Progress Board is effective in
disseminating the findings. By comparing the information
collected at the regional meetings with polling data and focus
group results, we concluded that the community leaders were
more optimistic than the general public. In short, the average
person at the coffee shop knows that the economy is more
diversified and that the state will never again be as
dependent upon its natural-resource-based industries. However,
there is a poor understanding of the role of high-end
professional services and the nature of the state's new
technology-generating industries. Transformations without a
clear vision of the future often lead to confusion and fear.
The text of the final report was intended to help reduce
confusion and fear, but it will take years to reach large
numbers of leaders and general citizens. The governor's task
force disbanded after its report was submitted, but one of the
important functions of the Oregon Progress Board is to make
presentations to community groups throughout the state. In
fact, the executive director was scheduled to make at least
one presentation per week for the last six months of 1997 to
service organizations, city dubs, chambers of commerce, and
local progress boards.
The Recommendations
It is too early to know whether the recommendations in
Oregon Shines II will be followed or whether they will make a
difference. We do know, however, that the reaction from
community leaders has been very positive. Their feedback
indicates that the new plan contains valuable information in
an easily understood format that helps them see the
relationships among economic, social, and environmental
issues. In addition, state agencies and nonprofits are
referencing the new state strategic plan in discussing their
programs and initiatives. The reaction from the media and
state political leaders has also been very positive. Newspaper
editorials have praised the vision. Some politicians who had
expressed skepticism about state strategic planning and
benchmarking also became strong supporters of the concepts
during the legislative session.
Both houses of the state legislature overwhelmingly
approved the bill reauthorizing the Progress Board. This bill
not only declared that an Oregon Progress Board is needed to
encourage the discussion and understanding of critical global
and national trends, but it also required the Progress Board
to develop "a strategy that addresses the economic, social,
cultural, environmental and other needs and aspirations of the
people of Oregon." In addition, the Progress Board was
directed to develop a series of goals with measurable
indicators of attainment and to prepare a report at least once
each biennium on Oregon's progress.
What Can We Offer To Other States?
We believe that there is considerable value in state
strategic planning and that the plan should be updated every
five to ten years as changes in the context indicate. For us,
it is less a matter of "whether" than "how." Therefore, the
suggestions offered below are derived primarily from the
changes in the process used for Oregon Shines II, the update
in 1996.
Include University Faculty and Students to Bring New Ideas
at the Cutting Edge
One of the benefits of having university involvement in the
state strategic planning process was the background research
done by faculty and students on the large forces producing an
economic and social transformation at the end of the twentieth
century. While every state is different, all are affected by
the same large forces. New technologies and global competition
are reshaping the economy. There is more stress on families
but less trust and support in communities for those in need.
Population growth and natural resource limitations have caused
more citizens to worry about an erosion of quality of life and
have led to confrontation between economic interests and
environmental concerns.
During the university/agency drafting of Oregon Shines II,
we attempted to give equal treatment to the economic, social,
and environmental areas but found that there was a much better
understanding of the factors underlying the economic issues
than the social issues, which in turn were often much better
understood than the environmental issues. As a result, it is
fair to say that our recommendations had less "punch" as we
moved from the economic, to the social, and then to the
natural surrounding goals.
Analyze Benchmarks and Other Information to Address Myths
and Outdated Beliefs
If strategic planning is a rational approach to realigning
the state with changes in its context, then planners and
policy makers must have a good understanding of the trends and
their impacts. Oregon's many years of experience with
benchmarking gave us a good place to begin the analysis of the
changes that had occurred since the previous plan was issued.
In the process we discovered that the relationship between
economic and social issues is much more complex than the
authors of Oregon Shines I believed it to be. They knew that
social problems, like abuse, had increased in the 1980s and
assumed that the rise was caused by a weak economy. They
believed that Oregon's social problems would decline if the
state's economy turned around. Oregon's economy has turned
around in the 1990s but there has been no change in the
poverty rate and other indicators, such as juvenile arrests
and teenage drug use, have risen.
Utilize a Bottom-Up Process to Engage the Public, Increase
Awareness, and Generate New Insights
Governor Kitzhaber is committed to the concept of
participatory democracy. Therefore, he wanted the 1996 update
to be developed with more of a bottom-up approach, relying
upon citizen input and the analysis of regional information.
As a result, Oregon Shines II is a more thorough and
thoughtful document than it would have been if it had simply
been developed by government policy "wonks." This approach
worked well in a state with only three million people but
would undoubtedly be much more difficult in a larger state.
In the course of meeting with hundreds of Oregonians from
different walks of life in all parts of the state, we came to
appreciate many different perspectives. Clearly, the public
mood is more positive than it was in the 1980s. Still, many
Oregonians are having a difficult time making ends meet and a
third are worried about their financial security.
To illustrate the differences in attitude found in
different parts of the state we developed Figure 1. In a
Maslow-like fashion these stair steps illustrate the way that
aspirations rise as the economy improves. Aspirations rise as
the economy improves. When a region experiences a long and
deep recession, people simply want more jobs to replace those
that have been lost. As unemployment rates decline, the focus
shifts to better jobs--higher salaries; insurance, retirement,
and other benefits; and better working conditions. When
salaries approach expectations the public interest rises to
better lives.
[Figure 1 ILLUSTRATION OMITTED]
Community leaders in different regions were at different
stair steps. In some parts of the state where unemployment was
still in double digits, the participants in our regional
meetings were still at the first step--trying to diversify the
local economy to create new jobs. Most of our regional meeting
participants, however, were either on the second or third
step. They were concerned about economic issues but were
unwilling to sacrifice their quality of life for economic
development.
In general the community leaders at our regional meetings
were more optimistic than the general public. Community
leaders knew that the economy had improved and were anxious to
move up to the next stair step. Our review of the polling
data, which was confirmed by our focus groups, indicated that
most people are aware that the state's economy is better but
they do not see any improvement in their personal situation.
Our experience with the regional meetings and the Progress
Board's other efforts to engage the citizenry indicate that it
is very difficult to get them to use data to develop informed
recommendations about public policy tradeoffs. However, these
forums do provide an important source of information about
citizens' beliefs and values. When the process forces them to
discuss their views with others around the table, as they did
at the regional meetings, they gain a better appreciation for
the complexity and interrelatedness of the issues facing the
region.
Link Every Major Finding from Research to a Recommendation
and Benchmarks to Ensure a More Logical Plan and to Monitor
Progress
Other states have strategic plans, but what sets Oregon
apart is its considerable experience with benchmarks as
measurable indicators of progress toward the state vision.
With many years of experience with outcome-based measurements,
we were able to write a different kind of strategic plan--one
with clear linkages among major research findings,
recommendations, and benchmarks.
Oregon's benchmarks report represented a whole new approach
to outcome-based assessment and accountability in the early
1990s. However, the benchmarks were developed after Oregon
Shines I was written in 1989, and there was no way to link the
two documents. Now, the benchmarks are incorporated in Oregon
Shines II. Every major finding is linked to a recommendation
and benchmarks for monitoring progress. The result is an
approach to state strategic planning that could be helpful to
leaders in other states who intend to develop their own plans.
One example of the linked structure relates to the
diversification of the economy. It is generally recognized
that the technology sector is increasingly important to
twenty-first-century competitiveness with the shift to a
knowledge-based or information economy (Gilder, 1989; Thurow,
1992; Toffler, 1980). While the technology sector in Oregon is
growing, it is not diversified. Therefore, the governor's task
force recommended a shift in public policy from recruiting
manufacturing facilities to becoming one of the top ten states
in the nation for starting and growing a technology company.
The benchmark the Progress Board will be monitoring is total
research and development spending by industry as a percentage
of gross state product.
Conclusion
Some authors have questioned the value of strategic
planning in general (Hamel, 1996; Mintzberg, 1994) and its use
by government in particular (Miller, Rabin, and Hildreth,
1987). Miller, Rabin, and Hildreth (1987) based their
conclusion that "strategists have committed themselves to the
road in the public sector that leads nowhere" upon their
finding that government financial managers feel vulnerable to
a liability suit, are constrained by political concerns, and
are less willing to use financial tools with greater
associated risk. This conservative, risk-averse behavior by
financial managers in the public sector runs counter, they
argued, to the values and assumptions of rational decision
making and strategic planning.
However, proponents could counter that leaders should urge
the public sector to adopt strategic planning and other
rational decision-making practices precisely to override those
risk-averse tendencies and thereby make better use of public
funds for social purposes. Indeed, the Oregon experience leads
us to concur with those who have encouraged the public sector
to adopt strategic planning as a rational and future-oriented
technique for adjusting to changes in context (Behn, 1980;
Bryson, 1988, 1995; Meising and Andersen, 1991; Nutt and
Backoff, 1992).
States strategic planning has been a valuable process in
helping Oregon adjust to a major economic and social
transformation. And, consistent with Bryson's (1995) views,
the process chosen to update Oregon's strategic plan
facilitated communication and participation. The regional
meetings were useful not only for gathering information from
participants but also for "myth busting." Over the next few
years we hope that the information in Oregon Shines II will
increase public understanding and help to reduce confusion and
fear.
Even if one grants that the analysis of the benchmarks and
the plan's strategies could provide a useful framework for
decision makers at the state and local levels, there is still
no guarantee that the strategic plan would actually be used.
We believe that it will be used for two reasons. First, the
original plan led to legislation in the early 1990s and it is
happening again with the updated plan. For example, several
pieces of legislation were directed at the workforce issue
raised in Oregon Shines I. Moreover, following the release of
Oregon Shines II, the legislature called for a plan to
reorganize the Economic Development Department to meet the
needs of those regions of the state that had not benefitted
from the economic turnaround. Second, agencies and non-profit
organizations are already relating their initiatives to issues
raised in the updated plan, as they did when Oregon Shines/was
released.
Therefore, we conclude that state strategic planning has
been a valuable process in Oregon. While each state must
tailor its own process, we recommend that state policy makers:
* include university faculty and students because it will
bring new ideas at the cutting edge to the public debate;
* analyze benchmarks and other information to address myths
and outdated beliefs;
* utilize a bottom-up approach involving regional meetings,
because it engages the public, increases awareness of the
complexity and interrelatedness of the region's issues, and
generates new insights into the status of the state;
* insist that every major research finding be linked to a
recommendation and benchmarks because it leads to a more
logical plan and a better way to determine whether the state
is moving in the right direction.
Gerald R. Kissler is associate professor of Planning,
Public Policy and Management at the University of Oregon. His
work is in state public policy, strategic planning and
benchmarking, and in higher education governance and finance.
Karmen N. Fore is completing a masters degree in public
affairs in the Department of Planning, Public Policy and
Management at the University of Oregon.
Willow S. Jacobson is completing a masters degree in public
affairs in the Department of Planning, Public Policy and
Management at the University of Oregon.
William P. Kittredge has completed a masters degree in
public affairs in the Department of Planning, Public Policy
and Management at the University of Oregon. He is now a
research associate in the Alan K. Campbell Public Affairs
Institute and a doctoral student in the Maxwell School of
Citizenship and Public Affairs at Syracuse University.
Scott L. Stewart has completed a masters degree in public
affairs in the Department of Planning, Public Policy and
Management at the University of Oregon.
Acknowledgement
The authors would like to thank Jeffrey Tryens, Deidre
Molander, and Zoe Johnson from the Oregon Progress Board for
their assistance in preparing this article. Three other
University of Oregon graduate students, Kathrine Richardson,
Greg Doss and Jeff Grieve, were also members of the team that
led the regional meetings, analyzed data, and drafted much of
the final report.
Note
(1.) Copies of Oregon's state strategic plans and other
related materials are available on the web site for the Oregon
Progress Board at www.econ.state.or.us/opb/
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