STRATEGIC PLANNING IN THE PUBLIC SECTOR - CASE STUDY GENT 2020

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1 FACULTEIT LETTEREN EN WIJSBEGEERTE Academiejaar STRATEGIC PLANNING IN THE PUBLIC SECTOR - CASE STUDY GENT 2020 Scriptie voorgedragen tot het bekomen van de graad van master in de Meertalige Bedrijfscommunicatie Elisa Van Peteghem Promotor: Dr. Ellen Vanpraet

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3 FACULTEIT LETTEREN EN WIJSBEGEERTE Academiejaar STRATEGIC PLANNING IN THE PUBLIC SECTOR - CASE STUDY GENT 2020 Scriptie voorgedragen tot het bekomen van de graad van master in de Meertalige Bedrijfscommunicatie Elisa Van Peteghem Promotor: Dr. Ellen Vanpraet

4 Acknowledgements I would like to thank a number of people who have encouraged me during this year and during the writing of this dissertation. First, I want to thank my parents, my brother Vincent and my sweet sister Julie. They are like the dough of a pie: the basis on which all relies. Thank you for your unending support. Also, thanks to my fellow students of the MTB programme, who can be seen as the filling of this year. You have made it a wonderful, interesting and fun experience! I also would like to thank Sarah Desplenter, my superb internship tutor, and Luc De Bie, for his excellent guidance through this year. Finally, I want to say thanks to my icing: Sien, Lore and my dearest Nicolas. You guys are that extra bit of sweetness that makes all the difference. Elisa Van Peteghem July 2009

5 Table of Contents 0 Introduction 1 1 The organization: the City of Ghent 5 2 Theoretical framework: Strategic Planning in the Public Sector Defining Organization, Public Sector and Strategic Planning The Public Sector versus the Private Sector Elaboration on the Concepts mission statement, vision statement and corporate culture Mission Statement Vision Statement Corporate Culture Formulation of the Mission Statement, Vision Statement and Corporate Culture Strategy and Goal Setting Strategic Plan Drafting a Strategic Plan Executing the Plan 31 3 Case Study: Gent Origin and Development of Gent Elaboration of the Concepts mission statement, vision statement and corporate culture in view of Gent Mission Statement Vision Statement Corporate Culture Strategy of Gent 2020: Goal Setting and Programmes 44

6 3.3.1 From Mission Statements to Concrete Actions External Mission Statement Internal Mission Statement Strategic Programmes Execution of the Strategic Plan Internally Externally My Contribution to Gent 2020 and Other Assignments Assignments with Reference to Gent Assignments with Reference to the Izmir - Guest of honour at Accenta 2009 Project Other Assignments Evaluation of my Internship 69 4 Conclusion 71 5 Bibliography Internal Sources External Sources 75 6 Appendices Table of Contents Appendices 80

7 Preface After my study of Linguistics and Literature: German and English, I did not feel ready to go out on the job market. Four years at university had allowed me to amass knowledge on languages, literature and art, and had broadened my worldview immensely. At the same time, however, I felt that there was much more to discover. Exploring other study options, I was particularly drawn to the practice-based spirit of the MTB programme, that not only included interesting courses, but most importantly several projects and an internship. During the first month of the academic year, I was overwhelmed by all the new information. Going from readings of German literature to courses in communication, economics, marketing, accountancy was a big step. Therefore, it was hard for me to choose an internship in this new world I only started to discover: did I want to work in a communication agency (crisis, corporate, etc.), in an advertising agency, in a company (internal or external communication?), etc. There were so many things to learn, so many possibilities, so many questions marks. When I read the internship offer coming from the City of Ghent, I was immediately convinced. The Staff Department was initially looking for an intern to perform trend watching, research on the good practices of other cities and governments in order to create projects that would improve the interaction with both the citizens and organizations of the city. At the end of the internship, the intern would present an outline of an approach for Ghent. I was interested in this internship offer because it combined research and brainwork, strategy and communication, independence and teamwork. I was also eager to learn more about communication in the public sector. I looked forward to working in an environment with which we had not been in contact during the MTB company visits and the projects. I considered myself a suitable candidate for the internship assignment. As a master in German and English with a good knowledge of French, I was able to consult sources in other languages. I can work independently but I also function properly in a team, which was also one of the requirements. Furthermore, I am acquainted with the

8 Internet. The thing that excited me the most, however, was that I would complete an internship for Ghent, an extremely beautiful city that I truly love. Another MTB student, moreover one of my best friends, was also interested in this internship offer. This was not an easy situation, as there was only one internship offer available. Nevertheless, we have both applied for the internship, a clear sign that we were both convinced of its content. During a first personal conversation with the internship tutors, I received the impression that they were willing to coach me well and that they were motivated to give feedback frequently two essential requirements for me. Afterwards, they let both of us know that we could complete our internships at the Staff Department of the City of Ghent. At that point, the assignment of the internship changed, as we could not both complete our internship and write our dissertation on the same topic. Instead of researching interaction and communication projects in other cities, I would assist in Gent 2020 and the Izmir project. I was informed about the change of assignment during a second meeting before the start of my internship. Since the decisive criteria for me to do the internship I mentioned above independence, teamwork, strategy, etc. remained the same, I did not have any problems with this change. The internship went according to my wishes and expectations. Thanks to the excellent guidance of my internship tutor, I was allowed to work on a variety of assignments. Also, my internship allowed me to write my master dissertation on a topic that has intrigued me from the beginning. An in-depth evaluation of my internship assignments can be found in 3.5.

9 Introduction

10 In 2006, the City of Ghent (Stad Gent) started with the development of a strategic plan for the city. This plan, called Gent 2020, contains a mission and a strategy. The mission envisions the city in the year In eleven years from now, the mission, which can be seen as the strategic plan s final destination, should be realized. The strategy is the route the City of Ghent will take in order to reach this end goal. At this moment, Spring 2009, the mission and several strategies have been fully outlined and the team is working on its implementation and execution. Private organizations often rely on the management tool of strategic planning for the optimization of their working processes. Strategic planning makes the organization perform better. For a public organization, however, the development of a strategic plan is innovative, as governments are only starting to discover the possibilities of strategic management in the public sector. From the beginning of my internship, I was eager to learn more about strategic planning in general, on Gent 2020 specifically and on the pioneering position of the City of Ghent on this matter. This master dissertation is in fact an extra internship assignment. As I showed interest in strategic planning and Gent 2020 during my internship, my internship tutor, Sarah Desplenter, asked me whether I wanted to write this dissertation with the intent to use it as a PR instrument for the City of Ghent. As noted above, Ghent is one of the pioneering cities working with strategic planning. As this dissertation presents the main concepts of Gent 2020, linked to a theoretical background, the City of Ghent could use it (partly) in case they have to present the strategic plan to external partners. In the first major part of this dissertation, I will offer a theoretical framework on strategic planning in the public sector. After having defined the frequently used notions organization, public sector, strategic management, strategic planning and strategy, I will outline several differences between a public and a private organization. Next, I will present an overview of the theory on the main concepts of strategic planning, i.e. mission statement, vision statement, corporate culture and strategy. The goal of this theoretical framework is to offer to the reader the background to fully comprehend the concepts of the case study Gent In the second major part, I will discuss the case study Gent First of all, I will elaborate the concepts mission statement, vision statement and corporate culture 2

11 in view of Gent Secondly, I will outline the chosen strategies. This section contains first of all a discussion on the implementation of the mission, i.e. how this abstract statement has been translated into concrete, practical and operational goals and actions. Then, the execution of the strategies will be discussed. I will point out how the strategic plan has been (up until now, Spring 2009) communicated to all the organization s stakeholders, internally and externally. One might remark that an important part of the strategic planning, namely the evaluation, is missing. I am aware of this omission, but it needs to be pointed out that the strategic planning of Gent 2020 is still in full development. There have been interim evaluations; however, it is still too early to discuss them. At the end of this second major part, I have added an overview of the assignments I have completed during my internship at the City of Ghent. Before embarking on this discussion, I believe it necessary to define the subject of this dissertation. One might detect overlaps between the research field of strategic management and that of city marketing and public branding. City marketing sees the city as a brand and has mainly a commercial and promotional perspective; it answers the question: Wat kost het om van een stad een A-merk te maken? 1 In their book on public branding, de Witte and Strijp clarify that also a public organization can function as a brand. Thereby, the branding of public organizations could advantage every stakeholder because met een merk kan de producent een band opbouwen met de consument. 2 Even though I believe that city marketing and public branding can offer interesting perspectives on strategic planning in the public sector, I will not discuss them in this dissertation. Another interesting research topic would be the specificities of communication in the public sector and the communication of Gent 2020 towards its stakeholders. This, however, would take us too far away from the main subject of this dissertation as well. I have based the theoretical framework on strategic planning in the public sector mainly on the book Strategie en organisatie van publieke organisaties of Sebastian 1 Klaasen, L.; Van Den Berg, L.; Van Der Meer, J.: Strategische city-marketing. Academic Service economie en bedrijfskunde: Schoonhoven, 1990, p Strijp, Paul; de Witte, Vera: Public branding, over zin en onzin van merkenbeleid bij de overheid. Kluwer: Alphen aan den Rijn, 2003, p

12 Desmidt and Aimé Heene. 3 Two reasons have motivated this choice. First of all, the book gives a comprehensive and up-to-date overview of the scientific literature on strategic planning. Secondly, this book functioned partly as a theoretical base for Gent As noted before, I am aware that this theoretical part does not give the reader a complete overview of the theory on strategic planning in the public sector. However, as I also mentioned before, it should offer the reader the necessary background in order to understand the case study Gent To the insights of Desmidt and Heene, I have added the findings of other authors on strategic planning. To conclude, it must be made clear to the reader that each process of strategic planning is unique. There does not exist a fixed set of rules, processes and tools that guarantees results and success. One should remember that for strategic planning, each organization must develop its own tailored process. 4 3 Desmidt, S., Heene, A.: Strategie en organisatie van publieke organisaties. Lannoo: Tielt, Grayson, L.; Tompkins, C: Management of Public Sector and Nonprofit organizations. Reston Publishing Company: Reston, 1984, p

13 1 The Organization The City of Ghent

14 Every day, about 4800 people are working to guarantee the functioning of the City of Ghent. 34% of them are technicians, and 11% works as safety personnel at the Fire Department. The vast majority (55%), however, is employed as administrative workers. All the employees work in one of circa eighty services and within one of the thirteen departments. 1 In general, the hierarchical structure of the organization can be presented as follows: Each employee has to give account to the manager of his or her service. The managers of the different services (within one department) report in turn to their Head of Department. The Head of Department is in charge of a single department. Together with the City Manager, the thirteen Heads of Departments form the Management Team. This team directly reports on the working of the organization to the City Council (i.e. College van burgemeester en schepenen). In contrast with nine externally oriented departments, such as the Department Education or the Department Culture, four departments (Finance, Human Resources, Facility Management and the Staff Department) have an assisting function. In Appendix A, an organization chart of the City of Ghent can be found. I have completed my internship at the Staff Department. 2 This department is responsible for the direction of an optimaal en duurzaam stedelijk beleid. 3 Within the department, five divisions can be distinguished. These are strategy and international cooperation, direction, knowledge and assessment, communication, and incubation. The first one, strategy and international cooperation, focuses primarily on strategic planning, data planning and monitoring, quality management, equal rights and international collaboration. The second division, direction, is in charge of projects on city renewal, local prevention and safety. The third, knowledge and assessment, has a financial and legal perspective. Communication, the fourth division, consists of the Public Relations service, i.e. the service that communicates the City Council s decisions 1 Thereby, each department consists of a number of services. 2 The content of the following two paragraphs is based on the internal document Voorstelling Departement Stafdiensten and the annual report of the Staff Department (Departement Stafdiensten Jaarverslag 2008, versie 4) that I have read at the beginning of my internship. 3 Web site of the City of Ghent: last consulted on July 22,

15 to the city s inhabitants. Finally, the fifth division, incubation, works on social topics such as the asylum and refugee policy, policies in order to help drug addicts, etc. Because of the fact that I have hardly been in contact with these five divisions during my internship, I will not discuss them further in detail. I have worked along with the staff members of the Staff Department. The staff members function is to assist the other services within the Staff Department. In addition, they are responsible for the assistance of the whole organization op vlak van beleidstrategie, project- en programmawerking. 4 For that reason, they are often engaged as project leader, programme director, project communicator, etc. For example, my internship tutor was project communicator for the projects Digitale Week and Accenta. It is also the staff of the Staff Department that is the mastermind behind the development, the implementation and the execution of the strategic planning Gent As the composition of the city administration changes every six years after the elections, the City of Ghent is an organization where during each legislative period other interests prevail. I believe this (inevitably) political dimension is one of the biggest weaknesses for the functioning of the organization. Within the thirteen departments, different political views can be detected. These opposing beliefs and interests might seriously affect the proper functioning of the organization. If the working environment is indeed affected by this, I wonder whether the organization will ever be able to function optimally. In my view, the political contradictions consolidate the usefulness of strategic planning, as it focuses on the long run, instead of on a single legislative period. With a mission and a strategy, the unity and commitment within the organization will be strengthened. 4 Internal document Voorstelling departement Stafdiensten, p

16 2 Theoretical Framework Strategic Planning in the Public Sector

17 Giving a complete presentation of the scientific literature on strategic planning in the public sector in about twenty pages is an unrealistic, even impossible assignment. I am fully aware of this, and I have therefore chosen to limit this theoretical part to a discussion of the theoretical concepts that are of importance in view of the case study of this dissertation, the strategic planning at the City of Ghent. After this brief introduction, I will give an overview of the scientific research on the concepts mission statement, vision statement, corporate culture and strategy. I have based my writings primarily on the book Strategie en organisatie van publieke organisaties by Sebastian Desmidt and Aimé Heene for the reasons already noted in the introduction of the dissertation. I have also added the insights of other authors on strategic planning to this theoretical framework. To begin with, I will first define the notions organization, public sector, and strategic planning. Secondly, I will give an overview of the main differences between the public and the private sector in view of their organizational structure and with regard to the strategic management tools and methods they can apply. 9

18 2.1 Defining Organization, Public Sector and Strategic Planning The notion organization in this dissertation refers to an organized entity, in which people with a common purpose are united. 1 In their book, Desmidt and Heene distinguish two systems of organizations: open and closed systems. Thereby, an open system is characterized by een continue wisselwerking [...] met zijn omgeving om zijn doelstellingen te kunnen realiseren. 2 This definition suits an organization such as the City of Ghent. According to Desmidt and Heene, the ultimate goal of each organization is the creation and distribution of value. For the public sector specifically, this creation and distribution of value is a socially oriented one. The social value is the motive for the existence of an organization: Zonder drijfveer heeft de organisatie geen bestaansreden en bijgevolg ook geen nood aan een strategie of strategisch management. 3 In this dissertation, I have interpreted the public sector as the total of all governmental institutions, on a federal, regional, provincial, municipal and communal level. One might state that the public sector is a subsection of the nonprofit sector, which comprises all organizations that de publiek bekostigde taak uitvoeren. 4 The reason for this interpretation lies in the fact that both the public as the nonprofit sector pursue the realization of the above-mentioned social value, rather than economic value. Although the insights of several theorists on the strategic planning for nonprofit organizations can be applied to the public sector as well, it would be too limiting to lose sight of the distinct features of the public sector itself. For the creation and distribution of the social value, Desmidt and Heene rely on strategic management, which they describe as het geheel van processen waarbij het 1 The definition of organization in this dissertation is based on the definition of the word organization in Van Dale Verklarend Woordenboek. 2 Desmidt, Heene: p Desmidt, Heene: p Geurts, J., Joldersma, F., and others: Strategisch management voor nonprofitorganisaties, koersbepaling, procesregie en metabesturing. Assen: Van Gorcum, 2007, p. 3. Examples of nonprofit organizations are schools, public arts organizations, charities, etc. 10

19 management van de organisatie op herhaalbare wijze mogelijkheden voor het creëren van waarde en voor het distribueren van waarde ontdekt en ontwikkelt. 5 It is important to define the notions strategic management, strategic planning and strategy clearly. In this dissertation, these terms are no synonyms. As noted above, strategic management is the collection of strategic decisions that create and distribute the social value. Desmidt and Heene define strategic planning as the process that aims to reveal the mission of the organization, namely its reason, its identity. 6 Strategic planning is a management tool that determines and helps realizing this mission. It is but a management tool next to other management tools within strategic management. 7 Allison and Kaye, authors of the workbook Strategic Planning for Nonprofit organizations, claim that strategic planning in general improves the organization in two ways: It helps the members of an organization bring into focus its priorities, and it improves the process of people working together as they pursue these priorities. 8 According to the theorists Bryson, Cohen en Joyce, strategic planning, and thus knowledge on the true identity of the organization, originates eight positive effects. Strategic planning... - kan helpen om te focussen op wat werkelijk belangrijk is; - kan bijdragen tot het bepalen van prioriteiten voor actie binnen de organisatie; - kan leiden tot een grotere coherentie in de organisatie; - kan de efficiëntie van de organisatie bevorderen; - kan een duidelijke communicatie over de strategische intenties van het management ondersteunen; - kan helpen om steun te verwerven interne en externe stakeholders; - kan helpen om toekomstige gevolgen van beslissingen beter te begrijpen; - kan de coördinatie tussen acties en departementen verbeteren. 9 5 Desmidt, Heene: p Poister, T.; Greib, G.: Strategic management in the public sector: concepts, models and processes. In: Public Productivity and Management Review, 1999, 13, p As discussed in: Desmidt, Heene: p Allison, M.; Kaye, J.: Strategic planning for nonprofit organizations. A practical guide and workbook. CompassPoint Nonprofit services: San Francisco, 2005, p Allison, Kaye: p Bryson, J.: Strategic planning for public and nonprofit organizations. A guide to strengthening and sustaining organizational achievement. Josey-Bass: San Francisco, 1995; Cohen, S.: Tools for innovators. Creative strategies for managing public sector organizations. Josey-Bass: San Francisco, 1998; Joyce, P.: Strategic management for the 11

20 Finally, in this dissertation, the notion strategy refers to the translation, implementation and execution of the strategic plan into practical, concrete methods and techniques and the setting of priorities: Strategy must provide a guide for decision making and action. 10 If mission is the strategic plan s final destination, then strategies are the paths or routes you are taking in order to reach that destination. Thereby, the notion of a path implies that choices involve options that are mutually exclusive, a consequence of trade-offs and the irreversible nature of truly strategic choices. 11 Strategy and strategic planning are always a matter of choosing. Schematically, the interrelations between strategic management, strategic planning and strategy can be presented as follows: Figure 1: Schematic presentation of the interrelations between the notions strategic management, strategic planning, and strategy public services. Open University Press: Buckingham, As discussed in: Desmidt, Heene: p Phills, J.: Intergrating mission and strategy for nonprofit organizations. Oxford University Press: New York, 2005, p Phills: p

21 2.2 The Public Sector versus the Private Sector In the generic tradition of the organization theory, several authors put forward that there is no significant difference between a public and a private organization, as so they presume they are both an organization. 12 Rainey, author of the book Understanding and Managing Public Organizations, doubts this statement: If they are not distinct from other organizations, such as businesses, in any important way, why do public organizations exist? 13 With Rainey, several other theorists disagree with the general point of view of the generic tradition. They fear an oversimplification of the notion organization and have searched for the features that distinguish the private and the public sector. In this section, I will try to give a theoretical overview of the insights of theorists on the differences between a public and a private organization. Differences on the Organizational Level Even though it is, according to Rainey, impossible to entirely distinguish private and public organizations due to their interrelations an evolution he calls the blurring and entwining of the sectors 14, some authors have pointed out differences between the public and private sector. Chandler mentions three. First of all, private organizations do not have the same amount of public accountability. There is a difference between them in the social transaction towards the external environment. Moreover, private companies are to a lesser extent subjected to legal and public restrictions. Rainey agrees on this matter as he writes: Government organizations operate under greater public scrutiny and are subject to unique public expectations for fairness, openness, accountability, and honesty. 15 Secondly, Chandler explains, the economic aspect is of major importance for private companies. The goals of public organizations that work from a social 12 Rainey, H.: Understanding and managing public organisations. Jossey-Bass: San Francisco, 2003, p Rainey: p Rainey: p Rainey: p

22 perspective are veel minder tastbaar, vaak conflicterend en waardengeladen. 16 According to Chandler, the main priority for public organizations is continuity. 17 Thirdly, he claims that the competitive aspect is mostly omitted at public organizations: these companies find themselves more often in a monopoly position. Other researchers have focused on structural differences between the two organizations. Wamsley and Zald pointed out that an organization s place along the public-private continuum depends on at least two major elements, ownership and funding. 18 The public organization in its purest form is a public property. Moreover, these organizations receive their financial means by a public funding, namely taxes. On the contrary, fully privatised companies are owned by private investors and financed by private capital flows. One should keep, however, Rainey s observations on the blurring of the sectors in mind: public and private organizations in their purest form do not tend to occur that often any more. The above stated differences are therefore definitely not applicable to each organization. Differences on the Level of Strategic Management Next, one can wonder to which extent there are differences between the strategic planning and strategic management of a public on the one hand, and a private organization on the other hand. In his book Understanding and Managing Public Organizations, Rainey repeatedly notes the assumption that government activities differ from those of the private sector and that government performs less effectively and efficiently than private sector organizations. 19 Public organizations are believed not to function as optimal as their private equivalents. One might therefore wonder whether public organizations can 16 Chandler, J.: Public administration and private management. Is there a difference? In: Public Administration Quarterly, 1991, 69, p As discussed in: Desmidt, Heene: p Desmidt, Heene: p Rainey: p Rainey: p

23 adopt the strategic management tools that are used by private companies in order to function as effectively and efficiently. To this question as well, different insights have been formulated. Taylor, one of the founders of scientific management, 20 claimed on the basis of his research that the principles and work methods that he had developed were fully applicable in both the private and the public sector. 21 Also the theorists Fayol and Weber have rejected in their works any managerial difference between the private and the public organization. In order to prove this view, they have designed models and techniques for the organization and managing of companies that applied to all organizations. 22 Rainey summarizes the research of these authors as follows: They have worked to build a general body of knowledge about organizations and management. Some have pointedly rejected any distinctions between public and private organizations as crude stereotypes. 23 Authors such as Rainey disproved of the insights of Taylor, Fayol and Weber. He acknowledged the distinctive needs and features of the public sector with reference to strategic management: There is a body of knowledge specific to public organizations and management. 24 On this matter, Desmidt and Heene write: Het ontwerpen en implementeren van generieke managementmodellen verwaarloost [...] de eigenheid van de publieke sector op politiek, ethisch en organisatorisch vlak. 25 Ring and Perry, two other researchers who disagree with the general view on organizations, represent the distinctive character of the strategic management for public organizations in five statements: 1. Het beleidskader van publieke organisaties is stricter gedefinieerd. 2. Het openbaar karakter van de besluitvorming creëert grotere beperkingen voor managers van publieke organisaties. 20 Within Scientific management, the role of management was to gather detailed information on work processes, analyze it, and derive rules and guidelines for the most efficient way to perform the required tasks. Rainey: p Taylor, F.: The Principles of Scientific Management. Hive Publishing:Easton, As discussed in: Desmidt, Heene: p Rainey, H. (1997) As discussed in: Desmidt, Heene, p Rainey: p Rainey: p Desmidt, Heene: p

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