Strategic Planning and Management for the Public Sector

By Tim Johnson (JSS Consulting); Randall Rollinson (LBL Strategies)

Like the private sector, the public sector community is facing significant challenges over the next 5 years that are certain to reshape how organizations are set up and operate.  I thought it may be useful to explore some of these trends and thinking through the potential implications.  My purpose is to provide some ideas and concepts in the hopes they will help some public sector organizations build and/or validate their strategic plans and properly account for these and other key strategic issues.

I have been helping all sectors think through trends and future impacts for many years and have seen many trends come and go.  Some public sector agencies navigated the changing environment well, while others refused to transform to account for changing trends.  Over the last few years I have noticed many new trends that are reshaping the public sector universe.  So, with this blog I wanted to share four issues that seem to be common for each:

  1. Changing demographics:  Over the past five years there have been significant changes in demographics that will change who and how we serve communities in the future.  With the growth of the middle classes in India, China and Central America we are seeing a significant increase in immigration from these areas with both skilled and non-skilled workers coming to the United States.  Additionally, the increase in the Hispanic population has exploded and is projected to continue to increase in a significant way. This will affect the labor supply, but also affect the make-up of the communities that we serve. 

Public sector agencies need to consider how these demographic changes will impact their communities and determine if there is a need to change either the mission or the way in which they engage the community.  I had a recent organization which supports adolescents have to reimagine how they will serve both rural and urban communities in terms of what challenges adolescents are facing and how to reach a much more diverse population with different cultures, and who participate in different activities or ways of connecting.  This is just one example, but it may be that all organizations may have to go through a similar process to rethink the future effectiveness of their programming.

  1. Shrinking labor supply:  This is a phenomenon that has actually been going on for quite some time as the baby boom population has been leaving the workforce in large numbers and the subsequent generations (Gen-X, Millennials, Centennials) are much smaller and are unable to fill the void that is being left behind.  This of course could impact public sector agencies who provide job assistance services or other related programming to their communities, but there is another more significant potential impact that could potentially rock the public sector. 

As skilled workers become scarcer in the private sector, the nonprofit and public sectors could lose people if for no other reason than supply and demand!  It may become so attractive as for traditional nonprofit and public sector workers to move to the private sector as companies increase pay, benefits, incentives, etc. to attract available workers.  The implications for the public sector may mean they need to compete better with pay and benefits and/or look for ways to reduce their labor needs either through improved efficiency or new technologies (Discussed below).

  1. Change in funding and performance requirements: Pressure has been increasing over the last five years for public sector leaders to demonstrate the impact that they are making for the community.  The notion of strategic performance in government goes by many names, e.g. Managing for results… Performance Budgeting… Evidence-based management.  Regardless of what you call it “Gauging degrees of success and failure in government work, and then making decisions based on that understanding” is the way Katherine Barrett and Richard Greene describe strategic performance in their new book, The Promises and Pitfalls of Performance-Informed Management, aimed at leaders and managers in state and local government.

While the scope and complexity are significantly greater in federal government, the same principles are highly relevant.  At all levels of government funders want to know how many people that are served (leading indicators) but they also want to know the impact on the specific community need (lagging or outcome indicators).  This is like the increased pressure being placed on the non-profit sector by donors/grantors. They want nonprofits to participate with partners or other nonprofits in making a “collective impact.”  So many nonprofits are out there doing the same things and coming to the same funders for support, that funders have started to ask that they get together and create common approaches/strategies to impact the communities’ needs to which they are focused.

  1. Change in organizational capacity:  Typically, when we talk about organizational capacity, we are referring to the workforce of the future and the information technology footprint within the organization.  As mentioned earlier, the shrinking labor supply could reduce the availability of full-time available staff and there must be a strategy in place to ensure that the work gets done in the future.  This will mean that public sector organizations must adopt some of the practices being employed in the private sector, from developing creative work environments to using new technologies such as Bots, AI, predictive analytics, machine learning, etc. to reduce/eliminate manual activities so available staff can focus on more mission-centered activities.  These technologies must also be adopted to better connect/interact with growing more diverse communities.

There are so many more trends that are impacting the public sector, but these are some key areas that seem to be common for all.  And the implications mentioned above are certainly not all inclusive as to how agencies could be affected.  For instance, the changing demographics, technologies, labor, etc. will all affect how the executive leadership is recruited and developed in the future to best support the changing needs. 

The key for all sectors is to identify important trends and assumptions about the future and then spend some time thinking about how they must transform themselves accordingly.  Those that are able to effectively envision a most probable future will be those that will be best able to create a path to long term sustainability.