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Decision Making and Performance Management in Public Finance Kamu Maliyesinde Karar Alma ve Performans Yönetimi TR08IBFI03 Day 2: Key concepts of strategic.

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Presentation on theme: "Decision Making and Performance Management in Public Finance Kamu Maliyesinde Karar Alma ve Performans Yönetimi TR08IBFI03 Day 2: Key concepts of strategic."— Presentation transcript:

1 Decision Making and Performance Management in Public Finance Kamu Maliyesinde Karar Alma ve Performans Yönetimi TR08IBFI03 Day 2: Key concepts of strategic planning Virpi Einola-Pekkinen

2 Decision Making and Performance Management in Public Finance Kamu Maliyesinde Karar Alma ve Performans Yönetimi TR08IBFI03 What is a strategy? a paper a document a work plan a way a process “a horizon of common interpretations“ ?

3 Decision Making and Performance Management in Public Finance Kamu Maliyesinde Karar Alma ve Performans Yönetimi TR08IBFI03 What is strategic thinking? looking towards future understanding the past to build up the wholeness seeing ”own work” as part of entity mapping the environment connecting past to future creating operational preconditions (Minzberg 1991: Strategic thinking as ”seeing”)

4 Decision Making and Performance Management in Public Finance Kamu Maliyesinde Karar Alma ve Performans Yönetimi TR08IBFI03 It’s about making your future... Drifting into the future Adapting to the future Making the future ATTITUDE TOWARDS FUTURE NEED FOR STRATEGIC SPACE large small passive active reactive proactive WAY TO ACT Määttä, Ojala -99

5 Decision Making and Performance Management in Public Finance Kamu Maliyesinde Karar Alma ve Performans Yönetimi TR08IBFI03 Mission Raison d’etre: what are we here for Not only a list of tasks Defines Our ”clients”: who do we serve Basic accounabilities Situates us compared with other institutions Gives us the identity, makes us unique

6 Decision Making and Performance Management in Public Finance Kamu Maliyesinde Karar Alma ve Performans Yönetimi TR08IBFI03 Vision Is clearly better than the present state, requires ”stretching” Is challenging but not impossible to achieve; is ”a dream of the best” but not an utopia Is clear, understandable, easy to remember greates a feeling of unity for the organisation What have we achieved in the society by the year x? How do we want others to see us when we have achieved our strategic goals?

7 Decision Making and Performance Management in Public Finance Kamu Maliyesinde Karar Alma ve Performans Yönetimi TR08IBFI03 Balanced Success Strategy as a Process

8 Decision Making and Performance Management in Public Finance Kamu Maliyesinde Karar Alma ve Performans Yönetimi TR08IBFI03 DimensionsEffectiveness-Processes-Resources-Renewal Critical success factors Assessment criteria Goal levels Issues in which success is crucial in order to implement the vision and the mission statement over the strategic period in question (long-term view) Criterion/measure/ method to identity/follow up the implementation of a critical success factor Min RealMax The goal set for the criterion describing the critical success factor over the operative period in question (short-term view)

9 Decision Making and Performance Management in Public Finance Kamu Maliyesinde Karar Alma ve Performans Yönetimi TR08IBFI03 Advantages of the Balanced Success - BSC Guarantees the connection between strategic considerations and concrete action Balance between various dimensions of policies (social, economic…) Connects short and long term perspectives A frame for the result management: setting result targets and reporting on results A compact strategy document: easy to communicate to outsiders and within the organisation Development process under control, only a limited number of critical success factors - no need to do everything at the same time

10 Decision Making and Performance Management in Public Finance Kamu Maliyesinde Karar Alma ve Performans Yönetimi TR08IBFI03 Critical conditions and pitfalls The executive group does not formulate the strategy but assigns someone to do it Top managers have controversial views on the need of a strategy (”it takes time away from real work”) The staff is nor trained neither involved in strategy work Delays in achieving short-term results cause a lack of confidence -> the strategy process appears unappealing and less dynamic The BSC is introduced as a management information system, the assessment criteria/measures of which are only used for control, not as a means of communication

11 Decision Making and Performance Management in Public Finance Kamu Maliyesinde Karar Alma ve Performans Yönetimi TR08IBFI03 Four dimensions of the Strategy

12 Decision Making and Performance Management in Public Finance Kamu Maliyesinde Karar Alma ve Performans Yönetimi TR08IBFI03 Result of the process – ideal case A compact and communicative strategy basis for policies Critical success factors derived from the strategy (3 to 5 years perspective) Measures/criteria/indicators for success factors Clear and understandable objectives and targets for the forthcoming year Defining responsibilities within the executive group

13 Decision Making and Performance Management in Public Finance Kamu Maliyesinde Karar Alma ve Performans Yönetimi TR08IBFI03 MoF 2007 => MoF 2012 It helps to find where you should be going when you know where you start from? => What do we want to change? “It helps to get there, if you know where you’re going...”

14 Decision Making and Performance Management in Public Finance Kamu Maliyesinde Karar Alma ve Performans Yönetimi TR08IBFI03 MOF’s VISION Government’s VISION ”Finland is economically, socially and environmentally stable, competitive and innovative economy Ministry of Finance is a strong reformer and leader of economy, public administration and services” ”Responsible, caring and rewarding Finland”

15 Decision Making and Performance Management in Public Finance Kamu Maliyesinde Karar Alma ve Performans Yönetimi TR08IBFI03 MoF’s MISSION MoF is responsible for balanced and sustainable growth of economic policy good management of state economy and good conditions for managing municipal economy effectively effective public administration

16 Decision Making and Performance Management in Public Finance Kamu Maliyesinde Karar Alma ve Performans Yönetimi TR08IBFI03 Why do so many strategies fail? only 10 % succeed... A strategy can fail because: It was never implemented It was the wrong strategy It was the right strategy but at the wrong time It was overtaken by technology Customers, suppliers, shareholders lost faith in the organization and its leaders It breached acceptable practice / the law It was superseded by a better strategy People didn’t know what was the strategy - It was never really communicated!

17 Decision Making and Performance Management in Public Finance Kamu Maliyesinde Karar Alma ve Performans Yönetimi TR08IBFI03 Setting the targets, negotiating the targets both on functional and personal level Evaluating the outputs and outcomes, giving feedback, guidelines etc. It´s all about management and leadership... MoF Targets Strategy Targets Action plans Targets Action plansTargets Actions Departments Units Individuals DIALOGUE

18 Decision Making and Performance Management in Public Finance Kamu Maliyesinde Karar Alma ve Performans Yönetimi TR08IBFI03 Management groups as strategy executors Economic policy Corporate governance Administrative branch- issues Ministry as work community / line managers meetings Leaders as strategy executors leadership- skills communication - skills Personnel as strategy executors “experts do manage themselves” activity, interest and motivation competences Strategy becomes reality through management

19 Decision Making and Performance Management in Public Finance Kamu Maliyesinde Karar Alma ve Performans Yönetimi TR08IBFI03 EFFECTIVENESS - Economically sustainable welfare - High quality and economic efficiency of public services CO-OPERATION WITH STAKEHOLDERS - Planned, segmented - Foreseeing / proactive - Deepened - Active contribution within EU and on other international forums HUMAN RESOURCES AND KNOW-HOW - wide scale expertise - good knowing in basic processes and operational environment MANAGEMENT AND LEADERSHIP - coherent managing chain - comprehensive, professional and inspiring leadership - managing competencies RELIABILITY INNOVATION TRANSPARENCY FAIRNESS MoF is a strong leader and reformer in economic and public sector issues MoF is a productive, inspiring and cheerful working community! MoF 2012


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