The five golden rules of strategy

Aidan Rave sees positive signs in the new government’s commitment to devolution, but with local power comes more strategic responsibility. Are you ready to take it on?

The UK is one of the world’s most centralised democracies. Even in our divided political system, recognition of the overbearing influence of Whitehall and Westminster is one of the few areas of consensus.

This isn’t just a matter of opinion. The UK lags significantly in local tax raising, with a total of 5% of revenue raised locally compared to 50% in Canada and 13% in France, which is the next most centralised country in the G7.

According to the Institute for Public Policy Research, 95p in every £1 paid in tax is taken by Whitehall. In Germany, that number is 69p in every £1. Just 1% of UK GDP is spent by local government on economic affairs, which is half as much as in France or Germany.

It’s not a new phenomenon, either. The UK has long arranged itself this way, with generations of leaders at both central and local levels being inducted into and then becoming keepers of this culture.

Of course, there are reasons why some countries need to be more centralised than others, just as there are reasons why some public services need to be more local than others. It’s a strategy game.

There have been attempts to jolt the status quo, with the early years of both the 1997 Labour government and 2010 coalition governments in particular making attempts to shake things up, but without much success.

Now we have a new government and a new commitment to devolution. The early signs at least suggest that it could be a serious commitment too. Time will tell.

Cultural challenge

While overcoming entirely warranted cynicism might be the stiffest challenge at a local level, there is also a real need to address the ingrained culture of years of centralisation. This is likely to be much more difficult to achieve than structural or even fiscal reform.

This culture has led to local leaders becoming implementers of strategy rather than designers of it. From regeneration to culture, housing to transport, the drumbeat has tended to emanate from Whitehall, with targets and, more importantly, cash coming with strings very much attached.

This mentality is simply incompatible with the principles of true devolution. If local leaders are to exercise more power, then it is not just cash and decision-making they must grasp, it’s also the ability to make strategy.

While most organisations have a strategy, creating and mobilising one that is truly effective is a challenge that requires the focus of all of the organisation all of the time, and that’s going to be a challenge for many organisations that have spent the last decade and a half stripping out strategic capacity in order to protect frontline services.

The five golden rules

There’s so much to balance in the development and execution of organisational strategy but we think there are five golden rules that will help keep you on track.

1. Strategy without ownership is just creative writing
   Ownership is crucial, and that means by everyone, not just leaders. If those responsible for executing the strategy do not feel a sense of ownership, it remains nothing more than a theoretical exercise. Avoid the ‘written in the boardroom’ trap and involve those who will be charged with executing the strategy in formulating it.
2. Good strategy is as much about means as ends
   The means of organisational strategy in public-facing organisations generally means one thing: people, including those in support services as well as front-facing. A common problem with public sector strategy is that it omits any mention of functions like HR, communications, finance and ICT, presumably because, frankly, the public wouldn’t be that interested. Strategy cannot be executed without clear roles for all functions.
3. A lack of consistency kills strategy
   Leadership is the backbone of any strategy. If leaders don’t walk the walk, even the best strategies will falter. This is particularly pertinent in organisations where the leadership base is not robust. Let’s be brutally honest, many organisations start from a low baseline in this regard; the cynicism of ‘one rule for us and another for them’ is often ingrained, so be alert to it.
4. Strategy is everyone’s job, every day
   Strategy must be integrated into the daily routines of everyone in the organisation. It cannot be viewed as a separate, isolated activity. If this integration is lacking, your strategy is doomed to fail. This might well require some refocusing and retraining but focusing on strategy once in a blue moon is pointless; in a volatile environment, strategy is BAU.
5. Alignment is crucial
   Many organisations lack strategic alignment. While the board may be very clear about strategy, often the capacity and capability of the organisation to execute that strategy is either misaligned or absent altogether. Like a car revving in neutral, this can lead to organisations expending considerable resource for little demonstrable progress. From tangibles such as skills and structures, to more nebulous elements such as culture and values, alignment is critical to successful strategy execution.

Don’t wait for your hand to be forced by regulators or centralised authorities. Contact us to discuss how we can help you develop the right strategy for your organisation.