Now, where were we?
Strategy implementation challenges for public sector organizations in the Middle East
Strategy – whereby a set of initiatives to be executed within a specific duration are defined – is critical for the success of any organization, regardless of its business nature or its industry and accordingly contributes to achieving its overall vision and mission. While many organizations do have well-defined strategies, they face challenges in implementing them. Others believe that they are following a certain strategy but can’t understand why they are not realizing their objectives. So what is the issue? Is it the strategy itself? Is it the people executing it? And why is it sometimes so difficult to implement a strategy?
Failing to plan = planning to fail
Any strategy has to be clear enough – with implementable actions and measurable objectives – so organizations can realistically execute it and measure their performance at it. The strategy under development also has to consider the current capabilities of the organization and any additional ones it can gain during the execution phase. It should consider the challenges that the organization might face while implementing it and therefore plan for remedial actions also.
But having a well-defined strategy does not, in and of itself, guarantee that an organization will achieve its objectives, nor that it will not face any challenges whilst implementing it. There are several challenges that any organization will face when executing a strategy. In the public sector, these challenges are even more difficult to overcome as decisions take longer and many limitations are sometimes beyond the control of the organization’s leader.
Challenge: Non-implementable strategy
A lot of government entities around the Middle East region seek external help in developing their strategies: some use consulting firms and others use experienced independent consultants. Few opt to develop their strategies using their internal resources.
Regardless of who is developing the strategy, it has to be implementable. Many entities only realize this after the fact, once they are in the execution phase. They realize that it is not possible to execute a plan – for whatever reason – and that there are many limitations they had not foreseen at the time of development. Sometimes the strategy itself is not clear, having required more detailed thought initially. In such cases, organizations end up having to hire another consulting firm to develop the same strategy but in a more detailed manner.
Solution: A strategy has to be detailed enough with timely, clear actions that can be executed with an aim to achieving measured objectives. Engaging consultants with experience in both, strategy and execution, will add clear value compared to others who have strategy experience alone.
Challenge: Lack of qualified internal resources
A common challenge that many public sector entities face in the Middle East region is the inability to find and hire qualified personnel, which is mainly due to limitations in the financial compensation in some countries and career progression in others. Government-sector employees are, perhaps unfairly, generally regarded as non-competent and inefficient, which has edged out the public sector from the race to recruit top performers.
While financial compensation may not be a challenge in some countries, it is in others. In Abu Dhabi for example, government employees are highly paid compared to employees in the private sector while it is not the same in other cities in the region. Different factors play a role in such variations, one of which is the relative percentage of the indigenous population.
Solution: A transformation is required in relation to the compensation structure of the public sector employees linked to performance metrics and an innovative model for career progression.
Challenge: Lack of qualified resources provided by vendors in some countries
Some government entities try to resolve the challenge of lacking resources and the complexity of hiring qualified personnel by sourcing open positions to vendors for a specific duration or on a periodic basis every year or two. The challenge there is the inability of some vendors to provide the right resources, on time.
Such a challenge could be the result of different factors: unrealistically low rates agreed to by the vendors at the outset (a result of winning the lowest bid as per the regulations in many countries in the region), improper planning by the vendors as to the required capacity, improper selection of vendors (which could be due to limitations in the procurement process in some countries) and in some cases, the difficulty of mobilizing resources in certain countries due to logistical and/or environmental problems.
Looking again at the big picture, leading government organizations that develop plans for the country should encourage discussions and interactions with the private sector to ensure that their plans are well aligned with the overall plan of the country and are based on its needs.
Solution: Both Public sector organizations and the service providers should look at each other as partners who work together aiming at achieving targeted objectives, and both should help the other towards this. This requires an open discussion between the public sector and private sector organizations so strategic actions at both sides are taken to resolve such issues in the future.
Challenge: Limitations and complexity in the procurement process
In many countries in the region, there are clear limitations to the government procurement process. The trend is to award a project to the vendor with the lowest price as long as they are compliant with the regulations and technically satisfy the requirements to a good extent, which prevents the selection of the best vendor even if a budget is available.
Price is not the only limitation. Another issue is the duration from the time the Request For Proposal (RFP) is issued until the project is awarded, which in most cases takes five to eight months if not more. The range varies from one country to another and from one government organization to the other; in many cases, a government organization in a country with a bigger budget and more control over the funding process takes longer to award a contract. (In the case where the budget required for a project is less than the specified amount, then the project may be awarded within a shorter time as it comes under the authority of the organization itself, without the interference of other leading government entities.)
This trend is changing over time but much depends on the maturity of the organization and the ability of its leader to deviate from certain rules, directly or indirectly, using government procurement tricks that serve the purpose without directly deviating from the rules. Others try to engage in direct discussions with the budget approving body but in most cases this approach takes very long time (a year or more should a totally new idea be brought to the table.)
Solution: A mindset change is required here, accompanied by a transformation in the government procurement process and regulations that are very old in many countries in the Middle East.
Challenge: Budget limitations in some countries
While this is not an issue in the Gulf States to a great extent, it is a real issue in other countries within the region where projects are cancelled, postponed or even an incompetent service provider is selected due to budget constraints.
It is important to mention here that, in some cases, other factors affect the granting of a certain budget. One of these factors is leadership support for certain projects and the openness to change. An interesting and feasible project may not be given a green light if the leadership of the organization does not support the idea for whatever reason.
Another limitation is the reconciliation of an annual budget with a strategy that spans several years. This means that an organization may be granted the budget required in one certain year but not the next. Some organizations were able to resolve this issue by spreading the budget estimates across as many years as possible at the time of developing the strategy, which impacted how initiatives were proposed for execution to avoid such a scenario.
In some countries and for specific types of services, a centralized entity is responsible for controlling the budget in coordination with the ministry of finance, adding yet another layer to the approval process. (In some cases this may add a big plus as such a centralized entity ensures that a proper plan and justification are in place especially when the requesting government entity does not have enough experience in relation to the area, but in other cases it can become a showstopper).
In a few countries, performance-based budgeting was introduced as a new concept pushing government entities to better execution in order to achieve targets before granting additional resources, the government of Dubai for example started developing that few years ago.
Solution: An important action to consider here is to not forget budget limitations when developing a strategy as this will have an impact on several elements such as duration of execution, the model selected for the operation, the options selected for solutions and even the organization’s capacity to provide the required human resources. This is one of the key elements that will make a strategy an implementable one.
Challenge: Ineffective approaches to measuring performance
The correlation between the maturity of government organizations and understanding the importance of having a strategy is evident. But in most cases the strategy is not maintained, its execution progress either not measured at all or not effectively so.
Many organizations claim to have a department or a team that takes care of monitoring the implementation of a strategy with some variations: some have established a program management office to control and monitor the execution of major projects, some have an office of strategy management, others have a portfolio management office.
On the other hand, several government entities in the region are still developing their understanding of these concepts and accordingly, have not effectively established such units, which has impacted the execution of strategy as no proper monitoring was in place.
Many government entities around the region have issued RFPs in the last few years to establish and operate a program management office for the purpose of monitoring strategy execution, though many of these RFPs actually focused on recruiting individuals to fill positions that the organization couldn’t fill itself. In some cases even, RFPs where issued to monitor the execution of a strategy that was not yet finalized or was still being developed, making it hard to recruit the right resources when there was such a lack of clear requirements.
Solution: The scope of strategy development should include developing a mechanism for proper performance management as well as a mechanism for maintaining the strategy. Moreover, the resources required to play such a role have to be available in the organization prior to starting the execution.
Challenge: Improper communication with the stakeholders and resistance to change
While having a strategy for an organization is important and acting on it is even more so, it is vital to get the buy-in from the different stakeholders who will play a role in the execution, whether directly or indirectly. Many strategies in the region fail because this factor is totally missed.
Some governments have caught on to this reality and are now implementing communication and change management programs in parallel with the core strategy development, using incentives to aid in their application.
It has also been impressive to see very few government entities involving members from other government entities or even selected individuals from the society whom they believe will prove resourceful in the development of a national strategy. This is a factor that will give a big push to the execution of the strategy. For example, the second national e-government action plan for the Kingdom of Saudi Arabia was developed in cooperation with Yesser (the e-government program) whence from the beginning of the project an advisory group composed of key representatives from government entities, universities and the private sector was established to engage in discussions and provide feedback throughout the different phases of the project. Yesser also invited representatives from all government entities in the kingdom to attend workshops announcing the start of the project and getting feedback before finalizing the plan and launching a final version. Such engagement ensures getting the buy-in and letting the stakeholders feel that they are part of the game.
Solution: A good strategy should include stakeholders’ engagement plan for the execution and a good method of developing the strategy should ensure key stakeholders are involved in developing the strategy they are required to execute.
Challenge: Strategic versus ad hoc actions
While developing a strategy, many organizations forget that regardless of how rigidly they plan, there will be ad hoc actions that they may need to take and sudden projects that they may have to execute as part of regular operations.
Keeping a balance between executing urgent operational requests and executing the strategic initiatives is very important provided that most of the activities performed are aligned with the developed strategy for the organization.
The issue arises when the count of such requests increases. For an entity to achieve its targeted objectives, it has to prioritize such requests considering clear criteria.
Solution: The strategy should not be very rigid and should allow for adding additional projects and shifting of priorities as long as this is performed based on proper analysis and considering the alignment with the general strategic direction. A good approach for developing a strategy should include in its scope, the development of a criteria that can be used for such change in the execution priority.
The resolution of these challenges varies from one organization to the other and from one country to the next, although there are common characteristics. The solutions presented above are actions that will contribute, but will not necessarily resolve the issue
of strategy implementation if implemented separately. Ultimately, it is the organization’s leader who, despite facing some limitations in certain instances as mentioned above, plays the major role of resolving these challenges: directly or indirectly. In many cases, the approach applied in developing the strategy and considering the different factors that, together, may impact its execution in advance play a major role in eliminating or minimizing such challenges.
by Muhannad Tayem, partner in Consulting, Deloitte Middle East