850 words (10 minutes reading time) by Colin Weatherby and ChatGPT

A passage from The Book of Local Government:

“And lo, the Local Government was filled with aspirations for the community. But when the State government imposed a rate cap, limiting their capabilities, the leaders knew they must align their aspirations with their limitations through strategy. And Richard Rumelt, a wise strategist, spoke unto them saying “A good strategy addresses the most important and high stakes challenges through a coherent set of analyses, concepts, policies, arguments, and actions.” But many Local Governments strayed from this path, with strategies that lacked a clear central idea and failed to address important problems or opportunities. And Rumelt warned them “If thou fail to identify and analyze the obstacles, thou doth not have a strategy, but instead a stretch goal, a budget or a list of things thou wish would happen.” And the leaders heeded his words, and developed a good strategy to overcome their challenges.”

Source: ChatGPT

I have been inspired for the title of this post by John Lewis Gaddis, who says strategy is necessary for ‘the alignment of potentially unlimited aspirations with necessarily limited capabilities’.  It is strategy that aligns our most important aspirations with our capabilities so that we can achieve them. It is especially important when capabilities are being limited.

Local government is full of aspirations. We deliberately ask the community what they want to create a list of things to do. We don’t wait for them to tell us. Our workers are expert at identifying new needs. We like to say that we really understand community needs and expectations. I suppose, this is where the problem starts when a State government disagrees and decides that people are being charged too much for councils to meet their needs and they introduce a rate cap.

Worse still, is when the State thinks some of those needs should not be met by the council at all or they are being met in ways that are inefficient or frivolous.

“The days of ratepayers footing the bill for Arnold Swarzeneggar impersonators are over.”

Labor leader, Daniel Andrews, 2014

I have recently re-read Richard Rumelt’s book ‘Good Strategy/Bad Strategy’. It is over 10 years old now and remains a classic on strategy. I also read his new book, ‘The Crux’. He has recently described his ideas about strategy as ‘challenge-based strategy’, which is useful when thinking about them in the context of local government. We have challenges.

Rumelt says that good strategy does more than just urge us forward and state a set of ambitions. He also laments the word strategy being used in contemporary business teaching and writing to mean so many things that is has become meaningless. Fortunately, he has a clear view.

“The core of strategy work is always the same: discovering the critical factors in a situation and designing a way of coordinating and focusing actions to deal with those factors.”

He says that, to be effective, strategy must addresses the most important and high stakes challenge (or aspiration). It does this through a ‘coherent set of analyses, concepts, policies, arguments, and actions’. It all starts with identification of the most important challenge through careful diagnosis, then development of guiding policy to address the obstacles identified in the diagnosis, and, finally, a set of coherent actions to achieve the policy intent.

What is the most important challenge for your council?

This is a question I often ask colleagues. I get so many different answers that it is apparent councils don’t see one common challenge. In some cases, they can’t decide on any one challenge. This is common and leads me to bad strategy, which Rumelt says it is more than the absence of good strategy because it misdirects the efforts of the organisation. He says it is an ‘edifice built on mistaken foundations’.

Strategy is bad when it actively avoids analysing obstacles because it is difficult or seen as negative, or it is simply an exercise in goal setting. Hard choices are avoided so that no one is upset. Rumelt’s hallmarks of bad strategy are:

1. Lack of a clear and cohesive central idea or concept.
2. Failure to address the most important problems or opportunities.
3. Confusion between goals and intentions.
4. Lack of coherence or alignment between different parts of the strategy.
5. Reliance on hope, as opposed to a realistic assessment of resources and capabilities.

I have used this list to assess some existing council strategies. Most get 5 ticks, and it is apparent that they follow a set format of ‘vision, mission, and goals’, which Rumelt describes as ‘template strategy’. This approach seems to studiously avoid focusing on the one big challenge or making any hard choices.

“If you fail to identify and analyse the obstacles, you don’t have a strategy. Instead, you either have a stretch goals, a budget, or a list of things you wish would happen.”

In local government, we like to make lists. It is always good to see everyone’s ideas written down. It is important that everyone has input and ownership. Plus, we don’t like saying no and disappointing people or alienating constituencies.

Based on the recent series of posts about rate capping, if we think that expenditure growing faster than revenue as a result of the rate cap is the biggest challenge, we should develop a strategy.

A good strategy.

On Grand Strategy (2018) by John Lewis Gaddis

Good Strategy/Bad Strategy (2011) by Richard Rumelt

The Crux (2022) by Richard Rumelt

Footnote

This is an earlier post on a similar topic ‘What matters and what works’. Why feasibility is important in local government.