Strategy Development at New Town Council
Andy Bailey and Julie Verity
The two cases New Town Council and Castle Press, illustrate the process of strategy development within different organisational contexts. Both cases are based on the views of the strategy development process as seen by members of the respective top management teams. The New Town case describes how four members of the top management team view their strategy process. Both cases a reconstructed around two general themes. The process of strategy development and the organisational context in which it takes place. The two cases illustrate differences in the strategy development process, demonstrating that the process of managing strategy development in one organisation may not be the same as, or necessarily appropriate to, and managing strategy development in another organisation.

I'm not really comfortable with the way we develop strategy here, but I'm not sure I know how to manage the process to make it more coherent either.
CHIEFEXECUTIVE, NEW TOWN COUNCIL, 1995

New Town Council formed one part of a two-tier system of local government responsible for the provision of services within a geographical area of the UK; the other part was the county council. Both authorities operated under Acts of Parliament, with specific duties laid down by these Acts and with central government controlling many of the activities of local authorities. The county council had responsibility for school education, fire and police services, highways and social care, while the council had responsibility for environmental health, housing, planning, recreational facilities and refuse collection. Local authorities consist of councillors (Members) and paid employees. The councillors are elected representatives and decide the council's policy and priorities. The paid employees are responsible for implementing policy, with the role of senior officers (the senior ranks of the paid employees) being to advise the councillors on policy and to implement the policy decided. New Town Council grew up alongside New Town as it was built on its green field site in the 1970s. Central government decreed that New Town would exist and the Development Corporation designed, planned and built it. As the bricks, mortar and amenities were developed, the council 'followed on behind, picking-up the litter, literally. I mean the Corporation built it and we provided the refuse collection systems for the people when they arrived to live here. When the Corporation was wound up and

This case study was prepared by A. Bailey and J.Verity, Cranfield School of Management. It is intended as a basis for class discussion and not as an illustration of either good or bad management practice. © A.Bailey and J.Verity,1996.

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Strategy Development at New Town Council

we had to take over, it was a lot to cope with-it think we are still learning to cope in some respects, 'explained a senior officer at the council. When the Development Corporation ceased activities in the early 1990s, New Town Council took responsibility for housing, environment, recreation, and economic development and community development services. It did not assume control of education or social services, which remained with the county council, an arrangement which by1995 was under review. From 1979 to 1997, the Conservative Party had been in central government and had made frequent and significant changes to local government legislation. It was against this back drop that some of the top management team of New Town Council described how they thought strategy came about in their organisation.

The chief executive had been in his role for ten years: For the majority of my time here we have had a hung council.1 My 'management board', therefore, is a group of elected representatives who are generally interested in a common aimthe greater good of the community-but who are totally split about the way to achieve it. They also rarely make a clear decision; they simply delegate, and when they don't like the proposed solution, they block implementation. Hence, my role is to act as an interface between the party political processes of the Members of Council and my management organisation [the officers]. I have to seek to understand the party political process, interpret it and help manage things via that process. At the same time, I have to understand the strengths and weaknesses of my management organisation [the officers], repair the weaknesses and build on the strengths. Two senior officer shad been recruited to the organisation within the last five years. One was head of personnel services: Our focus is the local community. Our strategy is based on the combined expectations of these people. Being a new town, taking over from the Development Corporation, you would expect us to have a defined vision to do with the social and physical development of New Town. The vision we have is not our own vision, we have inherited it. It is the vision of the government who decided to build New Town 30 years ago. The other was commercial director of the direct services· directorate. This was one of six main directorates within the council with responsibility for those services which the government had decreed should be subject to compulsory competitive tendering (CCT).2 this included services such as landscape, highways, building, vehicle maintenance and leisure management, and accounted for about a fifth of the council's workforce: From my perspective, strategy develops in fits and starts. Since I've been here we have had a hung council, which as meant that no one political party has been able to stamp its views firmly on the whole organisation. In strategy terms, that has left us floundering because it has been very unclear whether an initiative will get approval or not. As a group of officers, we have had to say that, regardless of the patty political situation, there are certain things we are going to have to cope with: one is the extension of CCT, another is the Local Government Review3 and lastly is our struggle with the budget, where by the money that
No political party in overall control. Central government legislation which compelled local authorities to invite competitive tenders for the provision of certain types of work, within-house teams bidding against private sector competitors for a specified task. 3 A review of local government structure from which recommendations are made for either the retention of the presenttwotiersystemorthecreationofasingleunitaryauthoritytoprovideservices within a geographical area.
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Strategy Development at New Town Council

we get from government has been held at the current level or reduced, year-on-year, while they have mandated we provide extra services! Finally, there was the· central services director, with responsibility for 200 people who largely provided services internally, to council departments. This directorate included computer services, estates management, the law division and central administration: In 1987 we held a conference to think about the future. We coupled that with a large public consultation exercise and as a result, the elected Members were asked to approve a strategic plan which had six main objectives in it. The process since then has been yearly reviews conducted By a small team within the policy directorate, which has reported back to the management team On the changes that have occurred in the environment and sought endorsement from Members. As a result of this review process, this year there are some fairly significant changes to the strategy document. Strategies also arise through the various council directorates: for example, Housing or Environment. Directorates produce their service plans each year, reviewing the external and internal: influences and reacting to changed circumstances, revising their objectives for the current year in line with these changes. Therefore, the council's strategy is a series of very broadly based objectives which express the aspirations of the community. This is meant to be supplemented by the council's short-term objectives, its policies and the directorates' service plans. It is an interaction between these two sets of objectives that determines the way we go.

Planning is Desirable, but…
Traditionally the organisation has not been focused on planning or developing policy. There was actually an anti-policy line. Instead, strategy developed in an ad-hoc manner, with the council being able to do as it wanted because it was well resourced. In the late eighties, we developed a community strategy- New Town 2000. This was perhaps a first for a local authority: that is, to try and devise a corporate strategy. After that, I think we got blown off course by events of the time: massive inflation, couldn't find staff or keep staff, so I spent a lot of time reorganising and looking internally. When we did find time, we tried to get the individual businesses of the council (because we are a series of services) to project their own services in to the future and formulate their own plans. Now we are back to trying to realise the community strategy. So strategy to us is about determining where we are principally in our community, the key influences which are pushing us around within this, and trying to make sense of the steps we are taking, knowing that we are going to falter on some and going to be accelerated on others.
CHIEF EXECUTIVE

The chief executive went on to conclude that planning was desirable and something he had tried to introduce in to the organisation by bringing in facilitators and training his people to become skilled in planning processes and techniques. He admitted, however, that the organisation was still struggling to plan effectively. Some issues were easier to plan for than others. The Local Government Review, for example, 'had encouraged officers to come together and realise that, despite the political differences, you can have planning for the future'. Others in his team, however, stressed that strategies had to be built around a theme of flexibility. With Strategies liable to change at any point, there were doubts about the value of planning in this organisation.
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Strategy Development at New Town Council

What strategic objectives we have do not emerge from inside the organisation, they emerge from outside the organisation [from central government].
HEAD OF PERSONNELSERVICES

The strategic objectives and priorities of New Town do not really come out of planning. Whatever is particularly powerful at the time will get attention first, and then next week it could be something different. This creates cynicism in the organisation because this week something is important and the week after it is something else entirely, and all the time we are required to keep picking up the bits and pieces and delivering them.
COMMERCIAL DIRECTOR, DIRECTSERVICES

New Town Council Is Action Oriented
The culture is not about restricting actions. Even in times of severe financial constraintwhich we have at the moment-the culture about this place is always to develop and try something new.
CENTRAL SERVICES DIRECTOR

The chief executive believed that, in the past, the council would have grasped every opportunity, a situation influenced by Members who saw everything as a priority. Things were changing. Now it was not realistic to try and put everything first on the priority list; budgets were shrinking and central government's list of demands was growing. However, despite an environment apparently littered with obstacles, there were opportunities to get things done and his council did deliver. After all, local authorities were essentially independent. There was a choice: You have to look at what you want to achieve, understand what is limiting and what is possible. A classic example is how we were capped 4 on capital projects in every area except for housing. Despite this we have just built a £6m recycling facility which we persuaded the government was in line with their ideas about the environment. There is no doubt that we have to accommodate ourselves to deliver what central government want, but there are ways and means of getting what you want as well. Another example is to get your community supporting you. If you can stand together, you can be vastly influential-if you ignore them, you are dead!
CHIEF EXECUTIVE

While all the officers agreed that political behaviour was common at New Town Council, there were differing views on how this influenced the development of strategy. The chief executive said: No one individual has dominated New Town. Individuals and groups do, however, determine the nature of the organisation and the way it does its business, and heavily impact on strategy. Power was held in certain directorates because of the size of their budgets, the nature of the service or the strength of the director's personality: There is some internal competition where one director is more powerful than another. These people tend to get more resources and perhaps develop their services at a faster pace. That often goes along with having more party political support. For example, housing is traditionally a
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Limits placed on the amount which can be spent.

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Strategy Development at New Town Council

strong department. It is an important concern of the council, and strong Members have chaired that committee. So resources do tend to move in that direction.
HEAD OF PERSONNEL SERVICES

We had an extremely powerful finance director, for example, because he was a very powerful individual. But, finance was also a key issue for us, so the function was important. Now, since this particular director left, finance is still an important issue, but the department does not have the same amount of power. By definition, the directorate structure tends to isolate us; communication does not happen across directorates. It is only through corporate working groups that we have been able to get people together.
COMMERCIAL DIRECTOR, DIRECT SERVICES

From my position, we are divided into two camps. Those who provide a central service (in a co-ordinating corporate role) and those who provide specific services like housing and recreation. In effect, we at the centre think we always compromise in favour of the direct services. Those in Direct services always say that they find themselves compromising in favour of the centre. But I don't think this has a big impact on strategy.
CENTRAL SERVICES DIRECTOR

The way to win the game of influence in this organisation was described by officers and chief executive alike as being close to members. However, only the chief executive thought that was good at bridging the divide between members' ideas and the organisation's ability to deliver. The central services director knew that, on the rare occasions that he had been particularly close to members, he had been very effective at influencing decisions. Influencing fellow officers was a matter of being 'in the network' or leading a working group on a specific issue. The head of personnel did not like 'politicking' with members, but realised that while she resisted indulging in this behaviour she was liable to remain less effective at getting her view heard. Talking with people was how the commercial director of direct services tried together ideas adopted-talking with colleagues on the top management team who might be sympathetic to her cause, or influential members and other senior managers. This took the form of informal preparation before the formal process. By the time the formal process was in action, she would have a good idea of the likelihood of her initiative being successful.

A Democratic Chief Executive
New Town officers were in agreement about the chief executive's style. He was a leader, but not a domineering one. He sensed the issues and hotspots: he was very conscious of what members were thinking; he was a facilitator and someone who moderated the power of different interest groups. He is not the most powerful person in the organisation. There are others with more outright power. He doesn't lay down the law or anything like that. But he is very good at making sure all interests are met, and when you look back, you can see what he has achieved even though it was difficult to appreciate at the time.
COMMERCIAL DIRECTOR, DIRECT SERVICES

The previous CE was an extreme autocrat, incomplete contrast with our current CE, who is a democrat. The power is not institutionalised in the position.
HEADOF PERSONNELSERVICES

He is the counter balance between the power of two or three of the service chiefs and their committees on the one hand and, the members of the council as a whole. He is a facilitator who uses his personality to manage the process.
CENTAL SERVICES DIRECTOR

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Strategy Development at New Town Council

A Clarity of Purpose
If you asked people working here if they had a good understanding of what this organisation was trying to achieve, then I predict their answer would be 'no'. This is partly because we are very poor at communicating about these issues.
CHIEF EXECUTIVE

Other members of his team agreed. The commercial director of direct services said: I don't think there is a strong shared assumption about what New Town Council is here for other than to provide services. I doubt if you would even get people to agree on what those services should be on a priority list. When the Development Corporation was dissolved, New Town Council was suddenly responsible for everything and it struggled to cope and is still not taking a lead. Members in particular have found it quite difficult to become strategic thinkers and develop long-term plans, particularly given that none of them have overall responsibility anyway. The head of personnel disagreed, believing that there was a unifying theme: We have managed to hold on to being something other than what the government requires us to be. That is the over-riding raison d'etre of the organisation. This makes organisational life difficult, because we are fighting against the government's direction and trying to set a strategic direction of our own.

In Pursuit of the Ideal
How would members of the top management team like to improve the strategy process? I don't think strategy is about forecasting the future. I think strategy is about setting out to say what do I want to do, what are we seeking to do, what are the guidelines that are going to take us in this direction. It's like playing football; you need to know if the strategy is to attack or defend. Also, because we are all rational, well most of us are, we want a strategy to be rationally based on some sort of hard evidence. What we have not done in organisations like this is develop a very rational basis of thinking. Our thinking is based partly on principle, partly on political philosophy and partly on the way you interpret what your local community might want in the future. The rationality comes when we try and bring these three together. Then something changes, as it always does, and we have to be prepared for that change as well. If we could forecast it rationally, it would be ideal. That is what we should strive for.
CHIEF EXECUTIVE

My criticism is that we spread ourselves too thin, that if we focused our strategy and concentrated on two or three very important goals then we might make more impact. On the other hand, by spreading ourselves thinly we have achieved an amazing amount. Maybe the downside of that though is that we have not all been pulling in the same direction, which means there could be room for improvement.
CENTRAL SERVICES DIRECTIOR

There is scope for improvement. We need to develop strategic skills and redefine the Members' role. We need to prevent the debate from slipping into the nitty-gritty, operational details and move it into the arena of developing policy and the strategic direction of the council.
HEADOFPERSONNEL SERVICES

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Strategy Development at New Town Council

In the top management team, we spend a lot of time talking about strategy, but we don't talk much about the implications of the strategy. So, we all may leave the room, having spent three hours together, with different interpretations of what the strategy means. Therefore, how we implement it may actually vary. What we need is general agreement as to what our purpose is. Some people might call it a vision. Something which says this is what we are trying to achieve and this is the direction we are trying to pursue. I don't believe we have this, but we need it. Why? Because we have lots of conflicting demands that we can't meet. A lot of our time therefore, is spent fire-fighting. I don't know if there is an alternative. Firefighting might not be a bad thing if there is no clear system to direct you otherwise. You just try and keep as many balls in the air as is possible until it becomes clearer. It's just that we seem to have been doing that for such a long time now!
COMMERCIAL DIRECTOR, DIRECT SERVICES

One view was that they should make a virtue of their system, given the hostile and volatile environment: In a way it works. It is very flexible and we may be doing exactly the wrong thing in trying to fit A rigid framework onto something that is inherently unstable. In which case we need to try and get this message over to staff, whose the process as it currently is as a mess and difficult to work in.

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