| Oregon's Strategic Planning Model |
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Aligning Government Priorities with Societal Hopes and Expectations.
Testimony of Jeffrey Tryens, Executive Director
Oregon Progress Board
Before the U. S. House of Representatives Committee on Government Reform and Oversight
Subcommittee on Government Management, Information and Technology
October 31, 1997
Mr. Chairman and members of the committee, my name is Jeffrey Tryens. I am executive director of the Oregon Progress Board. The mission of the Progress Board is to keep Oregonians focused on the future by developing and implementing a statewide strategic plan. To carry out its mission, the Board focuses significant energies and resources on developing ways to better align governmental activities more closely with societal hopes and expectations. My remarks today will focus on that aspect of the Board´s work.
Project History
Oregon´s most recent foray into strategic planning dates back to the early 1970s. Twenty-five years ago, timber was king and the Oregon economy was humming along so well that many were concerned that economic growth was overwhelming the state´s vaunted high quality of life. So concerned was then-governor Tom McCall, that he uttered the now famous declaration "Come visit, but don´t stay" to his fellow Americans and anyone else interested in Oregon as a final destination.
The national recession of the early 1980s severely affected Oregon. Over a three year span, Oregon´s per capita income and wages tumbled nearly ten percentage points in relation to the national average. By 1986 incomes had been flat for most of the decade, the state´s population was decreasing and unemployment was approaching double digits. The smugness of the 1970s had long since been forgotten.
The 1986 gubernatorial race was dominated by concern about how to "fix" the state´s economy. One candidate, Neil Goldschmidt, former mayor of Portland, ran on a platform called "The Oregon Comeback." This detailed economic strategy helped Goldschmidt win the governor´s race and set the stage for the development of a state strategic plan.
By 1989 Governor Goldschmidt had harnessed 150 of Oregon´s best and brightest to develop Oregon Shines: An Economic Strategy for the Pacific Century. The plan emphasized a three pronged strategy: 1) transforming Oregon´s population into a world class 21st century workforce; 2) creating an "international frame of mind" that would position Oregon as the gateway to the Pacific Rim instead of the end of the Oregon Trail; and 3) pitching Oregon´s extraordinary environmental amenities as a comparative economic advantage.
Heralded as the first "holistic" economic development strategy for a state,Oregon Shines affected a broad array of state sectors and government activities. For instance, adequate pre-natal care for pregnant women became part of Oregon´s human investment partnership to assure a superior 21st century workforce.
The underlying strategy for Oregon Shines is described by its drafters as the "Circle of Prosperity." A talented workforce, environmental amenities and quality public services create an atmosphere that attracts and grows good jobs which in turn provides opportunities for Oregonians and a tax base that enables the state to maintain its quality public services and facilities and protect environmental amenities. Simply described, it is a high service, high skill, high wage approach to economic development.
The 1989 state Legislative Assembly adopted Oregon Shines as the official state strategy and created the Oregon Progress Board to oversee its implementation. The Board is chaired by the governor and is comprised of nine Oregon business and community leaders who serve at his pleasure. Members are expected to represent the geographic breadth and cultural complexity of the state.
Next came the difficult task of measuring progress. Unlike most state strategic plans,Oregon Shines includes all Oregonians as partners in action. This meant that outcomes could not be limited simply to government accomplishments. They had to measure progress toward broad societal outcomes.
Borrowing a chapter from business, the Progress Board adopted a set of societal outcomes called the Oregon Benchmarks. The 1991 Benchmarks identified 158 indicators of progress including 28 that were considered high priority. These high priority Benchmarks were classified as "lead" and/or "key" Benchmarks. Lead Benchmarks were related to urgent problems, like teenage pregnancy that were expected to come and go. Key Benchmarks, like per capita income, were considered equally important, but more long term. Generally, specific goals, called Benchmark targets, were set for 1995, 2000 and 2010.
For the most part, the Oregon Benchmarks are based on performance, not effort. Rather than monitoring school expenditures to measure how well Oregon students are doing, for instance, Oregon measures student achievement based on standardized tests.
Oregon has a long history of citizen oversight of government. Almost every state agency has a citizen governing board that oversees its programs. Oregonians set policy regularly through the ballot box, especially with regard to taxes. The development and implementation of Oregon Shines is no exception.
Citizens were deeply involved in the development of Oregon Shines and the Benchmarks. From its beginnings, the process has invited participation by Oregonians who cared about the future of their state. Before the original Benchmarks were developed, citizen meetings were held across the state to gather input regarding what societal outcomes best captured the things Oregonians cared most about. In 1991, hundreds of Oregonians had a hand in formulating the original list of 158 Benchmarks.
In 1994, the Progress Board launched one its most ambitious ventures -- redesigning intergovernmental relationships based on outcomes rather than programs and funding streams. Called the Oregon Option, this new relationship took the form of a memorandum of understanding (MOU) between the federal government, the state of Oregon, and local Oregon governments. Its purpose according to the MOU is "to encourage and facilitate cooperation among federal, state and local entities to redesign and test an outcome oriented approach to inter-governmental service delivery. This special partnership and long-range commitment will serve as (sic) demonstration of principles and practices which may serve as a model for improvements nationwide."
The Oregon Option has provided the federal government with an opportunity to work with a state and its local governments to refine the broad concept of the "performance partnership" as an alternative to the standard bureaucratic approach to delivering services. Over a broad variety of initiatives including childhood immunization, employment for the disabled, wild salmon recovery, juvenile justice, welfare reform and child nutrition, federal officials have worked with Oregonians both inside and outside government to make progress on specific Benchmarks.
Performance is achieved by removing barriers and streamlining processes, often through waiving burdensome administrative rules or seeking statutory change. The state has benefited from $10 million in reinvestment funds saved by the reduction of the state´s welfare caseload, along with greatly improved childhood immunization rates and progress in other important areas. The federal government is now working to expand the performance partnership model for broader use, particularly within 32 agencies it has designated as Reinvention Impact Centers. These agencies will work during the next year to strengthen partnerships with state and local governments focused on mutually chosen outcomes.
The first Option initiative, aiming to raise two-year-old immunization rates from 53 to 90 percent, illustrates how the system works. Federal state, local and nonprofit partners met to discuss how to achieve this ambitious goal. They soon surfaced a number of barriers preventing progress at all levels.
The group systematically chipped away at the barriers. The federal partners secured a waiver that reduced time and activity reporting and merged six funding streams into one to relieve paperwork at the state level. They also secured a waiver that allowed the Social Security number to be used to identify children (with parental consent) on a new statewide immunization registry that vastly reduces confusion about children´s actual immunization status -- a major barrier. Aided by corporate donations and free air time from public and private broadcasters, state and local partners joined in massive statewide campaigns to seek out un-immunized children. The state´s largest health care systems have donated hundreds of thousands of dollars to survey two-year-olds, learning much more about actual rates and reasons for poor coverage.
Sixty organizations have joined the consortium that provides leadership on this Benchmark. Immunization rates had climbed from 47 percent in 1991 to 67 percent in 1996 and continue to rise rapidly. New partners are joining all the time. In July 1995 the Oregon Option became an independent project within Oregon state government.
Since 1991 the Benchmarks have been updated three time and Oregon Shines once. Each time, citizens have influenced the outcome. In the latest iteration, completed in January 1997, the process was lead by a 45 person citizen task force. Over 500 Oregonians participated in meetings to help modify the plan.
The three most significant changes that occurred to the plan since its inception are: 1) it has evolved from a holistic economic plan to a more comprehensive plan with three components -- jobs, community and environment; 2) the total number of Oregon Benchmarks has been reduced to 92; and 3) Benchmarks are now more closely linked to the goals in the updated plan. While the first change may appear to be little more than semantic, it is intended to recognize the changing inter-relationship between the state´s economy, its people and its environment.
In 1997, the Oregon Legislative Assembly made the Oregon Shines´ strategic planning effort a permanent part of state government. A report to the legislature on the status of efforts to achieve Benchmark targets is required every two years and a complete update of the Oregon Shines´ vision is required every six years.
Oregon has received numerous awards and other forms of national recognition for its early adaptation of the benchmarking approach to strategic planning. In 1994 Harvard University and the Ford Foundation recognized the Oregon Progress Board as one of the ten most innovative programs in state or local government that year. The National Governors´ Association featured the Oregon Benchmarks in its 1993 policy paper on redesigning state government. The Center for Enterprise Development recognized the Progress Board in 1992 for excellence in state development policy.
Has Oregon Shines Made a Difference?
Without question Oregon´s economic health is much improved over 1989. Job creation has been strong. Well paying high technology jobs have replaced many of the well paying timber jobs that were lost in the past decade. Oregon per capita income as a percentage of the U.S. has increased.
Apportioning credit for this success is difficult. Eight new state policies have been put in place to support the Oregon Shines´ vision, but because Oregon is such a small part of the national economy (one percent), that external forces dramatically affect the economy. The state economist credits Oregon´s recent success to both internal (costs, labor force, quality of life, industry mix) and external (international economy, national economy, California economy and federal government policy) factors. Certainly, a large majority of these changes would have occurred absent a state strategic plan.
An examination of Oregon´s success in achieving its short term Oregon Shines´ goals shows mixed results. When the ten key Benchmarks that were identified as most critical since 1990 are analyzed they show an equal number of successes and failures. Successes include increased per capita income; statewide job growth; forest, agricultural and wetland preservation; air quality; and health insurance coverage. Increased health insurance coverage is the only one of the five that can be mainly attributed to policy initiatives that have occurred since Oregon Shines was developed.
Conversely, the five areas where Oregon fared less well -- student skills; teen pregnancy; affordable housing; student use of alcohol, tobacco and drugs; and crime -- all received significant attention in Oregon over the past five years. Many factors have been cited as causes for these "failures." These include "Benchmark targets were unrealistically high," "Oregon was bucking difficult national trends," "resources to fight the problem were not forthcoming," "not enough time has transpired to see results."
Most observers would agree that Oregon Shines has made an important difference despite the state´s mixed track record to date in achieving results. Its three primary impacts are 1) the marginal benefits of having a strategic economic plan that favored education and other forms of human investment have been significant; 2) the state´s overall commitment to outcomes has been engendered by Oregon Shines and 3) more and more groups and agencies are aligning themselves with the Oregon Shines´ goals and objectives.
Citizen Driven Strategic Planning: Getting It Right
In order for this comprehensive approach to strategic planning to work, six ingredients are necessary: 1) priorities must be set; 2) collaborators must be identified and motivated; 3) resources must be identified; 4) strategies must be developed; 5) an evaluation system must inform the system of the need for changes and 6) the public must be kept informed. Oregon Shines has made a contribution in each of these areas.
Setting Priorities
Oregon Shines´ Benchmarks are revisited and adjusted every two years. Until recently this process was not directly tied to the achievement of particular goals in Oregon Shines and no strategies were specifically developed for achieving each of the priority Benchmarks.
Using research generated as part of the Oregon Shines update process, the Board hopes to work with state leaders to develop a set of Oregon Shines´ priorities for state government numbering ten or fewer. Other key parties, both in and out of government, also will be approached about setting priorities within their organizations that reflect the Oregon Shines´ goals. For instance, the trade association of professional services organizations in the state will be asked to "shepherd" the goal of having Oregon become a net exporter of professional services by 2010.
Recently the Progress Board helped develop a priority setting method in state government policy deliberations regarding social support investment opportunities. The method is based on four criteria -- 1) strength of causal relationships, 2) ability of government to affect an outcome, 3) relationship to an accepted norm, and 4) size of potential impact. By grading a comprehensive set of "risk factors" according to the four criteria, a group of state agencies chose the five key risk factors that will be the focus of new efforts by the Governor to reduce state social support costs.
Identifying Collaborators
One well known supporter of the benchmarking approach describes the Benchmarks as "magnets for collaboration." Birthing new collaborations has undoubtedly been the area of greatest success for Oregon´s eight year old strategic planning process. One of the best examples of cross sectoral, cross governmental collaborations is Oregon´s campaign to increase the immunization rate for two year olds from 47 percent in 1991 to 90 percent in 2000 described above in the "Project History" section.
Another good example of that approach within Oregon state government is the Oregon State Police (OSP). In the last seven years, the OSP has seen its mandate expand dramatically while appropriations lagged. Sensing an opportunity in the state´s holistic approach to strategic planning, the Oregon State Police Superintendent has gathered other partners under the Oregon Shines´ umbrella to assist in carrying out the mission of the agency. No longer do the State Police "go it alone." At the same time,Oregon Shines and the Benchmarks have become the bedrock of the agency´s strategic planning process.
Identify Resources
This first thought that comes to mind for most experienced policy makers when a new goal is identified is where will the money come from. One of the early criticisms of the benchmarking process came from state legislators who, as one observed wryly, "only hear about the Benchmarks when an agency director is asking for more money to achieve a Benchmark target." While the strategic planning goals and Benchmarks are clearly every Oregonian´s, the actual dollars for achieving the goals will often come from the public sector.
Availability of funds is an ever increasing problem for achieving the Oregon Shines´ vision. Voter mandates have both limited the amount of tax dollars state and local government can collect and mandated specific spending categories for the majority of expenditures in the state budget. In some cases, these mandates are directly opposed to the vision articulated in Oregon Shines and ratified by Oregonians in community meetings across the state. Despite a booming economy and increased tax receipts, policy innovators in Oregon are generally restricted to reworking existing programs rather than implementing bold new initiatives.
Increasingly, Oregon is turning to a different model for mobilizing resources -- state and local government coordinated leadership with partnerships that include financial commitments from private sector partners. For example, Oregon has recently embarked on an attempt to recover depleted wild salmon stocks (Benchmark 89) throughout Oregon´s 21,000 miles of rivers and streams.
Historically this type of task would have been too big for state government. No agency could handle it and too many private landholders are involved. Federal government involvement, through the federal endangered species act mandating broad ranging land use restrictions, would have been the only alternative. Today with coordinating leadership from the governor´s office and participation by 14 state agencies, the "Oregon Plan" will tap substantial private, non-profit and local government sectoral resources (both money and people).
Develop Strategies
Since its inception, the Progress Board has been involved in the strategy business. One of the first big successes of the strategic planning process was the creation of the key industry program. Combined with a regional approach to economic development, this program allows Oregon to target its economic development spending on 14 "key industries" throughout the state.
The Oregon Progress Board also co-led the process that created Oregon´s successful welfare reform program that provides strong support in the form of health and child care benefits to welfare recipients attempting to transition into full time employment. Oregon was one of the first states in the nation to put such a comprehensive program in place.
Universities have played an important role in understanding the economic and social dynamics that affect Benchmarks. A group of University of Oregon graduate students teamed up with the Progress Board to provide the empirical underpinning for the strategies identified in the updated Oregon Shines´ plan.
Recently, university faculty and students have engaged in research activities to better understand various dynamics affecting Oregon strategic outcomes. For instance, Oregon State University´s Department of Agricultural and Resource Economics is developing a simulation model to answer the question "What effect would a 50 percent improvement in high school drop out rates, teen pregnancy rates and child support collections have on the poverty rate?"
The Oregon Shines´ program has even had the opportunity to revisit and modify strategies. Oregon´s job creation strategy, for instance, has shifted from out of state recruitment of technology companies to growing our own. And emphasis on growing the professional services sector has been increased.
Informing the System
Understanding the relationships between large societal outcomes like Benchmarks and any one player, no matter how large, is difficult, verging on impossible. Using Benchmarks for accountability has been one of the most difficult and contentious aspects of putting this system in place. Nowhere has it been more difficult than in the area of assessing state agency performance.
A set of publicly approved, measurable outcomes with defined targets should be an important driver of government accountability. Since their creation, the Benchmarks have been victims of both too high hopes and too low expectations regarding their ability to transform government agencies into effective and efficient deliverers of government services.
Many Benchmarks boosters hoped that forcing agencies to align themselves around societal outcomes would, by the sheer legitimacy and power of the Benchmarks, cause agencies to achieve efficiencies that had been heretofore impossible. Boosters hoped for miracles.
Cynics, often government insiders, couldn´t see how Benchmarks were anything but the latest accountability fad that had been preceded by far more formidable, and failed, approaches like zero based budgeting. Cynics expected nothing.
Neither group was right. When included as one of an entire set of tools, Benchmarks can play an important part transforming a state agency´s ability to increase its effectiveness and efficiency. The state Department of Human Resources has used Benchmarks and related outcomes as a way of realigning the giant agency´s many disparate missions around a few well defined outcomes. (Nearly one state government employee in three works for this department.)
True accountability occurs when budgeted dollars are tied directly to outcomes. Oregon has taken a step in that direction by requiring agencies to identify the Benchmarks that are linked to their efforts. The Progress Board puts all of that information on a data base allowing legislators and others to see how many agencies are linked to each Benchmarks and how many Benchmarks each agency is targeting. This is a far cry from performance budgeting, but a useful tool for increasing accountability.
Unfortunately, the desire for accountability can get in the way of a powerful advantage of measuring outcomes -- using them as a learning tool. An effective system must balance the public´s desire for greater government accountability with the need to encourage risk taking by managers. Failure to achieve a Benchmark target should not automatically be interpreted as ineffectiveness on the part of the public agency.
Keeping the Public Informed
In 1996, the Progress Board issued its first "report card" to Oregonians describing progress toward achieving the outcomes set out in Oregon Shines. To insure impartiality, the Board adopted a method for grading progress toward target outcomes in advance of the Benchmark analysis. To attract public attention, a five tiered approach, "A" through "F," was adopted to mimic a student´s grades. (U.S. schools do not give "E´s".) An "A" meant the goal had been achieved. "F" meant conditions had worsened. "B," "C" and "D" were gradations between the two extremes.
Fifty priority Benchmarks were identified and graded as part of the process. Press coverage of the report card was excellent. Newspapers across the state carried the story. Progress Board staff appeared on radio and television talk shows to discuss the Board´s findings.
Currently, the Board is planning a statewide media campaign to air information about how Oregonians are using Oregon Shines as a guide to undertake projects that improve the lives of citizens. Part public relations and part educational, the privately supported campaign also is designed to increase the credibility of the strategic planning process with the public.
In every one of the six areas described above, the Oregon Shines´ process has brought about incremental improvements in Oregon strategic planning capability. Nowhere has a total "sea change" occurred.
Lessons Learned
1) Benchmarks Do Not a System Make
As described above, much more than benchmarks is required to put together a dynamic, data driven system to guide change in a state or country. Without a good management process to utilize the information about trends and conditions that comes from a benchmarking system, the data alone is virtually useless. The single most important "driver" is the commitment by civic and government leaders within the jurisdiction to achieving measurable results.
The Benchmarks have engendered an atmosphere within state government that is friendlier to data driven solutions. The social supports investment strategy described under "Setting Priorities" was considered an unusual exercise in state government because of the heavy reliance on data analysis.
2) Change Takes Time
Oregon began this process in 1989. Three governors, four legislative assemblies, two hundred community meetings and $2,000,0000 later, Oregon is still at it. The value of the process is that it does not have a prescribed end. Progress Board staff spend a significant portion of their time each year meeting with citizens in different fora to update the plan and refine the process.
The process has not lacked detractors. In 1995 the Oregon Legislative Assembly expressed its unhappiness with the Progress Board by allowing the Board´s enabling legislation to expire. Only an executive order by the Governor kept the strategic planning process in business. Fortunately, the legislature appropriated funds for the Board to continue to operate through 1997 while Board members addressed legislative concerns. In the past two years, the Board satisfied the legislature´s concerns about focus and accountability. These development ups and downs must be expected.
3) There Is Never Enough Data
Soon after the Progress Board opened for business, the need for local data became evident. Like many other jurisdictions, Oregon´s population and economy and environment vary dramatically over the state´s different regions. When citizens wanted to form a local progress board in an eastern Oregon county in 1991, the first thing they needed was local data for their own benchmarks. State averages were of little use to them.
Today, data for well over half the Benchmarks is collected at the sub-state level -- most is county based. (There are 36 counties in Oregon.) Very little of our data is meaningful at the city level. Only the U.S. Census provides data at a fine enough level for use at the city or neighborhood level. (If the Congress funds the Census Bureau to implement the American Community Survey, a significant portion of this problem will disappear.)
When Benchmarks identify important trends that should be addressed, data needs increase dramatically. For instance, failure to complete high school is considered a key determinate of economic success. When school dropout rates increased through the early 1990s, citizens and officials expressed alarm. But what was to be done? The Benchmark only identified the trend, it did not provide enough data to map a plan of action. Oregon has just completed an extensive "slice and dice" of the school failure problems that has allowed the state to pinpoint particular aspects of school failure for priority attention.
4) A Single Champion or Party Affiliation Can be Deadly
Despite its theoretical appeal to Republicans, the Oregon Shines´ process became known as a "Democrat thing" because of its close association with three Democratic governors and two Democratically controlled state Legislative Assembly sessions. Some people still associate the entire process with former Governor Neil Goldschmidt, even though he has had little to do with Oregon Shines or the Progress Board since 1991.
This association with one party was part of the reason the Republican controlled legislature felt free to fire "a shot across the Progress Board´s bow," as one legislator put it. While maintaining close ties with Governor John Kitzhaber through his role as chair of the Board, Progress Board staff and members today serve as a resource for elected officials from both of Oregon´s dominant political parties.
5) Mandating Benchmark Use Has Not Worked Well
In 1993 the Oregon Legislative Assembly required state agencies to tie their internal "performance measures" to Benchmarks. The intent was to inject some measure of accountability into the governance system by holding state agencies responsible for achieving these large societal outcomes through their actions. The attempt was largely unsuccessful. Many agencies went through the motions because they were required to, but little changed about the way those agencies operated. To their credit a few agencies took their charge quite literally and have worked very hard to tie their internal performance measures to the Benchmarks. As described earlier, the Oregon State Police did, along with the Oregon Department of Transportation and some human resources agencies.
At least one jurisdiction in Oregon, Multnomah County, has successfully implemented wholesale revisions in performance management systems to link to outcomes that are important to society. Budget expenditures are linked, at least theoretically, to county benchmarks. The different levels of success can be largely attributed to different systems of government. Oregon state government has a long history of citizen oversight of state agencies and a certain amount of independence on the part of agency directors is the norm. County commissioners are less encumbered by such elaborate checks and balances.
A better approach for Oregon may be to provide "change agents" of all types with tools that allow them to be more strategic about their planning processes and that allow them to easily tie their planning processes to the next level or multiple levels above. In Oregon this is taking the form of new information management tools and databases that add value to already existing planning processes. This approach is still dependent upon strong support from top levels of government and civic society.
Conclusion
Oregon is blessed by a number of factors that have allowed the state´s strategic planning process to take hold. Its long history of citizen involvement in government has created a strata of leaders who understand the benefits of long term planning. Oregonians are used to seeing their state leading in the development of new approaches to public management. The state´s economic resurgence occurred as the plan unfolded. Most Oregon political leaders of both parties still see the need for government to play an important, albeit changing, role in civic life.
Implementing the Oregon Shines´ strategic plan has required great flexibility on the part of civic and political leaders and other "action agents." Oregon´s leaders have had the patience to allow the system to unfold through a series of successes and failures. Oregon is clearly making progress, but still has a long way to go to truly link state government activities with societal hopes and expectations.
The author is solely responsible for the findings and opinions expressed in this testimony. His views do not necessarily reflect those of Progress Board members. The author wishes to thank William Scott, Gerald Kissler, Connie Revell, Deirdre Molander, Scott Stewart, Ruth Spetter and Zoë for taking the time to review and comment on this testimony.
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