Mld-110B: Strategic Management for Public Purposes

Draft -January 30, 2013a Version

Kennedy School of Government Harvard University Steven Strauss MLD-110B: STRATEGIC MANAGEMENT FOR PUBLIC PURPOSES SPRING 2013 [email protected] Taubman 456 Class meeting: Tuesday and Thursday, 8:40 AM to 10:00 AM Faculty Assistant: Starting January 29, 2013 TBD Littauer 382 Office hours: Tuesday 10:15 a.m-11:00 a.m 2:00 p.m-3:00 p.m. Or by appointment

1 Draft -January 30, 2013a Version organizational purposes. We will explore ways to release the power of strategy and strategic thinking from boundaries imposed by traditional models of organization, in order to deeply transform public organizations and the services they provide. Course Requirements Course requirements include class preparation and participation, ten of twenty-three written responses to readings and cases (250-500 words each), two longer written assignments (500-1000 words each), and a final paper of 5-7 pages. There will be no final exam. Grades will be determined approximately as follows:

 Class participation and responses to readings - 30%  Written assignment # 1, together with written assignment #2 or #3 - 30%  Final paper on improving operations and culture - 40%

Class participation: Productive case discussions depend on students not only reading - but also analyzing - cases and materials, and coming to class ready to present a diagnosis of the Course Assistants: problems presented by the case, together with a plausible solution. Class Ananth Gudipati participation will be evaluated based on the quality and quantity of [email protected] contribution. This course focuses on strategic management and leadership in the public sectors of Students should be democratic societies. This course draws on new developments in public sector management, prepared to be such as: Greatly increased use of competition and quasi-market mechanisms; “cold called”, outsourcing/offshoring; new uses of data to support continuous improvement; particularly benchmarking; libertarian paternalism; and the rise of social media. regarding case readings. Our cases are drawn from some of the following sectors: Health Care; Public Financial Management; Education Reform; Public Administration; Police; Regulatory Policy and Students must Implementation; Operations; Not-for-Profits; Military; and Transportation/Infrastructure. bring their name Geographically we will cover examples from: Asia, Europe and the United States. cards to each class. By the third class, This course is designed for students with management experience. It presents a practice- students should oriented approach to problems managers face, and aims to develop integrated strategies for choose a seat to improving performance when solving serious problems in the public sphere. It complements which they will be specialized courses that focus in greater detail on particular tools used by managers, and will assigned for the help students integrate their prior work experience with their course work. remainder of the course. Name This course examines several important strategic actions in public and nonprofit cards and assigned organizations: Setting and articulating goals and missions; aligning strategy with mission; seats will make it leading organizational change; managing with performance information; improving work much easier for all processes; structuring networks and partnerships; and dealing with crises and environments of us to learn each in transition. While examining these actions, we will use organizational theory and practice toother’s names. explore alternative models of leadership and authority in organizations - models which profoundly challenge the default organizational paradigm governing so many of our By the third class, assumptions about how organizations operate. you will be asked to complete a short Strategic thinking will be an important theme in this course. Strategy is the process by which survey about your we leverage resources at our disposal to maximize the likelihood of achieving the outcomes background and we seek. We achieve such leverage by discovering synergies among our available resources, and 2 exploiting those synergies to create coherence in our actions, directed toward our Draft -January 30, 2013a Version interests.

Reading responses: Reading response questions are included in the class outline below. You must submit a total of ten written reading responses, in addition to the required written assignments. Reading responses will be graded on a “+, ✓, or -”basis.

1) Reading responses must be posted on the course website by noon the day before the class. 2) They must also be sent to a special course email whose address will be announced in class. 3) Do not use attachments for these short reading assignments - write your reading response directly in the space provided. Student reading responses will be made public. You are encouraged to read the responses of your classmates, and to react and build on them as appropriate. If at some point you would like your reading response to be confidential, you may email it to Steven Strauss in lieu of posting it on the course website.

The course website will also offer opportunities for student discussion and elaboration of topics discussed in class. Additional readings, resources and announcements will also be posted on the course website.

3 Draft -January 30, 2013a Version

Study groups: We encourage you to meet regularly in study groups to discuss the cases and prepare for class. Students are responsible for forming their own study groups.

Written assignments: In addition to reading responses, there are two required written assignments. The first written assignment is due on February 14. The February 14 date is mandatory. For the second written assignment, you have a choice of either February 28 or April 23. Papers are due at the beginning of class.

Final Paper: Due May 9 The final paper is your opportunity to apply what you learned in this course to an organization of your own choosing. You should choose an institution you are familiar with; generally, this will be an organization where you have worked or plan to work. You may also choose to work on an institution you would like to learn about, but please confirm you will have enough access so that your paper will be based on actual knowledge of the institution.

Select a problem or opportunity that improve the work your selected organization does, and that can be addressed by applying concepts and tools learned in this course.

• Describe the problem or opportunity you are addressing; • Analyze the pluses and minuses of using specific management tools to address the problem or opportunity; • Make short and long-term recommendations to management; • Append a brief note on your sources.

We will provide more details on this assignment later in the term.

Readings: Some required cases and readings will be available online, through links provided in this syllabus, or through the online materials section of the course website. Some materials will be in the course packet, which you are required to purchase. The following books are available at the Harvard Coop, and we urge you to purchase them:  Elaine Kamarck, The End of Government…As We Know It, Lynn Rienner Publishers, 2007.  Mark Moore, Creating Public Value, Harvard University Press, 1995.

The syllabus indicates the location of readings, through the following abbreviations:  B: available in the books noted above;  O: available online at the link provided in this syllabus or through library resources;  W: available from the course website in the "online readings" section;  P: available in course packets distributed by the Course Materials Distribution Office (CMDO) in Belfer 7.

MLD-110B: Schedule and Topic Overview STRATEGIC MANAGEMENT AND ORGANIZATIONAL STRUCTURE January 29 January 31 February 5 February 7 February 12 February 14 February 19 1. Introduction – Strategic Triangle 2. Organizational Culture 3. Setting Strategy – Aravind Eye Hospital 4. Setting Strategies and Goals – Bills of Andalucía 5. Bureaucratic Entrepreneur – Student Aid in Sweden 6. Consensus Building – Providence Schools (Mandatory Assignment) 7. Innovation - GSA STRATEGIES FOR IMPROVING PERFORMANCE February 21 February 26 February 28 March 5 March 7 March 12 March 14 BREAK BEYOND ORGANIZATIONAL BOUNDARIES: NETWORKS, PARTNERSHIPS AND COALITIONS March 26 March 28 April 2 April 4 15. Networks - IHI 16. Competition – City of Indianapolis 17. Partnerships – NYC Parks 18. Coalitions – Rev. Brown 8. Performance Information – NYC Police and Crime 9. Changing Organizational Culture – Mayor Williams and DC 10. Performance System and Summary (Optional Assignment) 11. Learning Organization – Children’s Hospital 12. Balanced Scorecard – City of Charlotte 13. Regulatory Performance – OSHA 14. Alignment – Centrelink LEADERSHIP, JUDGEMENT AND DECISION-MAKING April 9 April 11 April 16 April 18 5 Draft -January 30, 2013a Version

April 23 April 25 April 30 May 2 May 9 19. Employee Motivation - TSA 20. Evaluating Talent - GE 21. Bias – One Church, One Child 22. Group Identity – Star Distributors 23. Leadership Styles – General Petraeus (Optional Assignment) 24. Leadership and Strategy - Michelle Rhee 25. MBTA 26. Summary/Special Topics Final Paper Due

Strategic Management and Organizational Culture 1. January 29 – Introduction to Strategic Management

5. February 12 – Setting Strategy as a Civil Service Entrepreneur Readings: ▪ Managing Student Aid in Sweden (Abridged version) HKS Case C16-93-1161.3, 15 pages [W]Readings: ▪ Mark Moore,Mark Moore, Creating Creating Public PublicValue, ValueHarvard, Harvard University University Press, Press,1995, pp.1995, 151-162 pp. 13-23, [B] 27-56 [B]  John P. Kotter, “What Leaders Really Do”, pp. 3-11 [P] Reading Frank Response Ostroff, #5: “Change Under what Management formal authority in Government,” does Billy Harvard Olsson pursue Business new Review, missions May and new business?2006, pp. (TBC) 1-8 [P]  Martin Gilens, “Inequality and Democratic Responsiveness”, Public Opinion Quarterly, vol 69 6. February#5, 14 pp. – Setting 769-778 Strategy [W] Through Consensus Building and Communication Readings: George F. Will, “Mountain out of a Molehill” [W] ▪ “Winning Lawrence Hearts andLessig, Minds: “More Reforming Money Can the Beat Providence Big Money School” [W] District (A)”, HKS Case C14-03-1689.0, 14 pages [W] ▪Reading “Principles Response of Effective #1: A) Persuasion” Is the town HBS librarian Note 9-497-059,described in 4 the pages Moore [P] reading an administrator or a ▪strategic John Kotter, manager “Leading – leader? Change: Or Why B) Visit Transformation the main branch Efforts of the Fail”, Cambridge 10 pages Public (P) Library. Do you think the Cambridge town librarian is an administrator or a strategic manager? 2.Mandatory January 31 Assignment:- Organizational Assume Culture Melody Johnson has decided to suspend school for a day and hold a celebration for Providence teachers in early December. Write a 500 word memo to Readings: Johnson analyzing the opportunities and challenges she faces as she assumes the job of ▪ Edgar H. Schein, Organizational Culture and Leadership, Josey-Bass, 2004, pp. 1-9, 9-23, Superintendent. Attach an opening paragraph for her speech. 39-61 [P] ▪ Elaine C. Kamarck, The End of Government…As We Know It. Rienner, 2007, Chapter 1, NOTE – Several students will be asked to read their opening paragraphs in class. pp. 1-13 [B] ▪ Graham Allison, Essence of Decision, Little, Brown, 1999 (second edition), pp. 1-11, 379- First Written Assignment is due February 14 by 8:40 am. 405 (Chapters 1 and 7) [P] ▪ (Recommended) Despite Red Flags, Judges Ran Kickback Scheme for Years - NYTimes.com

Reading Response #2: Pick one of the two organizations in the Schein article (DEC or Ciba-Geigy) and identify its: 1) artifacts, 2) organizational culture, and 3) resulting levers for change. 7. February 19 – Setting Strategy as an Innovator and Leader Setting Strategy 3. FebruaryReadings: 5 – Strategy and Leadership Readings:▪ “Innovation of GSA: Zero Environment Footprint and the Extreme Challenge”, HKS New ▪Case, Aravind 23 pages Eye Hospital, [W] Madurai, India – HBS Case 9-593-098, 25 pages [P] ▪▪ Mark Ronald Moore, A. Heifitz Creating and MartyPublic Linsky,Value, Harvard Leadership University on the Line, Press, Chapters 1995, pp. 2 and57-102 4, pp. [B] 31-48, 75-100 [P] Reading▪ Jonathan Response Weisman, #3: “ AgencyHow does Administrator Dr. V’s strategy Fires address Deputies, the Then three Resigns, elements Amid of Mark Spending Moore’s Inquiry” Strategic[W] Triangle? (To Be Confirmed - TBC) 4. FebruaryReading 7Response - Setting #7:Strategy How anddoes Goals Martha Johnson’s approach to strategy fit within the framework Readings: of the strategic triangle? (TBC) ▪ “Paying the Bills at the Junta of Andalusia”, HKS Case C16-90-809, 6 pages [W] ▪ Herman B. Leonard, “A Short Note on Public Sector Strategy Building”, November 2002, 10 pages [P] ▪ Mark Moore, Creating Public Value, Harvard University Press, 1995, pp. 105-134 [B]

Reading Response #4: In setting his strategy, what goals should be his highest priorities? What should be his specific objectives for these goals? (TBC)

Strategies for Improving Performance 8. February 21 – Performance Information as a Management and Transformation Tool 10. February 28 – Performance Management, Developing a Management System

Readings: ▪ “Assertive Policing, Plummeting Crime: The NYPD Takes on Crime in New York City: HKS Case C16-99-1530.0, 30 pages [W] ▪ Robert Behn, “The Theory Behind Baltimore’s CitiStat”, APPAM Research Conference 2006, 34 pages [W] ▪ Steven D. Levitt, “Understanding Why Crime Fell in the 1990s” [W] ▪ Kevin Drum, “America’s Real Criminal Element: Lead” [W]

Reading Response #8: What are the major benefits and costs (if any) of Bratton’s approach to managing the NYPD with performance information? (TBC)

9. February 26 – Changing an Organizational Culture using Performance Information Readings: ▪ “Mayor Anthony Williams and Performance Management in Washington, DC”, HKS Case C16-02-1647.0 [W] ▪ Elaine C. Kamarck, The End of the Government…As We Know It, Rienner, 2007, Chapter 5, pp. 61-94 [B]

Reading Response #9: Why did Mayor Williams choose Scorecards as one of his first mayoral initiatives? What were the potential benefits and risks of his choice? (TBC)

Readings: ▪ Robert Behn, “Managing Innovations in Welfare, Training and Work”, Paper presented at 1987 Annual Meeting of American Political Science Association, 22 pages [P]

Reading Response #10: How does the ET performance measurement system engage front line employees? (TBC)

Written Assignment #2 due February 28 by 8:40 am Select an organization with which you are reasonably familiar. Write a memo to the CEO on how data should be used in the organization to improve performance. Address: 1) Whether or not to use numerical targets or quotas in the organization, 2) And Why, 3) Whether to adopt a formal performance management system such as COMPSTAT, 4) How best to apply accountability and support, and 5) What balance should exist between the two?

11. March 5 – Learning as a Performance Strategy

Beyond the Organizational Boundaries: Networks, Partnerships and Coalitions 15. MarchReadings: 26 – Developing Networks for Improvement Readings:▪ Children’s Hospital and Clinics, HBS Case 9-302-050, 25 pages [P] ▪▪ InstituteDavid A. forGarvin, Healthcare Amy C. Improvement:Edmondson, Francesca The Campaign Gino, “Isto Save Yours 100,000 a Learning Lives, Stanford BusinessOrganization?” Case L-13, Harvard 36 pages Business [P] Review, March 2008. R0803H, 10 pages [P] ▪▪ JeromeAmy Edmondson, Groopman, “The MD, ChapterCompetitive 6, “The Imperative Uncertainty of Learning”, of the Expert” Harvard in How Business Doctors Review, ThinkJuly 2008,, Houghton R0807E, Mifflin, 10 pages 2007, [P] pp. 132-155 [P] ▪▪ AtulChris Gawande, Argyris, “TeachingMD, “The Checklist”,Smart People The to New Learn”, Yorker, Harvard December Business 10, 2007,Review, pp. May 1-13 1991, [P] 91301, 13 pages [P] ▪ Philip E. Tetlock, “How Accurate Are Your Pet Pundits”, Project Syndicate [W] ▪ Robert Kegan and Lisa Lahey, Immunity to Change, Harvard Business Press, 2009, pp. 11- 30; 31-60 [P] Reading Response #15: What is the biggest impediment to change in reducing risks to patients? (TBC) Reading Response #11: Julie Morath has read the first two chapters of Immunity to Change and is enormously excited by the argument made there about immunities to change. She wants to retain Kegan and Lahey to work with Children’s Hospital in their change process, but isn’t sure how to proceed. She asks you to write her a memo recommending the idea of doing this kind of work at the hospital.

12. March 7 – Balanced Scorecard as a Strategy for Performance Improvement Readings: ▪ City of Charlotte (A), HBS Case 9-199-036, 25 pages [P] ▪ Robert S. Kaplan and David P. Norton, “Measurement and Management in the Information Age”, Chapter 1 in The Balanced Scorecard, HBS Press, 1996, pp. 1-20 [P] ▪ Robert S. Kaplan, “The Balanced Scorecard for Public Sector Organizations”, Balanced Scorecard Report, HBS Press B9911C, 4 pages [P]

Reading Response #12: Identify one or more advantages, and one or more disadvantages, in the Balanced Scorecard approach versus the COMPSTAT approach to performance management. (TBC)

13. March 12 – Strategy for Improving Performance of a Regulatory Agency: Reinventing OSHA Readings: ▪ OSHA (A,B,C) HKS Cases C102-97-1371-0, 1372.0, and 1373.0, 28 pages [W] ▪ “Types of Processes”, HBS Case 9-682-08, 7 pages [P]

Reading Response #13: What are the advantages of OSHA’s Maine 200 approach compared to the Redesign approach? What advantages does the Redesign approach offer? (TBC)

14. March 14 – Achieving Organizational Alignment in Successful Performance Readings: ▪ Centrelink, (Abridged) HKS Case C16-99-1524.3, 19 pages [W] ▪ “Organizational Alignment”, The 7-S Model”, HBS Note 9-497-045, 1996, 10 pages [P]

Reading Response #14: How well has Sue Vardan positioned Centrelink for its new environment? What are the most important things for her to do next? (TBC)

19. April 9 – Decision-Making on Employee Sanctions

Leadership, Judgment, and Decision-Making

Readings: ▪ Mina O’Reilly at Logan Airport’s TSA, HBS Case 9-409-116, 11 pages [P] ▪ Michael G. Pratt and Blake E. Ashforth, “Fostering Meaningfulness in Working and at Work, Chapter 20, in Positive Organizational Scholarship: Foundations of a New Discipline, Besset – Koehler, 2003, pp. 309-327 [P]

Reading Response #19: What should Mina O’Reilly do about Ludo Sanchez? (TBC) 16. March 28 - Improving Performance Through Competition 20.Readings: April 11 –Evaluating Talent ▪Readings:Organizing Competition in Indianapolis (A) and (B), HKS C18-95-1269.0 and C18- 95-1270.0,▪ General Electric’s 20 pages Talent [W] Machine: The Making of a CEO, HBS Case 304-049, 28 pages [P] ▪▪ Elaine Jeffrey C. Pfeffer, Kamarck, Putting Ch. 6, People “Government First, Academy by Network,” of Management in The End Executives, of Government… 1999, Vol 13, 2, Aspp. We 37-48 Know [P] It , Rienner 2007, pp. 99-125 [B] ▪ Steven J. Kelman, “Contracting,” in Lester M. Salamon, editor, The Tools of Government, ReadingOxford University Response Press,#20: Should 2002, pp.Jeff 282-318Immelt change [P] GE’s vitality curve “with its rigid allocation of ▪top http://thedailypothole.tumblr.com/ 20%, highly valued 70% and bottom [W] 10%” in personnel evolutions? (TBC)

Reading Response #16: How does Mayor Goldsmith’s approach to improving productivity compare to Mayor Williams’? Should Mayor Williams have adopted the Indianapolis approach? Why or why not? (TBC)

17. April 2 - Using Private-Public Partnerships for Public Work Readings: ▪ Parks and Partnership in New York City, HKS Case CR16-04-1743.0, 30 pages [W] ▪ John D. Donahue and Richard J. Zeckhauser, “Public- Private Collaboration,” in The Oxford Handbook of Public Policy, 2006, pp. 496-525, 29 pages [P]

Reading Response #17: What risks do you see in Adrian Benepe’s approach to supporting the NYC parks? (TBC)

18. April 4th- Building Coalitions Readings: ▪ Rev. Jeffrey Brown, Cops, Kids and Ministers, HBS Case 9-801-284, 28 pages [P] ▪ HBS Note on “Building Coalitions”, 8 pages [P]

Reading Response #18: What is Reverend Brown’s distinctive contribution to reducing youth violence in Boston?

23. April 23 – Leadership Styles Readings:  The Accidental Statesman: General Petraeus and the City Of Mosul, Iraq, KSG Case C15-06-1834 (abridged), 46 pages [W]  L Paul Bremer, My Year in Iraq: The Struggle to Build a Future of Hope, Simon and  L. Paul Bremer, What We Got Right in Iraq, Washington Post, May 13, 2007 [P]

Reading Response #23: What key assumptions or biases appear to influence the different approaches of General Petraeus and Ambassador Bremer? (TBC)

Written Assignment #3 due April 23 by 8:40 am: Select an organization with which you are reasonably familiar. Write a 750 word memo, analyzing how issues of group identity (such as race, gender or other group identity) impact the organization, whether among the clients or among staff or both. Recommend how the organization might improve its response to these issues.

24. April 25 – Leadership and the Strategic Triangle Readings: ▪Michelle Rhee and the Washington DC Public Schools, HKS New Case, 28 pages [W] View the video interviews posted online here: https://knet.hks.harvard.edu/administration/case_program/pages/rhee.aspx

Reading Response #24: Do you agree with Rhee’s decision, as one of her first acts, to close 15% of DC schools? (TBC) 21. April 16 - The Impact of Bias on Decision-Making Readings: 25. April▪ Finding 30 – Crisis Black Management Parents: One Readings: Church, One Child - HKS Case C16-88-856, 21 pages [W] ▪ Malcolm Gladwell, Chapter 3, The Warren Harding Error: Why We Fall for Tall, Dark, ▪Crisis and Management Handsome, in at Blink: the MBTA, The Power HBS Case of Thinking N9-391-202, Without 12 pagesThinking [P] , Little Brown, 2005, Reading pp. 72-98 Response [P] #25: TBA

Reading Response #21: Why is the DCFS adoption process working poorly for black children? 26. May 2 – Special Topics/Last Thoughts 22. AprilTBD 18 - Race, Gender and Other Group Identities Impact on Decision-making Readings: ▪ Star Distributors, HBS Case 9-493-015, 15 pages [P] May 9 ▪– RobinFinal PaperEly, “Rethinking Due Political Correctness,” HBR R0609D, 11 pages [P]

Reading Response #22: What are the key factors that account for the conflict between Logan and Heyman? How has race affected the dynamics of this case? (TBC)