Date posted: 21/01/2021 5 min read

Scott and Jacinda need a cunning plan (and a strategic planning day)

Do our governments really have a big-picture strategy on where we’re headed? If not, it’s about time they did.

In Brief

  • Strategic planning days remain a core process for virtually every board and senior management team.
  • Our governments, however, don’t seem to have an agreed view of where we are going and what we need to do to get there.
  • This contrasts with post-war governments that set out national plans and goals to rebuild shattered economies.

Unless breaking out into work groups with big sheets of paper and coloured markers is your thing, and you’re fond of poor coffee in conference hotels, strategic planning days are not usually exciting affairs. And in these diet-conscious days you can’t even be sure that the former staple of the Kiwi off-site business meeting, the sausage roll, will be on the menu.

But strategic planning days remain a core process for virtually every board and senior management team, and with good reason. It brings discipline to scanning for risks and opportunities, and figuring out what you want to do, and why, and how.

But when I write “virtually every”, who is missing?

Remarkably, the answer is the Australian and New Zealand governments.

Why having a plan helps

We get party manifestos at election time. We get budgets. We get the odd big idea from a Productivity Commission. Our national infrastructure commissions have pipelines of projects. But there’s nobody connecting the dots and showing us the overall picture – an agreed view of where we are going, and what we need to do to get there.

“We get party manifestos at election time. We get budgets… But there’s nobody connecting the dots and showing us the overall picture.”
Donal Curtin

And we’re not unusual – most governments these days don’t have a national plan. Once upon a time planning played a useful role in figuring out how to use limited national resources to best coordinated effect. France and Japan, for example, used national plans to help reconstruct their post-war economies.

But that was many years ago. Since then, planning has largely withered away for a variety of reasons. There’s been – rightly, for the most part – an intellectual move towards more markets and less dirigisme [government control]. As we’ve become better off, the need to pull everyone together towards the overriding task of reconstruction has faded.

But strategic planning, however passé it might currently be in policy circles, still makes sense.

“Strategic planning, however passé it might currently be in policy circles, still makes sense.”
Donal Curtin

My bold new idea for the new century’s third decade is “bring back the plan”. And when I say ‘plan’, not Stalin’s “produce-5000-heavy-tractors-or-you’re-off-to-the-gulags” kind of plan, but ‘indicative planning’.

The benefits of indicative planning

Wikipedia says indicative planning is “a form of economic planning implemented by a state in an effort to solve the problem of imperfect information in market economies by coordination of private and public investment through forecasts and output targets ... Indicative planning is coordinated information that guides the choices of separate state and private entities in a market economy”.

The ‘imperfect information’ angle is a plus – many private sectors would work better if they had a multi-year-forward calendar of public contracts – but that’s only one of the benefits.

A bigger benefit is the efficiency we’d get from public resources being coordinated into a coherent whole: immigration policy, for example, lined up with the right amount of social and physical infrastructure.

As things stand, the siloed nature of spending via government departments leaves a lot of room for inconsistent muddle. And agreeing on common aims for the medium term may help depoliticise what, in a better planned world, would be the right line-up of technocratic choices.

We didn’t need the politicisation of the National Broadband Network rollout in Australia, nor the equally superfluous bickering over building a light rail system in Auckland.

It helps that today we have the tools to put together a pretty slick plan.

Economics has had input-output analysis for yonks: it can answer (say) what resources we would have to provide to support a doubling of tech sector output. And management consultants have developed multiple criteria decision analysis, which can build the most efficient portfolio of projects, allowing for their sequencing and correlations.

And it’s not as if the big challenges have gone away, like the post-war rebuild did for France and Japan. There are new ones.

The big challenges post-COVID

Every country is wondering how to transition to a greener post-COVID economy, and Australia with its coal industry has as big a challenge as any. New Zealand has chronic economic underperformance syndrome. Why wouldn’t you want to figure out a coordinated national path to where you’d prefer to be? If the Irish can put together a national 10-year plan and a planning framework, why can’t we?

It’s not a panacea. As military people say, no plan survives initial contact with the enemy. And that’s fair enough: hit by a global financial crisis or a COVID, you’d be silly not to sit down and see what still makes sense and what doesn’t, and make adjustments.

But a plan still provides a good stocktake of your starting point, and a sensible way of coordinating a response to the changed environment. Having none is a recipe for floundering. As the investment advisory people say, failing to plan – is planning to fail.

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