Strategic planning appears to be a management mainstay in the public sector.  Policies that call for strategic planning often do so with the assumption that the adopting government will have better performance.  The purpose of this study is to explore the potential impact of strategic planning on performance in local government departments. This study furthers the current research on the link between long-term strategy development and organizational performance through the creation of a unique new data set, an expanded operationalization of the strategic planning concept, the use of four different dimensions of performance, and by studying the potential impact in the context of local government departments. 

The relationship between strategic planning and performance has often been perceived as positive.  However, some research has failed to demonstrate a link.  Furthermore, practitioners often feel like there is more frustration associated with strategic planning than beneficial outcomes. The author argues that part of the problem with previous studies is the use of one-dimensional measures for strategic planning. If the organization is simply completing a strategic plan but not fully engaging in the process, a positive relationship with performance should not be expected.

This study gathers the past research on strategic planning to build a framework of comprehensive strategic planning processes.  The framework includes several facets of strategic planning, including the capacity of the department for strategic planning, department leadership of the process, participation of relevant stakeholders, adherence to best practices, and integration of the process with other departmental processes (management of the budget, human resources, and performance measurement).

This exploratory study uses a unique data set that combines the performance measures of select local government departments from the International City/County Manager’s Association and an original survey of the heads of those departments.  The survey assessed the comprehensiveness of their strategic planning practices based on the framework described above.  Performance measures are taken from the ICMA’s Center for Performance Measurement and are studied by dimension: efficiency, effectiveness, service quality, and productivity.  The study uses an evaluative approach by analyzing the practical significance of the potential impact using correlations, performance comparisons between groups, and the effect size of the differences (Cohen’s D). These analyses taken together help illuminate a relationship between strategic planning practices and performance, the majority being positive.

The findings justify studying these questions further about strategic planning in the public sector. Although the findings are mixed concerning the impact of strategic planning, the majority of the findings support the hypothesis that more comprehensiveness in the process leads to better departmental performance.  The mixed findings are due in part to studying the impact by dimension of performance, instead of a subjective measure. This demonstrates that there is a value in disaggregating performance by dimension. 

This research also points to the potential value of strategic planning policies.  The research is helpful to practitioners considering such a policy as it outlines the best practices and demonstrates that the policy can be effective, at least in terms of performance outcomes.