1. Using the pyramid of strategy practice (Figure 16.1), describe strategy-making in the city of Vaasa.

2. Comment on the strategy process being followed at Vaasa. In what ways does this depart from the previous way of doing strategy?

3. What are the advantages and disadvantages of the tools used in this strategy process?

4. Reflect upon the public sector context of this case – in what ways might there be similarities and differences with how strategy is practiced in ‘for-profit’ contexts?

‘Why should businesses, workers, and students choose to come to our city?’ Like universities or companies, many cities wrestle with the problem – or opportunity – of developing and sustaining their attractiveness. This was exactly the problem faced by the elected representatives and the managers of the apparently successful municipality of Vaasa in western Finland as the effects of global recession began to impact.

Searching for sustainable economic success, municipalities aim to attract companies and a skilled workforce. Municipal authorities try to develop their strategic decision-making to become more effective, agile and responsive than competitors in meeting the expectations of businesses that could establish operations in the region, and of a workforce which could be attracted to move into their city. However, fast and agile decision-making, in parallel with the generic expectations of democracy and equality, poses a unique challenge for public-sector organisations. The city of Vaasa took up that challenge in 2012.

The city of Vaasa

Vaasa is a small but international university city of 67,000 inhabitants, with more than 100 different nationalities. The city organisation employs over 6000 employees in four different sectors (social and healthcare, education and leisure, technical and administration). Vaasa’s top management team was renewed almost entirely in the 2010–2012 period, when a new mayor, divisional directors, development director and human resources director were appointed. This organisational renewal, together with the pressures of an economic recession in Finland, led to the city reforming its strategy and strategic decisionmaking in pursuit of strategic agility.

The city was known for its energy technology and engineering manufacturing companies such as ABB and Wärtsilä. A strong cluster of technology companies had resulted in a low unemployment rate and, by any economic measures, the city was considered highly successful. As a downside, long-term success had led to a situation wherein the city’s politicians and officials were relatively satisfied with its current state of affairs – with the attendant risks of strategic drift in a context that strategy literature describes as a learning trap. 1 , 2 However, the recessionary economic conditions created an opportunity  for the new management team to engage in a broad strategic renewal programme. The city launched a process of strategy making, through which strategy would not only be planned and implemented, but also continuously re-invented.

Strategy workshops and tools

In the beginning of the process, the city’s management team set the targets for the strategy work: to develop a city which would be more agile and effective to face the competition for companies and workforce. To generate agility in the long run, the city management believed that the strategy work should be participative and involve personnel throughout the city organisation. An underlying assumption was that participation would facilitate development of a shared understanding about strategy among all stakeholders. However, shared strategy discussions required tools to facilitate interaction, as described by the City Mayor:

‘Earlier, we used a system where everything came from top management and we made precise five-year plans, and everything was defined; that will be the outcome, when you do this. But these days, when there are so many external factors which rapidly influence development in the city, you need to be able to create a basic framework inside which new opportunities can emerge.’......