33 – Developing an organisational performance measurement system. Some ideas.

Posted by Lancing Farrell                                                                                     820 words

I have been thumbing through ‘Improving Performance – How to Manage the White Space on the Organisation Chart’ by Geary A. Rummler and Alan P. Brache, in particular the chapter about performance measurement. In it they describe measurement is the single greatest determinant of an organisation’s effectiveness as a system, and as the primary tool for ‘communicating direction, establishing accountability, defining roles, allocating resources, monitoring/evaluating performance, and taking improvement action’.

I haven’t seen a local government that has actively used performance measurement this way. Instead, it tends to be driven by external accountability requirements. We use the performance measurement that we do to convince others that we are doing what we should. Continue reading

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31 – Measures, targets, KPI’s, KRA’s and CSF’s. What are we talking about?

Posted by Lancing Farrell                                                                              740 words

There is a lot of talk in the public sector about measurement. Some people say that you ‘can’t manage what you can’t measure’ or, ‘what gets measured, gets done’. There is no doubt that measurement is inextricably linked to the pursuit of better performance and greater accountability. In local government, we seem to be desperately looking for things we can measure that will tell us how well we are doing. But are we measuring the things that count? Continue reading

22 – High performance in local government. Part 1 – What could it look like?

I think this is a good question. In fact, a very good question. People often talk about ‘best practice’ and ‘performance improvement’ without ever describing how it relates to high performance and what it would look like if it was achieved. Interestingly, the Australian Government Public Service Commission recently published on high performance organisations. This indicates that high performance is becoming a topical issue for the public sector.

As a methodology for describing a high performance local government organisation (HPLOGO) I have used Andre de Waal’s paper ‘The Characteristics of a high performance organisation’ and selected my ‘top 3’ characteristics for each of the 8 elements he describes in the HPO framework. These are the main characteristics that I believe would be present in a HPLOGO. More importantly, this is where I think you should start if you want to create one.   I have limited myself to 24 actions because it is probably already too many. To help act on this idea I have written each characteristic as an action.

To begin, it is important to understand the framework developed by de Waal. I have reproduced it below.

HPO framework

The idea is that the elements influence the degree to which members of the organisation will exhibit performance driven behaviour, which in turn determines whether it is a HPO. Here goes.


Organisational design

  1. Simplify and flatten the organisation by reducing boundaries and barriers between and around units.
  2. Stimulate cross-functional and cross-organisational collaboration by making team work and collaboration the top priority for management.
  3. Immediately realign the organisation with changing internal and external circumstances by setting up an adaptable business model.

What characteristics didn’t get a mention? Foster organisation-wide sharing of information, knowledge and best practices. Not because I don’t think it is important, but it would come next.

Strategy

  1. Align strategy, goals and objectives with the demands of the external environment.
  2. Provide clarity and a common understanding of the organisation’s direction and strategy.
  3. Create a strong vision that excites and challenges based on a ‘big idea’.

What characteristics didn’t get a mention? Lots. Again, this was not because I don’t think it is important. They would come next:

  • Set clear, ambitious, measurable and achievable goals.
  • Balance the long-term and short-term focus.
  • Adopt a strategy that sets the organisation apart (I think this is less relevant in local government).

Process management

  1. Continuously optimise processes by connecting the entire value chain.
  2. Continuously simplify and improve all organisational processes to improve responsiveness and eliminate unnecessary work.
  3. Deploy resources effectively to activities that create value.

What characteristics didn’t get a mention? Lots again:

  • Measure what matters.
  • Create highly interactive internal communication.
  • Report the financial and non-financial information needed to drive improvement to everyone.
  • Strive to be a best practice organisation.
  • Continuously innovate processes and services.

Technology

  1. Apply user-friendly ICT tools to increase usage.
  2. Implement flexible ICT systems.

What characteristics didn’t get a mention? None.

Leadership*

  1. Commit to the organisation for the long haul and balance common purpose with self-interest.
  2. Live with integrity and lead by example.
  3. Hold people responsible for results and be decisive about non-performers.
  4. Apply decisive, action-focused decision-making.

I couldn’t pick just 3!

What characteristics didn’t get a mention?

  • Set high standards and stretch goals.
  • Maintain trust relationships with people at all levels in the organisation.
  • Allow experiments and mistakes.
  • Develop an effective, focused and strong management style.
  • Assemble a diverse and complementary management team and workforce.
  • Grow leaders from within.

Individuals and roles

  1. Align employee behaviour and values with organisational values and direction.
  2. Engage and involve the workforce.
  3. Create a learning organisation by continuously investing in training.

What characteristics didn’t get a mention?

  • Create a safe and secure workplace (I have assumed that this is a given)
  • Develop people to be resilient and flexible.
  • Attract exceptional people with a can-do attitude who fit the culture.
  • Master core competencies and stick to them.

Culture

  1. Establish clear, strong and meaningful core values and make sure they are widely shared.
  2. Develop and maintain a performance driven culture by fighting inertia and complacency.
  3. Create a culture of transparency, openness and trust through shared understanding, by sharing information, and fostering informality.

What characteristics didn’t get a mention?

  • Empower people by giving them freedom to decide and act.
  • Create a shared identify and sense of community.

External orientation

  1. Continuously strive to enhance customer value creation.
  2. Grow through partnerships and being part of a value-creating network.
  3. Maintain good and long-term relationships with all stakeholders.

What characteristics didn’t get a mention?

  • Monitor the environment and respond to shifts and opportunities.
  • Only enter new activities that complement the organisation’s strengths.

You can probably see a pattern emerging. My focus in creating a HPLOGO would be on value creation, systems and processes, integration and alignment, measurement and accountability, the short and the long term, and engagement and trust.

Lancing Farrell

Australian Government Public Service Commission (AGPSC) 2014. (http://www.apsc.gov.au/projects/resources/human-capital-matters/2014/high-performance-organisations).

de Waal, Andre 2007. ‘The Characteristics of a high performance organisation’ (http://www.andredewaal.eu/pdf2007/HPO-BSS2007.pdf)

15 – Interested in local government management? Four books you should read and why. Part 1

I like to read. I know that not everyone else does and when you know someone who reads and likes to talk about it that it can be a bit painful. Nonetheless, I am going to do it again. This post is about the books that I discovered and found interesting in 2014 – books that should influence management in local government. I think they contain relevant and useful ideas to improve what we do. Ideas from all of them feature in posts.

1. Recognising Public Value by Mark H. Moore. Published in 2013, this book expands on the thinking in his earlier book Creating Public Value (published in 1995) in which he described the aim of managerial work in the public sector as ‘creating public value for the community’. This is the equivalent of managers in the private sector creating private value for shareholders.   He says “… it is not enough to say that public managers create results that are valued; they must be able to show that results obtained are worth the cost of private consumption and unrestrained liberty forgone in producing the desirable results. Only then can we be sure that some public value has been created.”

In his latest book, he takes this idea further to show how public value can be recognised and measured. The central idea is that the public sector can create an equivalent to the ‘bottom line’ available to the private sector. To achieve this, Moore has developed the ‘public value scorecard’, based on the idea of the balanced scorecard, containing a ‘public value account’ (a clear, explicit and measurable statement of the public value they have created and the costs involved in creating that value); measures of the organisations standing with the stakeholders providing social legitimacy and authority; and measures of the organisation’s ability to deliver the outputs required to achieve the desired public value.

In developing his case for the public value scorecard, Moore covers a wide range of issues, including discussion about private and public value; arbiters of value; costs of using public authority; sources of accountability for the public sector (very interesting reading); the public value chain; and the importance of performance measurement. Both of Moore’s books use case studies to illustrate his ideas, which makes the practical application of his thinking easier to understand. This book should really be compulsory reading for anyone in a leadership role in the public sector because it provides a practical, high-level framework for thinking about why a public organisation exists, what it intends to achieve, and how that can be measured.

2.  The Whithall Effect by John Seddon. Published in 2014, this book consolidates much of John Seddon’s writing about the public sector. If you have read his earlier book Systems Thinking in the Public Sector (published in 2008) you will be familiar with many of the ideas. There are five sections in the book. The first covers the ‘industrialisation’ of services and the many misconceptions that Seddon believes are evident in current service design and improvement, especially those borrowed from manufacturing. The second covers his approach, including his ‘Vanguard Method’ used to understand the current situation before improvements are made. The third section is a critique of government ‘reforms’ of public services that have not produced the results expected. The fourth section addresses current ‘ideology, fashions and fads’ in public services. The last section has his recommendations for change in Whitehall to improve public services in the UK. Overall, the book covers a lot of material, much of it supported by case studies.

Seddon is highly opinionated and critical of failings in government policy and action. This doesn’t detract from the fundamental messages in this book; services need to be understood as a system and there are (more) effective ways of doing this; interventions in service systems should be planned and use knowledge of customers, demands and work flow to inform them; measures must be relevant to the customer and used by the people delivering the service.

In a very practical way, Seddon provides tools for taking Moore’s ideas about public value into action. Seddon is much more focussed on private (customer) value, or the customer-defined purpose, and would no doubt argue that fulfilling purpose is a form of public value. In a way, I think ‘public value’ is just ‘purpose’ writ large. This book should also be compulsory reading for all leaders in the public sector. The ones who read, anyway. Firstly as a tale of what happens when changes to services are predicated on political, and not customer or public needs; secondly to provide a way to understand services as a system; and lastly to reinforce the importance of effective measurement of performance.

More books in Part 2.

Lancing Farrell

2 – Why do we provide the services that we do in local government?

For some practitioners this is a question that is unasked and, therefore, unanswered. For me, the answer is critical in developing my practice and managing for high performance. This is my attempt to provide an answer applicable to any local government.

To begin with, we have legislative guidance. Former local government CEO Catherine Dale, in her thesis for her Doctor of Philosophy, says the functions of a Victorian local government include advocating; planning for and providing services and facilities; providing and maintaining community infrastructure; undertaking strategic land use planning; raising revenue; and making and enforcing local laws. These functions are mostly very broad and open for each municipality to implement according to their community’s needs and preferences. It is a starting point for understanding why services are provided.

Specifically in relation to public services, Mark Moore argues that governments provide public services to create public value. He defines public value as the collective view of the public or community about what they regard as valuable, especially with regard to the use of public money and authority. He says that public managers (i.e. elected representatives and bureaucrats) need to try and understand what constitutes public value for their community so that they can set out to deliver it through their operations and be held accountable for their performance. Moore sets out four key requirements of public managers in creating public value. They must:

  1. Articulate a clear, complete and compelling idea of the public value to be produced.
  2. Develop a set of measures to record performance in producing that value.
  3. Invite and embrace external accountability for defining and creating value.
  4. Create management systems that distribute internal accountability for value creation across managers and employees so that they feel motivated to perform in the short-term and to innovate and learn over the long-term.

A process is required to determine what constitutes public value for each community that includes ways to check in periodically to stay in touch and be responsive to changes in needs and expectations. This could be one of the key objectives of community engagement programs. Too often, community engagement seems to occur so that the council is seen to be doing it, or to consult over a single project or plan. A serious focus on public value would help determine the operational capability required to deliver valued services and to design those services to meet expectations.

In contrast to Moore, John Seddon is less directly focussed on the concept of public value or value in general, and says that ‘purpose’ should be the main focus of services. He argues that it is in the interests of all taxpayers when services are delivered in the most efficient way to meet needs.  Accordingly, Seddon says that understanding the customer or citizen purpose in interacting with the organisation is the key to ensuring that services meet customer needs and expectations. In this model, the services offered and the way they are delivered would be determined by the service consumer and their private value expectation. Seddon places significant emphasis on the worker delivering services and their role in responding to customer–introduced variability and tailoring service delivery.

I think local government is expected to deliver whatever services are required for the community to be safe, healthy and fulfil its potential. This is expressed in many different ways. One council says that its mission or purpose is simply to make the municipality ‘a better place’. Obviously there is an inherent community expectation of value. People are paying taxes and giving authority to the council. They want something in return. As Moore explains, understanding what they want and how it constitutes public value is essential to high performance and success. It should determine the policy settings for services. At the point of a customer receiving a service, understanding their purpose in seeking the service becomes paramount if they are to be satisfied. As Seddon points out very effectively, failure to fulfil purpose leads to ‘failure demand’ and inefficiency.

In a nutshell, the services offered by each local government need to fit within legislated requirements, be responsive to the broader community needs and expectations, and meet the individual purpose for each person receiving a service.

Lancing Farrell

Dale, Catherine 2008. The Role of Local Government for a Contemporary Victorian Community.

Moore, Mark 2013. Recognising Public Value.

Seddon, John 2008. Systems Thinking in the Public Sector.