|
National Partnership for Reinventing Government
Balancing Measures:
Best Practices in Performance Management
August 1999
CONTENTS
Executive Summary
When the Government Performance and Results Act
was first implemented, many felt that government management was
somehow "different," that the same rules that applied
to the private sector could not apply to the public, or at least
not in the same way. After all, government agencies don’t have a
bottom line or profit margin. But recent efforts, as this study
shows again and again, attest that is not true. The bottom line
for most government organizations is their mission: what they want
to achieve.
But they cannot achieve this mission by managing
in a vacuum, any more than can the private sector. More specifically,
the roles of customer, stakeholder, and employee in an organization’s
day-to-day operations are vital to its success—and must be incorporated
into that success.
In their groundbreaking Harvard Business Review
article, Robert S. Kaplan and David P. Norton introduced the concept
of the Balanced Scorecard to the private sector. This article, and
subsequent works by them, discusses private sector efforts to align
corporate initiatives with the need to meet customer and shareholder
expectations. This study looks at how these efforts relate to, and
are being replicated within, the public sector. It examines the
ways and means by which government organizations are trying to include
customers, stakeholders, and employees in their performance management
efforts—to reach some balance among the needs and
opinions of these groups along with the achievement of the organization’s
stated mission. All of the organizations that served as partners
in preparing this report have had some level of success in doing
this.
Our partners believe that, while there is no perfect
fit of the Balanced Scorecard as envisioned by Kaplan and Norton
with performance planning, management, and measurement within the
public sector, this does not mean that the concept isn’t useful
in government planning—particularly with some tinkering and tailoring.
So, public sector organizations with the most mature strategic planning
processes—notably city and state governments—felt that the area
of employee satisfaction, for example, translated better to the
public sector when seen as employee empowerment and/or involvement.
Defining who exactly the customer
is can be a challenge for government agencies, especially for federal
agencies with more than one mission. For example, the U.S. Coast
Guard has both an enforcement and a service mission—and consequently
different customer bases. And even those agencies that have but
a single mission, such as regulatory agencies like the Environmental
Protection Agency, must take into account not only those with whom
they deal on a day-to-day basis in their enforcement activities,
such as major manufacturers, but also the citizen who is being protected
by those enforcement activities. And the organization that provides
a service or benefit, like the Social Security Administration, must
distinguish between what the customer may want and what U.S. citizens
may be willing to spend: that is, to balance their fiscal responsibilities
to the taxpayer with their responsibilities to beneficiaries.
Other important lessons about balanced performance
measurement gleaned from site visits and interviews with our best
practice and resource partners include the following:
- Adapt, don’t adopt: Make a best practice work
for you.
- We aren’t so different after all: Public or
private, federal, state, or local, there are common problems—and
common answers.
- Leadership doesn’t stop at the top, but should
cascade throughout an organization, creating champions and a
team approach to achievement of mission.
- Listen to your customers and stakeholders.
- Listen to your employees and unions.
- Partnership among customers, stakeholders,
and employees results in success. Telling—rather than asking—these
groups what they need does not work.
Why should you, a government leader, try to achieve
a balanced set of performance measures—or what’s often referred
to as a family of measures? Here’s what we found in
our research: Because you need to know what your customer’s expectations
are and what your employee needs to have to meet those expectations.
Because you cannot achieve your stated objectives without taking
those expectations and needs into account. Most importantly, because
it works, as can be seen from the success of our partners.
So you need to balance your mission with customer,
stakeholder, and employee perspectives. How exactly do you go about
doing this? These are the best practices we learned from our partners.
Establish a Results-Oriented Set of Measures That Balance Business,
Customer, and Employee
- Define what measures mean the most to customer, stakeholder, and employee by (1) having them work
together, (2) creating an easily recognized body of measures,
and (3) clearly identifying measures to address their concerns.
- Commit to initial change by (1)
using expertise wherever you find it; (2) involving everyone
in the process; (3) making the system nonpunitive; (4) bringing
in the unions; and (5) providing clear, concise guidance as
to the establishment, monitoring, and reporting of measures.
- Maintain flexibility by (1) recognizing
that performance management is a living process, (2) limiting
the number of performance measures, and (3) maintaining a balance
between financial and nonfinancial measures.
Establish Accountability at All Levels of the Organization
- Lead by example.
- Cascade accountability:
share it with the employee by (1) creating a performance-based
organization, (2) encouraging sponsorship of measures at all
levels, and (3) involving the unions at all levels of performance
management.
- Keep the employee informed via
intranet and/or Internet; don’t rule out alternative forms of
communication.
- Keep the customer informed via
both the Internet and traditional paper reports.
- Make accountability work: reward
employees for success. Supplement or replace monetary rewards
with nonmonetary means, reallocate discretionary funds, and
base rewards in a team approach.
Collect, Use, and Analyze Data
- Collect feedback data,
which can be obtained from customers by providing easy access
to your organization; remember too that "survey" is
not a four-letter word.
- Collect performance data by (1)
investing both the time and the money to make it right, (2)
making sure that your performance data mean something to those
that use them, (3) recognizing that everything is not on-line
or in one place, and (4) centralizing the data collection function
at the highest possible level.
- Analyze data: (1) combine feedback
and performance data for a more complete picture, (2) conduct
root-cause analyses, and (3) make sure everyone sees the results
of analyses.
Connect the Dots
If your performance management efforts are not connected
to your business plan (which defines day-to-day operations in a
government agency) and to the budget (which is where the money is),
then you will be doomed to failure because your performance measurement
approach will have no real meaning to the people running, or affected
by, the program. Planning documents must connect to business plans,
and data systems and the budget process must be integrated with
all these other factors. By doing so, you can create a strategic
management framework which serves to focus the entire organization
on the same mission and goals.
Share the Leadership Role
Leadership is a critical element marking successful
organizations, both public and private. Cascaded throughout an organization,
leadership gives the performance management process a depth and
sustainability that survives changes at the top—even those driven
by elections and changes in political party leadership. Two experts
in the field, the Hon. Maurice McTigue, a former New Zealand cabinet
member now working at George Mason University, and Dr. Patricia
Ingraham of the Maxwell School at Syracuse University, emphasize
in their teaching the importance of leadership in a political environment.
Given the potential constraints such an environment can present,
a successful public sector organization needs strong leadership
that supports the adoption of balanced measures as a feature of
organizational management and accountability.
Prologue
The U.S. Postal Service
(USPS), once considered outdated and inefficient, now has
a reputation as a good place to work and an on-time delivery
rate of over 90 percent; also, it has registered an increase
of over 20 percent in customer satisfaction.
The U.S. Coast Guard has shifted from a perspective
of regulatory enforcement to one of problem mitigation by building
a plan of compliance through strong partnerships. This emphasis,
reflected in a commitment to prevention and partnerships with
industry, has resulted in about a 50 percent drop in both the
overall average number of
large oil spills (those that are more than 10,000 gallons) from
pre-1991 levels and volume of oil spilled.
From employee and customer surveys, the
Bureau of Land Management (BLM) found that increases in
employee satisfaction correlated to increases in customer satisfaction
on almost a one-to-one basis. BLM has responded to its customers
by developing a one-stop website for federal recreation information
and by consolidating its permitting processes.
During the first year that the Florida
Department of Environmental Protection reviewed and measured
performance data, 46 focus areas were identified, and resources
were allocated toward improving these areas. By the end of the
first year, there was improvement in 29 (63 percent) of these
areas.
The first U.S. city to adopt a balanced measures
approach was Charlotte, North Carolina.
That city has operationalized their vision to be a "model
of excellence that puts the community’s citizens first, where
skilled, motivated employees are known for providing quality
and value in all areas of public service" into the elements
of their corporate scorecard. Charlotte reports that implementing
a balanced scorecard approach has helped to integrate common
goals across departments and build consensus and teamwork throughout
the organization.
The Department of Housing
and Urban Development (HUD), after years of difficulties,
today begins to see improvements in customer involvement, employee
morale, and overall confidence in the department as a whole.
What are these agencies doing right? For a start,
they have at least four things in common:
- an urgent need to change—and change dramatically—the
way they do business,
- employees who believe in the service they provide
and take pride in doing a good job,
- customers and stakeholders who want to work
with them to everybody’s benefit, and
- a strong leader who believes in listening to
and respecting the opinions of customer, stakeholder, and employee.
These organizations have achieved some measure of
success by balancing achievement of successful business results
with provision of good service to customers and provision of appropriate
tools for employees to do their jobs well. They are trying
to balance these three often competing demands to create a high-performance
organization.
Why Did We Do This Study?
For many years, leaders at all levels in the private
and public sectors have searched for the right tools and techniques
to help them create high-performing organizations. The Balanced
Scorecard introduced in 1992 by Kaplan and Norton of the Harvard
Business School galvanized and revolutionized the field. The Balanced
Scorecard approach to performance management gained wide use and
acclaim in the private sector as a way to build customer and employee
data into measuring and ensuring better performance outcomes. It
thus transformed the way private sector companies could achieve
and analyze high levels of performance and was critical in revitalizing
such companies as Federal Express, Corning, and Sears.
In August 1993, Congress passed the Government Performance
and Results Act (referred to as both GPRA and the Results Act).
Under GPRA, leadership in the public sector was legally obligated
to address issues such as performance planning and management—as
well as report on the results of those efforts. Many felt that government
management was "different," that the rules of performance
management and measurement that applied to the private sector could
not apply to the public. After all, government agencies don’t have
a bottom line or profit margin.
Recent efforts have shown, however, that not only
do the basic concepts apply to the public sector, they can also
be used to create a successful organization. For example, agencies
may not have a financial bottom line, but they do have goals and
outcomes that can indicate success (e.g., reduction in pollution).
Other concepts apply as well, as was borne out by
Executive Order 12862, signed by President Clinton in September
1993. This order requires federal agencies to determine from their
customers the kind and quality of service they seek. In the same
way that the private sector experienced noticeable changes by measuring
beyond business results, government agencies have also begun to
balance a greater constellation of measures by incorporating customer
needs and expectations into their strategic planning processes.
This balanced approach to performance planning, measurement,
and management is helping government agencies achieve results Americans—whether
customers, stakeholders, employees, or other—actually care about.
Cities, states, and counties have actively adapted
the balanced measures approach. Some federal organizations too have
begun to pursue balanced measurement as part of ongoing efforts
to improve efficiency, effectiveness, and customer service in their
organizations. Abroad, similar activities have been taking place.
The British government formed the Performance and Innovation Unit
to, among other things, "promote innovative solutions that
improved the effectiveness of policy, the quality of services and
the responsiveness to users’ needs." Also, the Service First
Unit in the UK has been focusing on customer service issues for
several years. Many Canadian government agencies—including Natural
Resources Canada, the St. Lawrence Seaway
Management Corporation, Atomic Energy of Canada, Ltd., and the
Trademarks Office—have been working to link their customer service,
performance management, and budget processes together.
At a time when new performance, budget, and strategic
challenges to the public sector affect its current and future decisions,
much can be gleaned from these various experiences with balanced
performance measurement. Thus, Vice President Al Gore—after hearing
three highly successful and diverse corporate leaders at a reinvention
forum attribute balanced measurement of performance as critical
to taking their companies to the top—charged the National Partnership
for Reinventing Government (NPR) with identifying and studying best
practices in using balanced measures in the public and private sectors.
How Did We Do This Study?
NPR chartered a team comprised of federal, state,
and local agency managers and staff. These team members worked with
study partners from all levels of the U.S. government as well as
from international agencies and the private sector.
This report represents an extensive undertaking
to survey and interview agencies and companies for practices that
contribute to improving service as well as business results. Our
findings show that the road taken—the process followed—has not been
exactly the same in every instance. The results, however, have been
remarkable. Balancing business results with customer, stakeholder,
and employee information generally produces marked improvement in
performance, service, and overall satisfaction. Our study partners
report gains in efficiency, data tied to strategic goals and measurement
systems, and improved relationships with employees and customers.
The team reviewed extensive literature on the subject,
both on-line and in hard copy. Screening surveys were developed
and sent to over 100 organizations. We completed more than 30 case studies, either
through site visits or telephone conferencing. These are linked in the
web version of this report and provide extensive data. At the end of each site
visit report is contact information for that organization for futher follow up. For
a complete description of our scope and methodology, see appendix A. Our best practice
partners and resource partners are listed in appendices B and C, respectively.
This report is divided into basic areas of performance
planning and management:
- creation of measures (section
1);
- need for accountability (section
2);
- use of data (section 3);
- linkage of all the aspects to day-to-day operations
(section 4); and
- the role of leadership in the evolution of
solid, sustainable management practices within an organization
(section 5).
Each section discusses how to balance customer needs,
employee needs, and business results.
Most of our state and local partners belong
to the Performance Measurement Consortium of the International
City/County Management Association (ICMA). Collecting and reporting
data on ICMA’s templates has enabled one notably successful
partner, the city of Coral Springs, Florida,
to compare its outcomes against those of a number of other communities
(http://www.icma.org/abouticma/).
Service areas evaluated under the city’s program include police
services; fire services; neighborhood services (e.g., libraries,
parks and recreation, refuse collection, road maintenance, and
street lighting); and support services (facilities management,
fleet management, human resources, information technology, purchasing,
and risk management). A fifth service area, youth services,
is under development.
Lessons We Learned
Overall, a balanced approach to performance measurement
works and will improve organizational performance when used. Flexibility
is the key. There is no "cookie cutter" approach, but
there are elements and experiences reported here that can be useful
and beneficial to all agencies.
- Adapt, don’t adopt. A best practice
generally cannot be adopted exactly the way it was done in another
organization, but it can be adapted to fit your organizational
needs and culture. Most of the organizations we interviewed
have adapted the traditional Balanced Scorecard into a family
of measures that is uniquely suited to their culture, their
structure, their mission. In the final analysis, you must adapt
an approach to fit your particular needs.
- We aren’t so different after all.
One of the most interesting discoveries for the team was the
fact that the problems the different organizations were facing
weren’t very different. Most struggled with the same issues:
reducing the number of measures, validating and verifying data,
establishing accountability and responsibility without being
punitive, and—most importantly—trying to balance achievement
of the organization’s mission with the needs of customer, stakeholder,
and employee. In many cases, merely defining the customer was
an obstacle. Public or private, federal, state, or local, there
are common problems—and common answers—in many areas.
- Leadership doesn’t stop at the top.
Leadership is important, but not just at the top levels; leadership
by employees in solving problems and achieving mission is what
makes for a most successful organization.
- Listen to your customers and stakeholders.
You might be surprised to learn what is really important to
them. The Oregon Department of Motor Vehicles was prepared to
spend money on ways to provide faster service and shorter lines.
Then it asked its customers what they wanted. They
wanted a choice in the ID picture that would be laminated onto
their license. Oregon listened and invested in better photographic
equipment and provided a choice to the customer as to the picture
to be used.
- Listen to your employees and unions.
Employees have historical knowledge and experience at the day-to-day
operations level. Don’t underestimate the importance of this
information and expertise. And, regarding the union, if it is
part of the solution, it is no longer part of the problem. This
precept is especially critical in achieving culture change within
an organization.
- Partner with customers, stakeholders,
and employees; don’t control. The more you partner with
those who have a vested interest in the success of your organization,
the more successful your organization is likely to be. Some
of the most successful organizations work closely not only with
customers and employees, but also with unions and legislators.
Better communication results in an increased level of trust.
Most importantly, we learned that there is
no such thing as a fixed and truly balanced set of measures;
instead, the process of balancing the needs of customers
and employees against mission is a constant and living one, flexible
and open to change.
The team learned a great deal from this study; we
are pleased to share this knowledge with you. The practices listed
here can be used, adapted, and implemented throughout the public
sector. We hope this report will be seen as a tool to help everyone
do their job better and more efficiently.
Balancing Measures:
Why Should I Do It and What Does It Mean?
"Reflecting back on the long history of
federal service, I never saw any single measure which could
adequately describe an agency’s performance. Use of the ‘scorecard,’
because it balances both internal and external stakeholder concerns,
gives us a much more comprehensive, and balanced, picture of
how we are doing. The measures we traditionally used tended
to focus almost exclusively on internal processes. They also
failed to measure three major areas: the real cost of doing
business, the impact of the processes on the veteran-customer,
and their impact on employees. Use of the scorecard balances
our measures because it looks at both external and internal
measures. They keep the organization focused on the vision and
our stakeholders: veteran-customers, employees, and taxpayers.
The scorecard measures provide a ‘line of sight’ for every employee
to see their contribution to organizational results."
—Joe Thompson, Under Secretary for Benefits,
Veterans Benefits Administration, Department of Veterans Affairs
Balancing measures is a strategic management system
for achieving long-term goals. Senior executives in industries from
banking and oil to insurance and retailing use balanced measures
to guide current performance and plan future performance. They use
measures in four categories—financial performance, customer knowledge,
internal business processes, and learning and growth—to align individual,
organizational, and cross-departmental initiatives and to identify
processes for meeting customer and shareholder objectives.
Their experience has shown that balancing
a family of performance measures works. This means that
in each phase of performance planning, management, and measurement,
the customer, stakeholder, and employee are considered in balance
with the need to achieve a specific mission or result. This approach
has worked in the private sector and is beginning to take firm root
in government as well. While there is no exact formula for applying
balanced measures, the goal of this report is to provide options
and courses of action for use in and across the federal government.
The experiences of those who have begun to use balanced measures
provide opportunities for agencies to read about what has been successful
for others, to choose applicable practices, and to improve performance
to match the best in the business.
Are You a Driver or a Pilot? Instrument Panel Versus Dashboard
Using balanced measures allows you to mirror the
factors that you believe are critical to the success of your organization.
"A good way to understand the balanced scorecard is to imagine
yourself as the captain of a jumbo jet," write Robert Kaplan
and David Norton in their groundbreaking article on the management
tool in the Harvard Business Review. They continue:
Imagine the flight deck and all the instruments,
dials and gauges on the panel in front of you. These instruments
tell you about the various parts of the plane and how it is
flying. Reliance on the altimeter only would be foolish—you
might know your altitude, but you wouldn’t have any warning
about impending storms. You wouldn’t look only at the radar,
of course—how would you know when you were low on fuel?
Balanced measures serve as an instrument panel
for your organization. They provide important information from different
perspectives, creating a holistic view of the organization’s health.
They bring together on a single management report many of the disparate
elements of the organization’s agenda.
Another useful metaphor in discussing a balanced
approach to performance management is the dashboard approach.
Management, when resistant to change, will often complain that it
cannot focus on everything at once, that the "powers that be"
need to make up their mind about exactly what it is the leader is
to look at. The answer to this is that being a good leader is like
driving a car. After all, there are many gauges on the dashboard.
While you are driving, you take note of the level of fuel (you don’t
want to run out of gas). You watch the water level (you wouldn’t
want to overheat the engine). And if an emergency light were to
come on, you would notice that as well. These all are secondary
observations, however, to the driver’s primary focus of moving the
car safely in one direction while watching for obstacles in the
road, including other drivers. That is exactly what a good leader
in an organization should be doing. A balanced set of performance
measures is like the gauges on the car; the mission is the destination.
Why a Balanced Approach?
Regardless of which metaphor you embrace, a balanced
approach allows you to consider all the important operational measures
at the same time, letting you see whether improvement in one area
is achieved at the expense of another. Key indicators should tell
you how the organization is doing. They will probably change over
time to reflect shifting organizational goals. Performance levels
can be reported on a monthly or quarterly basis. All levels of management,
including field personnel, can participate in the reporting process;
together, they provide a good idea of the health of the organization
from a variety of perspectives. It is only with a balanced approach
that leaders can create success throughout their organizations.
This proven approach to strategic management imbeds
long-term strategy into the management system through the mechanism
of measurement. It translates vision and strategy into a tool that
effectively communicates strategic intent, and motivates and tracks
performance against established goals.
A strategy is a shared understanding about how a
goal is to be reached. Balancing measures allows management to translate
the strategy into a clear set of objectives. These objectives are
then further translated into a system of performance measurements
that effectively communicates a powerful, forward-looking, strategic
focus to the entire organization. In contrast with traditional,
financially based measurement systems, the balanced measures
approach solidifies an organization’s focus on future success by
setting objectives and measuring performance from distinct perspectives.
The old method of management, which focused only on the bottom line,
no longer works. If the customer, stakeholder, and employee are
not part of the solution, they will forever be part of the problem.
Balanced Across What Perspectives?
You need to look at your performance management
from three perspectives: employee, customer, and business.
The employee perspective focuses attention
on the performance of the key internal processes that drive the
organization. This perspective directs attention to the basis of
all future success—the organization’s people and infrastructure.
Adequate investment in these areas is critical to all long-term
success. Without employee buy-in, an organization’s achievements
will be minimal. Employees must be part of the team.
Examples of Concerns From the Employee Perspective
- How do you get employees to see the federal
government as an employer of choice?
- Focus on issues such as employee development
and retention.
The customer perspective considers
the organization’s performance through the eyes of a customer, so
that the organization retains a careful focus on customer needs
and satisfaction. For a government entity, this perspective takes
on a somewhat different meaning than for a private sector firm;
that’s because most public sector organizations have many types
of customers. The private sector recognizes the importance of the
customer and makes the customer a driver of performance. To achieve
the best in business performance, the government, too, must incorporate
customer needs and wants and must respond to them as part of its
performance planning.
Examples of Concerns From
the Customer Perspective
- How do you want your customers to view you?
- Who are your customers? Is there more than
one group?
- Are measures based on external customer input?
- Do your measures reflect the characteristics
of good service (accessible, accurate, clear, closure, timely,
respectful)?
The business perspective, like the
customer perspective, has a different interpretation in the government
than in the private sector. For many organizations, there are actually
two separate sets of measures: the outcomes, or social/political
impacts, which define the role of the agency/department within the
government and American society; and the business processes
needed for organizational efficiency and effectiveness.
Examples of Business Results
- How do you want your stakeholders and/or customers
to view you?
- Are your measures outcome/results-based?
- Are the results something customers care about?
- Do you have real-time data for reporting purposes?
Together, these perspectives provide a balanced
view of the present and future performance of the organization.
A balanced set of measures allows leaders to think of their organization
in its totality. There is no one "right" family
of measures. The measures must reflect the overall mission
strategy of the organization. They have to be the measures that
drive the organization. In most cases, they are developed through
an iterative, evolutionary process. You can have as many categories
as you want, but the idea is to keep it as simple as possible so
that your measurements can be global and quick.
For the team members of this study, the key challenge
has been to determine what has to happen to make it possible for
government leaders to manage through the use of a balanced set of
measures.
Summary of Best Practices in Balancing Measures
In 1994, Vice President Al Gore gave a lecture
as part of the Georgetown University Series on Governmental Reform
in which he identified the characteristics of "The New Job
of the Federal Executive." Among those characteristics were
"creating a team environment, empowering employees, putting
customers first, and communicating with employees." Those characteristics
are embedded in the best practices of our partners—especially in
this area of performance measurement.
There is no generic set of balanced measures that
can be applied as best practice to all functions of the public sector.
Certain conditions, however, need to exist within an organization
for a balanced approach to performance management to be successful:
- strong leadership that supports the adoption
of balanced measures as a feature of organizational management
and accountability;
- the capability to communicate effectively throughout
the organization and the organization’s ability to communicate
to decisionmakers; and
- the knowledge that customers, employees, and
stakeholders are fully informed and that they understand and
support the initiatives of the organization.
While an attempt to find a one-size-fits-all
approach will not work, there are some generic principles that remain
constant across all government organizations:
- Good product or service. Does
the organization meet the consumer’s need for goods or services
or rectify a perceived wrong?
- Good image. How does public opinion
view the organization? Are employees enthused by the public’s
perception of them?
- Good availability. Can customers
get easy access and satisfaction? Is the organization ready
and able to respond immediately to any reasonable challenge?
- Good employer. Are there high
levels of staff retention, staff morale, and job satisfaction?
- Continuous improvement. Is there
a continuous evaluation process to identify and implement improvements?
Do the improvements benefit the product to the community?
A successful organization in the public sector will
apply these principles to its strategic framework which links performance
planning, measurement, and reporting to day-to-day operations, balancing
the need to achieve a stated mission with the needs of the customer,
stakeholder, and employee. The following five sections show how
our partners are doing just this as they:
- establish a results-oriented set of measures
that balances business, customer, and employee;
- establish accountability at all levels of the
organization;
- collect, use, and analyze data;
- connect the dots; and
- share the leadership role.
Section 1: Establish a Results-Oriented Set of Measures
That Balances Business, Customer, and Employee
Obstacles are those frightful things you
see when you take yours eyes off your goal.
—Henry Ford
Creating a family of measures is the most crucial
part of the strategic planning process. And a most crucial part
of this creation process is to consult with your customers (to find
out what they really want) and with your employees
(to find out what they need to achieve success). This
consultation has a significant impact on how the organization’s
overall performance is managed. If your customers and employees
are part of the planning process, they then become part of the achievement
as well, building an environment of trust and openness that can
really turn things around. Trust and openness stimulate buy-in,
and buy-in is what unifies an agency around a strategic mission.
Many federal agencies are just beginning to establish
a family of measures. Those agencies with a year or more experience
in developing their family of measures have much to teach us. The
more mature the process, the more involved the customers and employees
are in that process. The experience of these organizations—even
at this early stage—is crucial as a learning tool. The factors that
led to the establishment of a family of measures, the process followed,
and the enablers and mistakes are all useful points of reference
that agencies can interpret and apply to their own cases. They can
learn a great deal from the experiences of the state and local government.
State and local governments have established a Community
of Practice—the Performance Management Consortium of the
International City/County Management Association. Through this consortium,
they learn from each other and can compare outcomes against those
of other local governments. This is a lesson that federal agencies
would do well to learn: there is no need to reinvent the wheel.
A Community of Practice provides a central point for gathering and
sharing information on a particular topic. One outcome we hope evolves
from this study is the establishment of a Federal Community of Practice
for those working at all phases of strategic planning, not only
at the establishment phase.
On the federal level, the drive to establish measures
under the Government Performance and Results Act has not really
allowed the time to conduct extensive consultation with customers,
stakeholders, and employees. State and local governments, which
are not subject to the Results Act, have been able
to take the time to establish, consult, and then redefine their
families of measures. Many federal agencies are, however, making
a real effort to work with their customers, stakeholders, and employees.
Regulatory partners face a particular challenge
in the establishment and implementation of customer measures, including
indicators of customer service and customer satisfaction. Individuals
or stakeholders who are being investigated, regulated, interdicted,
inspected, restricted, or audited cannot be expected to be effusive
in their reporting of satisfaction. Some regulatory agencies note
that they are taking a new look at the concept of customer, including
broadening the definition to include the entire American public.
This new focus requires innovative new means of assessing satisfaction.
The critical areas of practice in the establishment
of measures are the following:
- Define what measures mean the most to your
customers, stakeholders, and employees.
- Commit to initial change.
- Maintain flexibility.
The city of Coral Springs,
Florida, has developed performance measurements that indicate
the city’s "stock price." The index includes 10 performance
measurements most critical to the city’s customers (as determined
by survey), including residential property values, school overcrowding,
crime rate, and an overall customer satisfaction rating.
The city reviews its strategic priorities every
two years in formal strategic planning workshops. Input to the
process is now collected from management as well as front-line
employees and volunteers on advisory boards and commissions.
Their input includes financial and demographic data and projections,
customer surveys on desires and perceptions, customer input
as obtained from neighborhood town meetings, and—of course—performance
results. Additionally, each employee of Coral Springs develops
personal objectives that tie back to the city’s key intended
outcomes, thus connecting them to strategic priorities and ensuring
that they actually understand them. All of these interconnected
processes create a city with a reputation for being an open,
caring, and good community in which to live and work.
Define What Measures Mean the Most to Your Customers, Stakeholders,
and Employees
The following are some best practices of our partners.
They are offered as ideas for use in your organization’s strategic
and performance planning. All of these partners have families of
measures which were established after consultation with customers
and stakeholders, and, in the more mature processes, with employees.
- Have customers, stakeholders, and employees
work together. The strategic planning process, from
establishment to performance reporting, should be collaborative
and interactive at all levels.
- The state of Iowa’s
performance measures encompass a variety of employee, customer,
and other perspectives. The State’s Council on Human Investment
(CHI) is chaired by the Director of the Department of Management
and includes both legislative representatives and private citizens.
Focus groups, citizen commissions, and town hall meetings augment
the annual citizen survey sponsored by the CHI. In the annual
planning process and the monthly review of performance measures,
individual measures are grouped by programmatic perspectives.
It is important to note that these programmatic perspectives
cut across organizational boundaries and require state agencies
to work cooperatively in both the development and achievement
of goals.
- The Veterans Benefits Administration
(VBA) involved numerous parties in the establishment
of its balanced set of measures: senior officials, staff managers,
line managers, customers, stakeholders, employees, and unions.
This broad level of involvement has helped shape VBA’s success
by making everyone a part of the team.
- BLM began its implementation
of the Results Act by conducting a series of focus groups with
stakeholders to determine what performance measures were important
for them. To ensure a balanced set of measures, both stakeholders
and employees were given opportunities to review and comment
on the measures throughout the process. In addition, BLM conducted
a customer survey. Subsequently, BLM based almost 20 percent
of its measures on customer survey results.
- Create an easily recognized body of measures.
- The U.S. Postal Service
established its measurement program by identifying three key
"aspirations"—business, customer, and employee commitment.
From these, USPS developed its Customer Perfect performance
management model. This model is founded upon three essential
measurement pillars: (1) the Voice of the Customer, (2) the
Voice of the Employee, and (3) the Voice of the Business. There
should always be alignment among the three, and—ideally—the
voices of the customer and the employee will dictate the voice
of the business.
- The city of Austin, Texas,
developed a Community Scorecard, which includes a subset of
the city’s most critical performance measures. The scorecard
includes measures for public safety, crime control, and neighborhood
vitality; support of youth and families; and protection of the
environment. In addition, it includes shorter term measures
of immediate concern to citizens that were drawn from customer
surveys. This Community Scorecard is widely available through
local media and the Internet.
- The state of Missouri
has identified three levels of performance measures for use
in planning and budgeting: outcome, objective, and output. Outcomes
include the 23 Show Me Results that have been identified by
Governor Mel Carnahan and focus on results that benefit Missouri
citizens.
- Performance measures for the state of Texas,
contained in its strategic plan, Vision Texas, cover the full
range of financial—and nonfinancial—categories of operational
performance. These include bond ratings, return on investment,
productivity/efficiency, internal processes, customer satisfaction,
employee feedback, citizen perspectives and feedback, and improvement
and innovation.
- Clearly identify measures within each
area.
- The Internal Revenue Service’s
(IRS’s) balanced measurement system is comprised of three
categories of measures: customer satisfaction, employee satisfaction,
and business results. It was determined that these categories
should align with the IRS mission: provide America’s taxpayers
top-quality service by helping them understand and meet their
tax responsibilities and by applying the tax law with integrity
and fairness to all. By so doing, the system will help in assessing
the agency’s organizational performance and progress toward
the three qualitative organizational goals.
- The National Aeronautics
and Space Administration’s (NASA’s) Langley Research Center
uses three critical success factors for its family of measures:
customer value, stakeholder value, and organizational value.
As a research agency, it found that determining its value to
the stakeholder (funder) was a critical determinant of overall
success.
Commit to Initial Change
One of the biggest challenges has been the
culture change needed to realize that employees and customers
matter, and that employees are accountable for results.
—Nina Hatfield, BLM Deputy Director
The National Marine Fisheries
Service established its measures from a clean slate, to avoid any
ingrained interests held over from previous measures. This ensured
that measures were comprehensive rather than cumulative—and was
a very difficult step to take, because it required the organization
to change its culture dramatically. Changing the culture and getting
that initial buy-in from everyone in the organization is of tremendous
importance. Without it, there can be no sustainability: the strategic
performance framework will cease to exist with any change in the
organizational structure. While leadership is a strong factor in
this (see section 5), there are some things an organization can
do to help ensure that buy-in occurs.
- Use expertise wherever you find it.
The Patent and Trademark Office has an
employee with experience in the area of performance benchmarking.
As a member of GPRA early implementation team, she was an objective,
impartial party and helped the team with initial benchmarking
in establishing a family of measures. The success this woman
had in working with the agency to provide the groundwork for
its family of measures is in part due to the agency’s willingness
to change. It also used teams comprised of all levels of employees
and made a concerted effort to closely tie the data to the employees
to make them more attuned to the performance information.
- Involve everyone in the process.
Natural Resources Canada invited all
of its employees to participate in workshops to establish the
organization’s performance measures. A performance measurement
working group was created, comprised of officials from throughout
the department. Also, Canada is preparing to conduct a governmentwide
employee survey, the results of which will be integrated into
the Natural Resources strategic plan and balanced set of measures.
- Make the system nonpunitive.
The city of Charlotte, North Carolina,
found that implementing a balanced set of measures system is
much more difficult than it had at first expected. The city
discovered the importance of developing challenging, but achievable,
stretch targets and placing them in a nonpunitive context. Leaders
recognize that buy-in and commitment from employees will be
compromised if the system is initially structured to put budgets
at risk if a performance target is not met. During these initial
phases of culture change, they feel it is best to leave the
employees with some breathing room—to let them know that they
and the city organization are struggling through this together,
rather than this being some sort of "us versus them"
situation.
- Bring in the unions. The NASA
Langley Research Center held more than a dozen focus group
meetings with its employees and unions. It also published a
booklet and created a large, widely disseminated poster to communicate
its balanced set of measures to employees—and thus ensure understanding
and buy-in.
- Provide clear, concise guidance.
The Social Security Administration has
a concise and thorough Planning Guidance Document, developed
by its Office of Strategic Management, which helps drive strategic
management throughout the organization. This annual handbook
describes the planning framework, guides development and management
of agency plans, provides a consistent process to follow, and
identifies accountable points of contact. There is a certain
comfort in having a document such as this: it eases transition
by giving managers a frame of reference from which to work.
Maintain Flexibility
All of the organizations we interviewed have revised
their sets of performance measures at least once since their establishment.
In most cases, the number of performance measures has been reduced
to simplify the overall system. This supports the fact that
a balanced set of measures cannot be established overnight.
It must be given time to develop, and the organization must be given
time to adapt. Flexibility is the watchword here. While it is true
that smaller organizations—almost by definition—can be more flexible
than large, the latter can, and must, incorporate flexibility in
their approach to performance measurement. Change will be slower
and more incremental in larger organizations, but it can nevertheless
be steady and progressive.
Phoenix, Arizona,
began with a top-down direction in establishing measures and
met with stiff resistance. The city now uses a more flexible,
department-driven method. Specifically, it has given its 25
departments considerable flexibility in choosing performance
measures. Not every department uses all measures. Rather, there
is a master set of measures, and each department is allowed
to determine which are most useful for its particular needs.
The only proviso is that the final set of measures must include
both customer- and employee-related items. That same flexibility
can be found in the city of Charlotte,
which has been encouraged through its experience to narrow its
list of performance measures to those that are truly essential
and meaningful to the organization.
- Limit the number of measures.
Many government agencies are developing hundreds of measures
under GPRA. Limiting the number of measures offers a real opportunity
to reduce the reporting burden and focus management on an organization’s
most important issues.
- In FY 1998, BLM reduced
the number of its performance measures from 65 to 45; Natural
Resources Canada reduced the number of its performance measures
from 66 in FY 1997 to 39 in FY 1999. Both organizations have
subsequently seen an improvement in reporting with regard to
timeliness and quality.
- The NASA Langley Research
Center found that the original structure of its family of
measures was too complicated and confusing for most people.
It has since simplified the structure, which now has only two
levels instead of four. The center has also learned the importance
of keeping the overall number of measures low, recognizing that
it is easier to deal well with a limited number of measures.
Some other best practices regarding revision of
and flexibility in establishing performance measures include the
following:
- Recognize that this is a living process.
The Canadian St. Lawrence Seaway Management
Corporation readily acknowledges that the performance measurement
system must be a living item. Its performance measures are currently
being adjusted to reflect the corporation’s new, more commercialized,
nonprofit status. It conducts employee satisfaction surveys
every two years to determine overall satisfaction and the alignment
between employees and the organization’s vision and objectives.
- Maintain a balance between financial
and nonfinancial. Kaiser Permanente
is moving toward (1) a balance between local and national measures,
(2) more outcome-oriented measures, and (3) a stronger focus
on metrics that represent drivers of performance. Moreover,
the company appreciates the importance of keeping its performance
measurement system fresh so that people continue to pay attention
to it. The health care business is rapidly evolving, and companies
must remain responsive to changes. Kaiser Permanente has found,
for example, that it is helpful to identify certain customer
bases by disease (e.g., diabetes) so that it can ensure that
the latest developments in treatment are communicated to the
customer quickly and efficiently.>
Section 2: Establish
Accountability at All Levels of the Organization
There is no greater teacher than responsibility.
—Warren Bennis, Managing People Is Like Herding Cats
Accountability is a multidimensional concept and
often a key enabler of success. This study was concerned with the
establishment or assignment of accountability for performance/results
and the effective stewardship of resources to produce those results.
To truly work, accountability has to be shared by managers and employees;
further, your organization as a whole must be accountable to the
customer and stakeholder.
Within the scope of an organization, accountability
is the responsibility of an individual, staff element, or unit for
achieving a mission and the functions to support that mission. Control
over actions and assets ("ownership"), answerability to
a chain of command (which includes some mechanism to ensure the
fulfillment of responsibilities), and responsiveness to changing
demands and organizational environment are essential elements in
a successful strategic framework. If either of the first two is
missing, the organization’s strategic framework will collapse simply
from lack of accountability. Without responsiveness, a program becomes
stagnant and irrelevant to an organization’s day-to-day operations.
Accountability for implementing and using a set
of measures within an organization lies with those responsible for
achieving the organization’s intended goals. In a public organization,
it is the responsibility of the entire workforce to
work toward these goals; they are thus being held accountable for
outcomes not completely under their control. And while the problem
of management buy-in regarding accountability may be less obvious,
it can still exist. Front-line managers may feel like any other
employee and resist being held accountable for outcomes they cannot
completely control.
Our best practices, listed below, reflect some ways
to develop and "cascade" accountability throughout an
organization. They emphasize the role of leadership in the process,
as well as the need for communication with customers and employees
and innovative thinking. The best practices include the following:
- Lead by example.
- Cascade accountability: share it with the employee.
- Keep the employee informed.
- Keep the customer informed.
- Make accountability work: reward the employee.
Lead by Example
Senior leadership must help an organization overcome
its resistance to change. It takes significant amounts of time,
communication, and education to effect the paradigm shift to make
managers and employees realize that they are responsible for their
results, not just for their efforts.
Throughout our review, the overriding theme was
that strong leadership is essential. Without a strong
impetus from the top of the organization, the chances of implementing
a balanced set of measures are greatly diminished. (Beyond these
examples, also see section 1, "Commit to Initial Change,"
and section 5.)
- The Veterans Benefits Administration
addresses this in part by linking executive appraisals to the
Balanced Scorecard.
- U.S. Coast Guard senior leadership made development
of a comprehensive suite of measurements a priority in 1993
as one of the first GPRA pilot efforts, and has embedded performance
measurement as part of the organization’s culture. The agency
continually refines its measures, and now uses them to determine
resource allocation across prevention and response mitigation
strategies.
Cascade Accountability: Share It With the Employee
Performance-based management works better when combined
with established measures that reflect customer/stakeholder needs
and a committed, skilled workforce. Management’s responsibility
does not end with the establishment of these measures, nor does
management alone hold responsibility for their achievement. It must
be a team effort.
"If there’s a champion, things get done."
This maxim has been the experience of many of our partners.
This "champion" can be a strong leader at an organization’s
top rungs, or it can be a process owner culled from the ranks
of the organization. The Canadian St. Lawrence
Seaway Management Corporation strives to have structured
performance measures be actionable and owned by employees, making
everyone a champion.
The single best practice we found was to create
a performance-based organization.
- The Federal Railroad Administration’s
(FRA’s) performance agreement with the Secretary of Transportation
is communicated to all employees. In this way, each employee
can be apprised of what is being measured.
- At the Veterans Health Administration
(VHA) of the Department of Veterans Affairs (VA), the Under
Secretary for Health establishes performance agreements with
each of the 22 medical center network directors. These directors
have their own performance agreements with the medical centers,
and the medical centers—in their turn—have performance agreements
with their service chiefs. In all of these agreements, specific
goals must be met in order to maximize end-of-year financial
incentives.
- The U.S. Coast Guard conducts rigorous regional
strategic assessments that cascade from the Atlantic and Pacific
areas down through the nine districts. These assessments examine
demand for agency services and try to anticipate current and
future demands for services and resources. The assessments look
at partnerships with ports and waterways.
- The Bureau of Land Management’s
Senior Executive Service (SES) personnel performance evaluations
are based on the agency’s strategic goal areas, and lower level
managers’ evaluations are based on the SES criteria. In the
future, BLM plans to have all SES and manager appraisals based
on its strategic goals and supplemented by a "360 degree
review."
Other best practices include:
- Encourage "sponsorship" of
performance objectives. The Social
Security Administration has ongoing executive sponsorship
of each of the agency’s strategic objectives. Executive sponsors
are accountable for achieving progress against measurable results
and ensuring the integration of agency activities needed to
achieve the goal. Sponsors must develop Programs for Objective
Achievement (POAs): this entails developing objectives, performance
indicators, and annual and long-range performance targets; identifying
gaps between current and targeted performance; and proposing
strategies and initiatives. The sponsors also establish teams,
whose members are drawn from across the agency, for managing
the achievement of the objectives laid out in the POAs. The
executive sponsors meet quarterly to review and assess progress
toward meeting performance targets. These mechanisms combine
to cascade responsibility for management program goals throughout
the agency.
- Involve the unions. At the Internal
Revenue Service, accountability is assigned downward. Specifically,
managers are held accountable for their unit’s performance,
and employees’ performance evaluations are linked to organizational
performance through critical elements and standards that are
aligned with the agency’s mission statement and the principles
of a balanced measurement system. A steering committee made
up of top-level IRS managers and the president of the National
Treasury Employees Union meets regularly to review progress
and provide direction in the development of the IRS balanced
measure system. By involving the union, the IRS ties in every
level of employee within the organization.
State and local governments also struggle with
cascading accountability. The city of Austin,
Texas, uses alignment worksheets to tie program results
to employee evaluations. The worksheets are used for each executive
level employee and link that employee’s compensation to program
results and progress made toward the city’s strategic goals
and vision. Over the next several years, these alignment worksheets
will be available for each and every employee, allowing all
employees, at all levels in the organization, to see how their
job performance contributes to overall operations.
Keep the Employee informed
nformation technology makes it possible to keep
all employees—both at headquarters and in the field—equally informed
about performance data. Most of our research partners use a combination
of the intranet, Internet, and e-mail to keep their employees informed
and current on organizational performance. Many also use newsletters
and hard copy postings to communicate this information to employees.
The more successful of our partners make a concerted effort to ensure
constant communication with employees. Best practices include the
following:
- Use the intranet and/or Internet on a regular basis.
- BLM’s management information
system (MIS), which integrates its performance, budget, financial,
activity-based costing, and customer research data, is available
to all employees and managers via the agency’s intranet.
- To provide a clear message to the field regarding
the organization’s goals and targets and how they are measured,
the Veterans Benefits Administration uses
the Balanced Scorecard and posts its results on the VA’s intranet.
- The U.S. Postal Service
communicates performance throughout the agency. Every region
knows what awards and incentives were given and what performance
levels were achieved throughout every region.
- At the Department of Housing
and Urban Development, the first thing an employee sees
when his or her computer comes on each morning is a message
from the Secretary. These messages generally contain information
regarding successes achieved within the department and help
the employee feel part of the "HUD team."
- Rely on supplementary and complementary
dissemination mechanisms beyond the intranet and Internet to
keep employees up to date.
- The Health Care Financing
Administration of the Department of Health and Human Services
spreads the word about accountability and results through its
quarterly publication, The Goal Post. This newsletter
highlights key performance measurements and time lines.
- The VA’s Veterans Integrated
Service Network of Upstate New York (VISN 2) formed a Network
Goalsharing Committee to review monthly reports and publish
the results in e-mail newsletters. Goalsharing results are also
posted at several locations within each of the medical centers.
- Natural Resources Canada
inaugurated its website by notifying all 3,700 of its employees
of the site’s existence and encouraging its use. To reinforce
this emphasis on utility, the site features both a user-friendly
format and explanations of the data it contains, and of the
agency’s role and future.
- Kaiser Permanente’s Northeast
Division set up a scorecard system that produces a report
to accompany paychecks: The system tracked a number of measures
sent out once per quarter reflecting overall performance within
the region. Performance data are also available on the company’s
intranet. To ensure widespread use, data are periodically "repackaged"
to keep the information fresh and attract employee attention.
- Missouri’s Department
of Natural Resources posts performance data on its intranet
to inform and motivate employees about agency direction and
performance. It also communicates information about agency programs
and reward systems through employee newsletters.
Keep the Customer Informed
Once an organization has opened the doors to communication
with customers and stakeholders regarding performance management,
it is vital that the flow of information be maintained. The customer
who has been involved in the planning process will want to know
how things are going. And, the more informed the stakeholders are,
the more feedback an organization will receive in the next round
of planning—and the better that planning will be as a consequence.
From a political standpoint, the customer is also a constituent,
and the importance of customer support should not be overlooked.
Communication with the legislative branch should be maintained as
well—a well-informed legislator will be far more supportive of proposed
initiatives.
Coral Springs, Florida,
is a tireless communicator. The city serves up information and
food at an annual dinner where it unveils its "State of
the City" report to its advisory committees, boards, and
commissions. Coral Springs also produces an end-of-year Service
Efforts and Accomplishments Report; sends bimonthly news
magazines to each household; posts key intended outcomes, quality
initiatives, and awards on its website; and holds a yearly Quality
Fest to honor employee achievement.
- Use the Internet.
- The Federal Trade Commission’s
(FTC’s) Consumer Sentinel database makes consumer fraud
data available to U.S. and Canadian federal, state, and local
law enforcement agencies. FTC and 47 other agencies jointly
maintain this one-stop consumer information website (http://www.consumer.gov).
The agency measures success by the number of hits on the website
and the number of calls to its Consumer Response Center phone
lines.
- The Federal Railroad Administration’s
Safety Analysis website makes railroad accident and inspection
data available to everyone and is a convenient reference for
field inspectors. FRA also makes minutes of public hearings
and other documents available to the public through its website.
- Missouri’s Show
Me Results program keeps the state government focused on results
that benefit its citizens. The program promotes accountability
for results through accurate and complete reporting to all citizens;
the state makes these results available on its website. Missouri’s
departments track and report on a core set of measures for each
Show Me result.
- Supplement electronic data with traditional
paper reports.
- Missouri’s Department
of Natural Resources disseminates performance data through
an annual Outcome Measuring Report, various other program
reports, and Internet and intranet "chat room" discussions
with stakeholders. It also uses performance data to focus group
discussions, resolve issues, develop questionnaires, and provide
feedback for annual reviews of policy and procedures.
- The city of Phoenix not
only uses its performance measurement system to develop criteria
for managers’ personal performance plans, but also relies on
the system as a mechanism for communicating effectively with
elected officials and the public. Since implementing this data
system, Phoenix can respond quickly and completely to information
requests from stakeholders: previously, data were collected
and reported only on an ad hoc basis.
- Virginia issues
a progress report on its performance measures every December.
This report, along with planning and budget information, is
available both in hard copy and on the Internet.
- The U.S. Coast Guard has combined its Performance
Report and Customer Service Report into a consolidated,
corporate-style Coast Guard Annual Report. Here, the
agency presents its performance goals—providing for each a discussion
of actions taken to achieve results, major factors affecting
strategies developed, and coordination with other organizations
(including customers and stakeholders). In reporting the analysis
and evaluation of the results, the annual report includes a
graphic of the target, information for the past several years,
and the trend line, as well as the initiatives defined as key
by the Coast Guard.
- The Social Security Administration
posts its Accountability Report, which includes its annual
performance report as well as its performance on its NPR High
Impact Agency goals on its website, SSA Online. The agency also
distributes periodic Reports to Customers, covering its
customer service standards.
Make Accountability Work: Reward the Employee
As noted earlier, it is the responsibility of the
entire workforce to work toward the stated goals in a public organization.
Once communication has been established with the customer, that
customer is naturally going to expect a certain level of performance.
Several of our partners have noted that it is a significant challenge
to effect a culture change that allows employees to realize that
they are accountable for results—not just to their supervisor, but
to the organization, customer, and stakeholder. Part of that challenge
is how to reward the successful employee within the parameters of
public employment. Accountability is a two-way street. The organization
must reward individuals who keep their end of the
bargain. Although state and local governments have more flexibility
in this arena than federal organizations, there are some best practices
that do translate to the federal sector; these are described below.
- Make rewards nonmonetary.
- Varying employee assignments allows FTC
managers to be creative in attaining results.
- Several federal agencies give time off as a
reward to employees. This option is approved by the Office of
Personnel Management and available to all federal organizations.
- Reallocate discretionary funds.
- BLM shifts discretionary
funds from teams not meeting goals to those doing good work.
Employees can then use those funds for travel, training, equipment,
or anything else that helps them do their job more effectively.
- Missouri’s Show
Me Results program focuses on the Governor’s priorities by concentrating
on a limited set of results and encouraging a reallocation of
resources to these priorities (rather than merely generating
a request for more money).
- Take a team approach.
- Employees have a monetary incentive for achieving
the performance goals that make up the set of measures at the
VA’s VISN 2. The Goalsharing Program
has proven to be highly successful in improving performance
in a declining budget environment. Customer service scores have
brought the network up to the top third out of the nation’s
22 VISNs—a significant improvement over its previous location
in the bottom third among networks. Last year, each employee
in VISN 2 received an average of $100 as an incentive award;
they also got a signed letter of appreciation from the network
director that outlined the improvements within VISN 2 that were
achieved as a result of each employee’s involvement in the process.
- USPS issues performance
bonuses to "performance clusters" for meeting and
exceeding performance standards. There is a quarterly celebration
for field clusters when performance targets are met. For meeting
annual goals, a letter is sent out to all employees announcing
who got rewarded and how much they received. USPS also makes
this information available on its intranet.
Section 3: Collect,
Use, and Analyze Data
Not everything that can be counted counts,
and not everything that counts can be counted.
—Albert Einstein
Properly collected and analyzed, data can give organizations
insight into their service, customers, and performance. That’s because
data provide a critical resource, linking activities and functions
to strategic planning, organizational goals, and management. And
this linkage, in turn, leads to increased productivity, efficiency,
and organizational effectiveness. For example, many organizations
use data in planning and performance evaluation as well as in determining
how employees and customers feel about the work environment and
services provided.
All of our partners use electronic systems to collect,
house, and disseminate data. The greatest successes in using data
result from systems that can integrate a wide variety of data sources.
Those systems that can access, use, and report on budget, finance,
customer/employee, and management and performance data offer insightful
ways for employees and managers to measure and improve performance.
A fully integrated information system provides the framework and
ability to use data effectively. Organizations with such systems
in place can create statistical analyses that provide feedback on
service to customers, on performance attainment and shortfalls,
and for use in strategic planning.
This section describes best practices in collecting
and using data. (Disseminating data, both internally and externally,
is discussed in section 2.) For our purposes, data can be seen as
covering two categories—feedback and performance. Both types of
data play important roles in the overall strategic planning process.
Feedback data let the organization know that it is
measuring the right thing; performance data let it
know that it is measuring it right.
Collect Feedback Data
The former mayor of New York City, Ed Koch, was
famous for yelling out to his audiences, "How am I doing?"
That is precisely what feedback data tell you. Feedback can tell
an organization how well it is performing and communicating, and
can also identify emerging issues and problem areas.
Best practices in this area include the following:
- Provide easy access for customer feedback
to your organization.
- The Federal Trade Commission
collects stakeholder feedback from its website, trade associations,
consumer groups, the antitrust sections of the American Bar
Association and the Department of Justice, collaborative rulemaking
projects, and industry. Additionally, FTC’s Bureau of Consumer
Protection tracks consumer input through its Consumer Response
Center, a nationwide comprehensive consumer complaint database.
FTC’s Consumer Response Center provides data
from widespread sources, including its nationwide comprehensive
consumer complaint database. The data collected by the center
are constantly used as benchmarks against opponents’ lawyers
and economists as well as against internal performance. FTC’s
belief is that good information can lead to good planning—which
leads in turn to good results.
- At Missouri’s Department
of Natural Resources, data are collected through interaction
with the public in a variety of town hall fora
and meetings. These data are collected against
outcome measures in strategic plans reported to the Governor
annually and to the U.S. Environmental Protection Agency as
required.
- Iowa collects data through
an annual statewide telephone survey, focus groups, citizen
commissions, and town hall meetings. Iowa’s Council on Human
Investment reviews this data annually to develop recommendations
on long-term measurable goals.
- The Securities and Exchange
Commission obtains customer data through its automated 800
number, an enforcement/complaint center website, and a series
of investor and small business town halls held in collaboration
with private industry.
- Survey is not a four-letter word.
- The city of Austin, Texas,
does extensive surveys of its citizens, customers, and employees
to measure their satisfaction and identify emerging issues.
Austin draws indicators from these surveys to help its boards
and committees refine their performance measures and make them
more credible.
- The city of Coral Springs,
Florida, uses a mix of data from financial and demographic
projections, neighborhood town meetings, and performance results
to build its business plan and determine its highest priorities.
- The Internal Revenue Service
surveys randomly selected taxpayers with which it has dealt
to assess their levels of satisfaction. The agency has also
developed two types of employee surveys: a work environment
survey to address issues at the workgroup or local management
level, and a corporate survey on broader organizational issues
such as customer focus, resources, and training.
- The Department of Veterans Affairs conducted
a departmentwide employee survey in 1997. The
Veterans Benefits Administration is using the departmental
survey as a baseline for its own employee survey later this
year. The Veterans Health Administration
monitors new potential measures for one year—with a focus on
the measures relating to "hot" issues. Each of the
five medical centers participating in the VISN
2 Goalsharing Program provides a monthly status report in
the form of either a scoreboard or a matrix.
- Collect employee and customer feedback,
then act on it.
- After a survey on mail delivery revealed that
customers cared more about reliability than speed, the U.S.
Postal Service changed its priorities. The result was a
20 percent improvement in customer satisfaction.
- When the Bureau of Land Management
began including mission success questions in its employee and
customer surveys in 1997, the agency found that as employee
satisfaction went up, so did customer and mission success satisfaction.
The correlation was close to one-to-one on agency missions such
as protecting the health of the land, managing permitting operations,
and protecting cultural and historical resources.
Collect Performance Data
Collection of performance data increases accountability
and provides a baseline of information from which trend data and
success/failure rates can be derived. State and local governments—which
have not been subject to the time constraints imposed on federal
agencies by the Results Act—have developed some particularly useful
and significant data in this area, as these best practices illustrate.
Analyze Data—and Then Use It
Obtaining good data is only half the battle. You
also have to be able to analyze it and use it to improve your performance.
Although it falls to the individual organization to define exactly
what its data needs are and how they should be applied, some of
our partners have developed approaches to this issue that merit
replication.
One successful way of charting data is to use
a geographic index system (GIS). A GIS integrates geographic
and other data, such as population, income level, or other statistical
data, into an information package that can be easily researched
on-line. Initially used by police forces to monitor crime, it
is now a valuable data analysis tool for many other agencies.
In 1993, NPR recommended the creation of a National Spatial
Data Infrastructure to harness data to help each city, community,
and region meet its unique challenges. This infrastructure has
become an important tool in helping government at all levels
track such results as improved water quality and lowered crime
rates, among others. GIS technology helps local governments
address urban sprawl by using data to plan and manage future
development. GIS data also allow urban leaders to make more
informed decisions about resource allocations and planning.
For example, the Department of Housing and Urban Development’s
Community 2020 software lets local governments see where HUD
funds are currently available within their communities by using
the software’s maps. They can then use that information for
planning and resource allocation. The National Oceanic and Atmospheric
Administration uses GIS data to track and forecast storm tracks,
providing more accurate early warning systems.
- Combine feedback and performance data
for a more complete picture.
- The Missouri Department
of Natural Resources makes a concerted effort to collect
data from the public at town hall meetings, fora, and workgroups.
These data and others are analyzed in-house by office staff,
line managers, and—where appropriate—intra-agency teams and
contractors. The analyses are presented from different aspects
to get a range of results and fresh angles on what the data
indicate. The most important uses of data for the department
are to focus discussions with stakeholders, identify and resolve
problem areas (including development of survey instruments),
and review policy and procedure (what’s working and what isn’t).
- The state of Iowa performs
an annual statewide telephone survey regarding customer concerns
and analyzes the results. These data are augmented with input
from focus group sessions, town hall meetings, and state-commissioned
studies. The results of the analyses are used to review progress
made toward performance goals, review strategic direction, account
for employee feedback and satisfaction, and provide new organizational
benchmarks when needed. Annually, data and subsequent analyses
are used at an offsite retreat to review past performance and
confront emerging issues.
- Conduct root-cause analyses.
- At FRA, the Administrator
is personally involved in tracking data and analyzing results.
The data, developed from meetings with stakeholders, are kept
principally on safety records and compliance factors. More importantly,
these data are regularly discussed both internally with employees
and externally with stakeholders to develop an environment of
trust and identify issues for resolution. FRA does root-cause
analysis to identify and remove the bases of safety problems
with a goal of zero tolerance of safety hazards. FRA has a separate
office for data collection and analysis. It is considering hiring
operations research analysts for more advanced data collection
and analysis.
- The Florida Department
of Environmental Protection uses root-cause analysis of
its data to tackle environmental issues. The department analyzes
|