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Observations on Performance Measurement
 

At its base level, performance measurement is very simple: Set a standard and measure performance against that standard.  However, from this very basic concept the field expands to encompass a variety of intriguing aspects. In this and future blog posts, I hope to explore many facets of the field in ways that are both thought provoking and useful to practitioners – namely, general managers and those operating performance measurement systems.

Topics I aim to explore in upcoming blogs include:

• Technology: How can and do organizations harness information technology to drive the entire cycle of performance measurement – from collecting information and analyzing and reporting on it, to facilitating effective responses to the information?
• Use of performance information. Who can and should use performance information and how they can leverage their performance information to drive key organizational and operational decisions?
• Sustaining a performance measurement system. How can an organization ensure that its performance measurement system outlasts any one leader?
• Citizen engagement in performance measurement. What more can and should be done in engaging community residents in designing, carrying out and using performance measurement systems?
• Other Performance Measurement Jurisdictions and Tools. What are other performance measurement indexes, and composite measures for complex domains such as teacher performance or environmental sustainability?
• Leveraging Prior Performance Measurement Work. How can one find and use performance measurement work that has already been developed?

Knowing at what level or levels you need to measure performance is important to clarify at the outset of a devising a performance measurement system. One must decide to work at the strategic, tactical or operational level.

The old joke that “the operation was a success but the patient died” is not too far from reality in some cases where the strategic context of a public program is not addressed, while operational levels receive the focus. In one state education department, there were good measures of diesel versus gasoline school buses, but no real measures of academic success or value added provided by a year of instruction.

Operational

Often basic operational performance information is core to a performance measurement effort. The “Stats” movement – starting with William Bratton’s CompStat for police and expanding out to cities and states – started in the realm of operational performance metrics. This level focuses on how many potholes are found in a specific stretch of a street, and how long it takes to fill one once a request is received, for example. There is still much to be done to have regular operational performance metrics that are acted on in a timely manner across the public sector.

Tactical

The tactical level looks at what the best way is to get the job done. This is the area that includes “best practices” and evidence-based management, and explores if an organization is using the best tools and paying the right price to get the job done. Metrics here often reach close to major strategic objectives. Take for example the widely viewed critical nature of reading proficiency by the end of the third grade as a predictor of future school success. At the strategic level, we’re looking at this measure (reading proficiency by the end of the third grade) in the context of achieving educational success for the system’s pupils. At the tactical level, we consider what the best tools are to bring every third grader up to proficiency by the end of the third grade – and if we are using the best tools for the job at hand.

Strategic

Finally, at the strategic level of performance measurement, we identify the organization’s broad strategic objectives and the information we need to know what we are accomplishing and to what extent at a broad, organizational policy level. This can be fairly straightforward for a modest agency but can get progressively more complex with larger organizations or in comparing whole countries. For example, over the past decade the Organization for Economic Co-operation and Development has taken on the question of measuring well-being and measures to increase it. The Legatum Prosperity Index is one attempt to get beyond GDP as a comparative measure of how well societies are serving their residents.

Knowing which of these levels of performance measurement we are working at and how the three levels relate is an important component of a sound performance measurement system.

Lyle Wray serves as Executive Director of the Capitol Region Council of Governments based in Hartford, Connecticut. He is a member of the board of directors of the Community Indicators Consortium. He co-authored the book Results That Matter on engaging community residents in performance measurement and community improvement efforts. He is co-author of the March 2012 article “community results toolkit” in Public Management. His email is This e-mail address is being protected from spambots. You need JavaScript enabled to view it . 

The Benefits of a Performance Measurement System: An Example

The City of Salisbury, Maryland is actively engaged in Performance Measurement. With a performance measurement system in place across all of its departments since 2009, Salisbury reviews its measures and goals quarterly, reports on outcomes and provides recommendations to the Mayor and Council annually, and regularly leverages insights gained from their efforts toward greater efficiency and effectiveness across all departments.

Overall, as direct result of their performance measurement system, the City of Salisbury is able to identify specifically what additional resources are absolutely necessary for successful delivery of services, such as additional training, staff, IT support, and financial resources. However, to arrive at this point, thorough planning and work were required.

Loré L. Chambers, Assistant City Administrator for Salisbury, shares information on their process of initial research on municipal performance measurement, measure development, measure review, performance reporting and outcomes.

By Loré L. Chambers
Assistant City Administrator, Salisbury, MD

The City of Salisbury began to research performance management systems in 2005. According to John Pick, City Administrator, "we became interested in performance measurement several years ago as a means of assisting in implementing our strategic plans. Since that time, we have developed measures that help us determine the extent to which we are reaching organizational goals and meeting the expectations of our various constituencies. We also continue to refine our performance measures to ensure that we are measuring those critical indicators that are most useful for these ends."

Initial Research

Initially, city staff visited another municipality to review its implementation of a system for tracking departmental performance. That was followed by attendance at a Performance Management Conference at Rutgers University in 2007 to gain an overview of the field and connect with other practitioners using or considering a performance measurement system.

Measure Development

To develop measures, we gathered information from the International City/County Manager's Association's (ICMA) Performance Management Center, other municipalities, and national associations for police, fire and code compliance. We then focused internally, with a series of meetings with department heads to discuss specific challenges for each department and brainstorming what was measurable, the reasonableness of the measures to be developed, and any challenges the department heads believed they would face in trying to meet certain performance goals. Generic measures were also developed that impacted all departments.

System Implementation

The City of Salisbury implemented a Performance Management System in FY 2009.  Performance measures were developed and implemented for all city departments to track how well departments were managing its resources and providing services to our citizens.  Over the past two years, adjustments have been made to address the feasibility of our chosen measures and their respective set goal levels.

Review and Reporting

This process has not been without significant challenges for some departments lacking the necessary information technology support and staff to collect, analyze, and report on the required data. Performance results for each department are reviewed quarterly and department heads must provide written explanations for any measure that is not met 100%.

At the end of the fiscal year, the Performance Management Manager meets with each department head to review the year's performance and to discuss all outcomes. Measures themselves are reviewed to determine if we are measuring the right thing and if the measures should be changed or deleted. We also discuss what is needed to improve overall performance and to incorporate necessary changes for the next fiscal year.

Salisbury Results

Outcomes over the past two years have indicated a need for additional training, staff, information technology support, and financial resources to adequately meet the performance requirements. At the end of each fiscal year, a report on the performance management system is provided to the Mayor and Council for review and consideration of additional resource needs during budget sessions.

Staff training has increased as a result of issues revealed during reviews of outcomes with department heads, including a recent training on performance measurements through an ICMA web conference.

Power Drivers and The Social Network

I just saw The Social Network.  Great movie and well worth the time.  A lot of scenes resonated with the overall messages in the movie, but one small scene jumped out from a business perspective.  Jesse Eisenburg (Facebook founder, Mark Zuckerberg) is on the phone with an early Facebook co-founder Andrew Garfield (Eduardo Saverin) just after Saverin puts a hold on the Facebook bank account.  Zuckerberg goes on an impassioned rant that on the surface seems nothing more than his venting about having the account closed.  From a plot perspective that's what this scene accomplishes, the first and fatal, tangible rift between the two friends.

Yet the content of this scene is surprisingly well written. 

Zuckerberg says their inability to access the funds risks bringing the site down and destroying their entire business.  He explains that similar sites experiencing wild growth phases took a huge step back once the user base has the slightest impression that the site would not be available one-hundred percent.  Just a slight drop in up-time correlated to a sizable drop in user confidence, which translated into lower user/customer loyalty/retention (what all websites and technology need to be successful, what we call stickiness).

Not surprisingly Zuckerberg (in this scene, although he surely understood this in real life) had singular focus on those few things that were critical to the success of his organization.  His company had to do many things right, but there were some things, a select few things, that if they were not done properly had a disproportional ability to cause failure, or at least destroy the industry leading success Facebook was experiencing.

These things are what I call Power Drivers - those few things that an organization must do right in order to succeed.  It is a concept that many leaders have trouble understanding, but which this scene highlights with Hollywood simplicity.

Typically an organization will think these things are those that directly result in revenue, but they rarely are.  This mistake is made because executives fail to view revenue as an outcome.  It is incorrect to think that customers give you money (revenue); instead, the thought process that will send your management in the right direction is that potential customers have needs which they believe you can satisfy with a product or service, in exchange for which they give you revenue. If they are then actually satisfied they will continue giving you revenue.  The difference is subtle, but significant.  It is the difference between tactical and strategic thinking.

Consider Facebook.  Users don't pay.  It is easy to think of them simply as users and the advertisers as customers.  After all advertisers provide revenue, users do not.  This viewpoint highlights the difference between Zuckerberg's and Saverin's perspective within the movie.  But it is Zuckerberg's constant and relentless focus on the power drivers of their organization, despite constant distraction, that put Facebook at the head of their industry and is still keeping them there.

What are your power drivers?

David F. Giannetto is CEO of The Telos Group, co-Author and creator of The Performance Power Grid, The Proven Method to Create and Sustain Superior Organizational Performance (J.Wiley, 2006), and the book of the same name.  He has been listed as a thought leader by Business Finance Magazine and he can be reached via www.TelosConsulting.com or This e-mail address is being protected from spambots. You need JavaScript enabled to view it .  

The Power of Community Indicators

Recently, a colleague asked for my help to ensure that her new project was using the right metrics to both improve its performance and demonstrate effectiveness for continued funding. She had thought carefully about internal data collection processes and could quantify both inputs and a series of service delivery measures, the metrics seemed incomplete. And they were.

Philip Lee argued in a recent column for the Federal Times (http://www.federaltimes.com/article/20100516/ADOP06/5160303/ ) for an ‘ends-to-means’ approach to performance measurement, where accountability “… should not begin with the performance of programs; rather, it should begin with improving qualities of life.” Given that programs exist to have impact in the communities they serve, measuring performance must include both what was accomplished and how it effected the community.

For performance reporting to be effective it must connect program or agency activities with community quality-of-life results. This interweaving of performance measurement and community indicators ensures that the focus of program activities remains on achieving desired community results, and that the internal metrics are consistently aligned to create the most effective impacts.

Some may argue that community issues are effected by sources well beyond the scope of any given manager, program or agency. However, it is critical to measure the success of a program through the community indicators within a performance measurement framework to the extent possible all the same. In fact, recognizing that many programs and agencies may have overlapping spheres of impact in a community may facilitate and yield more effective collaborative partnerships and leverage organizational efforts with other community actors.  

Integrating community indicators with performance measurement systems does more than increase our ability to connect with others addressing the same issues. The process of focusing on the desired community impact allows for the meaningful evaluation of program activities – not just the efficiency with which services are delivered, but also how effective the services are in creating the desired changes in the community’s quality of life. Community indicators, in this case, serve the same function as a product feedback mechanism. For example, we might monitor performance internally to ensure that we are the leanest possible producer of buggy whips, but if community conditions have changed, buggy whip production may be irrelevant to current community needs.

What did this mean for my colleague? Simply put, the most effective way to develop performance metrics is to determine first what you want to accomplish. Why does this service or program exist? What would success look like? Once the desired community impact is identified then the metrics fall in place, beginning with measuring community indicators and marching the process back through the specifics of the program or services in place to change those outcomes.

For programs that have been in place for a long time, this assessment can sometimes be illuminating.  One program I worked with a few years back had completely lost track of why the services were established originally. They had concentrated so much on internal measures of “clients served” and internal satisfaction surveys that they missed the community impact towards which they had once aimed. Once the community indicators were reinstated as performance drivers, the internal measures (and many of the processes) had to change to transform the program from a nice initiative to an effective program that resulted in strong community impact and relevance. 

For more information about integrating community indicators and performance measures, see the Community Indicators Consortium http://www.communityindicators.net/communities-of-practice,ci-pm-integration

Ben Warner is the Vice President of Jacksonville Community Council Inc.

(JCCI), where he is responsible for JCCI's annual Quality of Life Progress Report and Race Relations Progress Report. He has served as President of the National Association of Planning Councils and was the inaugural President of the international Community Indicators Consortium.