The Future of Performance Management

I was at an AGA breakfast a few months ago and the point was raised that people in government had been talking about performance management for "some time", with few results. It got me to thinking abut whether there is a future in performance management and what it might look like. A couple of publications I recently read struck me as two different thoughts on where we're headed in this field, one being an "academic" piece on performance management and the other more grounded in practical approaches. The first was a point/counterpoint look at the history of performance management (largely using examples from New York city) and how it might inform better practices in municipal management around the country. The counterpoint in the article focuses on some of the failures at the Federal level in creating a useful performance measurement framework. The authors, Dennis Smith and Beryl Radin, have a largely academic debate which at times gets muddled in teasing out the nuances of performance "management" vs. "measurement". But generally speaking it's a good article with a few highlights that I took from it:

1. Cities like New York took decades getting to an effective performance management program so we shouldn't be too hard on cities that don't get it right away.
2. In the case of New York, moving from an input/output focused metrics to outcome based measures seem to be the turning point where measuring performance becomes effective.
3. Local efforts seem to have been more effective than national efforts in this space.

There's a lot more to the article and it must be purchased from JPAM, but it's an excellent piece.

The other is a series published by the Urban Institute called "Legislating for Results" and offers a framework not only for performance management within individual agencies, but also a more broad plan for managing an entire jurisdiction. What I liked about the series is that it's a practical, step-by-step guide to getting results from government (in contrast to more academic approaches in other pieces). One of the nuances that Urban employs in the series is using the term "information" synonymously with metrics/measures. In fact, what we're looking for from performance measures is actually nothing more than information, and the Urban plan emphasizes providing quality information to government decisions makers in the hope of improving outcomes. My main problem with the piece is that there are many moving parts and it incorporates budgeting, communicating to the media, etc. into the framework. As a whole the series is a little too much, but I see most of the value from the three pieces on getting the right information, getting quality information, and using that information for planning purposes.

From the two pieces I got that there are clearly failures in performance management, but also some successes. Additionally, even though some academics have been talking about performance measures and management for "some time", the approaches are under constant revision and dare I say, improving. The important thing is to continue to push for jurisdictions to use performance measures, and to assist those with existing performance management programs to constantly improve them.

Where Are the Performance Metrics in the Recovery Act?

About a month and a half ago, OMB released the Federal reporting requirements for the American Recovery and Reinvestment Act. It's taken me a little while to look through the requirements, and I had read that the focus was on job creation, but I was still a little surprised at the lack of Federal interest in other performance metrics. It pretty much boiled down to "# of jobs created" and a fairly standard set of financial data points entailing how the funds were spent. The Federal government has always been a laggard in requiring its own agencies to adopt strong performance management practices, but it didn't seem out of the question that in doling out hundreds of billions of dollars they would put together a few other metrics to make jurisdictions more accountable. At the very least it would have gotten towns, cities, and counties in the habit of reporting performance data, and possibly start some of them down the road of a more substantial performance management program. Lets hope that future rounds of government reporting requirements contain a more diverse set of measures, or at least let jurisdictions name their own. It's one step toward a more ingrained culture of government performance management.

Using Performance Metrics to Manage

In the final installment on a performance management framework, we'll look at using performance metrics and analysis in order to effectively manage agencies and their programs by using remediation and corrective actions. We've already covered the first and second steps, and will focus on the final two in this posting (all four are listed just below):

1. Report performance metric data on pre-defined schedule.

2. Analyze data for troubling trends or missed targets. Operationally research root cause(s) of problems.

3. Provide corrective action for metrics where target was missed or data is trending in wrong direction.

4. Repeat process for next reporting period.

Assuming that reliable metrics have been gathered and reported, and that data trends have been analyzed, an agency should have a good idea about where it stands operationally. The question then becomes how best to use the new information. For example, if I'm an FEMS agency that knows my emergency response times are trending in the wrong direction, and I know that the problem lies somewhere in my call center, what's the next step? (I'll answer this in a minute.) Given the diversity of agency missions that exist within any government, it would be impossible to give specific guidelines on how to fix troubling trends. For the purpose of our framework, however, the important thing is that the information is used to formulate some plan of action, and that the plan of action is clear, has timelines, and is documented for future consideration. Maintaining documentation of attempted corrective actions can be particularly helpful when there are several options for remediation. Each option can be tried over a given reporting period and performance data can be tracked. If there is some improvement in the numbers, the corrective action was likely effective; if there is little or no improvement according to the data, then another option on the list may be your best bet. The important thing in documenting the remediation is not to spin your wheels by proposing the same corrective action repeatedly and expecting a different outcome with each successive attempt.

Going back to our emergency response example in which we assume that the call center has been identified as the source for deteriorating response times, there may be multiple options to improve performance, including additional training, process re-engineering, etc. There may not be an obvious "best" remedial option, but the important thing is to pick one and continue to track response times. If additional training was implemented but the trend is not reversed in response times, then lack of training can be eliminated as both the cause of the problem as well as a corrective action. Continue the cycle of capturing and reporting the metrics, but with a different corrective action this time. Perhaps the response process is streamlined or adjusted and overall times improve. We then have some indication that our proposed solution had a positive effect on the operations that we are tracking. Through trial and error in the corrective action process, while concurrently continuing to track and report data, any agency can improve effectiveness in its operations.

The important takeaway from this exercise is that in order to demonstrate marked improvement in any public sector operation or program, all steps in the framework that we've outlined here (and in past postings) must be followed. Tracking and reporting metrics without proposing and documenting remediation in trouble spots won't bring about the change in negative outcomes that most agencies are seeking. The feedback loop of track-report-remediate-repeat is the fundamental process behind our performance management framework, and is essential in solving government inefficiencies.