Management Case Study Outcome-Based Performance Management: Christchurch City Council Drives Toward a Long-Term Strategic Horizon - For more ...

 
Management Case Study Outcome-Based Performance Management: Christchurch City Council Drives Toward a Long-Term Strategic Horizon - For more ...
Management Case Study
Outcome-Based Performance Management:
Christchurch City Council Drives Toward a
Long-Term Strategic Horizon

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Management Case Study Outcome-Based Performance Management: Christchurch City Council Drives Toward a Long-Term Strategic Horizon - For more ...
Outcome-Based Performance Management: Christchurch City Council                                                       API Case Study

             Outcome-Based Performance Management: Christchurch City
                   Council Drives Toward a Long-Term Strategic Horizon

                                                                By
                                               Bernard Marr* and James Creelman

                   Abstract: Many organisations, especially in the government sector, are aiming to
                   create more outcome-based performance management systems. The aim of these
                   systems is to prioritise strategic objectives, clearly articulate the intended impacts,
                   and to focus management attention onto the things that matter the most. This
                   management case study outlines how Christchurch City Council has put this into
                   practice using the Balanced Scorecard approach with strategy maps, long-term
                   community council plans, the Malcolm Baldrige framework, and an intranet-based
                   performance management software tool.

           Version: 8 September 2008                * corresponding author

           Bernard Marr is the Chief Executive and Director of Research at the Advanced Performance Institute. E-mail:
           bernard.marr@ap-institute.com
           James Creelman is a Fellow of the Advanced Performance Institute

           The Advanced Performance Institute (API) is a world-leading independent research and advisory
           organisation specialising in organisational performance. It provides expert knowledge, research, consulting
           and training to performance orientated companies, governments and not-for-profit organisations across the
           globe. For more reading material or information on how the API might be able to help your organisation please
           visit: www.ap-institute.com

           How to reference this case study:
           Marr, B. and Creelman, J. (2008) Outcome-Based Performance Management: Christchurch City Council
           Drives Toward a Long-Term Strategic Horizon, Management Case Study, The Advanced Performance
           Institute (www.ap-institute.com).

© 2008 Advanced Performance Institute, BWMC Ltd. (All rights reserved) www.ap-institute.com                                  Page 2
Management Case Study Outcome-Based Performance Management: Christchurch City Council Drives Toward a Long-Term Strategic Horizon - For more ...
Outcome-Based Performance Management: Christchurch City Council                                           API Case Study

     Outcome-Based Performance Management: Christchurch City Council
     Drives Toward a Long-Term Strategic Horizon

     Introduction
                                                              About Christchurch City Council
     New Zealand has one of the most advanced
                                                              Located on the east coast of New Zealand’s South
     approaches in the world for ensuring outcome-
                                                              Island, the City of Christchurch has a population of
     based public sector performance management.
                                                              about 350,000, making it the nation’s second
     Each of the nation’s 85 local authorities must create
                                                              biggest   city   after   Auckland.    Internationally
     Long Term Community Council Plans that set
                                                              recognized as ‘a garden city’ due to its expansive
     performance goals over a 10-year horizon. At the
                                                              parks and public gardens, Christchurch was
     core of these plans are a set of community
                                                              designated an International Safe Community in
     outcomes that are identified through an extensive,
                                                              October 2008 by the World Health Organization.
     heavily   participative   and    legally   mandated
                                                              This designation was based on criteria such as
     consultation programme with local residents and
                                                              accident prevention, road safety and crime
     other groups.
                                                              prevention. The region is technologically advanced
                                                              by international standards and is the main
     This management case study outlines how
                                                              distribution centre for the South Island and is also
     Christchurch City Council has implemented a
                                                              considered the gateway to the Antarctic. With two
     performance     management      system     to   better
                                                              universities and 16 research institutions it boasts a
     operationalise its long term-goals. Their approach
                                                              stable and well-educated workforce.
     includes a Strategy Map (which it calls ‘Plan on a
     Page’) that focuses on a critical few strategic
                                                              Christchurch City Council covers an area of 152,837
     objectives. This is supported by a comprehensive
                                                              hectares. This area includes highly urbanized city
     intranet-based system performance management
                                                              areas as well as extensive agriculture and areas of
     and measurement system called Horizon that
                                                              natural beauty, including Banks Peninsula. The
     collocates and tracks a large number of operating
                                                              Council has an annual budget of about M $670 and
     measures and improvement initiatives. Importantly,
                                                              about 2,700 employees. It has a fast growing
     the Horizon metrics etc aggregate up to the Plan on
                                                              population that increased by nearly 12% between
     the Page objectives. As a further mechanism for
                                                              1991 and 2001 and is projected to grow by another
     driving forward performance Christchurch City
                                                              16% by 2026.
     Council assesses performance to the criteria of the
     Malcolm Baldrige framework. Recently the council         Community Outcomes
     was a recipient of the New Zealand version of the
                                                              The New Zealand Local Government Act of 2002 is
     Baldrige award.
                                                              one of the most progressive approaches to public
                                                              sector performance management in the world. Peter
                                                              Ryan, Manager, Planning and Performance at

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Management Case Study Outcome-Based Performance Management: Christchurch City Council Drives Toward a Long-Term Strategic Horizon - For more ...
Outcome-Based Performance Management: Christchurch City Council                                             API Case Study

     Christchurch City Council, believes that it has made         •    Stock-take of existing services and funding
     best-practice planning and delivery mandatory for                 from the Council and government
     local government. For instance, as a legal                   •    agencies;
     requirement    each     authority    must,   and    in       •    Interviews with key stakeholders;
     consultation with residents and community groups,            •    Interviews and workshops with elected
     identify community outcomes, with a robust set of                 members;
     supporting metrics. Ryan who achieved significant            •    Research with key groups such as people
     successes in improving public sector performance                  with disabilities, Maori and Pacific people;
     in non-New Zealand agencies (in particular the City          •    Discussion papers developed with external
     of Brisbane, where he spearheaded the building                    stakeholders and reference groups;
     and implementation of a Balanced Scorecard that              •    Feedback on the 2004 to 2014 LTCCP and
     led to the city’s induction into the Balanced                     the Community Outcomes developed in
     Scorecard Hall of Fame) has been instrumental in                  2004;
     Christchurch     City     Council’s      performance
                                                                  •    Feedback from a specially designed
     management implementation.
                                                                       section on the Council’s website.

     Community outcomes are reviewed every six years.         Long-term Council Community Plan
     The present outcomes for Christchurch City
                                                              How the Christchurch City Council delivers these
     Council, which take the city to 2012, are a safe city;
                                                              community outcomes is described in great detail
     a city of people who value and protect the natural
                                                              within the Long-Term Council Community plan
     environment; a well-governed city; a prosperous
                                                              (LTCCP). This is the council’s ‘contract with the
     city; and a healthy city. These are shown with
                                                              community’ describing how it intends to deliver to
     supporting performance indicators in Figures 1.1
                                                              achieve the outcomes as well as the other long-term
     and 1.2. These outcome objectives were arrived at
                                                              goals of the city. “The shift from community
     through a number of participative processes that
                                                              outcomes to the LTCCP means a move from the
     were conducted during a year period, including:
                                                              conceptual to the highly concrete,” explains Ryan.
         •    Results from monitoring trends and other
                                                              The LTCCP covers a period of 10 consecutive
              information (more than 500 measures);
                                                              financial years, though it is reviewed every three
         •    Reviews of prior consultations (5000            years; the most recent preparation being in 2008 for
              submissions, 54 reports);                       the 2009-2019 period. This allows the Council to
         •    Reviews of reports and literature (300          take a long-term view while enabling it to adjust for
              reports);                                       constantly changing financial and other factors and
         •    Reviews of government strategies (187           keep its accounting and budgets up-to-date.
              strategies);
         •    Review of existing Council strategies and
              Community Board statements;

© 2008 Advanced Performance Institute, BWMC Ltd. (All rights reserved) www.ap-institute.com                           Page 4
Management Case Study Outcome-Based Performance Management: Christchurch City Council Drives Toward a Long-Term Strategic Horizon - For more ...
Outcome-Based Performance Management: Christchurch City Council                                                   API Case Study

     The Balanced Scorecard                                        coordinating       and     managing      its   strategy
     Given the size and multi-level complexity of its              implementation efforts. Christchurch City Council
     planning exercises, the council has introduced the            has a full suite of cascaded scorecards from the
     Balanced Scorecard as a core framework for                    executive management to team levels.

       Figure 1.1: Community Outcomes and Performance Indicators

                                          We will know we are using               Progress will be measured
       Community Outcome
                                          these key indicators                    Using these key indicators

       A Safe City
       We live free from crime,            • Rates of crime and injury            •   Hospital treatment for
       violence, abuse and injury. We        decline.                             •   accidents
       are safe at home and in the                                                •   Total offences
       community. Risks from hazards       • People feel safe at all times in     •   Notifications to CYF
       are managed and mitigated.            Christchurch.                        •   Perceptions of safety
                                                                                  •   Road casualty statistics
                                           • We have excellent safety
                                             networks, support people and
                                             services.

       A City of Inclusive and
       Diverse Communities
       Our diversity is seen, heard,       • Our city is built on strong          •   New Zealand Deprivation Index
       valued and celebrated. All            communities.                         •   Income gap between low and
       people feel a sense of belonging                                           •   high income earners
       and participate in the              • A diverse range of people feel       •   Perceptions of ethnic diversity
       community.                            at home in Christchurch.             •   Maori language speakers
                                                                                  •   Perceptions of quality of life
                                           • Everybody is able to                 •   Perceptions of community
                                             participate, particularly those      •   Support
                                             who are most vulnerable.

       A City of people who value and
       protect the natural environment
       Our lifestyles reflect our          • Everybody takes responsibility       • Tonnes of waste to landfill
       commitment to guardianship of         for their impact on the natural      • Liquid waste
       the natural environment inland        environment.                         • Total ground water use
       around Christchurch.                                                       • Renewable versus nonrenewable
                                           • Biodiversity is restored,              energy consumption
       We actively work to protect,          protected and enhanced.              • Waste recycling
       enhance and restore our                                                    • Recreational water quality
       environment for future              • We manage our city to                • Number and area of ecological
       generations.                          minimise damage to the                 heritage sites
                                             environment.

© 2008 Advanced Performance Institute, BWMC Ltd. (All rights reserved) www.ap-institute.com                                  Page 5
Outcome-Based Performance Management: Christchurch City Council                                              API Case Study

     However, Christchurch City Council does not use            compliance and of a report card. It doesn’t do
     the term Balanced Scorecard or indeed Strategy             justice to the aim of the methodology.”
     Map. They are simply known as ‘Plan on a Page’.
     According to Ryan this was a deliberate ploy to help       Plan on a Page
     secure buy-in: “The problem is that the term               Figure 2 shows the Plan on a Page for the
     Balanced Scorecard conjures up an image of                 Executive Team. As befitting the priorities of a

       Figure 1.2: Community Outcomes and Performance Indicators

                                           We will know we are using Progress will be measured
       Community Outcome
                                           these key indicators      Using these key indicators

       A well governed city

       Our values and ideas are           • Everybody actively participates   • Confidence in council decision-
       reflected in the actions of our      in public decision-making.          making
       decision-makers. Our                                                   • Representation on school
       decision-makers manage             • Everybody feels represented by      boards of trustees
       public funds responsibly,            their decision-makers.            • Census response rates
       respond to current needs and                                           • Voter turnout at council elections
       plan for the future.               • Our decision-makers plan for a    • Voter turnout at general
                                            sustainable Christchurch.           Elections

       A prosperous city
       We have a strong economy that is • Christchurch has a strong,          • Economic Activity Index
       based on a range of successful      healthy economy.                   • Full and part time employment
       and innovative businesses.                                               rates
                                         • Standards of living improve for    • Unemployment rate
       We value sustainable wealth         everyone.                          • Personal, family and household
       creation, invest in ourselves and                                        income
       in our future.                    • Our economic development           • Volume of commercial waste
                                           prioritizes future well-being.     • Recycling

       A healthy city

       We live long, healthy and          • We all have access to affordable • Self reported health status
       Happy lives.                         health services that meet our    • Life expectancy
                                            needs.                           • Frequency of physical activity
                                                                             • Type 2 diabetes rates
                                          • More people in Christchurch live • Barriers to accessing GPs
                                            healthy lifestyles.              • Number of days exceeding air
                                                                               quality guidelines
                                          • Our city environment supports
                                            the health of the community.

© 2008 Advanced Performance Institute, BWMC Ltd. (All rights reserved) www.ap-institute.com                          Page 6
Outcome-Based Performance Management: Christchurch City Council                                             API Case Study

                                       Figure 2: Plan on a Page – Executive Team

     public sector organization, the top perspective is        Finance:            Deliver services and projects to
     customer rather than financial, as the ultimate goal      budget
     is to deliver value to the community rather than          Process:            ‘Create the long-term council
     shareholders. In the Appendix we show the key             community plan for 2009-19’, plus ‘Instill customer-
     metrics, targets and initiatives (or Balanced             centric processes’
     Scorecard that support the Executive Team Plan on         People: Implement        organizational    workforce
     the Page. Note that CEO Tony Marryatt is principles       planning (‘right people, right place, right time’) and
     owner of the measures.                                    ‘Increase   staff    engagement’     (measured     via
                                                               international Hewitt methodology).
     Common Objectives
     Each Plan on a Page, from the executive team              Figures 3 and 4 show the Plan on the Page
     through general managers and down into units,             Strategy Maps for City Environment and the
     carry a core of ‘vital few’ objectives (with supporting   Strategy and Planning Group.
     measures and targets). These align all the
     scorecard levels. These objectives are:                   As examples of common measures and targets the
                                                               customer objective ‘deliver long term plan levels of
     Customer:          Deliver long term plan levels of       service’ is measured by the overall percentage of
     service and projects                                      levels of service being achieved.

© 2008 Advanced Performance Institute, BWMC Ltd. (All rights reserved) www.ap-institute.com                             Page 7
Outcome-Based Performance Management: Christchurch City Council                               API Case Study

                                    Figure 3: Plan on a Page – City Environment

                                  Figure 4: Plan on a Page – Strategy and Planning Group

© 2008 Advanced Performance Institute, BWMC Ltd. (All rights reserved) www.ap-institute.com          Page 8
Outcome-Based Performance Management: Christchurch City Council                                                  API Case Study

     At the organizational level, this target means all the   service’ objective, this means the report summary
     levels of service for the organization. In a             provides a single result against the target (say 83%
     department, it will mean those levels of service for     of levels of service achieved) but it also means
     which the department is responsible. ”This achieves      seeing a list of any services that are not on track,
     alignment,” claims Ryan. “These half dozen ‘vital        who is running them and what that officer
     few’ measures and targets tie and align all the          recommends going forward.” It’s summary reporting
     scorecards by operating as a cascade.”                   at the strategic level and exception based reporting
     Ryan stresses that as well as viewing the vital few      at operational level,” explains Ryan.
     metrics leaders must be able to drill down and see       Figure 5 is a screenshot of the Horizon online front-
     performance to metrics and targets to many               page, which provides employees with a navigational
     performance dimensions. “At any one time we are          aid for going to any of the organizational scorecards
     tracking perhaps 250 levels of service across such       and viewing performance to any of the perspectives
     diverse services as libraries, water, child care,        or indeed individual performance areas. Using City
     economic development or roading,” says Ryan. “We         Environment as an illustration, Figure 6 provides an
     are also tracking maybe a thousand capital projects      overview of actual performance against designated
     around the city.” He continues that executives           targets, with the responsible manager clearly
     clearly need a summary in their scorecard but they       identified.
     also need to know where to intervene where a
     contributing factor is driving an objective off track.   Figure 7 provides information on which people are
                                                              assisting with the delivery of a particular initiative.
     Horizon Scorecard                                        “It is not possible for the accountable manager to
     This is enabled though Horizon, which is an in-          throw the light on the measure without looking at
     house developed software system that contains the        how the supporting initiatives are performing,”
     city’s comprehensive collection of metrics, targets      explains Ryan.
     and initiatives “Horizon combines the key features
     of an executive information system with project          The system also enables the loading and tracking of
     management and value analysis, providing a clear         the individual's performance plan for the year and
     line of sight from strategy to operational tasks,”       for monitoring how an individual is performing any
     Ryan says. Moreover, it is fully transparent and can     point in time. Accountability for measures and their
     be accessed by anyone in the organization. “Such         supporting initiatives is therefore very clear and
     openness helps create a performance-oriented             cascaded to individuals on a methodical basis.
     culture as everyone can see how everyone else is
     performing.”                                             Incentive Compensation
                                                              Unusually      for    a     public   sector    organization
     Horizon provides both the summary view against           Christchurch         City    Council    uses      incentive
     the Plan on a Page targets, as well as any               compensation as a key mechanism for ensuring that
     exceptions. In the case of the ‘deliver levels of        people focus in performance to scorecard goals.

© 2008 Advanced Performance Institute, BWMC Ltd. (All rights reserved) www.ap-institute.com                                 Page 9
Outcome-Based Performance Management: Christchurch City Council                                              API Case Study

                                               Figure 5: Horizon Screenshot

     Introduced in July 2007, fully 450 people (covering         The compensation link works this way.            The
     all the management layers and forming about 1/8 of          performance assessment is weighted to highlight
     the workforce) have the major portion of their              the council’s scorecard priorities. Therefore in 2007
     remuneration tied to scorecard results.                     35% of the bonus was dependent on performance

                                           Figure 6: Performance Overview - Horizon

© 2008 Advanced Performance Institute, BWMC Ltd. (All rights reserved) www.ap-institute.com                          Page 10
Outcome-Based Performance Management: Christchurch City Council                                                 API Case Study

     to the customer perspective, 20% was allocated to             management reporting is that it provides either too
     the financial perspective, people 15% and process             little detail by being strategic or too much detail by
     10%. The remaining 20% of the bonus is linked to              being operational,” says Ryan. “By focusing on the
     individual development targets. “This review and              ‘vital few’ objectives and their results in our
     compensation link is based on performance to                  scorecards, we have sharpened up reporting while
     clearly defined measures and targets,” says Ryan.             keeping it strategic. He continues that by adding
     “It is a lot more scientific that the ad-hoc discussion       operational detail around those objectives only
     that often informs public sector performance                  where action is required, the council has reduced
     reviews.”                                                     report volume while still providing the right level of
                                                                   detail to make fixes possible.
     Horizon Update
     The online Horizon tool is updated monthly (by the            Measures of Success
     aforementioned 450 accountable managers). This                With Christchurch City Council inculcating such
     update triggers a report for each Plan on a Page /            robust     and      comprehensive       performance
     Horizon scorecard. A high level one page overview             management and measurement systems the million
     is supplied for each of the four perspectives,                dollar question is how successful is it proving to be
     followed by a detailed list of exceptions (results            in driving up performance. As an indication of their
     flagged as amber or red). When exceptions are                 successes, annual residents’ surveys show that
     signaled the responsible manager must outline                 70% of Christchurch residents are “very satisfied”
     options and a next-step solution, in addition to any          with Christchurch as a place to work, live and play,
     explanation of performance variance.                          and also with the way the city looks and feels.
                                                                   Customer satisfaction with service at first point of
     “The most common complaint leveled at any form of             contact is consistently over 95%.       Moreover, in

                                             Figure 7: Initiative Tracking - Horizon

© 2008 Advanced Performance Institute, BWMC Ltd. (All rights reserved) www.ap-institute.com                             Page 11
Outcome-Based Performance Management: Christchurch City Council                                             API Case Study

     delivering these results the city council has           unusual for an organization to receive this award in
     maintained a Standard and Poors AA+ rating. This        its first year of entry. However the council has
     shows its commitment to return an annual operating      earned the accolade. It is a highly competent,
     surplus each year and manage its level of debt.         mature organization with many strengths, including
                                                             sophisticated leadership and a clear focus on
     Malcolm Baldrige Framework                              customer        interests.     The    development    of
     As another powerful indicator of the success of the     organization-wide            competencies,    including
     organization,   Christchurch    City    Council    is   advanced analysis, integration and learning and
     recognized as an exemplary user of the Malcolm          alignment, indicates organizational ability which is
     Baldrige   Model.   Launched     in    1987   as   a    sought after by higher performing organisations
     methodology with which to improve the performance       internationally.”
     of US companies, the Baldrige model assesses
     performance to seven performance categories:            Business Results
     Leadership, Strategic Planning, Customer and            ‘Business Results’ is the seventh and by far the
     Market Focus, Information and Analysis, Human           most important set of criteria in the Malcolm
     Resource Focus, Process Management and                  Baldrige framework focusing on service, customer
     Results. Such has been the model’s success that it      and financial results. Working backwards from this
     has now spawned international awards, for instance      point    will    provide      snapshot   examples    of
     the Performance Excellence Study Award (PESA) in        performance management within Christchurch City
     New Zealand.                                            Council, and so gain an insight into what the
                                                             independent assessors saw, as well as an
     PESA is open to organizations from the public and       understanding what drives the organization’s
     private and there are three categories to the award     business results.
     (health/education, private sector and public sector)
     with entries being independently audited against the    Process Management
     Baldrige quality criteria. Many entries are posted      We start with criteria six, Process Management. A
     each year by large health, defence, manufacturing       primary focus here is managing the organization’s
     and other organizations. However in 2006 only one       key value creation processes. These are the high
     organization in New Zealand (in any category) was       level processes that are essential to delivery of the
     assessed as meeting the strict criteria of the          LTCCP. Key value processes are determined by the
     Baldrige framework – Christchurch City Council.         Executive Team and Business Excellence Team
     The council participated in the award to gain an        (comprising 45 people who lead improvement plans
     external assessment of how the organization is          under the seven Baldrige categories).
     managed. At the time of announcing the award
     PESA (the organizers of the award) spokesman            Human Resources
     Errol Slyfield says that Christchurch City Council      As an example for criteria five (Human Resources)
     can be justifiably proud of its achievements: “It is    in 2005 the council introduced a new methodology

© 2008 Advanced Performance Institute, BWMC Ltd. (All rights reserved) www.ap-institute.com                        Page 12
Outcome-Based Performance Management: Christchurch City Council                                               API Case Study

     used internationally to measure staff engagement         Balanced Scorecard work well together,” says
     and satisfaction. This looks at environment, health      Ryan. “The first is a macro-level assessment of how
     and safety, customer focus and communications. As        an organization is managed, an overall health check
     cited, improving staff engagement is an objective        that is pretty stringent. If something in our
     within each organizational Plan on a Page.               management is not working well the independent
                                                              Business Excellence assessment will pick this up
     Measurement, Analysis and Knowledge                      and provide feedback, which can then be built into
     Management                                               the   scorecard     for     action.   The      two   are
     The Plan on a Page / Balanced Scorecard is itself a      complementary if used this way to create a great
     powerful example of Christchurch City Council’s          feedback loop.”
     delivery to Baldrige criteria four (Measurement,
     Analysis and Knowledge Management).                      As an example of an improvement initative that has
                                                              come out of the Baldrige assessment process, the
     Customer and Market Focus                                council has launched a ‘better financial reporting’
     As an example of criteria three, Customer and            programme that includes a revamp of budgeting
     Market Focus, this council has developed a new           and forecasting processes. It has become an
     approach to resident survey methodology in               objective in the Corporate Services scorecard.
     conjunction with international market research
     company, AC Neilsen.                                     Strategic Planning
                                                              Baldrige criteria 2 is strategic planning. As stressed
     The survey tests resident satisfaction across the full   throughout this case study, Christchurch City
     range of services twice each year, probing into the      Council has a robust strategic planning process.
     root cause of very high or very low satisfaction         The strategy development and deployment process
     responses.                                               ensures close alignment between short term
                                                              operational   plans       with   longer-term    strategic
     Note how ‘delight customers’ is an objective within      objectives and outcomes for the city.
     the executive team’s strategy map and, as cited,
     instill customer-centric processes is an objective in    Leadership
     every Christchurch City Council Strategy Map.            Criteria one of the Baldrige framework is
     That there is a close alignment between                  Leadership. It is of course the quality of leadership
     Christchurch’s performance focus for the Baldrige        that transforms any performance management
     criteria (which is commonly known as Business            framework from a nice idea into a practical solution
     Excellence in New Zealand) and for the scorecard is      that delivers change. Ryan says that the leadership
     not coincidental, as Ryan explains.                      of the council has been instrumental in driving
                                                              performance success, and is crucial for succeeding
     “Unlike a lot of management systems the Malcolm          with the Balanced Scorecard.
     Baldrige business excellence model and the

© 2008 Advanced Performance Institute, BWMC Ltd. (All rights reserved) www.ap-institute.com                           Page 13
Outcome-Based Performance Management: Christchurch City Council                                           API Case Study

     Scorecard Success Factors                                put another way, where it is difficult to fail it is
     “There’s no point even thinking about putting a          equally difficult to succeed, which often leads to
     scorecard in place if you do not have the CEO on         inertia and an embracement of the status quo.”
     board,” he comments. “Having a committed CFO             Overcoming these performance barriers, he says, is
     and head of HR is also critical as they have a           usually through the appointment of a new CEO with
     hugely important role in creating an environment         a clear performance agenda. “In this scenario those
     where people are encouraged to look at strategy          inert managers who favour the stays quo should
     using non-financial as well as financial information.    realize that they are probably standing on a burning
     These individuals, plus the executive team, must be      platform.”
     actively looking for a game plan and a means to
     implement it, if the scorecard is to succeed.”           Complexity
                                                              With regard to complexity he says that local
     He continues that it is also important that an           authorities have to successfully deliver a lot of
     organization has reached a stage of maturity where       services that often conflict, such as protecting the
     it is ready for the scorecard. “For instance the         environment while needing to grow the economy by
     finance function must be ready to look at more than      encouraging development, which makes it difficult to
     the financials and the HR department must be ready       prioritize performance. “It’s not like a company
     to think about more than administrative or personnel     where you’re pitching for profit, which has a hard
     functions,” he says.                                     edge to it but is easy enough to understand as a
                                                              prime directive,” he comments. “Some public sector
     Key Performance Management Challenges                    organizations – local government being a notable
     More broadly, and looking across his work for            example - have so many things that they’re seeking
     Christchurch, Brisbane and other public sector           to deliver that they end up not knowing what they’re
     organizations, Ryan states that there are a number       supposed to do first.”
     of key challenges in putting in place effective public
     sector performance management and measurement            This ‘not knowing’ often leads to the creation of
     frameworks. He categorizes these as tradition and        enormously complex Balanced Scorecards. “Too
     complexity.                                              often in the public sector we see ‘spaghetti and
                                                              meatballs’ Strategy Maps that try to capture
     Tradition                                                everything the organization has to do,” says Ryan.
     “Tradition can be a barrier because many in senior       “Such maps and accompanying scorecards become
     positions might not see the point of expending the       difficult to manage, confuse the organization and
     effort to significantly improve performance,” he         invariably run out steam.”
     says. “Few public sector organizations fail in the
     commercial sense so there is not always a                Ryan states that a successful public sector
     compelling requirement to figure out how to              scorecard should not have too many objectives
     significantly improve performance,” he says. “To         (Christchurch averages 12 or less for each of Plan

© 2008 Advanced Performance Institute, BWMC Ltd. (All rights reserved) www.ap-institute.com                      Page 14
Outcome-Based Performance Management: Christchurch City Council                                                 API Case Study

     on a Page). Moreover, in creating the scorecard             and effect arrows all over them when we
     managers should not be too focused on excessively           communicate the maps.”
     documenting cause and effect relationships. “There
     is usually a many-to-many relationship in our               Ryan concludes that there is a point in strategy
     strategies, which makes the documenting of cause            development where a balance must be struck
     and effect problematic,” he says.                           between the academic correctness of the game
                                                                 plan and the ability to communicate that plan.
     He provides the relationship between staff                  ”Finding that point – where the strategy has integrity
     engagement and service delivery as one example.             but is also appealing and comprehensible to staff –
     “This relationship alone could generate twenty              is what makes for a good implementation,” he says.
     cause and effect arrows on the Strategy Map, which
     would be confusing,” he says. “So we test for these                         www.ap-institute.com
                                                                                 For more case studies, reports and
     cause and effect relationships when building the                            articles visit www.ap-institute.com
     scorecards, but we don’t plaster dozens of cause

     Endnotes, References & Further Reading

                        Marr, Bernard (2010), “The Intelligent Company: Five Steps to Success with Evidence-Based
                        Management”, Wiley, Oxford.

                        Marr, Bernard (2009), Managing and Delivering Performance: How Government, Public Sector
                        and Not-for-profit Organizations can Measure and Manage what Really Matters, Butterworth-
                        Heinemann, Oxford.

                        Marr, Bernard (2006), “Strategic Performance Management”, Butterworth-Heinemann, Oxford

     The API resources library:
     Our Resource and Research Library offers a selection of relevant
     downloads and links to books, articles and case studies. These have
     been selected as useful information sources for further reading and to
     illustrate best practice and leading thinking.

     To read more just click: http://www.ap-institute.com/resources.htm

© 2008 Advanced Performance Institute, BWMC Ltd. (All rights reserved) www.ap-institute.com                            Page 15
Outcome-Based Performance Management: Christchurch City Council                               API Case Study

     Appendix: Illustrative Example of Scorecard

© 2008 Advanced Performance Institute, BWMC Ltd. (All rights reserved) www.ap-institute.com         Page 16
Outcome-Based Performance Management: Christchurch City Council                               API Case Study

© 2008 Advanced Performance Institute, BWMC Ltd. (All rights reserved) www.ap-institute.com         Page 17
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