The Operator's Manual - An Update of Chapter 2: Performance

The IBM Center is releasing an update to its 2009 “The Operator’s Manual for the New Administration” for the use of new executives in the federal government. This updated chapter reflects statutory changes since 2009 and provides insights on how executives can improve performance in their agencies’ programs.

MEMORANDUM FOR THE HEADS OF EXECUTIVE DEPARTMENTS AND AGENCIES

SUBJECT: Performance

One of the many myths about government that you have probably encountered is that “government doesn’t have a bottom line.” By this, folks usually mean that government doesn’t make a profit.  You do have a bottom line and will have to manage to it. However, your bottom line is different; it’s the results of your organization. Former government executive Chris Wye writes, “Political leaders are triply vested—as American citizens, appointed public servants, and members of an incumbent political party—with bottom line responsibility for the performance of the policies, programs, and activities entrusted to their care.”

Assess Your Performance Framework.  Harvard University’s Robert Behn describes a performance framework as a way of thinking about the leadership challenge of producing specific results in organizations based on a collection of general, cause-and-effect principles, supported by some operational hints for implementing these principles. Much of your first year in office should be devoted to understanding the performance framework of your organization so that you can track progress on your organization’s performance and results. You won’t be starting from scratch.

Your predecessors also tracked performance. Your job is now to make sure that the information currently being collected by your organization is useful to you in both your decision-making capacity and performance manager role. Due to the numerous demands on your time, you should select three to five priority areas on which you will personally monitor your organization’s performance. You should place your emphasis on your most important organizational goals. However, your organization will also be addressing a wider range of goals, many of which will not require your attention but still must be done.

Under the Government Performance and Results Act, enacted in 1993, each federal agency is required to develop both multi-year strategic and annual performance plans that include agency goals and measures.  The recently revised Government Performance and Results Act requires each federal agency to revise its multi-year strategic plan during 2013 and update their existing priority goals.  These will be due to Congress in early 2014.  It also requires you to designate a chief operating officer – oftentimes this is your deputy -- to help you lead and oversee your agency’s performance and results. 

One of your first requests to your staff should be to review your organization’s existing strategic plan. Over the next year, you may need to revise the strategic plan to link to the president’s priorities. You will also benefit from the experience your staff has gained over the last decade in both strategic planning and performance management. Technology has also enhanced organizational capability to use performance management to track organizational progress toward agency goals as reflected in the organization’s strategic plan.

Implement Your Performance Framework.  Behn describes three components of performance management that you should put in place to ratchet up your organization’s performance.  It should take into account the governmentwide performance framework developed by the Office of Management and Budget to implement the new requirements of the Results Act.  Behn’s components are: 

• Create or enhance the performance framework: What would it mean to do a better job?
• Drive performance improvement: How can you mobilize your people?
• Learn to enhance performance: How will your organizatio change to do better?

Behn offers “better practices” for you to use in implementing your organizational performance framework.  Engage your chief operating officer in spearheading these better practices.  Expect to devote some of your time and effort in participating in regular data-driven progress reviews of your agency’s priority goals and strategic objectives.  This would likely happen at least quarterly. You should:

• Clarify and articulate your organization’s mission. Behn recommends that you “proclaim—clearly and frequently—what the organization is trying to accomplish.” A key to your success will be ensuring that you “get the mission right” and then articulate it.
• Identify your organization’s most consequential performance deficit. Your task here, as described by Behn, is to “determine what key failure is keeping the organization from achieving its mission.”
• Establish a specific performance target. This involves specifying what new level of success you desire for your organization.
• Clarify the link between target and mission. This involves clearly articulating how meeting the performance targets you establish will help your organization accomplish its mission.

Use Performance Information.  After your performance framework is in place and you are comfortable with the information your organization is producing, you will find that you can use performance information in many ways. The Urban Institute’s Harry Hatry, Elaine Morley, and Shelli Rossman, along with former University of Southern California professor Joseph Wholey, identify four ways in which you can use performance information in your organization:

• Trigger corrective action. In your managerial role, you can use the information collected to make changes in your organization’s performance to eliminate performance deficits.
• Motivate your employees. As discussed in the Memo on People, one of your key  responsibilities is motivating and rewarding your employees. Performance management will tell you which of your managers are exceeding the performance targets you established and should be recognized and rewarded.
• Plan and budget. As discussed in the Memo on Money, one of your major challenges will be using performance information in the budget process to allocate resources within your organization.
• Identify and encourage “best practices.” Based on the information you collect, you will begin to see that some components of your organization might be performing better than others. This will give you the opportunity to share the best practices of high-performing components with other components that might not be performing as well.

There is an old saying that “if you don’t know where you are going, you will never get there.” This is truly the case of managing in government. If you do not have a performance framework (which includes your goals and objectives) in place, you will not be able to track where you are heading and agency progress toward achievement of your goals. In order to track agency progress, you will need to either put a performance management system in place or use the system now in place.

Relevant Reports from the IBM Center for The Business of Government Since 2008

Five Methods for Measuring Unobserved Events:  A Case Study of Federal Law Enforcement, John Whitley (2012)

This report describes the challenges of measuring “unobserved” events – such as tax cheating, drug smuggling, or illegal immigration.  It offers five statistical methods for measuring these kinds of events and shows how this can then be used to track progress, set strategy, and allocate resources.

From Data to Decisions: Building an Analytics Culture, Partnership for Public Service (2012)

The goal of this report is to provide practical approaches, practices or strategies that agency program managers can apply. By sharing compelling stories of how agencies are developing, growing and sustaining their analytics and performance-management approaches, the report sheds light on key steps and processes that are transferable to other agencies.

From Data to Decisions: The Power of Analytics, Partnership for Public Service (2011)

A number of federal agencies were surveyed to identify best practices in data analytics and performance management.  This report points to the importance of analytics in measuring agency performance.  The authors emphasize that data collection is only the first step in turning data into usable information — moving from data points to decision points.

A Guide to Data-Driven Performance Reviews, Harry Hatry, Elizabeth Davies (2011)

This report examines federal agencies that are using data-driven performance reviews to improve agency effectiveness and efficiency.  It draws from practices of agencies, including state and local governments.  It serves as a “how to” guide for setting up and running data-driven performance reviews.  It also lays out who needs to be involved, how to organize the meetings, what kinds of performance information should be collected, how to run the meetings, and how to follow up afterwards.

Performance Reporting: Insights from International Practice, Richard Boyle (2009)

In this report, Richard Boyle provides cross-national comparative data on good and bad practices in performance reporting, shares good practices across these countries, assesses the state of performance reporting, and provides directly relevant assistance to program managers in both central and line agencies

Moving Toward Outcome-Oriented Performance Measurement Systems, Dr. Kathryn Kloby, Dr. Kathe Callahan (2009)

This report provides examples of outcome-oriented performance measurement systems in place around the country, describes findings from these case studies, and offers practical recommendations on how to develop useful outcome-oriented measurement systems that other communities - sponsored by either government or community indicator projects - can act.

Performance Management Recommendations for the New Administration, Shelley H. Metzenbaum (2009)

Dr. Metzenbaum’s premise is that performance information should be used to improve performance, not just report performance for accountability purposes. She offers a series of recommendations to the President, the Office of Management and Budget, new agency heads, and the Performance Improvement Council on ways to make performance information a vital element of success.  Many of these recommendations were incorporated into the 2011 amendments to the GPRA law or into OMB guidance.

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Read about our efforts to update the Operator's Manual.

Read our other Operator's Manual Blog,an update of Chapter One: Leadership.

Read our update of Chapter Four: Money.

Read our update of Chapter Five: Contracting.

Read our update of Chapter Six: Technology.

Read our update of Chapter Seven: Innovation.

Read our update of Chapter Eight: Collaboration.

Read the original chapters of the Operator's Manual.

Read materials related to Governing in the Next Four Years.