Measure What Matters:
5 Best Practices from Performance Management Leaders
August 8, 2018 – Danny Fuchs
Public sector performance management has long held the promise of improving efficiency, productivity, and community outcomes. Many jurisdictions have explored or taken steps towards implementing performance management programs, yet few have been able to claim success. So how can you drive better results?
In this post, industry-leading consulting firm HR&A brings their 40 years of experience setting organizations up for success in the field of public sector performance management to offer expertise in how you can select the right KPIs and structure performance metrics that matter.
What gets measured gets done. This favorite adage of performance managers keeps organizations focused on results and the efficient use of scarce resources, particularly in state and local government.
But how do you know if your agency, city, or state is measuring the right things? As Michael Lewis chronicles in Moneyball, the popular book and movie on how data and analytics contributed to the remarkable rise of the Oakland Athletics baseball team, while certain metrics seem like the right ones to inform your decision making, they may not accurately predict the outcomes you hope to achieve. For the A’s it was getting on base and scoring runs; for government the picture is a bit more complicated.
Over the past four decades, we have worked with dozens of municipal governments across the United States, often focusing on setting – or re-setting – the metrics that they use to measure their performance. We’ve partnered with them to improve outcomes for the public and develop new means of managing towards those outcomes.
The five best practices described here have emerged from that work and are focused on strategic performance management. Although some of these lessons also apply to the nitty gritty of day-to-day operational efficiencies, they are focused more on how to set the highest level performance metrics to ensure that governments achieve the policy outcomes they seek.
1. Build performance indicators aligned with your most important strategic goals.
In 2017, the City of Boston released fourteen metrics to measure the progress on its top-line policy goals and targets set in Imagine Boston 2030, the city’s comprehensive plan. These publicly-available indicators, measured annually, show how initiatives from the plan are making a difference in the lives of Bostonians.
To drive inclusive economic growth, the City set a goal to create higher paying jobs and tracked progress towards this interim target by measuring the growth of wages in low-wage occupations and the share of households earning below a household sustaining income.
For Carbon Free Boston, a long-term initiative to reduce the City’s contribution to climate change by becoming carbon neutral by 2050, the City set interim targets to reduce emissions by half (25% by 2020 and half by 2030) relative to its 2005 baseline.
By focusing on metrics driven by a citywide strategic planning effort, Boston is able to better understand how specific services, investments, and policies contribute to desired outcomes. They’re taking performance management to the next level, not just optimizing their operations. By focusing on complex, triple-bottom-line governance that prioritizes economic, environmental, and social outcomes, they are building a framework for success.
2. Measure your impact on people
Government is in the business of progress for the people. Its performance metrics, therefore, should closely align to desired outcomes for people. A city evaluating an open space master plan may measure the total amount of open space created in the plan, or the percentage of growth in open space area before and after the master plan’s implementation, but it can be hard for people to relate to those metrics.
A thoughtful, people-centered metric, however, would consider resident and worker access to quality open space, and may segment accessibility by demographic groups. The city might measure the number or percentage of senior citizens or elementary school children residing within a five-minute walking distance of city parkland, for example. The city might further consider the change in parkland area accessible to those with disabilities or living below the poverty line, or the change in hours of free, public programming administered in parks, or even the number of people living within walking distance of an improved open space. Initiatives in Philadelphia, New York, and other cities are focused on these types of more nuanced metrics, often emanating from policies of promoting equitable growth in cities.
Methodologies grounded in people-centered metrics enable government officials to measure how policies and plans serve the needs, interests, and activities of constituents. They can also have the benefit of building additional public support for government initiatives as more people understand how government actions impact them as individuals and members of communities.
3. Seek to tie outcomes to inputs
It may seem obvious that in order to manage to performance metrics you need to know which have the biggest impact on outputs and outcomes. Sometimes, the challenge is that the linkage between inputs and outputs is not necessarily proven. Indeed, that linkage can be quite tenuous.
Take public expenditures. While it may be possible to link certain municipal investments directly to outcomes – as with our example of park access – it can often be difficult to tie changes in spending levels to outcomes for the people. Investments in roadway improvements can generally be linked to the physical condition of streets – a common operational performance metric – but it’s harder to tie levels of spending to street safety. Additional factors that are difficult to measure, such as roadway design and speed limits, often have a considerable effect.
Strategic performance management towards policy goals that improve lives should be based on an understanding of – and rigorous tracking of – municipal actions that are directly tied to those outcomes. In other words, you probably have the right key performance indicators (“KPI’s”) if they consistently point to specific actions that affect desired outcomes.Track not only how much money is being spent on roadway resurfacing or reconstruction, or how many miles are completed each year, but also how much incremental money is being spent specifically on new roadway designs to improve safety, and how many of those projects are implemented each year.
4. Design your performance management system collaboratively and iterate over time
The best performance management systems are designed by staff from multiple divisions, of varying levels of seniority, and often with independent outside advisors.
Multiple staff levels are particularly useful because the most senior executives may have the clearest sense of policy goals, but more junior staff often have the best sense of data sources and processes that inform the validity of performance metrics.
In larger agencies, we have also found that incorporating perspectives from multiple divisions is essential: the office of the executive may lead, but budget divisions, IT divisions, policy or planning divisions, and operational divisions each have perspectives that make stronger performance management systems and ensure that leadership has broad buy-in to new management priorities and the operational or organizational changes that are necessary to achieve those outcomes. Organizational change management is often a prerequisite for the successful implementation of new performance metrics, but that’s another blog post all together.
Reaching outside your agency can also often be helpful. Sometimes talking with others in your city or state for a ‘fresh eyes’ peer review can be helpful; university partnerships may help with additional research; independent professional consultants can bring additional experience, expertise, and help foster consensus.
Independent of the process of designing your metrics, it’s important to recognize that metrics sometimes need to change over time. Be clear with directions but remain flexible and open to alternatives. It’s most helpful to set specific metrics and stick with them to create time-series data that can be evaluated over many years. Yet it’s also important to recognize that data sources or processing methods can improve, making possible new metrics that better measure policy outcomes. Nonetheless, selecting metrics that can be measured at least once per year – if not more regularly - is important for changing city actions responsively.
5. Don’t reinvent the wheel
In recent years, a vast wealth of knowledge and best practices on performance management in government has been made available by exceptional researchers and practitioners so that local governments don't have to reinvent the wheel. Data-Smart City Solutions from the Harvard Kennedy School’s Ash Center for Democratic Governance and Innovation is a valuable place to start, as is What Works Cities by Bloomberg Philanthropies. Of course, OpenGov’s operational performance tools also offer a broad range of precedents that also allow governments to contextualize their metrics against peers. Whatever your area of practice may be, you don’t need to reinvent the wheel. Research and integrate best practices both from within and outside your organization.
Bonus: Measure people’s perceptions in addition to actual performance
Following the 2013 New York City mayoral election, a consortium of civic organizations launched an innovative civic engagement project called Talking Transition to transform the normally opaque, closed-door process of mayoral transition into an opportunity for New Yorkers to make their voices heard. Combining a range of public engagement events, neighborhood canvasses, and intuitive digital surveys, the program attracted nearly 70,000 respondents, representing one of the largest public opinion surveys in New York City’s history.
The project complemented administrative data about policy challenges with data regarding public perceptions of those challenges. While housing affordability was a known concern and a central campaign issue for candidate Bill de Blasio, Talking Transition revealed an overwhelming consensus among residents of the issue’s priority. More than two thirds of residents across the city, and the majority of residents in every single neighborhood neighborhood of the city described housing affordability as a major challenge or getting worse. This public sentiment complemented administrative data to provide Mayor de Blasio with a bold mandate to effect policy change.
Talking Transition reminds us of the imperative of active engagement with public sentiment – in the formation of a policy agenda, as well as in the development and refinement of performance metrics. An affordable housing official, for example, might be inclined to focus on typical indicators of affordable housing supply, such as the number of affordable units, whereas a survey of public sentiment might suggest a focus on indicators of housing condition, such as the percent of designated affordable units in need of a major repair.
Ultimately, achieving outcomes for constituents requires holistic thinking about how goals, targets, and metrics align with public sentiment. Measuring is part of the battle, managing is the other side, but communicating and building trust is government is the third leg of the stool.
Want to learn more? Join our upcoming webinar on August 23, 2018 with Danny Fuchs, Managing Partner of HR&A Advisors, and Charlie Francis, Director of Government Finance Solutions at OpenGov and former Treasurer at City of Sausalito, CA, to learn how you can drive a thriving performance management program at your organization. Register here!
About the Author:
Danny Fuchs is the Managing Partner of the New York office of HR&A Advisors, Inc., an industry-leading economic development and public policy consulting firm. Until 2017, he served as the Director of Capital Planning for the City of New York and Founding Director of the Capital Planning Division of the Department of City Planning, where he was responsible for integrating new technologies and data-driven approaches into the City’s capital planning and budget-making process across nearly two dozen agencies. As part of his portfolio, he focused on tying the City’s $95.85 billion Ten-Year Capital Strategy to the economic, social, and environmental outcomes of investment. With deep experience in both the public and private sectors, he has shaped and managed large-scale capital investment programs and district development strategies; led the development of government data products and digital tools; and designed and implemented organizational changes that foster innovation and efficiency in government. Danny holds a BA from Yale University. Read more here.
Category: Performance Management