Thank you for the opportunity to be part of a panel focused on results-based management in the public sector.
I wanted to start with an observation I’ve come to over time; that is, the seeming contradiction between focusing on results and managing for results. You see, the funny thing about results-based management – with its emphasis on outcomes, on the “final product” or the value delivered – is that it is really process-based. It takes the traditional management model – where you plan and resource; implement your program; monitor and adjust (only now we talk about performance measures and targets); and report internally and externally – and adds this emphasis on results. So we say that results-based management is a shift in thinking from inputs, activities and processes to encompass a focus on outputs and outcomes. It’s a shift in focus from how you do something to why you do it.
My contention is that if we want to realize the benefits of results-based management, we need to go back to that process in the management model where you monitor, adjust and report – to the use of performance information. I make this suggestion for a couple of reasons.
For one, we’ve seen that planning and reporting in its external form – the public reporting of performance – is, for the most part, disconnected from the rest of an organization’s business. It’s a once-a-year exercise done for public consumption. I don’t mean to suggest this is true of all organizations but I think it’s perhaps more common than not.
I mention external reporting because the public performance reports are a reflection of how well an organization is managed. As the Auditor General often says, performance reporting is a by-product – not the end product – of an organization’s performance management system.
A good performance report, then, is built on the internal management functions of an organization. And if it is not, you begin to wonder how that organization is managing. How are its performance measures in its Service Plan, for example, linked to the programs an organization delivers? How does the organization monitor the ongoing success of its programs? How does it know when it should adjust its strategies? How is it managing?
A key to realizing the benefits of results-based management, then, is to use information to manage, as imperfect as that information may be.
This means defining your information needs. Some organizations use logic models to help them define their results and the performance measures they need, but also to help them discern where they have control versus influence. Defining your information needs may also mean getting the right suite of measures (input, outputs and outcomes).
Once you define your information needs, you have to collect it. This could be done via big electronic database systems, but it doesn’t have to be. Periodic program evaluation can provide a snapshot of how you’re doing and may be better able to focus on client outcomes. Or organizations may be able to rely on manual methods.
Then, of course, you need to use the information to monitor the success of your program and adjust your strategies as appropriate.
This sounds simple enough but, of course, it’s not. Results-based management asks that people think, behave and operate in ways that are quite different from before.
They have to monitor with more of an eye to the longer-term results of their programs – focusing on outcomes, for example. But results-based management also puts much more onus on managers to be involved and make decisions in areas that were, more often than not, the purview of others: financial management and control, HR recruiting, staffing, and counselling, and risk management.
Not that these functions weren’t part of the job of the manager before, but it’s a much bigger part of the job now. Managers are much more intimately involved in those functions. And they have to exercise their judgement about these matters on the basis of principles rather than rules and regulations – there isn’t the same kind of roadmap anymore; there are only guideposts. There isn’t the same comfort as there was when one simply followed rules.
So part of the challenge of shifting to results-based management is in changing the culture of an organization.
There’s lots of advice on changing culture. You can focus on the people, quite directly, for example, or you can focus on process. I’ll focus on process this morning.
By using information to monitor, adjust and report, organizations will be sending a strong message to people that results-based management is here to stay. One thing is certain, if performance matters to the Executive of an organization, it will matter to everyone. In a survey conducted in the summer of 2004, we asked “How often does Executive monitor ministry progress against measures in the Service Plan?”. While over 55% said the measures were monitored every 1 – 3 months, 40% said it happened only once or twice a year; the remainder, not at all.
In one ministry we studied, each Executive member was given responsibility for achieving high level indicators. Each Executive worked with the program area to ensure performance data was collected and monitored, and that adjustment strategies were put in place. Doing this also sent a clear communication to people within the ministry – performance does matter – and helped shift the culture of the organization to one that also values a focus on results.
I’ve been talking about the internal use of performance information but external users – legislators and the public they represent – can also have a positive impact. Knowing that your report will be scrutinized, that it will be the focus of debate, that questions may be asked, I think, will help sustain the commitment to managing for results and reporting on performance. Scrutiny can be a powerful incentive for driving program improvements because a good performance story, which is what every organization wants to tell, depends on good management.
So it’s important that those who demand this information also use it. But how much is that happening? And why is it not more commonplace?
It happens in different ways and to different degrees, but seldom it seems in a very public or systematic way. Why is that? Well, it may be a bit of a chicken and egg problem. Reporting that is not complete, fair and balanced tends to raise questions about its value. And if its value is in question, you can be sure its use will be limited. If it’s use is limited, then those who expend significant effort now on reporting won’t want to continue. That doesn’t mean organizations won’t have to manage for results anymore, but it does mean there is one less incentive for doing so.
So how do we encourage external users to accept these reports and add their value to the process? My Office tries to encourage better public reporting – and by extension, good performance management – by reviewing each year the quality of the annual reports of government. We do so against established reporting principles that were developed with government and endorsed by a committee of the Legislative Assembly.
Organizations themselves seek ways to enhance the credibility of their reports through independent third parties. The Public Guardian and Trustee Act, for example, calls on the Auditor General to audit his performance report. We provide a similar review to the Public Guardian and Trustee’s report as we do for the annual reports of government organizations.
I’ll give you a second example. The Workers Compensation Board (now known as Worksafe BC) asked us to provide an audit opinion on the quality of its performance report – so going beyond an audit of its financial statements to include its operational performance. This report is one of the leading edge performance reports you’ll see. And it includes an opinion from the Auditor General that the report fairly presents performance.
We believe this third party assurance adds value – it tells the external user that the report is fair and reliable; and it exerts discipline on the organization. As the Public Guardian has said, “If we can’t prove it, we can’t say it.” That philosophy has a direct impact on the organization and on the way it manages – from the performance measures and targets it selects to the information it gathers and the way it monitors performance.
So focusing on the use of information, internally and externally, I believe, can help organizations make the shift to results-based management. Using information, however imperfect it may be, brings performance management to life – and by extension – drives performance improvements throughout an organization. It sends a strong message to people within the organization that results matter and, in the process, begins the culture change that is necessary.