Some Advice for good measure

It's easy to see why their enthusiasm for the Results Act is underwhelming. In most of the rhetoric, performance measurement is presented as a way to hold agencies accountable. The mantra is, "We'll praise an agency when it does well and criticize it when it fails," but it's easy to see why senior leaders are skeptical. After all, one never hears: "You have done such a fantastic job that we're holding you accountable by giving you a promotion." By its nature, accountability is linked to punishment.

This negative perception has led many agencies to establish separate staffs-outside the senior management loop and day-to-day operations-to implement the Results Act, preparing reports that whiz back and forth between the agency and the Office of Management and Budget and Capitol Hill. By segregating these dealings into a staff that is expert in the arcana of strategic plans and performance plans but has no influence over agency leadership, agencies hope to proceed with their business undisturbed.

But new appointees and seasoned career executives need to understand the enormous upside of using results-oriented performance measures: It can help them achieve their agency goals. Last July, I argued in a Government Executive column that missing from much of Washington's discussion of performance measurement is the central point that measuring results can improve an organization's performance.

Performance measurement should not be seen as a thermometer, gauging a fixed phenomenon, but as a lever for change. When leaders use performance measures in managing their organizations, they improve results by motivating employees and communicating where they should concentrate their efforts and where they need improvement. Indeed, federal executives have fewer incentives to influence performance than their private sector counterparts because of restrictions on pay and promotions. So performance management may be the most important lever a federal executive has.

The Gift of Goals

In The Strategy-Focused Organization (Harvard Business School Press, 2000), Harvard Business School Professor Robert S. Kaplan and consultant David P. Norton emphasize for a predominantly business readership the crucial role of performance measurement in top management strategy. The book's key message is that performance measurement should exist for managers, not for a measurement staff. Developing an organization's strategy and measures, the authors argue, should go hand in hand.

Discussion about Results Act measures at the Veterans Benefits Administration, for example, led people to realize that the organization traditionally measured only internal operating efficiency, not customer satisfaction. Noting that an important part of the agency's mission was to serve veterans, agency managers established customer satisfaction measures. For the city of Charlotte, N.C., once leaders developed five strategic goals for the city, individual departments could develop performance measures advancing those goals. Measures also can link an organization's activities and real-world results. McDonald's, for example, measures the cleanliness of its stores on the theory that cleanliness produces sales, and the Transportation Department measures the condition of interstate highways on the theory that doing so reduces traffic deaths.

Promoting Performance Although measurement improves performance in a number of ways, Kaplan and Norton concentrate on its potential to align employees' behavior with the organization's overall strategy. Performance measures can send a signal about what senior executives believe should be an employee's priorities. Success increasingly depends on getting people on the front lines to come up with ideas that advance the organization's strategy. Performance measures don't tell people what to do, but tell them what goals are sought. The aim is "making strategy everyone's everyday job," Kaplan and Norton say.

Performance measures, Kaplan and Norton argue, must be communicated throughout the organization with the kind of marketing campaign used to launch a new product. "Would you simply put the new product on the shelf, hoping that (customers) notice it?" the authors ask. Most organizations just let their performance measures float out there, even though "the changes in behavior required for a workforce to execute a new strategy are far greater than the changes required to get consumers to try a new product," Kaplan and Norton say. Speeches, town meetings and agency intranets should all be used to create awareness of the organization's performance measures.

Making Up the Difference

In the public sector, establishing a list of strategic goals and measures can be more complicated than it is in the private sector. The involvement of actors outside the agency, most importantly of elected officials, and conflicts among potential agency goals sometimes hinder the process. But not every agency is a Forest Service, where some see the mission as wilderness protection while others see it as timber supply. For many agencies, there aren't conflicts over what goals to pursue. In addition, private sector performance often involves conflicting goals as well, the authors point out, such as productivity versus growth at Mobil Corp.

Despite these obstacles, political appointees worth their salt should have a list of big things they'd like to accomplish, and performance management is crucial to moving that list forward.

Kaplan and Norton's book, while it targets a predominantly business readership, applies the performance management framework to government and nonprofit organizations, using illustrations ranging from the city of Charlotte at the local level to the National Reconnaissance Office and the Energy Department's procurement shop in Washington. The book sends a message to its corporate readers that government organizations can be a source of lessons in good management for private sector ones-a real pat on the back for government executives. It is a valuable resource for new executives who've never had government experience or believe the many stereotypes about federal agencies.

Sure, performance measurement carries a risk that agencies' results will be used against them. But performance measurement exists. It's mandated by law. If executives don't use such measures to improve performance, they could land in the worst of both worlds: Measures would be there to hammer them and they would not have taken advantage of the measures to achieve improvements, which could have deflected criticism.

Advice to new appointees: Get the Results Act out of the back room and into the front office.