Model 4: Performance Governance

(a continuation from the December 23, 2009  blog on “Managing Performance”)

The fourth “idealistic” performance model described by Bouckaert and Halligan is the “performance governance” model, which offers a prominent role for citizens.  None of the countries covered by the book had such an approach in place at the time it was published in early 2009.  This model was more of a prediction by the authors.  However, subsequent to the publication of their book, three of their case study countries have launched such initiatives:  United Kingdom, Australia, and the United States. 

This model differs from the “performance framework” model in that the framework model focuses on government while the “performance governance” model focuses on a broader policy ecosystem to include citizens, non-profits, and the private sector as well.

In this model, multiple interdependent actors contribute to the delivery of public services.

British business author, Stephan Osborne, describes “new public governance” as a “plural state where multiple inter-dependent actors contribute to the delivery of public services and a pluralist state where multiple processes inform the policy making system.”

Bouckaert and Halligan say there are several strands of performance governance:

• The broad and diverse movement to embrace “joined up government, horizontal management, whole of government, integrated governance and more generally collaboration and networks.” And . . .
• “The engagement with the citizen as governance becomes more externally focused and encompasses the movement to engage citizens in performance measurement and re-evaluation of performance in an democracy.” This includes deliberative democracy and stakeholder analysis.

Defining the value added of networks is one key challenge for performance governance.  American academic Robert Agranoff writes that it is possible to measure collaborative performance along four perspectives:  specialists, the participating organizations, the network itself, and the network outcomes.

One way to operationalize the notion of “value added” in networks is to look at it through the lens of a “production of welfare” framework that goes beyond economy, efficiency, and effectiveness to also include equity, participation, advocacy, and innovation.

The performance governance model extends beyond the performance framework model in that it consists of co-governance, co-management, and co-production with the third sector and the public/citizens (and possibly adds the elements of co-design, co-decisions, co-implementation, and co-evaluation as described in the framework model).

Interestingly, the performance governance model is reflected in an institutional mechanism gaining popularity in the U.S. called “national strategies.”  This approach began as a congressional requirement for national defense in the late 1990s and was used more widely in the homeland security arena under President Bush.  It was also used in several domestic arenas, such as the 2005 National Strategy for Pandemic Influenza.  However, it is also being promoted again by Congress as part of the pending healthcare reform legislation, which requires the development of a national strategy for quality improvement in healthcare.

Model 3: Performance Management Framework

(a continuation from the December 23, 2009  blog on “Managing Performance”)

The third idealized model described by Bouckaert and Halligan is a “comprehensive and integrated performance management framework.”  This model seems to be favored by both academics and consultants. The two countries in the authors’ case studies that seem to come closest to this approach are Australia and Canada.  (note: these links are to an OECD study on performance budgeting, not to the Bouckaert-Halligan case studies, which are not available on-line.  You have to get their book to read those!).

This model, when implemented successfully, engages stakeholders, contributes to the legitimacy of government as a key provider of services, and is used for predicting customer behaviors.   Those using this approach rely on externally-developed performance frameworks, such as Balanced Scorecards, ISO 9000 standards, the European Framework for Quality Management, or country-specific home-grown models such as the Canadian Management Accountability Framework (which is now in its fourth iteration).

According to the authors, this model is where “performance information is systematically and coherently generated, integrated and used,” and “Information produced by performance measurement systems becomes part of a process of management and ultimately of governance.”

They also observe an interplay among three dynamics: political legitimacy, technical design, and functional processes:   “Auditing a performance measurement system is one way to produce and maintain legitimacy between the executive and legislative branches.  Another way is to create ownership by administrative stakeholders by having them co-design their performance measurement systems. . . . citizen involvement in an operational performance measurement system is another way to corroborate the legitimacy of performance information.”   This in turn results in a shift from a closed to an open measurement system, and from a top-down to top-down and bottom-up system.

Bouckaert and Halligan note that: “. . performance measurement systems should . . contribute to the legitimacy of the public sector itself.”  And that, for reasons of political legitimacy, performance measures should become more subject to independent controls (audits),  be more bottom up (from front line), and more external (citizens, stakeholders) in their design and implementation.

One strategy, they say, “is to take citizen as customers actively on board at all stages of the policy cycle, and in the service delivery cycle, up to even giving them a say in the budget process.  This results in co-design, co-decision, co-production, and co-evaluation.”  Interestingly, this seems to be the direction of President Obama’s Open Government Initiative.

Model 2: Siloed Performance Systems

(a continuation from the December 23, 2009  blog on “Managing Performance”)

Some organizations or countries operate a series of parallel performance systems, disconnected from each other.  Oftentimes this happens when different leaders, at different levels of an organization, and at different points of time, launch measurement initiatives that are disconnected from each other. The two country case studies described by Bouckaert and Halligan that typify this model are Sweden and the Netherlands (note: these links are to an OECD study on performance budgeting, not to the Bouckaert-Halligan case studies, which are not available on-line.  You have to get their book to read those!).

These separate performance systems are often overseen by specialists and are used for more than just compliance with legal requirements.  For example, the chief financial officer may have one system, the quality officer may have another, and the strategic planning office may have yet another.  Each uses performance information for his or her own purposes, but not necessarily for the overall enterprise.

The siloed approach focuses on managing structure and functions, and there is an internally interactive measurement process within each management function.  Bouckaert and Halligan note that this approach:  “focuses on several structural and functional mechanisms mostly within the market-based private sector, resulting in organising management functions.”   Also, each operation decides which types of measures and controls work best for different kinds of jobs.

The authors observe that a developed measurement system can push individuals, teams, and organizations in a particular direction.  In this case, “measurement then becomes a motivational and intentional process for the purpose of change.”   They continue, noting:  “Measures are not intended purely and simply to observe, but to cause reaction, sometimes to reward or to punish.” . . this moves the system “from a naïve belief in a thermometer type of neutrality to an awareness of the need for functional measurement.”  Their analogy is that a disconnected traffic camera can still result in slower traffic simply because drivers think they are being watched.

Model 1: Performance Administration

(a continuation from the December 23, 2009  blog on “Managing Performance”)

Bouckaert and Halligan call their first idealized performance management model the “Performance Administration” approach.

This model is seen as modest, ad hoc and un-systematic.  It is oftentimes designed for formal, hierarchical organizations and is seen as mechanistic or compliance-oriented in implementation.  Nevertheless, it is the typical starting place for many organizations.

This formal, procedural approach can be seen by skeptics as “hyper-rational,” developing strategic plans, performance plans, operational plans, and reports.  This may be best exemplified by the requirements of the U.S. Government Performance and Results Act. 

In this model, an agency is seen as successful if it can demonstrate a functional, legitimate performance system.  This approach, according to the authors, focuses on “due process, which becomes the essence of the performance of this system.  As a consequence, there is a systematic and law-based selective perception that it is more input- and process-oriented than output- and effect-focused.” . . . “The formal and procedural mechanisms, or the due administrative processes, are the core itself of the system, and hence of its performance.”

Bouckaert and Halligan observe: “A systematic administrator-driven Performance Administration is at the level of a single organization.  Its purpose is to improve efficiency and productivity and it is only partly incorporated and used for improvement purposes.” . . . “The essence of the measurement type is static and based on a single loop process of learning.  This is compatible with a causal and mechanistic way of perceiving the production cycle. . . .”

In addition, they note: “A Performance Administration measurement system is a static and micro organisational-based type.  It is a causal, scientifically grounded, mechanistic and a linear input/output-based type of measurement system. . . .as a consequence the main focus is on productivity or technical efficiency.”

Bouckaert and Halligan’s longitudinal case studies demonstrate how, over time, such systems seem to evolve from just compliance, to the development of a supply of measures, to their use in making policy, program, and resource decisions.

While this may seem like a natural evolution, it can remain frozen or diverge into another path.  The next “idealized model” described by the authors is one where multiple performance systems exist side-by-side. . . “siloed performance systems.”

Managing Performance: A Series

"Managing Performance" by Geert Bouckaert & John Halligan

Remember the YouTube phenomena, “The Evolution of Dance?”  I have been reading a book, “Managing Performance: International Comparisons” by two highly-regarded foreign academics – Geert Bouckaert (a Belgian) and John Halligan (an Australian).   Their book could well have been named:  “The Evolution of Performance!” 

Twenty years into a global performance management movement, they describe the evolution of performance management in government and provide detailed case studies for a half-dozen countries:  Australia, the Netherlands, Canada, Sweden, United Kingdom, and United States.

They lay out a set of four “ideal types” of performance systems as a framework for comparison, and then use these types to comparatively assess the approaches used by a variety of countries, even going beyond the case studies.  While a bit dense for practitioners (e.g., references to “isomorphic mimetic behaviour”), they offer useful insights into ways to frame performance strategies at different levels – for entire countries, individual agencies, or program-level efforts.

Their models roughly describe a continuum that is linked to the evolution and maturity of a country’s or an organization’s performance measures.  This evolution also depends on the underlying philosophy of that country or organization’s approach to management – which oftentimes change over time as well.  For example, do leaders see performance monitoring primarily as a tool to enforce accountability or do they use it primarily to improve performance?

The authors note that different organizations will start at different places in developing their performance management approaches and that there is no one, right spot to begin.  Rather, the approach depends on an organization’s needs and culture.  And, the implementation strategy used may vary depending on the level at which the measurement approach is applied:  governmentwide, at an agency level, or at the program level.

The Models.  The four “idealistic” models developed by Bouckaert and Halligan are:

• The “Performance Administration” Model
• The “Siloed Performance Systems” Model
• The “Comprehensive and Integrated Performance Framework” Model, and
• The “Performance Governance”  Model

Each is described further in subsequent blog entries in this multi-part series. . . .

Performance Relationships. In addition to the models, the authors describe a series of six “performance relationships,” each of which need to be addressed in the implementation of any of the four models: There are six potential performance relationships:

• Performance budgets and audits between executive and legislative branches.
• General charters between government leaders and citizens
• Contracts between program executives and the central administration (e.g., in the U.S., this could be executive departments or the Administration)
• Specific charters between the central administration and citizens (e.g., service level agreements or service quality surveys)
• Accountability agreements between the central administration and the legislature.
• Defining the interaction between citizens and the legislature (e.g., via the policy process or an ombudsman)

Which model do you think your agency is using to build its performance approach?  Has your agency organization explicitly considered each of the sets of performance relationships in developing its strategy?