Communicating Results

In an interview with Government Executive, former New Zealand Cabinet minister Maurice McTigue, whose country pioneered results-based management in government agencies, discussed the importance of annual reports in public-sector organizations. McTigue not only served in the New Zealand parliament, but at various times headed the country's ministries of employment, state-owned enterprises, labor and immigration. He is now a distinguished visiting scholar at George Mason University in Fairfax, Va.

On the importance of the first annual reports: Whether people like it or not, the very first annual report is going to be the benchmark against which the organization is going to be judged for all time. That requires, in my view, some very special consideration by the senior management team to be certain that the benchmark they are setting is a benchmark that they would want to set--that they can live with that benchmark over time. This is not an issue that should be approached from the point of view that we have a compliance requirement here--that we must produce an annual report, so we will produce an annual report.

That approach is likely to have disastrous consequences for at least some agencies. And that risk can be managed by just having senior management consider the presentation of this particular report as a strategic opportunity to establish what kind of image they are trying to create for the organization.

On comparing agencies' annual reports with corporate annual reports: I see these reports as being every bit as important for government organizations as they are for Fortune 500 companies, because they are going to describe in a very succinct way why this organization currently exists, why it should continue to exist in the future and what scale it should have.

[The reports are] going to build up over time as the formal recorded history of the organization. That parallels very closely what happens with the annual reports of General Motors, Coca-Cola,etc.

On the objectives an agency can achieve with its annual report: It can provide a major risk management tool, in that if you can persuade the majority of the public and particularly the Congress that this organization is successful at a majority of what it does, it helps insulate you against the anecdotal story of something that went wrong from time to time. The anecdote can be managed and put in perspective.

Right around the world, not unique to the United States, the bane of government organizations is a legislature moving to micromanage the process of what they do on a day-to-day basis. Clever use of an annual report can help to insulate you against that micromanagement.

On the presentation of the annual report: In reporting on performance under the requirements of the act, you have to report on your achievements against your performance plan. You also have to report on those areas where you underachieved or overachieved, and you have to explain why. That really allows you to describe the barriers to improving your success.

The annual report gives the organization the opportunity of being able to say, particularly to the legislature, we can perform at this level, but we have these constraints on our activities at this moment that are statutory, that are regulatory, or administrative orders. If they could be removed, this would be the level of achievement we would be able to get. Government departments have never had that opportunity before.