The Power of Performance Measures

The idea for this kind of forum grew out of an observation by John Dunlop, one-time Secretary of Labor and Washington policy-maker, who said the United States lacked sufficient institutions for consensus-building across political and interest-group boundaries. The first of these Harvard sessions, more than a decade ago, brought together some big-city police chiefs to discuss improvements in law enforcement procedures and led to the spread of community-policing techniques across the nation.

Since then, other executive sessions have addressed challenges ranging from reducing medical errors and improving child protective services to promoting philanthropy and stamping out terrorism.

One of these sessions, held in 1999 and 2000, focused on performance management-establishing performance measures for government organizations and using those measures in everyday management. Participants included Comptroller General David Walker, District of Columbia Mayor Anthony Williams, former Postmaster General and auto executive Marvin Runyon, several Cabinet deputy secretaries and agency heads, award-winning city and county managers, the president of the Consumers Union and some leading business management consultants. These consultants included Harvard Business School professor Robert Kaplan, who developed the balanced scorecard.

These events are fielded relatively rarely at the Kennedy School-at a rate of about one every two years-so the decision to do this one reflects the view from the Charles River that performance management is critical to government improvement. The Kennedy School hopes to raise additional money to fund the group as an ongoing advocate of performance management.

Participants recently issued an open memorandum to new political appointees. The memo begins, "As a politically appointed leader, you have a limited number of tools available for advancing the administration's priorities throughout your organization. Performance goals and measurements are among the most powerful." The memo cites several examples of how effective performance management has led to improved public outcomes:

• On-time overnight delivery of local mail jumped from 79 percent in 1994 to 94 percent in 2000, after the U.S. Postal Service began managing on-time delivery performance.
• Railroad accidents declined significantly between 1993 and 2000, after the Transportation Department began managing safety performance.
• The Charles River became "swimmable" 65 percent of the time in 2000, compared with 19 percent of the time in 1995, thanks to the Clean Charles project, which included the use of performance goals.

The memo is a quick, practical guide for managers and executives using performance measures to manage their organizations. The number of measures should be limited, the memo warns, saying, "If everything is a priority, nothing is a priority." Organizations should use multiple means, such as meetings, speeches and the Internet, it says, to communicate performance measures to employees. The memo cautions agencies about linking performance measures to individual employee rewards or penalties.

A results-oriented environment should be an important part of creating a high-performance federal workplace that makes government service attractive for bright young people. Improvements resulting from performance management also would boost citizen confidence in government.

The timing of the memo is appropriate. Some progress has been made toward bringing performance management to the federal government since Congress passed the Government Performance and Results Act in l993. But the question is whether such an initiative will survive the transition to a new administration or be lost in the urge to cast off the old, and thus be dismissed by the federal workforce as yet another flavor of the month.

It's too early to tell, but the first signs from the Bush administration are modestly positive. Sean O'Keefe, the Office of Management and Budget's deputy director, has dubbed performance management one of the administration's top two management priorities (along with the human capital crisis), although the spin is too focused on using it as a budgeting tool rather than as a performance improvement tool.

The bottom line is, read the memo. It is on the Kennedy School Web site.