Why Choose Performance Improvement?
During economic downturns, local-government revenues almost always suffer. Of course, when revenues are down, we still have to balance our budgets. And, that means reducing spending or raising taxes. People-first administrations focus on reducing spending. Here again, there are 2 choices cutting or shrinking. Cutting means cutting programs, services, or people. Too often, this approach is used to squeeze the public into accepting higher taxes. People-first administrations prefer to shrink spending. That means delivering the same programs and services more efficiently and effectively by improving performance. It's win-win since it doesn't balance the budget on the backs of taxpayers or staff. Improving performance increases job satisfaction since almost everyone takes pride in doing a better job. And, it pleases the public by keeping taxes in line. Having chosen the performance-improvement route, ...
What's the Next Step?
Since most performance improvements require an investment of time, money, and other resources, we need to know the return we can expect if we make that investment. The difficulty of calculating that return on investment has been a major stumbling block for organizations wanting to undertake performance improvement. Without some handle on the return we can expect from an investment, justifying that investment to elected officials or to the public especially in tough times is just too high a hurdle. To overcome that challenge, our Institute has developed a proven method to estimate the return on investment in performance improvement. So, ...
How Does It Work?
The key to this method is to uncover the savings 'hidden' in our budgets. I say hidden because the budgets for most local-government agencies contain very few frills, especially when compared to those of our senior governments. So, it takes some detective work to uncover the potential savings. To do this quickly and without spending a small fortune, the preferred approach is to compare our performance with that of our peers. If another organization is able to deliver a comparable level and quality of service for less, applying their methods will produce savings for you. This type of comparison enables you to calculate the extent of your potential savings the return on your investment in performance improvement. It will also assist you in deciding how much to invest and where to direct that investment to gain the best return. And, that provides our administrators with the information needed to justify the investment to elected officials. In addition, it provides our elected officials with the information needed to justify the investment to the public. The next question is ...
What Are Its Components?
This initiative starts by measuring your current performance in 11 different areas of activity. These areas of activity are common to almost all municipalities. If this is your 1st excursion into performance improvement, it will establish your performance baselines. In step 2, your performance is compared with a group of your peers. And, since a standard chart of accounts is used, the comparisons are apples-to-apples. These comparisons identify the top performers in each area of activity. That's key because the fast track to performance improvement and cost savings is to adapt the methods of the top performers to your organization. Step 3 calculates your potential savings your return on investment. Since performance is measured using unit costs, that calculation is straightforward. So, in just 3 simple steps, you are able to establish your performance baselines, identify the high achievers in each area of activity, and calculate your potential return on investment. Now, let's examine some details of the initiative, starting with the question ...
What Measures Does It Use?
Every local government performs a governance function. We call it General Government. So, the 1st 7 measures assess performance in this vital area. They include council (elected officials and their committees), CAO (the office of the chief administrative officer or city manager), clerk (the office of the municipal clerk, chief record-keeper, or chief legislative officer), finance, human resources, information systems, and legal. The next 4 measures apply to road maintenance which takes a significant share of the budget in most municipalities. These measures include hard-top maintenance, loose-top maintenance, weather-response urban, and weather-response rural. In warmer climates, weather-response refers to activities which deal with the results of severe storms and heavy-rainfall incidents. In colder climates, weather-response applies to those activities which deal with snow and ice. Once the measurements have been taken, ...
How Are the Comparisons Made?
As noted above, each performance measure is reported as a unit cost, according to a standard chart of accounts. Only when both elements unit costs and the standard chart of accounts are included can real apples-to-apples comparisons be made. Next, the unit costs of each participating organization are ranked for each of the 11 areas of activity. The 3rd-best score in each activity area then becomes the reference point. This is similar to the benchmark used in other comparisons with 1 major difference. The benchmark is the score of the 1st-place finisher. We prefer to use the 3rd-best score since we know that 3 separate organizations (those who finished 1st, 2nd, and 3rd) have been able to achieve this result making it far more likely that the others in the comparison group will be able to achieve it as well. Of course, the greater the number of organizations in a comparison group, the greater the potential savings for each participant are likely to be. For that reason, we have set the minimum size of a comparison group at 10 organizations. Once the comparisons have been made, ...
What Results Can You Expect?
We 1st applied this initiative to a county consisting of the county government and 10 rural municipalities, none of which, at the time, had a year-round population exceeding 5,000. Yet, in just a few short months and for the price of just over $1,000 per municipality we were able to identify potential savings of more than $1 million. We next applied the initiative to a group of 10 mid-sized cities, with populations ranging from just over 40,000 to just under 185,000. Over roughly the same timeframe and for a similar price per municipality, we uncovered total potential savings of more than $21 million. Potential savings were identified for each municipality in the group, ranging from just over $800,000 to more than $4 million. Of course, that begs the question ...
Will It Work for Your Organization?
Will your organization be able to obtain similar results? That will depend on the number of organizations in your comparison group and the differences in their levels of performance. But, after 10+ years of comparing the performance of local governments, we have seen the tremendous diversity of approaches used to perform the same activities even among next-door neighbors in the same county. This is why virtually every organization does something from which others could benefit from adapting and why every organization could benefit by adapting the best practices of others. It makes this next question almost rhetorical ...
Is It Win-Win?
You bet it is. Unlike most comparisons which end with the ranking of participants, this initiative takes it to the next level. A simple ranking may be a win for those on top but not for those who finish near the bottom. However, with this initiative, those who finish below the reference point are winners as well because they identify the savings hidden in their budgets which sets the stage for improving their performance. And, because of the diversity noted above, virtually every organization will have something to contribute and no one organization will be a top performer in every activity area. All will have something to learn from the others. Nor is the public left out. When the performance of local government improves, the public should see a dividend in the form of better service, lower taxes, or both. That said, ...
Should Your Organization Participate?
If you want to shrink your costs, increase the job satisfaction of your people, and earn the support of your public, performance improvement is a proven solution. With this initiative, the door has been opened to virtually any local-government agency to reap the benefits of performance improvement. For just $700, you will be able to establish your performance baselines, identify the high achievers in each of the 11 areas of activity, and calculate your potential return on investment. In addition, you will receive a group subscription (for up to 10 persons) to View from the Cordillera a $200 value. Current subscribers will be eligible for a discount equal to your annual subscription rate. To enroll your organization, just send us an email with the word 'Enroll' in the subject line. Be sure to include your name, title, organization, email address, and a phone number where we can reach you to discuss the others you would like to include in your group. When you submit your registration, ...
What Role Will the Institute Play?
When we receive your registration, we will contact you to obtain the names of the other organizations that you would like to have in your comparison group. You may also wish to involve your municipal or professional organization. (If your organization is not a local-government agency, you may elect to sponsor 1 or more such agencies of your choosing.) We will then contact the organizations you have named to provide them with information on the initiative and invite them to participate. When we receive 9 registrations from the organizations you have named, you will receive a spreadsheet on which to record your data, together with our proprietary standard chart of accounts and instructions for completing the form. Once we receive the completed data forms from all participants in your comparison group, we will analyze the data, determine the unit costs, conduct the comparisons, establish the reference points, and calculate your potential savings. Results will be summarized in an electronic report which will be emailed to you and to each of the other organizations in your comparison group.
To Sponsor Another Organization
Municipal associations, professional associations (such as those representing elected officials, municipal managers, finance officers, or economic developers), upper-tier municipalities (counties, regions, districts, etc.), senior-government agencies, attorneys, auditors, consultants, chambers of commerce, businesses, and concerned citizens are all potential sponsors. If your organization would like to sponsor 1 or more municipalities or other local-government agencies, just send us an email with the word 'Sponsor' in the subject line. Be sure to include your name, title, organization, and email address as well as the name(s) of, and contact information for, the organization(s) you would like to sponsor.
To Submit Your Data
When you are ready to submit your data, just follow the instructions that came with your data-recording package. Remember to put the word 'Submit' in the subject line.
Where Can You Obtain Further Information?
If you have questions on this initiative, you may send me an email at the address below or call me at the number below. Due to research and other commitments, I am rarely at my desk before 3PM. So, the best times to reach me by phone are between 3PM and 8PM (Eastern Time). I look forward to hearing from you.