Topic 6.1: Designing and Building Performance and Management Systems

Evaluating the strategy execution

In the context of your organisation, the purpose of your work is to deliver outcomes to relevant, significant and designated stakeholders. The guiding principles are to do this within the efficiency, effectiveness, governance, vision frameworks and other goals specified by public sector value and the organisational context.

In the workplace this is fostered by maximising and maintaining individual, team, program, and organisational performance. Typically, you would be guided by the overall strategy and strategic objectives of the agency, department, section and the specific desired outcomes. Thus, your role is to deliver on those strategic imperatives.

In this unit, and specifically in this module, we focus on evaluation of the overall system and its performance, not specifically on the evaluation of the individuals involved in the delivery process.

To achieve this, as public sector managers, you have the tools and processes of strategic and operational management. Connections between people resources and performance management is important because public sector managers need to be able to connect the actions they take in leading the performance management systems to the wider system where the aim is to improve the organisation’s and government’s performance.

Managers need to be able to assist individuals to see this link by establishing a line of sight. This link may contribute to motivation or job satisfaction since meaningful work is vital for job satisfaction.

So, who defines success and performance parameters in your context? Clearly there are many different levels of analysis and data systems that are available for organisational performance management. Be mindful of these systems as you complete this module.

We will consider how performance indicators relate to performance measurement and management, and what the needs and perceptions are of different stakeholders who require different types of performance information.

To address these considerations, here are some guiding questions for you to consider (Andrews, Boyne, & Walker, 2006):

Figure 6.1 Performance Indicators^[1]

Overall, performance management relates to accountability, governance and compliance. Performance management therefore forms part of the system in which responsibility and authority for outcomes are devolved to public sector managers. However, before performance can be managed, it is important to understand what the term means.

Table 6.1 Performance Indicators, measurement, ratios, efficiency and outputs

Overall then, we can measure anything and everything…input, processes, outputs, outcomes, hindsight, insight, foresight, oversight, catalytic measures. The question thus becomes – what is meaningful in a given context, and what will best serve the desire to deliver ‘valued’ public sector value?

Once the performance system has been designed and specified. It needs to be applied. Given that the overall purpose is to deliver value, how might we measure and evaluate value. There are two states of evaluation – concept evaluation, and process evaluation (Williams & Lewis, 2008)^[2].

Assuming that the concept passes the ‘useful, decent, acceptable, positive and profitable’ test – that is concept evaluation – the next stage is process evaluation – addressing the question of whether we are going about delivering value in the most appropriate manner. (Meynhardt et al, 2014)^[3].

Process Evaluation

Process evaluation as an evaluation of the value delivery mechanisms that organisations use to deliver on their purpose and objectives. One way to evaluate a delivery mechanism is to apply The Value Chain concept model (Porter, 1985)^[4]. The Value Chain concept (see Figure 6.2 below) is a model which describes the categories of activities within an organisation or department which create and deliver a product or service, and explains how organisational activities contribute to a strategy (Johnson, et al., 2014)^[5].

The model helps an organisation and its managers to understand the linkages to see where value is added, and how the activities are integrated to best advantage. Note there are both primary and support activities, which the organisation can refine and develop to form an overall set of processes that enable a highly effective and (ideally) unique delivery system. Thus, we would consider this to be a process evaluation model.

Figure 6.2: The Generic Value Chain Model within an Organisation

A second and more specific way to explore process evaluation is to apply the Service Blueprinting technique as a diagnostic tool to a specific process or service model (see Module 4). For example, the moment of truth and pain point indicators, linked to customer actions, are an excellent way to explore for example whether a service system is designed to effectively deliver on provider and customer expectations.

A third approach is to utilise the strategic triangle concept we introduced in Module 1 (Moore & Khagram, 2004)^[6]. The adapted questions from this approach are:

1. Does the model or strategy deliver the public value the organisation is seeking to produce?
2. Will the model or strategy achieve the goal of acquiring the legitimacy and support from the authorisers within the system who would allow the managers to take action and procure the necessary resources to sustain the effort to create the proposed value?
3. Does the organisation have the operational capabilities to deliver on the proposal to achieve the desired results?

Now that you have options for evaluating the process, we would recommend that those seeking to evaluate the proposed or existing model or strategy would also consider using a governance lens to make a final assessment. Please refer to Module 1 Topic 5 as a reminder of the five factors of governance and compliance; in particular the Strategy, Culture, Relations, and Compliance and Accountability factors will be relevant here.

Outcome Evaluation

Following on from a concept and a process evaluation, the final stage would be an outcome evaluation system, which should be designed to enable relevant participants and stakeholders to measure and appreciate public value outcomes. We suggest that you explore the following approaches, and also investigate any evaluation processes with which you are familiar, or have observed in your career. Here we propose that you revisit the value proposition concepts from the business model canvas introduced in GSZ633 and further explored in this unit.

Value Proposition Performance

One approach is to identify, and quantify, the value proposition of an initiative or project. We explored the value proposition in Module 3 in the context of the business model canvas.

A stated value proposition, within a business model canvas, is an easy concept to see, share, understand, and use to action and evaluate business models and strategy from a public sector manager perspective. The challenge of course is to carefully specify the objective characteristics of a value proposition’ from both the organisation’s and the recipient’s perspectives.

The suggestion is to build a ‘value Proposition and fit Map’ (Osterwalder, et al., 2014) that links organisational actions to specific outcomes for the specified user. by linking this with a business model canvas, the value chain model, the Watkins (2013)^[7] 30:60:90 frame, and final the Rockefeller 5+1 Priorities (Harnish, 2002). this approach usually is presented as a short and highly visual set of graphics, so that all participants and stakeholders can see the promise, the benefits, the consequences and the timeframe.

Figure 6.3 Value Proposition and Fit Map

Regardless of the outcome evaluation tools that you apply, governance should be top of mind. Indeed, the performance factor of governance is a relevant lens to apply in any outcome evaluation system.

So, to wrap up this section, continue to focus on developing a suitable and flexible suite of tools and processes that are context and public value oriented for your business model and strategy evaluation.