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Success Through Proactive Leadership: Using Performance Information to Achieve Results Terry Carnahan Managing Director, KPMG LLP. Introduction and Agenda. Open Government Framework High Performance Management Structure Performance Management Legislation and Guidelines Selecting a Measure - PowerPoint PPT Presentation
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© 2012 KPMG LLP, a U.S. limited liability partnership and a member firm of the KPMG network of independent member firms affiliated with KPMG International, a Swiss cooperative. All rights reserved. Printed in the U.S.A. KPMG and the KPMG logo are registered
trademarks of KPMG International, a Swiss cooperative.
Success Through Proactive Leadership: Using Performance Information to Achieve Results
Terry CarnahanManaging Director, KPMG LLP
Success Through Proactive Leadership: Using Performance Information to Achieve Results
Terry CarnahanManaging Director, KPMG LLP
© 2012 KPMG LLP, a U.S. limited liability partnership and a member firm of the KPMG network of independent member firms affiliated with KPMG International, a Swiss cooperative.
All rights reserved. Printed in the U.S.A. KPMG and the KPMG logo are registered trademarks of KPMG International, a Swiss cooperative.2
Introduction and Agenda
Open Government Framework
High Performance Management Structure
Performance Management Legislation and Guidelines
Selecting a Measure
Using a Measure
© 2012 KPMG LLP, a U.S. limited liability partnership and a member firm of the KPMG network of independent member firms affiliated with KPMG International, a Swiss cooperative.
All rights reserved. Printed in the U.S.A. KPMG and the KPMG logo are registered trademarks of KPMG International, a Swiss cooperative.3
Open Government Framework
Transparency
Participation
Collaborat
ion
© 2012 KPMG LLP, a U.S. limited liability partnership and a member firm of the KPMG network of independent member firms affiliated with KPMG International, a Swiss cooperative.
All rights reserved. Printed in the U.S.A. KPMG and the KPMG logo are registered trademarks of KPMG International, a Swiss cooperative.4
High Performance Management Structure
© 2012 KPMG LLP, a U.S. limited liability partnership and a member firm of the KPMG network of independent member firms affiliated with KPMG International, a Swiss cooperative.
All rights reserved. Printed in the U.S.A. KPMG and the KPMG logo are registered trademarks of KPMG International, a Swiss cooperative.5
Budget and Spending Planning
· After areas of improvement have been determined, budgeting can be adjusted accordingly.
· Without monitoring internal performance, budgeting is mostly guesswork.
· So much more than “just compliance”.
© 2012 KPMG LLP, a U.S. limited liability partnership and a member firm of the KPMG network of independent member firms affiliated with KPMG International, a Swiss cooperative.
All rights reserved. Printed in the U.S.A. KPMG and the KPMG logo are registered trademarks of KPMG International, a Swiss cooperative.6
Government Performance and Results Act
· Enacted in 1993 following Congressional findings of waste and inefficiency in the government.
· Purpose:
increase management accountability and public confidence in the government.
· Why is measuring performance vital to effective and efficient management?
© 2012 KPMG LLP, a U.S. limited liability partnership and a member firm of the KPMG network of independent member firms affiliated with KPMG International, a Swiss cooperative.
All rights reserved. Printed in the U.S.A. KPMG and the KPMG logo are registered trademarks of KPMG International, a Swiss cooperative.7
GPRA Modernization Act of 2010
· Required Strategic Plans and Performance Goals be made publicly available online.
· Description of how each Performance Goal ties into the higher level Agency Goal.
· Transparency as to how data for each Performance Goal is obtained and assessed.
· More specific instruction as to what is reported and how.
© 2012 KPMG LLP, a U.S. limited liability partnership and a member firm of the KPMG network of independent member firms affiliated with KPMG International, a Swiss cooperative.
All rights reserved. Printed in the U.S.A. KPMG and the KPMG logo are registered trademarks of KPMG International, a Swiss cooperative.8
GASB
· In 2010, GASB published guidelines for voluntary reporting of Service Efforts and Accomplishments (SEA) Performance Information.
· More specifically tailored to State and Local Governments.
· Established four key components and six qualitative characteristics of an effective SEA report.
· Also provides guidance on effective performance measures.
© 2012 KPMG LLP, a U.S. limited liability partnership and a member firm of the KPMG network of independent member firms affiliated with KPMG International, a Swiss cooperative.
All rights reserved. Printed in the U.S.A. KPMG and the KPMG logo are registered trademarks of KPMG International, a Swiss cooperative.9
SEA Guidelines
· Components
Purpose and Scope
Major Goals and Objectives
Key Measures
Results and Challenges
© 2012 KPMG LLP, a U.S. limited liability partnership and a member firm of the KPMG network of independent member firms affiliated with KPMG International, a Swiss cooperative.
All rights reserved. Printed in the U.S.A. KPMG and the KPMG logo are registered trademarks of KPMG International, a Swiss cooperative.10
SEA Guidelines
· Characteristics
Comparability
Consistency
Relevance
Reliability
Timeliness
Understandability
© 2012 KPMG LLP, a U.S. limited liability partnership and a member firm of the KPMG network of independent member firms affiliated with KPMG International, a Swiss cooperative.
All rights reserved. Printed in the U.S.A. KPMG and the KPMG logo are registered trademarks of KPMG International, a Swiss cooperative.11
SEA Performance Measures
· Measure of Service Efforts
Input Measures
− Cost of road maintenance.
· Measure of Service Accomplishments
Output Measures
− Number of lane-miles of road repaired. Outcome Measures
− Percentage of roads in good or excellent condition.
· Measures Relating Efforts to Accomplishments
Efficiency Measures
− Cost per lane-mile of road maintained. Cost-Outcome Measures
− Cost per lane-mile of road maintained in good or excellent condition.
© 2012 KPMG LLP, a U.S. limited liability partnership and a member firm of the KPMG network of independent member firms affiliated with KPMG International, a Swiss cooperative.
All rights reserved. Printed in the U.S.A. KPMG and the KPMG logo are registered trademarks of KPMG International, a Swiss cooperative.12
SEA Performance Measures
· Independently of each other, these measures do not provide much information.
· When integrated within the agency plan and to each other, these measures act as complements and can be very useful.
· So much more than “just compliance”.
© 2012 KPMG LLP, a U.S. limited liability partnership and a member firm of the KPMG network of independent member firms affiliated with KPMG International, a Swiss cooperative.
All rights reserved. Printed in the U.S.A. KPMG and the KPMG logo are registered trademarks of KPMG International, a Swiss cooperative.13
Selecting the right Measure
· Measures should be:
Outcome based.
Easily and objectively measurable.
Understandable.
Directly linked to agency goals.
Able to provide a meaningful frame of reference.
Comparable with previous years and/or other agencies.
© 2012 KPMG LLP, a U.S. limited liability partnership and a member firm of the KPMG network of independent member firms affiliated with KPMG International, a Swiss cooperative.
All rights reserved. Printed in the U.S.A. KPMG and the KPMG logo are registered trademarks of KPMG International, a Swiss cooperative.14
Outcome Based
· Rather than “output” or “input” (spending) based.
· Measures the desired outcome rather than a quantity of output.
· In previous example, “percentage of roads in good or excellent condition,” more useful than “number of lane-miles of roads repaired”.
© 2012 KPMG LLP, a U.S. limited liability partnership and a member firm of the KPMG network of independent member firms affiliated with KPMG International, a Swiss cooperative.
All rights reserved. Printed in the U.S.A. KPMG and the KPMG logo are registered trademarks of KPMG International, a Swiss cooperative.15
Objectively Measurable
· All terms in the measure should be objectivity defined.
· Once defined, data can be easily measurable.
· In road example, “good or excellent condition” would need a definition.
· Perhaps based on user survey of road conditions.
© 2012 KPMG LLP, a U.S. limited liability partnership and a member firm of the KPMG network of independent member firms affiliated with KPMG International, a Swiss cooperative.
All rights reserved. Printed in the U.S.A. KPMG and the KPMG logo are registered trademarks of KPMG International, a Swiss cooperative.16
Understandable
· Since the users of this data are the general public, measures should be clearly stated and defined.
· Example –
“Percentage of roads in good or excellent condition” is easy to understand, whereas “lane-miles” might not be as accessible.
© 2012 KPMG LLP, a U.S. limited liability partnership and a member firm of the KPMG network of independent member firms affiliated with KPMG International, a Swiss cooperative.
All rights reserved. Printed in the U.S.A. KPMG and the KPMG logo are registered trademarks of KPMG International, a Swiss cooperative.17
Directly Linked to Agency Goals
· Each measure must be linked to a higher level goal, all the way up to the top agency goals.
· Road example –
maybe the departmental goal is to “maintain a road system in good condition”.
Agency goal “achieve a top 10 statewide infrastructure score”.
· Clear how maintaining the roads in good/excellent condition ties back to both of these goals.
© 2012 KPMG LLP, a U.S. limited liability partnership and a member firm of the KPMG network of independent member firms affiliated with KPMG International, a Swiss cooperative.
All rights reserved. Printed in the U.S.A. KPMG and the KPMG logo are registered trademarks of KPMG International, a Swiss cooperative.18
Provide Frame of Reference
· Use of “percentage” or “percentage of total” or “percentage of eligible” provides usable data.
· Avoid “number of” measures.
· Example –
510 roads are in excellent condition.
Not clear how many roads are being measured.
Extremely poor performance if this is New York City.
Extremely good performance in a more rural area with 520 total roads.
© 2012 KPMG LLP, a U.S. limited liability partnership and a member firm of the KPMG network of independent member firms affiliated with KPMG International, a Swiss cooperative.
All rights reserved. Printed in the U.S.A. KPMG and the KPMG logo are registered trademarks of KPMG International, a Swiss cooperative.19
Comparable with Previous Year and/or Agency
· Comparing data period by period or year by year shows trends.
· Comparing data to another agency or state highlights relative performance.
· Example –
90% of roads in good/excellent condition in current year.
If this figure was 95% in the previous year, this number should be a cause for concern.
If, however, the next best state uses the same measure and has a number like 80%, clearly our agency is excelling.
© 2012 KPMG LLP, a U.S. limited liability partnership and a member firm of the KPMG network of independent member firms affiliated with KPMG International, a Swiss cooperative.
All rights reserved. Printed in the U.S.A. KPMG and the KPMG logo are registered trademarks of KPMG International, a Swiss cooperative.20
Using the Measure
· A well constructed and defined measure is extremely valuable
· Analysis of results can:
Identify areas for improvement within the agency.
Reveal the agency’s strongest performers.
Determine positive and negative trends from period to period.
· Making results publicly available:
Increases accountability within the agency.
Improves public confidence in the government.
Gives the public a better general understanding of the uses of their tax dollars.
© 2012 KPMG LLP, a U.S. limited liability partnership and a member firm of the KPMG network of independent member firms affiliated with KPMG International, a Swiss cooperative.
All rights reserved. Printed in the U.S.A. KPMG and the KPMG logo are registered trademarks of KPMG International, a Swiss cooperative.21
Performance Measures Success
· Leadership is a primary determinant
· Managers use output measures
· Data Calls are prevalent
· Data driven reviews
· So much more than “just compliance”.
© 2012 KPMG LLP, a U.S. limited liability partnership and a member firm of the KPMG network of independent member firms affiliated with KPMG International, a Swiss cooperative.
All rights reserved. Printed in the U.S.A. KPMG and the KPMG logo are registered trademarks of KPMG International, a Swiss cooperative.22
Building Consensus
· Formulate implementation goals to advance the performance agenda
· Build a performance community
· Develop a performance management framework
· Implement repeatable processes
· Develop IT systems and tools
· Collaborate with stakeholders
· Showcase performance information
© 2012 KPMG LLP, a U.S. limited liability partnership and a member firm of the KPMG network of independent member firms affiliated with KPMG International, a Swiss cooperative.
All rights reserved. Printed in the U.S.A. KPMG and the KPMG logo are registered trademarks of KPMG International, a Swiss cooperative.23
Questions?
Questions?
© 2012 KPMG LLP, a U.S. limited liability partnership and a member firm of the KPMG network of independent member firms affiliated with KPMG International, a Swiss cooperative.
All rights reserved. Printed in the U.S.A. KPMG and the KPMG logo are registered trademarks of KPMG International, a Swiss cooperative.24
Contact Information
Terry CarnahanManaging DirectorKPMG LLPCell: 703-220-7181 Office: 703-286-8560 [email protected]