Key Performance Indicators for Government and Non Profit Agencies

DAVID PARMENTER is an international presenter who is known for his entertaining and thought-provoking sessions, which have led to substantial change in many organizations. He is a leading expert in the development of winning KPIs, replacing the annual planning process with quarterly rolling planning and management practices that will get you to the top. David has delivered workshops to thousands of attendees in many cities around the world, including Sydney, Melbourne, Hong Kong, Kuala Lumpur, Singapore, Tehran, Jeddah, Muscat, Johannesburg, Prague, Rome, Dublin, London, Manchester, Edinburgh, and Toronto. He has worked for Ernst & Young, BP Oil Ltd, and Arthur Andersen, and is a Fellow of the Institute of Chartered Accountants in England and Wales. David is a regular writer for professional and business journals. He is also the author of Winning CFOs: Implementing and Applying Better Practices and The Leading-Edge Manager's Guide to Success (both from Wiley). David can be contacted via parmenter@waymark.co.nz or +64 4 499 0007. His website, davidparmenter.com, contains many white papers, articles, and freeware that will be useful to readers.

Preface xiii Acknowledgments xxi Part I Setting The Scene Chapter 1 Background 3 Are Agencies Really Non Profit Agencies? 3 Measurement in Government and Non Profit Agencies 3 Unintended Behavior: The Dark Side of Measures 4 Balanced Scorecards within Government and Non Profit Agencies 6 Checklist: Where Are You in Your Journey with Performance Measures? 6 Major Benefits of Performance Measures 8 Notes 10 Chapter 2 Myths of Performance Measurement 13 Myth 1: Measuring Performance Is Relatively Simple and the Appropriate Measures Are Very Obvious 13 Myth 2: You Can Delegate a Performance Management Project to a Consulting Firm 14 Myth 3: Your In-House Project Team Can Achieve Success while Continuing with Their Other Duties 14 Myth 4: By Tying KPIs to Pay You Will Increase Performance 14 Myth 5: Most Measures Lead to Better Performance 15 Myth 6: Performance Measures Are Mainly Used to Help Manage Implementation of Strategic Initiatives 16 Myth 7: The Balanced Scorecard Was First Off the Blocks 17 Myth 8: Measures Fit Neatly into One Balanced-Scorecard Perspective 18 Myth 9: The Balanced Scorecard Can Report Progress to Both Management and the Board 18 Myth 10: There Are Only Four Balanced-Scorecard Perspectives 18 Myth 11: Strategy Mapping Is a Vital Requirement 20 Myth 12: All Performance Measures Are KPIs 22 Myth 13: Monitoring Monthly Performance Measures Will Improve Performance 23 Myth 14: KPIs Are Financial and Nonfinancial Indicators 23 Myth 15: The More Measures the Better 23 Myth 16: Indicators Are Either Lead (Performance Driver) or Lag (Outcome) Indicators 24 Myth 17: We Know What Good Performance Will Look Like Before the Year Starts and, thus, Can Set Relevant Year-End Targets 24 Notes 25 Chapter 3 Revitalizing Performance Management 27 Foundation Stone 1: Understanding Human Behavior 27 Foundation Stone 2: Knowledge of the Paradigm Shifters (Drucker, Collins, Welch, Hamel, Peters, Waterman, and Others) 29 Foundation Stone 3: Using an Appropriate Strategy 44 Foundation Stone 4: Critical Success Factors Known by All Staff 45 Foundation Stone 5: Abandon Processes That Do Not Work 45 Rejuvenating Human Resources 46 Performance-Related Pay: Correcting the Errors 47 Reviewing an Individual's Performance 48 Getting the Right People on the Bus 48 Jack Welch's 20/70/10 Differentiation Rule 49 Secrets from High-Performing Teams 49 Toyota's 14 Principles 50 Role of Performance Measures: Implementing Winning KPIs 51 Quarterly Rolling Planning: The Setting of Targets 51 Reporting Performance 52 Outside-In View 53 Adopting Kaizen 53 Working Smarter Not Harder 54 Getting Technology to Deliver 54 Moving from Management to Leadership 55 Notes 55 Chapter 4 Measurement Leadership Has to Come from the Chief Executive Officer 57 Barriers to Measurement Leadership 57 The Way Forward for the Chief Executive Officer 58 Appoint a Chief Measurement Officer 60 Notes 60 Chapter 5 Strategy and Its Relevance to Performance Measures 61 Define Your Organization's Mission, Vision, Values 61 Create a Strategy That Is Understood by Staff 63 Ensure That Your Strategy Is Balanced 64 Monitor Implementation of Your Strategy 66 Creating the Future 66 Replace the Annual Planning Process with Rolling Planning 67 Notes 67 Part II Winning KPIs Methodology Chapter 6 The Great KPI Misunderstanding 71 Key Result Indicators 71 Performance and Result Indicators 73 Key Performance Indicators 74 Seven Characteristics of KPIs 76 Difference between Key Results Indicators and KPIs 78 Lead and Lag Confusion 79 10/80/10 Rule 81 Importance of Timely Measurement 82 Note 83 Chapter 7 Finding Your Organization's Critical Success Factors 85 The Missing Link 85 Importance of Knowing Your Organization's Critical Success Factors 86 Four Tasks for Identifying Organization-Wide Critical Success Factors 91 Strategy Mappin