IMCNE ResourceLink - Working Smarter VS Working Harder

Institute of Management Consultants • New England Chapter

Published in
Government
Division News,
Summer 2002
(reprinted here
with permission
of the author)

Jared Clark, CMC
Government
Consulting
Group, Inc.
24B Hawthorne Village
Franklin, MA
02038
(508) 533-7119

www.govt
consulting
group.com

Working Smarter Versus Working Harder©

Working smarter is accomplishing the same or greater results with fewer resources and/or less overall effort. Given the real world in which government and educational organizations must function, how is it possible to work smarter, particularly when it seems impossible to do more without additional resources?

Learning how to work smarter is made possible by using a structured process that identifies, communicates, coordinates, implements and measures the attainment of what’s important. This process has been used successfully by for profit, not for profit and government organizations to create strong positive results. Examples include a major corporation making the transition from being last in class to best in class within three years(1) and a state government creating ways for more than 240 government agencies to solve a complex multinational problem.(2) The process is simple enough to apply to small organizations as well.

Four Perspectives

To leverage the development of innovative solutions, organizational problems need to be examined and monitored from at least four dimensions or perspectives. Professors Robert S. Kaplan and David P. Norton at the Harvard Business School came to this conclusion based upon their research and work.(3) They also learned that accomplishments in one perspective can and need to drive accomplishments in the other perspectives. They have called this structured approach to strategic management and communication the Balanced Scorecard.

In government and education the customer perspective contains the organizational purposes and identifies the most important areas and results these organizations produce. The capacity of agencies to produce customer perspective results is the outcome of the internal processes. The results of internal processes determine or drive customer perspective results. Accordingly, internal process is or can be(4) the second perspective from which to target and evaluate agency performance. What people learn and/or the new services developed determine the comparative viability of alternative internal processes. This is called the learning and growth perspective. Fourth, financial results determine the results that can be achieved in each of the other perspectives. The financial perspective is the fourth perspective by which to direct and evaluate agency performance. Collectively these perspectives, the strategy and linkages amongst them, and the associated measurements create the foundation for developing a balanced scorecard. The balanced scorecard is an application of the 80/20 principle i.e., paying attention to 20% of the information that produces 80% of the organization's outcomes.

Where To Begin

Ideally this structured thought process is initiated at the highest levels of an organization such as the chief executive, the primary policy-making body or senior management team. The planning process focuses upon those matters that are strategically important to the organization and what its leaders determine are important. The process can be used successfully, however, wherever the head of an organization is willing to accept responsibility for defining and achieving goals.

Steps To Working Smarter

Learning to work smarter begins by thinking in generalizations and subsequently becoming quite specific. The first step is to identify the strategic themes that are considered important. Themes are concepts such as public safety, academic excellence, and physical infrastructure. Naming these strategic themes does not mean that others are unimportant. It simply means that the other services are not part of the current strategic direction, and that the ways for those service providers to contribute to the strategic objectives needs to be determined.

Once leadership agreement is reached on the strategic themes, the next step is to define what needs to be accomplished within each theme. Ask the question, "What are the goals for each theme from the customers' perspectives?" This is a different question from asking how to achieve customer satisfaction; however, some answers may involve customer satisfaction issues. Broad goals should be defined in short simple statements. For a sample theme of public safety and from the customer perspective, a sample goal might be to help people feel safer. Again, to keep everyone working together, leadership agreement on and commitment to the goals must be obtained before proceeding to the next step, defining SMART objectives.

SMART Objectives And Thinking

Working smarter requires that goals be restated as SMART objectives. These are objectives that are Specific, Measurable, Achievable, Relevant, and Time-bound. An example of the SMART objective is to make the residents in target neighborhoods feel 5% safer by next year. Once SMART objectives are developed and leadership agreement is obtained, it is then possible to define the specific things that need to be done to achieve them. The same process applies to all other themes, goals and objectives.

Close The Gap Between Current And Desired Results

One of the most useful questions to answer at this point is, "What is it that we need to do differently to close the gap between current and the desired results?" It is at this point that the development and implementation of a balanced scorecard creates the opportunity to make the transition from thinking within the limitations of current paradigms to working smarter. Thinking through, discussing, determining and committing to what needs to be done differently to close the gap between current and desired results initiates the process of working smarter. A trained balance scorecard facilitator can help these discussions stay focused and productive.

Involve Those With Implementation Responsibility

If the people with direct management, supervisory and key line responsibility have not been involved in the discussions, from this point forward they need to be. They are the experts. Achieving the objectives is their responsibility, and their commitment to goal attainment is critical to success.

An Example

The purposes of the example are to illustrate how to work smarter and to develop a balanced scorecard. It is not to take the reader through a detailed thought process or to convince the reader about the relative merits of particular policing strategies. Accordingly, to make people feel 5% safer in target neighborhoods by next year, from the internal process perspective it may be determined that to close the gap two new initiatives are required. First, 7% more serious offenders (perpetrators of Uniform Crime Reporting crimes listed under Part 1, i.e., "UCR Part 1 crimes") need to be arrested and successfully prosecuted. Secondly, the police need to communicate effectively with at least 10% of the community about policing performance improvements.

To accomplish the two new internal process initiatives, it was determined that the new initiative of catching and successfully prosecuting 7% more serious offenders would require that on average 30% of the solvability factors of part 1 criminal investigation cases would need to be known (the learning and growth perspective). As part of a balanced scorecard development process for line organizations, quality improvement initiatives may be required to define and achieve these and other internal process objectives. Secondly, to communicate effectively with 10% of the people in the target neighborhoods it was determined the police need to develop an effective public communications program.

In this example, the balanced scorecard project team also concluded that for the police to learn the extent to which its customer perspective goal is achieved, it would be necessary to determine the extent to which people in the target areas feel safe at the beginning and end of the measurement period.

Costs Matter

From the financial perspective the question of what an initiative costs is separated from the question of funding sources. Cost is the amount spent to conduct an initiative. Initially it may be satisfactory to estimate costs. If an organization is to continuously learn to work smarter, however, the ability to routinely track activities and analyze costs must become part of the automated financial accounting systems, and routine way of conducting the business of government and education.

When seeking funds for new initiatives, there are only three sources. One is to raise prices (taxes). The other is to take the funds from other programs or less important activities. The third is to cut unnecessary costs. Government and education leaders can and do decide what is more important based upon subjective criteria.(5) The public perception, however, is that public officials only describe how much more they need to spend and that there is little factual assurance that goals will be achieved. Results are described simply as better or worse, bigger or smaller.

The SMART objective, selected initiatives, required learning, estimated costs and the cause and effect linkages (what drives what) are depicted in the strategy map that follows (Chart 1). In this example and at this summary level it is relatively easy to see the strategy the police professionals believe is the way to close the 5% gap in how safe people in the target neighborhoods feel by next year, what needs to be learned and the estimated costs to make it happen.

Chart 1

Measure Results

Thinking smarter also requires that one determine how to measure the results achieved for each objective in each perspective. From the customer perspective a public opinion survey is one good tool to assess how safe people feel. The instrument asks people to rate on a scale how safe they feel regarding the different issues that contribute to feelings of neighborhood safety. The second is the percentage change between safety opinion ratings at the beginning and the end of the measurement period.

The number of serious or part 1 crimes solved is a standard measurement and statistic kept by police departments. A change in percentage of this number is a simple calculation. This simple number, however, is not the best measurement because of potential changes in the number of serious crimes committed and reported. A more relevant goal may be to increase by 7% the ratio of serious crimes solved and successfully prosecuted compared to the total number of part 1 crimes committed during the measurement period.

Scorecards within each of the operating units that are aligned with the corporate objectives is working smarter because the interrelated scorecards help effectively coordinate people in the operating units to accomplish the same or closely related objectives. They also enable senior managers and oversight boards to monitor primarily the top-level objectives and measurements. On an exception basis managers can review or drill down into the more detailed measurements to analyze variances in performance compared to plan. The Texas State Auditors Office uses one of the several commercially available software packages in this way to assist in creating and monitoring multiple scorecards to manage its operations and projects.

The balance of scorecard measurements discourages simply attacking intermediate objectives such as solvability factors and still failing to achieve the end results. Focus on the results achieved rather than on tasks completed is a smarter way to work.

Discussion of objectives and measurements from each perspective produces a complete balanced scorecard that might look similar to the one below (Chart 2). Collectively all of the above information is more succinctly stated and easily communicated to organization members and the public in a scorecard.

Chart 2

Determining what is strategically important and measuring the results achieved from the four perspectives produces useful, credible information, identifies cause and effect relationships and can communicate simply the effective use of public resources.

Summary

Development, implementation and use of the balanced scorecard makes it possible for people to work smarter and accomplish more with the same or fewer resources, because this structured process...

Obtains leadership commitment and support for strategically important goals and SMART objectives
Creates new paradigms within which to evaluate, assign priorities, coordinate and focus on what is determined as most important
Secures middle management and line staff commitment and support
Focuses on closing the gap between existing and desired outcomes
Quickly and effectively communicates expectations
Aligns multiple operations with common or related goals and objectives
Links results achieved with their costs
Balances the results achieved amongst four perspectives: customer, internal process, learning and growth and financial
Only requires that a few critical indicators and measurements be developed, taken, and used to make decisions about strategically important objectives
Enables senior managers and policy makers to monitor only a few indicators and to be alerted to review more detailed performance indicators to identify problem sources
Balanced scorecard development and monitoring can be automated
Helps people learn from experience to improve performance
Leading indicators enable service providers to take corrective actions before final deadlines
Identifies cost-effective strategies, tactics and behaviors
Balanced measurements help create balanced performance
Uses an easy to comprehend step by step structured thought process
Process improvement techniques can be used on strategically important issues

The real test, however, in working smarter is to try it. You too should be able to replicate the same kinds of dramatic performance improvements experienced by Mobile North American Marketing and Refining Division, the State of Washington, the State of Texas Auditors Office, the City of Charlotte, North Carolina and dozens of other government and not for profit organizations. You too can work smarter instead of harder by developing and managing strategy to bring about constructive organizational performance improvement.

Jared Clark is a certified management consultant by the Institute of Management Consultants, USA. He specializes in working with state and local governments and schools to create innovative results. His offices are in Franklin, MA. He can be reached at 508-533-7119, by or through the company's web site www.govt-consulting-group.com.

Footnotes:

(1) Mobil North American Marketing and Refining Division during the period 1992 through 1995 made the transition from being last in profitability amongst it peers to being the most profitable by a 56% margin above the industry average using a balanced scorecard approach. Kaplan, Robert S. and Norton, David P. The Strategy Focused Organization, Boston, MA, Harvard Business School Press, 2001, p. 4.

(2) The State of Washington used the Balanced Scorecard methodology to develop a program to protect and restore the Pacific northwest salmon involving more than 240 government agencies in two countries, five states and provinces, numerous local governments and several native American Indian tribes. Dear, Joseph, Chief of Staff, Office of the Governor, State of Washington, "Managing For Results Conference," Lyndon B. Johnson School of Public Affairs, Austin, TX, 2000.

(3) The State of Washington in its work added a fifth perspective, agency mission.

(4) It is possible to develop different perspectives and to arrange the factors that drive performance in a different way and sequence from the ones presented here. However, these four are considered the basic standard by Kaplan and Norton.

(5) Part of the difficulty, however, in making decisions about what is important is that politics is to publicly funded organizations what the law of supply and demand is to business. Politics determines who gets what. Additionally, government agencies and schools are often rule driven i.e., things must be done because a law says so. Consequently, it appears that almost everything that government agencies and schools do is considered important. The demand for more funding appears to be without limit. Unless results and costs are measured, however, it is difficult or impossible to determine which alternatives are most cost-effective. Unless results and costs are measured, legislators and other rule making authorities will continue to adopt new rules and provide appropriations as a statement of political commitment with no further regard to what is required to deliver the results required by the rules.

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(Updated 9/12/02)