This first appeared as an ASPANET On-Line column in November 2003.

 Keeping Score
by John M. Kamensky

Managing for results in the District of Columbia’s government has historically been seen as an oxymoron.  But Tony Duckett knows what “managing for results” really means.  He’s the “activity manager” responsible for collecting Washington, DC’s garbage.  He has a budget of $14.5 million and a staff of 217 and they have very clear performance expectations:  “Achieve 99.8% same-day, on-time trash collection.”  For the first 6 months of the fiscal year, his score was “only” 97.3 percent.  And he heard about it! . . . and he has an answer why:  two months of extremely heavy snowfall had diverted his resources to clearing the streets (another one of his responsibilities), thereby dropping on-time performance for trash collection to 90 percent in February.

His agency, the Department of Public Works, provides about 250 services, six of which fall under Mr. Duckett’s responsibility, including trash collection.  And within the District government, the Department of Public Works is but one of a range of agencies that are increasingly focusing on managing for results by keeping score.

This all originated when the current Mayor, Tony Williams, took the reins of a basically broken city government in 1999.  At the time the District was in receivership and was governed by an outside board appointed by Congress.  Williams, the City Council, and the D.C. Financial Control Board worked together to apply all the modern tricks of management reform.  They envisioned a “strategic management cycle” comprised of strategic planning, performance budgeting, and performance management.

Mayor Williams began by creating a strategic planning process to serve as a framework for action.  He convened a Citizens Summit in 1999 to define and set citywide priorities for action.  This resulted in a two-year plan covering five citywide priority areas.  A repeat Summit in 2001 resulted in a more sophisticated approach, defining neighborhood-based priorities.  About 39 Strategic Neighborhood Action Plans (SNAPs) identified immediate and near-term priorities that were incorporated into agency plans.  These included such elements as “600 additional litter cans installed across the District.”  A third Summit is set for this month.

The Council pushed for a performance budgeting system, but that was impossible in 1999.  The District couldn’t even get its power bills paid so it could operate the street lights.  Who had time to develop performance metrics for the budget process?  But the Council passed legislation requiring a system be in place by 2003.  At the time, the Council had been receiving performance information on an ad hoc basis.  There were separate reports and different measures for individual council members and Members of Congress.  But this legislation was intended to make these measures systematic, linked to results, and embedded in the budget.  The pressure for action and the support of the Council were important to its success and the first phase was rolled out as part of the District’s Fiscal Year 2003 budget.

Once priorities were set, the budget was restructured into supporting programs, activities, and services for each of the 72 District agencies.  City Administrator John Koskinen --  a deputy to the Mayor – collected a lot of performance measures that were then loaded into a new accountability system for agency directors, senior managers, and eventually individual employees.  He worked closely with the Chief Financial Officer’s Office of Budget and Planning to create Agency Strategic Business Plans.  Their goal was to have four types of metrics for each service:  results, output, demand, and efficiency.  He and the Mayor also created publicly-posted scorecards on progress so citizens could keep track. 

Each agency was directed to develop its own strategic business plan and operating strategies.  This is being done in phases, with business plans being in place for the first time in 2003.  The business plans clearly define each agencies’ mission: what they do, who they do it for, and why (see the Department of Public Works as an example).  They also identify managers by name and detail what they are personally responsible for delivering.  So far, 34 agencies (comprising 85 percent of the budget) have strategic business plans in place. 

In addition, these plans are tied to the performance contracts of agency directors.  Sixty percent of their performance is based on how they meet agency goals; forty percent on how they contribute to operational support.  Those directors that successfully meet their commitments are allowed a bonus of up to 10 percent of salary.

The District has made remarkable progress in the past four years.  John Craig, the District’s chief for strategic budgeting says: “The most important aspect of this process is that it changes the discussion from money to results.”  However, there is still much to be done to complete the “strategic management cycle” envisioned at the outset.

The first of the remaining challenges is to recast the budget to be the main performance accountability plan.  The goal is to have this completed by 2005.  In the process, District strategic planning and performance management director Doug Smith says, they want to web-enable the strategic planning and performance measurement reporting process and benchmark the District against other similar jurisdictions.

A second challenge is that the District does not yet have activity-level costs so managers can determine the per-unit cost of services or activities.  Without this kind of information, line managers will not have the ability in the long run to manage the costs of their operations, which is one of the goals of performance budgeting.  (A recent IBM Center for the Business of Government report on performance budgeting describes the opportunities for performance budgeting at the federal level; many of these opportunities can also be applied at the local and state levels).

A third challenge is going beyond performance budgeting to performance management – linking performance of the organization to the performance of individual employees.  The District has begun this by linking to directors, but the next step is to extend it to all employees. 

And finally, the biggest challenge will be to institutionalize the strategic management system so that it is so easy to use that successors of the current crop of innovators will adopt it as their way of doing business as well.  Current reformers believe that if the performance measurement and scoring system are seen as too burdensome, the systems will be abandoned by future managers as they attempt to streamline and improve what they inherit!