Performance Measurement an Management of PACA and LED: The Compass of Local Competitiveness

1. Performance Measurement an Management of PACA and LED: The Compass of Local Competitiveness Jörg Meyer-Stamer jms@mesopartner.com

2. A methodology for monitoring and evaluation: The Balanced Scorecard approach Customers’ perspective Financial perspective Learning and growth perspective Internal business processes perspective

3. Key ideas involved in Balanced Scorecard (1) • BSC is not an ex-post evaluation tool, but a performance management tool • it forces actors to agree on goals and priorities • You allow no more than 3 - 4 Critical Success Factors (CSF) per quadrant • You allow no more than 2 - 3 Key Performance Indicators (KPI) per CSF • BSC creates a concurrent process of action and of reflection, leading to adjustment

4. Key ideas involved in Balanced Scorecard (2) • BSC is organised in a hierarchically structured way • a top-level BSC at a programme / policy level • more specific BSCs for initiatives that feed into the programme • even more specific BSCs for individual projects and interventions

5. Adapting the Balanced Scorecard to PACAThe Compass of Local Competitiveness: An Example External perspective: * distinctive locational profile * improved locational marketing * better standing with funders * stakeholder relationships Economic impact: * business retention * creation of jobs and income * generation of start-ups LED learning: * LED skills accumulation * alignment of goals and objectives * systematic M+E LED Process: * competent public service * membership-driven Chamber and business associations * effective communication between key players

6. Possible quick-wins with PACA External perspective: * distinctive locational profile * improved locational marketing * better standing with funders * stakeholder relationships Economic impact: * business retention * creation of jobs and income * generation of start-ups LED learning: * LED skills accumulation * alignment of goals and objectives * systematic M+E LED Process: * competent public service * membership-driven Chamber and business associations * effective communication between key players

7. Context and purpose • Assess the overall progress and impact of a PACA Project or another LED initiative • Create an occasion to discuss goals and achieve goal alignment • define indicators for each of the four quadrants in a participatory way • define critical success factors (CSFs) • define key performance indicators (KPIs) • Create an occasion for exchange of experience between different subsector / cluster / value chain initiatives.

8. How to do it practically? Top-level workshop • Workshop during first PACA follow-up • Repeat the scoring exercise on a bi-monthly basis • Start to collect hard data on OVIs as they become available.

10. Sequence of activities in a Compass Workshop 1 Framing: What exactly are we talking about? 2 Look back: What have we achieved so far? 3 Visioning: What are the overall objectives of the object of the Compass? 4 Define Critical Success Factors • organise CSFs into four quadrants • prioritise them (Pareto) 5 Option 1: Define 2 - 3 KPIs for each CSF • obtain a first score for each indicator 6 Option 2: Go directly into definition of activities to address CSFs (with participants with little experience in formulation of indicators

11. A possible Cluster / value chain / subsector PACA Compass Customers’ perspective: * what are the CSFs in creating and maintaining customer interest (price, quality, timely delivery, brand, lifestyle, ...) Economic impact: * business growth * level of investment, rate of return * creation of jobs and income Innovation and learning: * understanding the 5 forces * skills development * R&D * linkages with support orgs. * market intelligence Business Process: * productivity, quality, design, upstream and downstream, technology, market channels, flexibility, responsiveness, compliance with standards, ...

12. The Ilembe Agriprocessing Compass Relationship: * access to agricultural product markets * partnership btw. commercial and emerging farmers * coop. public/private sector Economic impact: * value chain integration * product diversification * market-driven demand * availability of funding Knowledge and learning: * effective transfer of skills * extension * market analysis * capacity building in quality control Internal organisation: * land reform * agri BEE objectives internalised * effective process management

13. Context and purpose • Assess the overall progress and impact of a value chain / cluster / subsector initiative • Create an occasion to discuss goals and achieve goal alignment • define indicators for each of the four quadrants in a participatory way • define critical success factors • define key performance indicators • more customer-focused exercise • Create an occasion for interaction between private and public sector

14. How to do it practically? • Workshop during first PACA follow-up • Repeat the scoring exercise on a monthly or bi-monthly basis • Start to collect hard data as they become available

15. Some lessons learnt in Ilembe pilot exercise (October 2004), 1 • Crucial to exactly define what the Compass is about (limits of the system, insider / outsider, territory, sector / value chain, LED / local development at large) • Build in iterations to check wording and alignment of understanding

16. Some lessons learnt in Ilembe pilot exercise (October 2004), 2 • The exercise involves an assessment of the overall strategy -- to the surprise of the participants • in locations with incipient LED activities, a Compass workshop is a possible alternative to an “LED Awareness Workshop” • Option: use Compass for strategy formulation, use Paper Computer for prioritisation • The earlier you can introduce the Compass in an LED initiative, the better (baseline data)

17. Thank you for your attention!