Performance Measurement and Organizational Effectiveness

1. Performance Measurement and Organizational Effectiveness Presented by Larry W. Maholland ICMA Center for Performance Measurement 2005 Forum April 26. 2005

2. Mission Vision Execution

3. Citizens Mayor and City Council City Administrator Formal Organizational Structure Departments Police Fire Public Works Community Development Economic Development Finance Human Resources Information Systems

4. Welcome to St. Charles! • Population 32,000 • 35 miles west of Chicago • Settled in 1834 • 365 full-time equivalent employees • Budget = $150 million

5. Our Strategic Framework

6. Core Values ~ Core Values ~ Core Values ~ Core Values ~ Core Values ~ Core Values ~ Core Values ~ Core Values ~ Core Values ~ Core Values ~ Core Values ~ Core Values ~ Core Values ~ Core Values ~ Core Values ~ Core Values ~ Core Values ~ Core Values ~ Core Values ~ Core Values ~ Core Values ~ Core Values ~ Core Values ~ Core Values ~ Core Values ~ Core Values ~ Core Values ~ Core Values ~ Core Values ~ Core Values ~ Core Values ~ Core Values ~ Core Values ~ Core Values ~ Core Values ~ Core Values ~ Core Values Resources Objectives Information Sources (Current Reality) Vision Strategies and Action Plans PerformanceTargets Strategic Framework STRUCTURED MEANDERING . STRUCTURED MEANDERING . Citywide Goals Mission

7. STRUCTURED MEANDERING . STRUCTURED MEANDERING . See Handout Information Sources (Current Reality) • Customer Surveys • Comparisons and Trends • Performance Measures • Focus Groups • Business Calls & City Hall Housecalls • Listen & Learn • Tuesdays Over Easy Information Sources (Current Reality)

8. STRUCTURED MEANDERING . STRUCTURED MEANDERING . See Handout Vision • An ideal picture of the future • Integrates the past with the future • Created by the community Vision

9. STRUCTURED MEANDERING . STRUCTURED MEANDERING . STRUCTURED MEANDERING . STRUCTURED MEANDERING . Citywide Goals Core Values ~ Core Values ~ Core Values ~ Core Values ~ Core Values ~ Core Values ~ Core Values ~ Core Values ~ Core Values ~ Core Values ~ Core Values ~ Core Values ~ Core Values ~ Core Values ~ Core Values ~ Core Values ~ Core Values ~ Core Values ~ Core Values ~ Core Values ~ Core Values ~ Core Values ~ Core Values ~ Core Values ~ Core Values ~ Core Values ~ Core Values ~ Core Values ~ Core Values ~ Core Values ~ Core Values ~ Core Values ~ Core Values ~ Core Values ~ Core Values ~ Core Values ~ Core Values Resources Objectives Mission Strategies and Action Plans PerformanceTargets See Handout Structured Meandering

10. Formalizing the Philosophy

11. Guiding Principles to Formalize the Philosophy • Devote the necessary time • Involve employees from all levels • Significant changes and programs • Use outcome and efficiency performance targets

12. See Handout Steps to Formalize the Philosophy • Step 1: Why Are We Doing This? • Step 2: Environmental Scan • Step 3: Information Review • Step 4: Vision, Mission and Values • Step 5 & 6 – Intradepartmental Analysis & Interdepartmental Communication

13. See Handout Steps to Formalize the Philosophy (cont.) • Step 7 -- Council Retreat • Step 8 – Review Key Initiatives (citywide goals) • Step 9 – Develop Objectives, Strategies, Performance Targets and Action Plan • Step 10 – Present Plan • Step 11 – Process Evaluation

14. Converting Theory Into Practice

15. Introducing the Concept • Why is it called a Business Plan? • Why citywide goals? • Is an objective qualitative and a goal quantitative, or is it the other way around?

16. Deployment • Learning together • How many to involve • How far to go • Persistence

17. Institutionalization • The look of the document • Business Plan presentations • Broad Distribution • Discuss with new hires • Included in budget

18. Personalizing Posters • Listen and Learn • Staff meetings • Council Update • Business Plan process review

19. St. Charles’ View of Performance Measurement

20. “A team without a scoreboard is not playing the game; it is only practicing.” Tom Malone, President, Miliken & Co.

21. City of St. Charles Vision Statement • “We will preserve our unique character as a dynamic, prosperous city, maintaining the small town charm, the natural beauty of the Fox Valley, and the quality schools, parks and services that make St. Charles distinct. Our historic downtown is the heart of the community, and keeping it healthy and vibrant is essential. Building on our heritage, we will balance nature and development…”

22. “How Do We Know?”

23. Reasons to Use Performance Measures • What gets measured, gets done • You can’t tell success from failure • If you can’t see success, you can’t learn from it • If you can’t see success, you can’t reward it • If you can’t see failure, you can’t correct it • If you can demonstrate results, you can win public support Source: NWMC --“Performance Measurement Consortium: Technical Committee Report” Sept. 1998

24. Reasons to Use Performance Measures (con’t) • Planning/budgeting • Operational improvement • Program evaluation • Reallocation of resources • Accountability • Directing operations • Contract monitoring Source: ICMA -- “Accountability for Performance Measurement and Monitoring Local Government” Edited by David N. Ammons, 1995

25. Balancing the Critical Factors for Success Developed by: Robert S. Kaplan & David P. Norton

26. Strong financial position Financial + Satisfied and loyal customers Customer Responsive and predictable internal processes Operations + Motivated and skilled employees Learning and Growth + High quality products and services Result of attention to perspectives = Factors That Influence Success Factors for Success Perspective

27. Short-term Financial Long-term Perspectives Important to Success “There is a saying in the United States that customer is king. But in Japan the customer is God.” ~Tak Kimoto, Sumitronics Inc. Customer It is the workers … who hold a company’s information and knowledge about its research, its products, its customers, and its corporate experience of what works and what doesn’t.” ~Leon Martel Employee “If there is a way to do it better … find it.” ~Thomas A. Edison Operations

28. Drivers Provide Indication of Future Success • Driven by short-term measures that lead to successful outcomes • Drivers link cause to the effect • Drivers are leading indicators • Outcomes are lagging indicators

29. Operations Learning & Growth Financial Customers Drive the Other Perspectives Quantitative Customer Data Priorities Survey Bus. Retention Survey Employee Survey Follow-up Surveys Available output, outcome and efficiency measures Qualitative CustomerInformation Focus Groups “Business Calls” “City Hall Housecalls” “Tuesdays Over Easy” “Listen and Learn” Business Plan Budget Plan

30. St. Charles’ Strategy In Action

31. St. Charles’ Strategy in Action • Customer – Site visits and surveys • Learning and Growth – Service Essentials TM • Internal Business Processes – Service standards • Financial -- $140,000 per year • Intangible • Successful business • Human capital Letter to Mayor: “When we first considered moving to St. Charles , we expressed concern over the city’s reputation of being difficult to work with on construction projects…” “An unhappy customer will share their experience with 20 others.” ~Bob Moran, President, Moran Consulting

32. St. Charles’ Strategy in Action • “…I can say with all honesty that the interaction we experienced with every city department was professional, courteous and respectful of our needs and time constraints…the many staff members we worked with left me with the impression that St. Charles was a community that would welcome our business and work with us to achieve our goals.”

33. Programs That Support City’s Philosophy • Process Improvement Teams • Wellness • Accounts Payable • Health Insurance • Retiree Insurance • Supervisory & Leadership Training (SMILE) • Performance Unbundling • Emergency Preparedness • Hiring Process • Mobile Communications • Permit Tracking

34. Programs That Support City’s Philosophy (cont.) • Service Essentials training • Grapevine • Pre-application & Pre-submittal meetings • Council Update • Records management • Emotional Intelligence coaching • Council agenda summaries • Staff meetings

35. The “Bottom Line”Is Results

36. “How would you describe St. Charles as a place to live?”

37. “Overall, how would you rate St. Charles as a place to do business?” *Low response rate

38. “How would you rate the responsiveness of St. Charles’ city employees?” *Low response rate

39. Employee Training

40. “I understand the City’s mission and goals.” 1 = Strongly disagree 7 = Strongly agree

41. “I am proud to work for the City.” 1 = Strongly disagree 2 = Strongly agree

42. Providing budgetary/financial information in an easy-to-read and understandable format Satisfaction

43. Conclusions • Create a vision • Assess current reality • Commit to experimentation and learning • Measure performance

44. Questions?

45. Group Activity Each table will create a vision, mission, objectives, core values and performance targets for my retirement party.

46. Group Activity -- Example Plan your next vacation Vision • Sunshine and 80 degrees near the water with great restaurants and a casual atmosphere. Mission • Relax and get recharged Objectives • Enjoy the recreational opportunities (e.g. sailing & fishing) • Return relaxed and reenergized Core values • Have fun • Appreciate the diversity in food and people • Live healthy

47. Group Activity -- Example Performance targets • Blood pressure will drop by 10% upon return • Read at least 3 “pleasure” books • Gain no more than 5 pounds • Survey of work group before and after you return, “On a scale of 1-Lousy to 5-extremely happy, rate your mood.” The score should be Improved from a 2.5 to 3.5.

48. Larry W. Maholland City of St. Charles 2 East Main Street St. Charles, IL 60174 lmaholland@stcharlesil.gov 630-377-4425