Performance Alignment: Linking Resource Management to Organizational Goals
- 1. Welcome to the fmi igf Webinar Thursday, November 8, 2012 1:00 PM EST Performance Alignment: Linking Resource Management to Organizational Goals
- 2. Webinar Operation In the “Ask a question box”, please ask the presenter a question or send your question via twitter @fmi_igf Technical sound/visual difficulties? Click on “Technical” and send a message Webinar will be archived under www.fmi.ca
- 3. Speaker: Mike Haley Landmark – Intersol Moderator: Marcel Boulianne Treasury Board of Canada Secretariat
- 4. Performance Alignment: Linking Resource Management to Organizational Goals Presenter: Mike Haley, Landmark–Intersol & Board Member FMI Halifax
- 5. Speaker Bio – Mike Haley Mike Haley leads the Performance Alignment practice at Landmark- Intersol, a strategic partnership between Landmark Decisions Inc. of Halifax and The Intersol Group Ltd. of Ottawa. The firms' focus is a methodology that brings sound concepts for integrated business management together with enterprise-class performance and cost modeling technologies all built on strong fundamentals of disciplined data management. In doing so, Landmark-Intersol help’s clients understand both their current performance environment and a means to develop a blueprint for enhanced organizational performance. Since the early 90’s, Mike has worked with clients worldwide in the training, technology transfer and general application of performance and cost management concepts to the telecommunication, manufacturing, pharmaceutical, food processing, distribution, government and financial service industries. Public sector clients include a wide variety of Federal, Provincial/State and Municipal Governments such as Fisheries & Oceans Canada, the Public Health Agency of Canada, Health Canada, Transport Canada, Ontario Ministry of Finance, City of Charleston, the US Navy and various departments in the New Zealand Government. Mike sits on the Board of PPX, the Performance & Planning Exchange, a Canadian non-profit centre of excellence for learning, sharing and developing expertise in performance and planning across the public sector. He has a M.Sc. from Dalhousie University and lives in Halifax, NS where he also serves on the board of the local FMI chapter.
- 6. From Performance Measurement to Performance Alignment ...the use of performance management techniques __for coordinating the activities and resources ___necessary to ensure all aspects of business ____management (i.e. planning, risk management _____and project Alignment management) are integrated. …the adoption of practices and tools by _which an organization establishes __strategic and operational plans and then ___executes and adjusts these plans using ____performance measurement data. Management …the definition & collection of data _used by organizations to track __progress against stated goals, ___objectives and intended results. Measurement Organizational Performance Maturity
- 7. Why is Performance Alignment important? • Senior Management & Employee Engagement • Involvement in Development Process • Clearly Defined Expectations • Improved Change Capacity • Enhanced Decision Making Capacity • Results Against Expectations • Resource Requirements (i.e. Value for Money or “Efficiency & Economy”) • Support for Strategic Reviews • Reduced Time & Effort on Planning, Reporting & Evaluation • Departmental Reporting – RPP/DPR, PMF, Horizontal Initiatives • Consistent Approach Across Department (“Economies of Scale”) • Evaluations (“Built In” by design) • Improved Compliance with Central Agency Requirements • TBS Policies & Directives • MAF Ratings & Action Plans • OAG Findings / Recommendations / Action Plans Drives an Organizational Performance Culture Shift!
- 8. Driving Forces for Improved Resource Management in GOC Revisions to the Management Resources & Results Structure (MRRS) • Introduction of Efficiency Indicators for lowest level programs in the PAA • Development of standardized performance indicators for Internal Services • New Results Management Component (RMC) System (~ technology enablement) Continued Management Accountability Framework (MAF) Enhancements • Proposal for new “Integrated Management for Results” AoM • Focus on use of MRRS information for decision making (~ technology enablement) Standing Committee on Government Operations & Estimate (OGGO)) – Strengthening Parliamentary Scrutiny of Estimates and Supply (June ‘12) • Move from O&M, Capital & G&C Votes to Program Based Appropriations • Proposal to table Estimates and Report on Plans & Priorities on the same day • RPP to contain 3 years of history, 3 years of forecast and variance analysis • Development of a searchable online database (~ technology enablement)
- 9. Recent GoC Definitions on Linking Outcomes & Resources Economy: minimizing the use of resources. Economy is achieved when the cost of resources used approximates the minimum amount of resources needed to achieve expected outcomes. Efficiency: the extent to which resources are used such that a greater level of output is produced with the same level of input or, a lower level of input is used to produce the same level of output. The level of input and output could be increases or decreases in quantity, quality, or both. Effectiveness: the extent to which a program is achieving expected outcomes. Performance: the extent to which effectiveness, efficiency and economy are achieved by a program Source: TBS Policy on Evaluation (2009) Core Issue #5: Demonstration of Efficiency and Economy Assessment of resource utilization in relation to the production of outputs and progress toward expected outcomes Directive on the Evaluation Function (April 2009)
- 10. The Logic Model Visualizing the Linkages between Resources & Outcomes Performance Indicators that populate the indicators of all dimensions of a measurement framework Efficiency Time, Quantity, Quality, Throughput, Resource Utilization Effectiveness Satisfaction, Reach, Benefits, Impacts, Achieving Expectations & Targets Economy Budget Variance, Resource Capacity RESOURCES ACTIVITIES Process OUTPUTS Efficiency & Cost Direct Outcomes Final Outcomes EXTERNAL FACTORS CLIENTS Output and Client Group Costs Resource Utilization & Cost Efficiency Costing Indicators that explain how costs are consumed in the organization.
- 11. The Logic Model as a Performance Plan A Foundation for Performance Alignment and Resource Management Output Cause (Outputs) Performance Indicators Effect (Outcomes) Line of Sight Departmental, Business, or Program Plan Strategic Outcome Strategic Outcome Performance Plan (Logic model) Intermediate Outcome Intermediate Outcome Intermediate Outcome Immediate Outcome Immediate Outcome Immediate Outcome Output Output Accountability Planning (Business Structure) Regions Directorates Cross Functional Teams Branches Units Departmental Business or Program Structure Performance Indicators Performance Indicators Performance Indicators Performance Indicators Performance Indicators Performance Indicators Performance Indicators Performance Indicators Performance Indicators Performance Indicators
- 12. Aligning Project Management Practices Departmental Business or Program Plan Strategic Projects Strategic Outcome Strategic Outcome Performance Plan (Logic Model) Intermediate Outcome Intermediate Outcome Intermediate Outcome Immediate Outcome Immediate Outcome Immediate Outcome Output Output Output Project Scope Indicators Operational Projects Project Risk Indicators Project Schedule Indicators Project Resource Indicators Project Management Process Establish Project Resources Define Project Scope Assess Project Risks Develop Project Schedule
- 13. Aligning Risk Management Practices Organizational Business or Program Plan Strategic Outcome Strategic Outcome Performance Plan (Logic Model) Intermediate Outcome Intermediate Outcome Intermediate Outcome Immediate Outcome Immediate Outcome Immediate Outcome Output Output Output Risk Management Process Identify Risk Factors Risk Factor Indicators Develop Risk Mitigation Strategy Risk Mitigation Indicators Assess & Prioritize Risk Risk Assessment Indicators Strategic Risks Operational Risks
- 14. Aligning Resources with Business Management Practices Resource Management Financial Management Financial Indicators Workforce Management Workforce/HR Indicators Asset Management Asset Indicators Departmental Business or Program Plan Strategic Outcome Strategic Outcome Risk Management Process Intermediate Outcome Intermediate Outcome Intermediate Outcome Immediate Outcome Immediate Outcome Immediate Outcome Plan Management Process Output Output Output Establish Project Resources Project Management Process Define Project Scope Assess Project Risks Develop Project Schedule What’s missing? Activities!
- 15. Insightful References on Resource Management …. “ Questions can only be answered by analyzing the activities that are needed to attain objectives.” 1954 ! Doing Things Right - Operational Changes •Reduced Costs •Improved Efficiencies •Resource Capacity Planning •Resource Constraint Management Doing the Right Things – Strategic Changes • Program / Services Rationalization • Business Process Design • Impact on Outcomes • Shared Service Opportunities • “Value for Money” 1998
- 16. GoC’s 7 Step Approach to Costing 7. Sign off 6. Calculate & Validate Results 5. Select Cost Assignment Methodology 4. Define Cost Classifications (direct vs. indirect) 3. Establish the Cost Base (costs to be included) 2. Determine the Cost Objects (end result) 1. Define the Purpose of the Costing Exercise (scope) Source: TBS-OCG Guide to Costing (2008)
- 17. Output Costing Model Visualizing, Calculating and Validating Economy & Efficiency Operational Cause Resources “What we pay for” $$$ $$$ $$$ Activities “What we do” Outputs “What we supply & service” Cost = $$$ Capacity Capacity Field Personnel Equipment Corporate Site Visit Support Call Visits Calls Service 1 Service 2 Monthly Update Reports Capacity Labour Hrs Eq. Hrs Personnel Labour Hrs Capacity = 4000 Building Actual = 3800 SqFt Throughput = Labour Hrs / Visit Utilization = 95% Financial Effect Program Cost or “Cost to Serve”
- 18. Benefits of Output Costing Models Output Costing Models OPERATIONS MANAGEMENT Resource Allocations/Scheduling Capacity Planning Alternative Program Delivery FINANCIAL MANAGEMENT Planning & Budgeting Transfer Pricing Efficiency Indicators & “Value for Money” CLIENT MANAGEMENT Service Standards User Fee Pricing Strategies Cost to Serve STRATEGIC MANAGEMENT Program Rationalization Business Scenarios Shared Services
- 19. Limited resources dictate performance achievement & often establish future funding Output Costing Model Resources Departmental Business or Program Plan Performance Indicators Strategic Outcome Strategic Outcome Performance Indicators Performance Indicators Performance Indicators Intermediate Outcome Performance Indicators Performance Indicators Intermediate Outcome Performance Indicators $$$ Performance Indicators Performance Indicators Performance Indicators Performance Performance Intermediate Indicators Planning Outcome (Logic model) Immediate Outcome Immediate Outcome Immediate Outcome Output Capacity Activities Output Output Linking Resources, Outcomes and Targets Avoiding a Negative Performance Feedback Loop Organizational goals & targets should drive resourcing requirements but…
- 20. Technology as a Performance Alignment “Enabler” Performance Understanding Performance Information Enablement Maturity Aligned & Adaptive A “Performance Culture” Desired Path Best Practice: Phased Approach Education & Facilitation IM/IT Software and/or Infrastructure Investment Adapted from “The Performance Management Revolution”, Dresner, H. (2007) Reactive but Apprehensive Compliant but Lethargic Evasive & Apathetic
- 21. Technology for Output Costing Models Operations Process Model Resources $$$ Capacity Activities Performance Indicators Output Performance Indicators Output
- 22. Value of Performance Technology Solutions • Paper based studies/exercises are dated the moment they are printed and are too easily “forgotten” • Drives discussions & consensus on performance definitions & terminology. Forces the standardization of meta-data and data collection strategies • Makes performance “Real & Engaging” for all levels of personnel by putting planning & reporting into the hands on “the masses” (particularly the more technology minded employees) Advice: Embrace Performance Technology! Don’t wait until the end of the content development process to think about using or implementing performance software.
- 23. Contact Information Mike Haley | Performance Alignment Practice Lead Landmark-Intersol | mhaley@landmark.ca +1.613.230.6424 x221 (o) | +1.902.499.5425 (c)
- 24. QUESTIONS & ANSWERS In the “Ask a question box”, please ask the presenter a question or send your question via twitter @fmi_igf
- 25. Next Webinar: THURSDAY NOVEMBER 28, 2012 at 1:30 EST (FRENCH LANGUAGE PRESENTATION) Presenter: Daniel McMahon FCPA, FCA, President & Chief Executive Officer, Chartered Professional Accountants of Quebec Topic: Mr. McMahon will describe the process that lead to the unification of the three accounting bodies (CA,CMA, CGA) in Quebec. He will also provide an update on the unification discussions in the rest of Canada.
- 26. Next English Webinar WEDNESDAY DEC. 12, 2012 at 1:00 EST Presenter: David McGuinty Member of Parliament Topic: How parliamentarians use and view financial information provided to them by government financial communities.
- 27. In the “Ask a question box”, please provide us with: Feedback on this webinar? Ideas for future webinars? Next week this webinar will be archived on the fmi*igf website www.fmi.ca.