(editor's note: our first guest post comes from SAS Strategist Gary Cokins.)
I don’t know why I was recently surprised to see tangible evidence of performance management applied by public sector organizations. I know that its components – such as strategy maps, balanced scorecards and activity-based costing – are common sense and offer benefits to all organizations regardless if they are commercial or government ones. However, like many others I still tend to associate public sectors as inefficient. I need to change my thinking.
The evidence I refer to comes from a military services conference I presented at in Madrid, Spain. There were excellent presentations from all of the Spanish military branches. One colonel revealed as mature a strategy map as I have seen in commercial organizations. Better yet, the impact of the map has led to a strong focus on the projects that truly support the command leadership with many other in-process projects postponed or terminated if they did not support the top commanders’ strategic intentions.
The second example was presented by a colonel in the Spanish air force. His organization constructed a very robust activity-based costing system that made visible the true costs to maintain and operate Spain’s diverse fleet of aircraft. He shared anecdotes of changes directly made by commanders resulting from reporting true costs that were substantially different from the beliefs the commanders had based on flawed and misleading costs calculated by their prior traditional costing method. One type of aircraft that was small in number but required relatively intensive maintenance was retired earlier than scheduled when they concluded that money being spent could be much better redirected to another more economical type of aircraft.
Why do I continue to be surprised when I see government agencies adopting modern managerial methodologies becoming widespread in commercial companies? I’m not sure. I need to shake this misperception. I guess I am realizing that when organizations are under pressure to do “more with less,” they simply look around at what are better ways to do the right thing.
- Gary Cokins
