Key Performance Indicators for Government and

Winning techniques and strategies for nonprofits and government agencies in creating successful and critical key performance indicators By exploring measures that have transformed businesses, David Parmenter has developed a methodology that is breathtaking in its simplicity and yet profound in its impact. Key Performance Indicators for Government and Nonprofit Agencies: Implementing Winning KPIs is a proactive guide representing a significant shift in the way KPIs are developed and used, with an abundance of implementation tools for government agencies and nonprofit groups. Implementation variations and short cuts for government and not-for-profit organizations How to brainstorm performance measures Templates for reporting performance measures A resource kit for a consultant who is acting as a coach / facilitator to the in-house project team Also by David Parmenter: Key Performance Indicators: Developing, Implementing, and Using Winning KPIs, Second Edition Filled with numerous case studies and checklists to help readers develop their KPIs, this book shows government agencies and nonprofits how to select and implement winning key performance indicators to ensure that their performance management initiatives are successful.

David Parmenter is an international presenter who is known for his entertaining and thought-provoking sessions, which have led to substantial change in many organizations. He is a leading expert in the development of winning KPIs, replacing the annual planning process with quarterly rolling planning and management practices that will get you to the top. David has delivered workshops to thousands of attendees in many cities around the world, including Sydney, Melbourne, Hong Kong, Kuala Lumpur, Singapore, Tehran, Jeddah, Muscat, Johannesburg, Prague, Rome, Dublin, London, Manchester, Edinburgh, and Toronto. He has worked for Ernst & Young, BP Oil Ltd, and Arthur Andersen, and is a Fellow of the Institute of Chartered Accountants in England and Wales. David is a regular writer for professional and business journals. He is also the author of Winning CFOs: Implementing and Applying Better Practices and The Leading-Edge Manager's Guide to Success (both from Wiley). David can be contacted via parmenter@waymark.co.nz or +64 4 499 0007. His website, davidparmenter.com, contains many white papers, articles, and freeware that will be useful to readers.

Preface	p. xiii
Acknowledgments	p. xxi
Setting the Scene
Background	p. 3
Are Agencies Really Non Profit Agencies?	p. 3
Measurement in Government and Non Profit Agencies	p. 3
Unintended Behavior: The Dark Side of Measures	p. 4
Balanced Scorecards within Government and Non Profit Agencies	p. 6
Checklist: Where Are You in Your Journey with Performance Measures?	p. 6
Major Benefits of Performance Measures	p. 8
Notes	p. 10
Myths of Performance Measurement	p. 13
Measuring Performance Is Relatively Simple and the Appropriate Measures Are Very Obvious	p. 13
You Can Delegate a Performance Management Project to a Consulting Firm	p. 14
Your In-House Project Team Can Achieve Success while Continuing with Their Other Duties	p. 14
By Tying KPIs to Pay You Will Increase Performance	p. 14
Most Measures Lead to Better Performance	p. 15
Performance Measures Are Mainly Used to Help Manage Implementation of Strategic Initiatives	p. 16
The Balanced Scorecard Was First Off the Blocks	p. 17
Measures Fit Neatly into One Balanced-Scorecard Perspective	p. 18
The Balanced Scorecard Can Report Progress to Both Management and the Board	p. 18
There Are Only Four Balanced-Scorecard Perspectives	p. 18
Strategy Mapping Is a Vital Requirement	p. 20
All Performance Measures Are KPIs	p. 22
Monitoring Monthly Performance Measures Will Improve Performance	p. 23
KPIs Are Financial and Nonfinancial Indicators	p. 23
The More Measures the Better	p. 23
Indicators Are Either Lead (Performance Driver) or Lag (Outcome) Indicators	p. 24
We Know What Good Performance Will Look Like Before the Year Starts and, thus, Can Set Relevant Year-End Targets	p. 24
Notes	p. 25
Revitalizing Performance Management	p. 27
Foundation Stone 1: Understanding Human Behavior	p. 27
Foundation Stone 2: Knowledge of the Paradigm Shifters (Drucker, Collins, Welch, Hamel, Peters, Waterman, and Others)	p. 29
Foundation Stone 3: Using an Appropriate Strategy	p. 44
Foundation Stone 4: Critical Success Factors Known by All Staff	p. 45
Foundation Stone 5: Abandon Processes That Do Not Work	p. 45
Rejuvenating Human Resources	p. 46
Performance-Related Pay: Correcting the Errors	p. 47
Reviewing an Individual's Performance	p. 48
Getting the Right People on the Bus	p. 48
Jack Welch's 20/70/10 Differentiation Rule	p. 49
Secrets from High-Performing Teams	p. 49
Toyota's 14 Principles	p. 50
Role of Performance Measures: Implementing Winning KPIs	p. 51
Quarterly Rolling Planning: The Setting of Targets	p. 51
Reporting Performance	p. 52
Outside-In View	p. 53
Adopting Kaizen	p. 53
Working Smarter Not Harder	p. 54
Getting Technology to Deliver	p. 54
Moving from Management to Leadership	p. 55
Notes	p. 55
Measurement Leadership Has to Come from the Chief Executive Officer	p. 57
Barriers to Measurement Leadership	p. 57
The Way Forward for the Chief Executive Officer	p. 58
Appoint a Chief Measurement Officer	p. 60
Notes	p. 60
Strategy and Its Relevance to Performance Measures	p. 61
Define Your Organization's Mission, Vision, Values	p. 61
Create a Strategy That Is Understood by Staff	p. 63
Ensure That Your Strategy Is Balanced	p. 64
Monitor Implementation of Your Strategy	p. 66
Creating the Future	p. 66
Replace the Annual Planning Process with Rolling Planning	p. 67
Notes	p. 67
Winning KPIs Methodology
The Great KPI Misunderstanding	p. 71
Key Result Indicators	p. 71
Performance and Result Indicators	p. 73
Key Performance Indicators	p. 74
Seven Characteristics of KPIs	p. 76
Difference between Key Results Indicators and KPIs	p. 78
Lead and Lag Confusion	p. 79
10/80/10 Rule	p. 81
Importance of Timely Measurement	p. 82
Note	p. 83
Finding Your Organization's Critical Success Factors	p. 85
The Missing Link	p. 85
Importance of Knowing Your Organization's Critical Success Factors	p. 86
Four Tasks For Identifying Organization-Wide Critical Success Factors	p. 91
Strategy Mapping	p. 100
Notes	p. 103
Foundation Stones for Implementing Key Performance Indicators	p. 105
"Partnership with the Staff, Unions, and Third Parties" Foundation Stone	p. 105
"Transfer of Power to the Front Line" Foundation Stone	p. 107
"Measure and Report Only What Matters" Foundation Stone	p. 108
"Source KPIs from the Critical Success Factors" Foundation Stone	p. 108
"Abandon Processes That Do Not Deliver" Foundation Stone	p. 111
"Understand Human Behavior" Foundation Stone	p. 112
"Organization-Wide Understanding of Winning KPIs Definition" Foundation Stone	p. 113
Notes	p. 113
Implementing the 12-Step Process	p. 115
How the 12-Step Model and the Seven Foundation Stones Fit Together	p. 115
Step One: Senior Management Team Commitment	p. 115
Step Two: Establish a Winning KPI Team Working Full Time on the Project	p. 120
Step Three: Establish a Just-Do-It Culture and Process	p. 124
Step Four: Set Up a Holistic KPI Development Strategy	p. 127
Step Five: Market the KPI System to All Employees	p. 131
Step Six: Identify Organization-Wide Critical Success Factors	p. 134
Step Seven: Record Performance Measures in a Database	p. 134
Step Eight: Select Team-Level Performance Measures	p. 137
Step Nine: Select Organizational Winning KPIs	p. 143
Step Ten: Develop the Reporting Framework at All Levels	p. 145
Step Eleven: Facilitate the Use of Winning KPIs	p. 148
Step Twelve: Refine KPIs to Maintain Their Relevance	p. 151
Notes	p. 152
Determining the Measures	p. 155
How to Derive Measures	p. 156
Brainstorming Measures	p. 156
Stacey Barr's PuMP	p. 157
Checking KPIs for Behavioral Alignment	p. 159
Case Studies	p. 161
Golf Club (Non Profit Membership Organization)	p. 161
Surf Life Saving (Non Profit Membership Organization)	p. 166
Government Department	p. 169
Professional Accounting Body	p. 170
Selling Change	p. 173
Selling by Emotional Drivers	p. 173
Selling the Move to Winning KPIs	p. 174
Common Critical Success Factors and Their Likely Measures for Government and Non Profit Agencies	p. 177
Reporting Performance Measures	p. 185
The Work of Stephen Few in Data Visualization	p. 185
Reporting the KPIs to Management and Staff	p. 186
Reporting Performance Measures to Management	p. 191
Reporting Performance Measures to Staff	p. 195
Reporting Performance Measures to the Board	p. 195
Reporting Team Performance Measures	p. 201
How the Reporting of Performance Measures Fits Together	p. 204
Notes	p. 204
Epilogue: Resources	p. 205
Foundation Stones of Performance-Related Pay Schemes	p. 211
Effective Recruiting-Getting the Right People on the Bus	p. 223
The Public Sector Can Abandon the Flawed Budget Process	p. 229
Jack Welch's Strategy Slides	p. 241
Suggested Success Factors for Government and Non Profit Agencies	p. 243
List of Performance Measures Suitable for Government and Non Profit Agencies	p. 273
Presenting the Critical Success Factors to the Board/Government Official	p. 293
Main Differences between the Balanced-Scorecard and Winning-KPIs Methodologies	p. 301
Index	p. 305
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Key Performance Indicators for Government and Non Profit Agencies Implementing Winning KPIs

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