A dynamic performance management approach to support local strategic planning (original) (raw)
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The purpose of this paper is to present how system dynamics (SD) can be used to enrich performance management in local government and to foster a common shared view of the relevant system’s structure and behavior among stakeholders for territorial strategic planning. We begin by framing how dynamic complexity through SD modeling can support consensus building among different stakeholders within a territory, which moves beyond the traditional view of strategic planning within the context of a single jurisdiction. A Dynamic Performance Management (DPM) approach, as shown by our case-study approach, may help such players to overcome possible barriers to collaboration because of its support to better detect how pursuing a sustainable development in the territory’s performance impacts on the sustainability of each single institution belonging to the territory. This implies that territorial public agencies, e.g. municipalities, may understand and communicate to their stakeholders that long term performance cannot be only assessed in financial terms or by referring to output measures only, but also in relation to the outcomes that public services will be able to generate as value transferred to the territory. Likewise, the enterprises operating in a given territory should be enabled to detect how their own performance can be sustainable in the long run if they will be able to generate not only financial capital, but also social capital to the benefit of the other players belonging to the territory. Therefore, a key to implement a DPM approach for each of the players is to combine an institutional (single-player) with an inter-institutional (i.e. multi-players or territory) perspective with a view to enhancing performance and pursuing sustainable development. An inter-institutional perspective frames the territory (rather than a single institution) as the relevant system where to comprise and manage the cause and effect relationships between performance factors and strategic resources.
Fragmentation and pillarization of the public sector is one of the results arising from the implementation of New Public Management reform. A multi-level governance structure carries the risk of generating ‘wicked’ problems directly affecting the performance of organizations providing public services. The focus of this paper is to examine how such a governance structure could impose several constraints on the management of public agencies. The analysis has been conducted through a Dynamic Performance Management approach, which combines the traditional Planning and Control tools with System Dynamics modelling. An Italian case study has been provided as a basis for discussion.
Governing Local Area Development through Dynamic Performance Management
Public Organization Review
Several attempts of local areas development fail due to a predominant attention to the internal performance of public organizations. The perspective of local area development may enhance performance management in public entities by considering: a) their outcomes in the local area; b) the inter-institutional relationships actable with other local areas' organizations to achieve such outcome; c) the improvement of the activity of other social institutions, enterprises and families, through networking and trust. This paper proposes a dynamic performance management (DPM) conceptual model to govern local area development and includes a case study of the Integrated Water System of Agrigento, Italy.
Management Accounting Research, 2000
The drive for reform in the public sector worldwide has focussed attention on the measurement of performance in public sector organizations. This is particularly true in local government. Local government has traditionally been concerned with measuring the delivery of primary objectives, or results, at the expense of secondary objectives, or the determinants of organizational performance. Current strategic management literature suggests that there should be a strong linkage between strategic plans and performance measures. Kaplan and Norton's (1992) balanced scorecard and Fitzgerald et al. 's (1991) results and determinants framework can provide this linkage. This paper reports on research into performance management systems in local government using the four dimensions of the balanced scorecard: financial, community, internal business processes and innovation and learning. It shows how the focus in this system of local government has been on the results of council work, ie. financial performance and to a lesser extent on how the community views performance. Local government performance measurement pays much less attention to the determinants, or means of achieving long-term, sustained organizational improvement in internal business processes, and innovation and learning. Whilst these issues are recognized as important, there are few measurement processes in place to manage performance in these areas. Strategic performance management demands an approach that recognizes the importance of a focus on both results and the means of achieving these results. This paper highlights a suggested framework for strategic and balanced local government performance measurement.
Improving Public Sector Performance and Fostering Accountability through System Dynamics Modelling
The 2nd Summer School in Improving Public Sector Performance and Fostering Accountability through System Dynamics Modelling: a Strategic Planning & Control Perspective is an elective course offered by the University of Palermo (Italy). It also is part of the curriculum of our International Ph.D. program in “Model Based Public Planning, Policy Design and Management,” which is jointly run with the Universities of Bergen (Norway) and Nijmegen (Holland). The Summer School follows the successful experience of last year’s Summer School, when we hosted 21 participants in Ustica (a flourishing island located 60 kms North of Palermo) from different parts of the world (Brazil, Egypt, Holland, Mozambique, Norway, Poland, Venezuela, and Italy) on the topic of “Model Based Public Planning, Policy Design, and Management: a System Dynamics approach.” This year the Summer School will focus a different—though related—subject. We aim to cover the topic of public sector performance, framing this subject around the viewpoints of different public sector industries. Examples and peculiarities of System Dynamics applications to specific industries (Health Care, Public Utilities, Energy, Housing, Public Works, Social Services, etc.) will be provided, and participants will be involved in working with teams to apply System Dynamics modelling to their own research fields. The School also will focus on research issues and research methodologies in Planning & Control and Modelling & Decision-Making in the Public Sector. The Summer School will be held at the “Addaura Hotel” (http://www.addaura.it/engl/) which is located 150 meters from the sea in the beautiful gulf of Mondello (Palermo).
Dynamic Performance Management: An Approach for Managing the Common Goods
Sustainability, 2019
Public organizations need innovative approaches for managing common goods and to explain the dynamics linking the (re)generation of common goods and organizational performance. Although system dynamics is recognised as a useful approach for managing common goods, public organizations rarely adopt the system dynamics for this goal. The paper aims to review the literature on the system dynamics and its recent application, known as dynamic performance management, to highlight the state of the art and future opportunities on the management of common goods. The authors analyzed 144 documents using a systematic literature review. The results obtained outline a fair number of documents, countries and journals involving the study of system dynamics, but do not cover sufficient research on the linking between the (re)generation of common goods and organizational performance. This paper outlines academic and practical contributions. Firstly, it contributes to the theory of common goods. It provides insight for linking the management of common goods and organizational performance through the use of dynamic performance management approach. Furthermore, it shows scholars the main research opportunities. Secondly, it indicates to practitioners the documents providing useful ideas on the adoption of system dynamics for managing common goods.
2013
This paper aims to show how applying the system dynamics methodology to performance management can provide public sector organizations a powerful modeling perspective to prevent, detect and counteract behavioral distortions associated to performance measurement. A dynamic performance management approach is able to support performance management system designers to outline and implement a consistent set of measures that can allow public sector decision makers to pursue sustainable organizational learning and development. This perspective implies a major shift from a static to a dynamic picture of organizational processes and results. This means framing delays between causes and effects, feedback loops, and trade-offs in time and space associated with alternative scenarios. It also means understanding how different policy levers impact the accumulation and depletion of strategic resources over time, and determining how performance drivers affect end-results. An application of this perspective is outlined, in relation to crime control policies at Municipal level. Concerning this, unintended behavioral consequences generated by the implementation of the Compstat program (at the New York Police Department) on reward and performance management systems are framed through the ‘lenses’ of dynamic performance management.
This paper aims to show how applying system dynamics methodology to performance management can provide a powerful modeling perspective enabling public sector organizations to prevent, detect, and counteract behavioral distortions associated with performance measurement. A dynamic performance management approach is able to support performance management system designers in outlining and implementing a consistent set of measures that can allow public sector decision-makers to pursue sustainable organizational learning and development. This perspective implies a major shift from a static to a dynamic picture of organizational processes and results. It means framing delays between causes and effects, feedback loops, and trade-offs in time and space associated with alternative scenarios. It also means understanding how different policy levers impact the accumulation and depletion of strategic resources over time, and determining how performance drivers affect end results. An exemplar application of this perspective is outlined in relation to municipal crime-control policies. Unintended behavioral consequences generated by the implementation of the CompStat program (New York Police Department) on reward and performance management systems are framed through the “lenses” of dynamic performance management.
2014
The purpose of this paper is to illustrate how system dynamics (SD) modeling can be used to enrich performance management in local government and to foster a common shared view of the relevant system's structure and behavior among stakeholders for territorial strategic planning. This is a quite hybrid field of analysis in performance measurement/management. In fact, in this context, performance is not primarily related to the single institutions in a regional area; it is rather associated to the territory where they operate. We begin by showing how framing dynamic complexity through SD modeling can support consensus building among different stakeholders in a territory. This shifts the attention beyond the traditional view of strategic planning, which is focused on each single jurisdiction. As shown by the case-study in the paper, a Dynamic Performance Management (DPM) approach, may help different institutions to overcome collaboration barriers. In fact, such approach supports players to detect how pursuing a sustainable development of a territory impacts in the long run on the growth sustainability of each institution operating in the territory itself. This implies that territorial public agencies, e.g. municipalities, may understand and communicate to their stakeholders that long term performance cannot be only assessed in financial terms or bounded to output measures, but also in relation to the outcomes that public services will generate, i.e. in terms of their value transferred to the territory. Likewise, enterprises operating in a given territory can be enabled to detect how their own performance will be sustainable in the long run if they will generate not only financial capital (i.e. profits), but also social capital to the benefit of the other players belonging to the territory. Therefore, a key to implement a DPM approach for each of the players is to combine an institutional (single-player) with an inter-institutional (i.e. multi-players or territory) perspective with a view to enhancing performance and pursuing sustainable development. An inter-institutional perspective frames the territory (rather than a single institution) as the relevant system where to comprise and manage the cause and effect relationships between performance factors and strategic resources.