Article from the Economist on performance measures

[kvaria@uk.cgeyc.com]

I thought this article was powerful in showing the chaos of setting
measurement by numbers in government processes and not looking at process
from a total customer service point of view. Comments would be welcome.
Ketan Varia


Missing the point


Apr 26th 2001


>From The Economist print edition


Britain  is  leading  the world in setting exacting performance targets for
its  public  services.  But  there  are  better  ways  of getting value for
government money


WHEN  the  British government set local authorities a target for collecting
recyclable waste, it seemed a good idea. Even better, the local authorities
persuaded  residents  to  take  the  trouble to separate the stuff that was
worth  recycling from all the rest?and met their target. There was only one
snag. The target was for collecting recyclable waste, not for recycling it.
As  a  result,  some  local  authorities  put  the rubbish that had been so
carefully separated back in with the rest of their garbage, and incinerated
the lot.


More than any other country, Britain has taken to relying on output targets
as  a  way  of  getting  the  best  out  of its public services. Government
departments  are  currently  striving  to  meet  around  600  of  them (see
article).


The  government's  determination  to focus on the public sector's output is
laudable.  After all, ministries have for decades measured their success in
terms  of the size of their budgets?rather as though a business were judged
a  success  when its costs, not its profits, were rising. But targeting, as
the  cautionary  tale  of  the  rubbish  suggests?and as the history of the
Soviet  Union's  economy  argues?is  not a reliable way of extracting value
either.


Targets  need  to  be simple, or they are no good as a management tool. Yet
public  services  are  often  trying  to  fulfil many objectives. If public
servants  are asked to focus on one measure, they will (rightly) ignore the
others. So when the government set a target for reducing class sizes within
primary schools, these duly fell?and secondary school class sizes rose. And
when  the  government  set  a  target  for  raising  literacy and numeracy,
children became more literate and numerate?but at the cost of squeezing out
other beneficial activities such as sport.


At  worst,  targets  create "perverse incentives"?when workers are cleverer
than  targeters, and find ingenious, and not necessarily desirable, ways to
meet  their  targets. That is why, for example, the government's commitment
to  reduce the hospital waiting list is now widely discredited. The target,
cutting  the  number  of  people waiting for treatment by 100,000, has been
met. But the number of people waiting to see a specialist?waiting to be put
on  the  waiting  list,  in  other  words?increased. And Sir Barry Jackson,
president  of  the  Royal College of Surgeons in England, has said that the
target has distorted clinical priorities: minor disorders can be dealt with
more swiftly than serious illnesses, so managers have been putting pressure
on surgeons to give smaller problems priority over larger ones.


Most  pernicious  of all, targets are based on the illusion that the centre
can  drive  change,  that  the man in Whitehall knows best. The opposite is
true.  Improvements in public services will generally come from individuals
and  teams  finding  better ways to work. The objective should be to spread
best practice through benchmarking, not to dictate from the centre. Targets
encourage  bureaucracy  and  are  thus  likely  to stifle initiative on the
ground.


The customer is always right


Targets  do  have  a  role  in  areas of government where the market cannot
easily  reach?defence,  for  instance,  and  policing. But in areas such as
health  and  education,  where there is scope for more consumer choice than
people  are  currently  offered,  targets  are  a  poor  substitute for the
disciplines  of  the  market.  Rather  than  wasting  public servants' time
forcing  them  to  measure their performance against some arbitrary target,
let consumers measure the public servants' performance against each other.


If  the  government  is  serious about extracting as much value as possible
from  its  public  services,  it  should focus more on transparency than on
targets.  Tell  people  everything  they  might  want to know about waiting
lists, mortality rates, class sizes, exam pass rates and sporting successes
and  give  them  the  power  to choose between different providers. Winning
custom is the toughest, and best, target of all.