At Governing's annual Managing Performance conference this fall in Austin, Texas, it wasn't surprising to hear from so many state and local officials about the benefits of tracking and managing government performance. After all, performance-management strategies have defined some of the best-managed governments in this country for several years. What was remarkable was how ingrained that dedication is becoming.

No longer is the concept of performance management the exclusive domain of managers and supervisors. It's a real-life, real-time practice that is permeating all levels of government.


In Washington State, performance management starts at the top, with Governor Christine Gregoire, who began her term in office with a series of listening tours. To gauge what government services citizens valued the most, she asked two questions: What are your top priorities for state spending? And what will tell you that the state is accomplishing those objectives?

Those meetings informed Gregoire's performance-management system, Government Management Accountability and Performance. "It's a vehicle for us to show our performance to the public," Gregoire said. "Are we accountable? Can we show that we have delivered results? You have to look at the data you get, ask the right questions, set the right performance measures and do it on a real-time basis. It's not easy."

The goal of GMAP--ensuring that government is serving citizens efficiently and effectively--is also the driving force behind Virginia's performance-management focus. Bill Leighty, a 28-year veteran of state government serving as chief of staff to Governor Tim Kaine (as well as his predecessor, Mark Warner), emphasized: "You must be able to articulate government's mission and how it aligns with the actions you're taking and the goals you set."

Virginia has adopted seven overarching goals, each supported by a set of performance measures. State agencies now are defining how their work, program by program, supports those goals. Every action will be linked to a performance measure, and every performance measure will be linked to the budget. That way the state hopes to clearly show a return on taxpayers' investment.

Leighty admitted that performance measurement in a political context is challenging. "It's hard to get legislators and other elected officials to focus on 40-year goals," he said. Performance goals are not useful if they are mired in bureaucracy or siloed in agencies: "Goal-setting needs to be collaborative, holistic and cross-boundary."

It can be daunting to gather the right data to measure performance-- making sure that it's not only accurate but also that it's measuring the appropriate actions or results. Start where you can, Leighty advised. "Begin measuring what you can measure, and then move on to what you should measure."

Given the large amount of money that state and local governments spend, it is not surprising that procurement is a key target for the use of performance measures. In Michigan, for example, the state's chief purchasing officer, Sean Carlson, was able to save $100 million by moving toward a performance-based procurement initiative, also called strategic sourcing. A similar effort in California produced equally impressive results, said Terese Butler, who served as the director of California's initiative, which generated savings of more than $170 million. As a separate entity, the strategic-sourcing program in California has concluded, because the tenets of performance-based procurement are now "completely incorporated into the procurement process," Butler said.

Although performance-management efforts generally have been initiated in the executive branch, a number of state legislatures are moving in this direction as well. In Connecticut, the drive to integrate performance data into the work of state government is led by legislators. State Representative Diana Urban, chairperson of the Results-Based Accountability Workgroup in the General Assembly, and Representative Denise Merrill, the House Appropriations chairperson, are forging an explicit tie between an agency's performance and its budget.


Cities and states also are using performance audits to refocus programs on the results they attain. Traditionally, auditors have focused primarily on government finances. But that is changing. Since its first performance audit was released in 2000, Metro Nashville has undergone nearly 60 audits assessing nearly every aspect of metro government, explained Finance Director David Manning. "Metro government agencies hadn't had any exposure to this kind of auditing," Manning said. "Their reactions ranged from outright hostility to skepticism to, sometimes, hope." But managers ultimately came to understand that performance audits could actually help their agencies. "Audits, if done correctly, can make a case for managers that they can't make for themselves," Manning noted. "It's a substantiation of need and of progress for an agency." It's also a process that has saved Nashville about $100 million so far.

Sometimes a crisis creates the right environment for the move to performance management. That was the case in Chicago, where performance and accountability are the touchstones of a new management approach being implemented by Mayor Richard M. Daley.

Chicago's effort began a year ago, when the city was mired in a corruption scandal in its hired-truck program, as well as an ongoing scandal regarding patronage hiring. The city knew it had to reform the way it was managing itself. Ironically, said Ron Huberman, Daley's chief of staff, the scandals were a good catalyst.

"If we weren't facing both a crisis of public confidence and an internal crisis, this would have been much harder," he said. "As it was, the crises were an opening for change." The mayor married the budget process with the performance-management process and began collecting and analyzing more data from city departments. Top decision makers in city government began meeting regularly with every department to discuss measures and results. These meetings have often included decisions to change policy, actions possible only because all the players are at the table together. Although Chicago still has a long way to go, Huberman said, it's a big--and necessary--step toward creating a city government that is truly accountable to its citizens. "We're now investing in performance management, and we're beginning to impact the culture of city government."


Certainly, high-level officials in states and localities are embracing a performance-management approach, but strategic governance is a concept that's being integrated throughout the chain of command in many agencies, with particular emphasis on including employees directly in charge of various activities.

The New York City Housing Authority, for example, has implemented a virtual management office to guide its investments in information technology. Fiscal realities require the department to be selective in its IT investments to ensure that every new technology project works as promised and solves whatever business problem it was intended to address.

To achieve that goal, NYCHA creates a project-management team for every new investment. The team is made up of an IT manager and a "business owner" from the area where the technology will be used. This allows the business unit affected to "own" the IT project. It's changing the culture of the department at every level, said Avi Duvdevani, chief information officer and deputy general manager for the housing authority. "When the elevator manager gets up in front of the general manager talking about TCP/IP, it's a wonderful thing to behold."

As in Chicago, crisis brought the opportunity for change in Los Angeles County, which in 2001 had the nation's worst food stamp error rate, and was slapped with huge federal penalties as a result. In response to that unhappy situation, the county's Department of Public Social Services decided to apply performance measurement throughout its operations, all the way to each individual field worker.

Applying the Compstat approach pioneered by the New York City Police Department to reduce crime, Bryce Yokomizo, director of the county's department, announced that the accuracy rate for each district and each individual worker would be measured and published, rank-ordered and discussed with employees at monthly meetings. Getting buy-in from managers on this kind of accountability and transparency was a challenge, Yokomizo acknowledged. "They would come into the office, close the door and say that this approach would destroy morale. But once the data showed improvement, their attitude improved." The food stamp effort was a resounding success. Within a year, L.A. County had reduced its error rate to nearly the national standard, a point the county did reach in 2005.

As state and municipal governments increasingly rely on private and nonprofit partners to deliver services, performance measurement is becoming an important component of that relationship.

"You cannot be successful unless your nonprofits are successful," said David Royer, head of the Alcohol, Drug and Mental Health Board for Franklin County, Ohio. Every government official managing a partner needs to know the answers to two critical questions: "What are we getting from our investment in nonprofits? And how do we know we are getting what we want?"

Focusing on performance helps government better deliver the services that citizens need, said Tom Ridge, former governor of Pennsylvania and former Homeland Security secretary. "One of the most thrilling-- and the most challenging--aspects of state and local government is that you really work with the people you serve," Ridge declared. And those citizens, he said, need to know that their government is performing well.

"Americans, at the end of the day, are performance-oriented," said Ridge. "They expect results."