Monday, July 11, 2011

Performance Contracting: Getting the "How" Right

This is the third of three posts on Performance Contracting. The first post can be accessed by clicking here; the second, by clicking here.

In my first two posts on performance contracting – what we call Partnering For Results – we identified the two key principles for successfully creating contracts to help you ensure your customers experience the results they require:
  • Be very clear on who the customer is, and focus on the results they experience

  • Be sure you build your contract(s) around results for your customer and not something less
In this third and final post, we want to use these two principles to talk about the how – how you can successfully Partner for Results.

Before beginning to Partner for Results, there are several important decisions that need to be made at the enterprise or jurisdiction level. These are essential to ensuring success. Two of the primary questions are:
  • What services will be contracted out?

  • What approach will you take to Partnering for Results?
Your organization may elect to have its services delivered almost exclusively through contracts or choose to contract out for selected services. Each organization has to make this decision based on the services it provides, the results it needs to deliver, the best value for the money and what it knows of its community, culture, and politics. But the important thing is to be intentional about this choice and thoughtful in your approach..

Once your organization is clear on which services it wishes to contract out, there are several important decisions regarding the approach to be taken . These include:
  • Is this a contract with a sole source ? If so, particular care will need to be taken to structure the contract in a way that preserves the focus on customers and results. Remember that the customers are those who receive the service and experience the benefit – not the contractor.

  • Is this contract to be put out for competitive bid? If so, will employees/employee groups be eligible to submit bids to deliver the results? Many jurisdictions have found that employee groups can provide competitive, if not compelling, bids – and that the process of doing so helps the organization get very clear about the true cost of doing business.

  • Will your performance contracts help to create a market place for your service delivery? The establishment of performance contracts can create a broader market, with more players and more competition. We’ve seen this occur with performance contracting for child welfare services.

  • Performance Contracting can be used to fund innovation. The Office of Hawaiian Affairs, with which we’ve worked extensively to create a powerful Partnering for Results system, is intentionally issuing RFP’s to fund innovation, leveraging the creativity of the community to drive new solutions to achieve Strategic Results around Income, Education and Health.

  • Is cost a primary driver for your performance contracting? We caution against using performance contracting primarily to drive down cost. Performance contracting provides an invaluable tool to understand the impact on customers and results – but performance contracting does not always automatically yield cost savings.
When the major policy decisions have been made, keep in mind these keys to operational success in using performance contracting:
  • Establish clear, time-specific reporting requirements. Make sure expectations are clearly established in the contract for what performance information will be reported, how, and when. The Office of Hawaiian Affairs has licensed the use of our web-based performance software MFR Live for their contractors to use to report their performance information. This ensures definitions are consistent and makes compilation and review of the results much faster and easier.

  • Establish a consistent process for monitoring performance and evaluating the contract. Regular monitoring, feedback and follow-up with contractors helps to improve performance by ensuring the focus remains on the results in the contract and ensures accountability for performance measures in the contract. A performance contracting process that does not actually look at performance regularly is not going to deliver the same results as one that uses it as an active management tool. The Alcohol Drug and Mental Health Board of Franklin County, OH, holds regular “ProviderStat” sessions with their contractors to review and manage performance. The Office of Hawaiian Affairs has two levels of review. A performance review is a desk review of performance reported against the contract. A performance evaluation is more extensive and is conducted on-site.

  • Keep time frames in synch with your budget period. Multi-year contracts for the delivery of services do not provide as effective a platform for managing performance as single year contracts, though it is sometimes necessary for very large projects to extend the contract period beyond the budget period. Multi-year contracts encourage a sense of entitlement for the vendor. Shorter time frames – particularly in the beginning of a performance contracting effort – help ensure accountability is at the appropriate levels.

  • Publish the results. Publishing the performance information of contractors is a powerful way to demonstrate transparency and accountability for you and for your contractors. It can also be a free and powerful way to foster innovation and to improve performance as your contractors will see who is performing better than they are – and what they can learn from those high performers to improve their own results. There is nothing like published results to foster a little friendly competition.
Partnering for Results provides an incredibly powerful tool to help you align your contractors to provide the greatest possible results for your customers. I hope you have found these posts to be helpful as you think about the challenges and opportunities in Partnering for Results. Let us know if I can help.

Friday, July 8, 2011

Performance Contracting: Contracting for Results...or Something Less

This is the second of three posts regarding Performance Contracting. The first post can be accessed by clicking here. Keep an eye out early next week for the last installment.

Speaking events are a great way to connect with people and to find out what is really going on among government leaders. We often ask questions at the beginning of seminars and presentations, mostly to find out about the audience and to get a quick assessment of their progress in Managing for Results.

One of my favorite questions is: Are your contracts performance based?

And a follow-up question for those who indicate their contracts are performance based: Do you contract for outputs, or for results?

Over the years more and more hands have begun to raise in response to the first question – more governments are developing performance based contracts. The answers to the second question, though, are still nearly always “outputs.” Rarely is the answer that governments are contracting for “results.” That means at best most government contracts are contracts for outputs, and few if any are contracting for results to achieve a particular customer experience.

You may have read our statement that:

“If you can think it clearly, you can write it clearly;

If you can write it clearly, then you can measure it;

And if you can measure it, you can get it done”©.

An old friend of mine in Iowa used to also say “you get what you inspect, not what you expect.” So, when contracting for services, what do you measure and what do you inspect, results or something less?

If contracts for service only count or measure how many services (outputs) are delivered or how many people are served, then you may never know what impact you are having on your customers. Remember in the first post on Performance Contracting, we said that customers are the people who receive your services and experience the intended result.

Results are a measure of the experience your customer have as a consequence of receiving your services – % fires contained to the room of origin, % of permits issued within 10 days, % of children in foster care not experiencing abuse, % of road miles plowed (snow) prior to the school bus schedule for those same miles.

If you want results for your customers, outputs alone will not get you there.

If you want results, contracts will need to include clearly stated and measurable results.

If you want results, you will have to monitor and inspect what you measure.

To contract for results, the organization doing the contracting will need to become very clear about three things:

  • Who is the customer?
  • What result are we trying to achieve for this customer?
  • What service or outputs will deliver that result?

Watch for our third and final post in this series, coming soon: How to Contract for Results.

Read the first post in this series by clicking here.

Check out Weidner's recent webinar on Performance Contracting — you can download the presentation by clicking here and listen to the webinar audio by clicking here.

And don’t miss this column – “Performance Contracting: Turning Talk Into Action” – by our friends Katherine Barrett and Richard Greene for the IBM Center for the Business of Government.

Monday, May 16, 2011

Performance Contracting: Now, Who Is the Customer, Again?

Governments provide services and deliver results for customers in two basic ways: through employees, or through contractors.

Aligning and integrating employee performance to advance your organization is a powerful way to “git ‘er done,” and it’s a big focus of our efforts as well. At Weidner, we’re in the middle of presenting a series of webinars on Employee Performance Management; you can check out what we’ve already shared by clicking here, and you can sign up for one of our upcoming sessions by clicking here.

But with all the (deserved) attention to employees, organizations sometimes don’t focus enough on using their contracted vendors to accomplish results as well. Partnering for Results is a suggested way of talking about Performance Based Contracting, and I’ll be talking about that here and in a couple of blog posts to come.

This first piece focuses on being clear about who the customer is – is the customer the vendor, or the people receiving the service? In upcoming posts I’ll share some thoughts about what you want to actually contract for, and how you can build capacity in your organization and in your contractors to get the results you need.

The first of three keys to successful Partnering for Results (code for Performance-Based Contracting):

Be relentlessly clear about the answer to the question, “Who is the customer?”

We are unequivocal about this: the people who receive the services provided through the contract are the customer. Not vendors. Vendors who provide services are not the customer – they are your “performance partners.”

Customers are not held accountable for results, and we do not measure their performance. But vendors should be held accountable, and their performance must be measured. In contracting relationships, staff can develop what I would call a co-dependent relationship with vendors that can soften expectations for performance. Listen, services providers would love for you to treat them like they are the customer!

What’s the big deal about this? Contracts are intended to be an extension of your organization’s efforts to implement your strategic and business plans and achieve key results for your customers. So there is a great deal at stake in managing performance through contracts.

What does it look like when vendors are considered to be the customer?

•Contracts include few, if any, performance requirements.
•Little or no data is collected on the experiences of the people who receive the services.
•Contract or performance reviews are rare to nonexistent.
•Support services for vendors are first priority.
•Contracts tend to be multi-year and extended with little effort by the vendor.
•Performance reports are mostly about how much money is spent.

Not a pretty picture.

By comparison, what does it look like if the people who receive the services are considered the customer?

•Contracts have both output and results measures.
•Data is collected on both types of measures and reported at regular intervals.
•Contract reviews are primarily about performance and are conducted regularly.
•Performance is reviewed frequently.
•Reports connect money to the customer experience.
•Contracts are clearly and directly aligned to support your strategic and business plans.

The Alcohol, Drug and Mental Health (ADAMH) Board in Franklin County, Ohio, has demonstrated best-in-class focus on results for the customer through their efforts to Partner For Results. They contract out, through service providers/vendors, more than 90% of the funding they receive each year. Over a decade ago they made the decision that the individuals and families receiving the services are the customer, not the vendors who provide those services. The impact of that decision has been extraordinary.

Check out our recent webinar in which Susan Lewis Kaylor, Vice President for Performance and Management at ADAMH, shared the story of their focus on results for customers. You can see the presentation file and listen to the webinar audio.

Get clear about who the customer really is, and then you can be clear about what you need your contracts to accomplish – results, or something less. I’ll talk about that next time.

Monday, May 2, 2011

No Surprises

This last post in the Five Rules for the Road on Managing Up is all about dealing with ‘reality as it is’, communicating that reality and managing expectations. Whether your boss is a City Council, a County Commission or the Executive of the organization, except on their Birthday... nobody likes surprises.

As much as anything, creating no surprises is best achieved by dealing with ‘reality as it is’ and communicating that reality. People can respond to reality if they know what it is. Way too often surprises occur because we haven’t told folks above us in the organization the reality of our situation. We are then set up to take reality like a punch. The truth is always best told early.

Our dear friend and long time colleague, Charles Curry, has fun talking about the ‘temporary comfort of ambiguity’. A foggy sense that ‘everything is okay’ actually is comfortable for a while, until reality comes barging in. Apply this to performance. If you don’t know what your performance is, there isn’t much to worry about. Well, actually there is. Sooner or later your customer will tell you about your performance, and at that point it becomes a surprise. A couple of years ago, one of our favorite County Managers was surprised (ambushed may be a better term) at a meeting of business leaders when he was told how poor the county’s performance was in issuing permits on a timely basis. You can imagine that from that point forward, he asked for and received performance reports on the time it was taking the County to issue building permits.

It takes time to communicate what to expect, and it’s worth it. Surprise your boss with an issue or problem and you are almost certain to get a negative response, especially if it is too late to do something about it. This requires us to think ahead, plan ahead, analyze ahead - anticipate and plan for what will actually happen – then communicate as you move forward. If you are the boss in a given situation, you can and should expect the same.

Imagine the surprise of an elected Commission member (not in one of our customer jurisdictions) who was recently told that there was a multi-million dollar problem with the coming year budget, because the operating cost of a new facility was that much more than anticipated. You can imagine the conversation when that information was shared. Really? How did that happen? We knew the staffing levels, the utility costs, etc. How could we have been that far off? All those priorities that were lined up to receive money now won’t. Not good.

Manage the expectations of your bosses away from surprises and expect the same from your direct reports.

Managing Up. We all do it because we all have a boss or several. The question is how we manage up. Because this site is mostly for executives and senior managers, you no doubt have people managing up to you all the time. My advice is to be clear about what you expect. Your chances of getting what you want are that much better.

These Five Rules of the Road have been with me a long time and have served me well. Let me know if they work for you or if you have some other ‘Rules for the Road’ for Managing Up that work for you.

Managing Up – Initiative, Take It! – Never Make Your Boss Ask or Wonder What You are Doing – Manage Expectations Around Deadlines – Never Reverse Delegate – No Surprises

Tuesday, April 26, 2011

Never Reverse Delegate

When your boss asks you to do something, simple or complex, they are doing you several favors. Favors? At its most basic level, they are giving you a job to do so you can earn your pay. Assignments and responsibilities described in your job description give you a chance to prove yourself and your value to the organization. Each assignment, every project, is an opportunity to show what you can do. All of this is self-evident to any professional person.

One of the points I want to make about reverse delegation is that giving your job back to your boss is essentially giving away your job and your opportunities.

If you are the boss, be aware when reverse delegation is happening. In a moment, it might even feel good that one of your direct reports is essentially saying that ‘you are the only one who can do this’. Don’t buy that for a minute. Reverse delegation often comes disguised as a request for help, which turns into you doing the job, and if the reverse delegator is good at it they will make you feel important in the process.

Worst case, reverse delegation happens when the person you gave the assignment to simply doesn’t perform, and you have to take it over. No doubt you feel the frustration of that situation. How much of that are you willing to tolerate? How much of that can the organization tolerate? What is the best thing for the organization? My advice is to take care of business, take care of the organization. Assignments are opportunities for your folks to prove themselves or not. Make the call if someone can’t do the job.

Another form of reverse delegation is - If the boss has to think about and remind you to do your job and when to do it, they are doing your job for you. Any time I have to remind folks to do their job I’m doing their job.

Reverse delegation comes in your door quietly. Often staff will come to you with a problem – but no solution. This is a subtle form of reverse delegation – expecting you, the boss, to come up with the solution. Either because of your experience or creativity, you may be able to come up with the solution yourself. Again, this is not the time to let your ego get in the way. Grow your people by making it clear that if they bring you a problem, they also need to bring the solution or at least some options. The job includes both problem identification and solution generation.

This applies to collaborative team work. Most of the time folks will agree with the boss. If the boss always has the solution, then the organization can grow lazy and lose out on all of the stored up innovation within the team. Force your team to develop solutions. You will grow a much stronger organization in the long run and have much more creative solutions in the short run.

A few remaining thoughts - Life is a writing and speaking contest. Look at every opportunity to develop a written product or make a presentation as your chance to shine.

Writing something? Edit it yourself. Don’t make your boss find and make edits that you should know to make. And for heaven’s sake, remember and internalize feedback your boss gives you so he/she doesn’t have to repeat the same edits again next time.
Reverse delegation comes quietly.

Managing Up: Take the Initiative! - Never Make Your Boss Wonder What You are Doing - Manage Expectations Around Deadlines - Never Reverse Delegate

Thursday, April 21, 2011

Manage Expectations Around Deadlines

When we measure results there are always two variables – how much and by when. This is the ‘by when’ part of Managing Up. If taking the Initiative is the most important aspect of Managing Up, and not making your boss wonder what you are doing is the most basic, this one is the easiest to do.

A deadline is a deadline is a deadline. Whether you are issuing permits, delivering a budget or a performance report, submitting a grant or issuing an rfp, a deadline is set because timeliness is important. The essential truth about goals is that goals and deadlines drive performance and are a great lever to make happen whatever difference for customers is on the agenda.

Look at deadlines as a great opportunity to meet or exceed performance expectations. Because that’s what deadlines are – performance expectations. Remember – how much by when. If you meet or exceed the ‘by when’ part of the equation, you are managing up – managing to the expectations of the organization and presumably your boss.

It’s pretty simple really. If you can meet the deadline, meet it and celebrate that. If for any reason, any reason, you cannot meet the deadline, communicate with your boss as soon as you know this. As hard as it is to do so, especially if the reason for not meeting the deadline may be your own performance, do it anyway. The alternative is much the worst. It’s a matter of honesty – just tell the truth. It always pays to do so – George was right about this. Ask any politician how it works to withhold the truth.

A couple of more points about what not to do-- If you say you are going to deliver a product by a certain date, then do it. It will enhance your credibility as someone the boss can count on – and you do what you say you are going to do. Under promise and over deliver is one of my favorite sayings.

If we promise something or agree to deliver something by a date and it looks like we can’t do that for any reason, then re-negotiate the deadline. This is so simple to do and is a great opportunity to communicate and build a bond of trust. Remember the earlier posting about not making your boss wonder or ask? Re-negotiating deadlines prevents the boss from being in that position.

If you are the boss, you want to know the deadline is not going to be met so you can either bring additional resources to bear, help solve problems to come as close to the deadline as possible, and so you can manage expectations above you about what is happening and what to expect. If people know ahead of time that something is happening or not happening, they can adjust their thinking, expectations and communicate rationally.

Manage Deadlines, Manage Expectations, Manage Up.

Next is ‘Never Reverse Delegate”.

Tuesday, April 19, 2011

Never Make Your Boss Ask or Wonder What You are Doing!

If taking the Initiative is the most important aspect of Managing Up, this one is the most basic. If you are the boss and you have to wonder what a member of your team is doing, something is wrong. If your boss has to ask you what you are doing, something is missing.

Right off the top, this is an important issue when managing up. If your boss is wondering or asking what is happening or what you are doing, you have a problem. That is not the state of mind or the state of the relationship that is best for you, for the boss or the organization. The boss does not want to spend his or her time wondering – he or she has plenty to think about. Never make your boss wonder what you are doing! Don’t even make them ask. If they are asking, somewhere there is a lack of Initiative on your part to make sure they know.

Proactively communicate with your boss. As a boss, I appreciate this so much. Yours will too. And if you are communicating too much, you’ll sense it or they will tell you. Make sure the boss sees the value of your contributions, your leadership, your products, the productivity of your staff and the key relationships you bring to the organization. Never make them wonder.

Oh, one last point – if your boss has to think of and remind you of what you are supposed to be doing (your job), the boss is doing your job for you.

Next in Managing Up – manage expectations around deadlines.

Wednesday, April 13, 2011

Initiative - Take It!

As you read this series I want to encourage you to think not only about how you manage up, but how you want people to manage up to you! Whether it be my 5 Rules for the Road or your own, it pays, as always, to be clear about what you expect.

Initiative is defined by the American Heritage Dictionary as ‘The power or ability to begin or to follow through energetically with a plan or task; enterprise and determination.’

Initiative is power, energy and determination unleashed and directed. Taking the Initiative means that you aren’t waiting to be told what or how to do what needs to be done. Instead it means moving forward what needs to be moved at or ahead of when its expected or required.

You do have to observe the extent of your authority. However, I’m a fan of asking forgiveness for high performance rather than asking permission.

Initiative is the polar opposite of resistance, especially passive aggressive behavior, which happens to rank at the very top of my list of unacceptable behaviors.

Manage your boss’s expectations by exceeding them. What I look for in employees is that they are continuously taking the Initiative, expanding the job they’ve been given and surprising me with unexpected results. Delivering products or results before I even asked for them or before they were due to arrive in my inbox will win my confidence. How about you? These are the folks we want in our organizations and these are the folks who will ultimately lead our organizations.

Courage and Confidence. It takes a fair amount of both of these to actually take the Initiative. It requires a little courage to move forward more or less without being told to do so. It takes a little confidence to believe in yourself to move forward without your boss looking on. Grow both of these in life and work and you’ll have no problems Managing Up.

Wednesday, April 6, 2011

Managing Up

All of us have a boss - or several. I've been working for money since my first paper route at age 7 and have been both a boss and had many bosses since then. Yeah...that's a few bosses, a few years and a lot of employees.

Managing Up is worth talking about because we all have to do it. How the relationship with the boss is managed has everything to do with how much we can get done, how we feel about the job and, at the very least, our short term success. So here are my five Managing Up - Rules for the Road:

  1. Initiative - Take It!

  2. Never make your boss ask or wonder what you are doing

  3. Manage expectations around deadlines

  4. Never reverse delegate

  5. No surprises
Coming up are my comments about each of the 'Rules'.

Tuesday, March 29, 2011

The Essential Principles: Focus Everything You Do on Results

The third of three lessons learned during my 20 years in government is that if government focuses everything it does on results, then the chances of success go up significantly.

Wednesday, March 16, 2011

Results Conversations: Clyde Namuo, Office of Hawaiian Affairs

In 2009, the Office of Hawaiian Affairs developed a new Strategic Plan, built on the input of over 3,000 individual and very much focused on measurable results for Native Hawaiians. To take a look at OHA’s a remarkable Strategic Plan. Now, throughout 2010 and 2011, OHA is implementing Managing for Results (MFR) at all levels in their operations including Budgeting, Business Plans, Work Plans, Performance Measures, Individual Performance Plans and Performance Based Contracting - and they are using MFR Live and MFR People to support the effort.

While on a recent on-site visit, I sat down with OHA CEO, Clyde Namuo, to reflect on their considerable accomplishments and what it all means to OHA and to the Native Hawaiian community. Listen in while Clyde shares the OHA story.

Thursday, March 10, 2011

The Essential Principles: Focus on the Right Results

The second of three lessons learned during my 20 years in government is that if government focuses on the right results, you will get the results you desire.

Friday, February 18, 2011

The Essential Principles: Focus on Results

In 20 years working in government, I have learned three, (yes three) things that I call the essential principles. The first is that if government focuses on results, those results are achievable...

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