Leadership Driven Method (LDM) of Performance Measurement (PM) – A Navigation System

What organizations in the world spend the most money and which ones waste the most? In our experience the answer is the Public Sector. Typically, half the funding in these organizations is spent on human resources and the other half on information technology/large capital and other projects. This is where the auditors at every level, local, state/province and national detect the extensive and excessive misuse of public funds. 

Considering the ever-increasing demands for more funding in education, health care and other key functions, effective use of public sector resources is more essential than ever. 

One of the major reasons why the public sector fails to optimize their resources is a lack of complete, timely and accurate information. In today’s environment where the only constant is ongoing change, not having effective information means there is no way to navigate through the myriad of shifts in budgets, programs, human resources, political and structural changes to attain their strategic direction.

So, what is the answer?  

A strategic, leadership-driven, performance measurement system, that focuses specifically on the public and not for profit sectors.

Why should you pay attention to LDM? 

This approach to performance measurement has been used to enhance existing PM Systems or to build them from scratch. It works for an organization as a whole or at a department, branch and even operational levels to improve decision making, enable proactive problem solving and institutionalize continuous improvement.  

Practical use of the LDM ensures:

• There is a strategy or road map in place to develop, implement and operate the PM System.  
• The identified performance measures are complete, balanced, accurate, timely and objective. 
• There is an Implementation Strategy in place that defines the roles/responsibilities, reporting frequencies/formats, and methods of data analysis/interpretation. 
• There is a smoothly functioning implementation system for gathering, analyzing, interpreting and reporting performance information with broad based acceptance and support. 

The diagram below portrays many of the key concepts and components that can be found in the book ‘The Leadership-Driven Method to Performance Measurement’ which I co-wrote with Patricia Lafferty.

This new and inclusive approach to performance measurement works because it provides the principles, approach and methodology needed to effectively address both the art and the science of developing or enhancing the PM system. 

• The science in developing and/or improving PM systems is based on a defined, step-by-step methodology that provides a disciplined and consistent development approach. Senior management leadership and support is required throughout. Both management and user involvement are mandated to ensure a thorough process-driven approach that provides multiple opportunities to review revise and approve the component deliverables.  This process-oriented approach is highly successful in breaking down individual and organizational resistances to what can be an extremely threatening project.  Further this approach ensures that the knowledge, skills and support needed to accept, operate and maintain the PM system are established. 
• The art of developing and/or improving PM systems is based on tailoring the PM system to the unique requirements of the public or not for profit organizations. Adapting the PM system to the needs of the organization regarding organizational climate, planning requirements, measures, timing, security requirements, and governance is incredibly important. These factors ensure that the PM system provides the right information at the right time, in the correct format with the proper analysis and interpretation. 

The LDM provides both the art and the science to successfully develop and/or improve a PM system for public or non-profit organizations. It provides the means to diagnose, understand, assess and facilitate the improvement of all aspects of PM systems. In summary, the LDM provides a navigation system that ensures public and not-for-profit organizations have the feedback to reward accomplishments and deal effectively with the ongoing issues interfering with the achievement of their strategic goals. It is the ultimate risk management tool.

Written by Bryan Shane.
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