Magazine article Government Finance Review

Performance Management and Lean: Frenemies?

Magazine article Government Finance Review

Performance Management and Lean: Frenemies?

Article excerpt

The new normal is no longer new; it's just reality. Governments simply have to generate more value to meet rising demands with the constrained resources that are available. Most jurisdictions have been using some form of performance management to help meet this challenge, with mixed results. Now, many organizations are exploring how Lean may be able to help us. Which begs the question: Are these two systems fundamentally complementary (friends), in conflict (enemies), or some combination of the two (frenemies)?

FRIENDS

Both Are Fundamentally about Better Results and Value. Lean's imperative for action can inject energy into existing performance measurement initiatives because Lean makes measures both consequential and more immediate. The Plan-Do-Check-Act cycle, an underlying principle of both frameworks, requires regular measurement and data analysis.

Performance management starts by defining what outcomes we want to achieve, or asking "are we doing the right things?" Lean starts with defining the problems to solve, or asking "are we doing the right things well?" Performance management establishes the strategic direction, and Lean helps employees improve their processes to get there. You can also look at performance management as diagnostic tool to identify the key problem areas--but even after drilling down several layers, few performance management approaches fix the issue. At this point, Lean provides a remedy for processes that are slow or wasteful.

Performance management focuses on outcomes that we cannot always control, which can create frustration and lead to questions about accountability and attribution. Lean creates less of an accountability dilemma because it typically works on a department's own processes, so the department can change them. Lean works on the problems of the government itself more than those of society in general. The corollary, however, is that Lean isn't used strategically as often as performance management is.

Most of us have faced challenges in trying to get performance management working consistently on the front lines of the organization. This is because measurement is often seen as threatening. Lean is no magic bullet either, but the structure and discipline of Lean "daily management" is an effective form of front-line performance management. King County, Washington, has found that the employee empowerment that is inherent in Lean encourages daily management. In addition, the metrics required to inform daily management are used first by the employees who are doing the work, so the process doesn't seem like something that is used to report up the chain of command.

Lean's commitment to listening to --and acting on--the ideas of frontline employees finally breathes life into the concept of employee empowerment, which might be the most abused buzz phrase of the last several decades in government. Performance management has typically been more of a tactic for management, and it has most often been imposed and managed from the top down. It's not that performance management cannot empower employees, but that aspect isn't as hard-wired into performance management as it is in Lean. It's true that Lean does usually arrive as a leadership initiative, but that is followed by moments of true surprise when front-line employees actually drive the change. The transformative power of Lean culture is real.

A note: Performance management is not generally perceived as a direct threat to people's jobs, but an initiative called "Lean" that seeks to eliminate "waste" naturally prompts suspicion. For that reason, and because people should not be asked to redesign themselves out of employment, many governments enter into agreements with their organized labor partners to ensure that participation in Lean will not result in the loss of employment, and unions do appreciate seeing their front-line members providing experience and ideas that result in improvements for both customers and employees. …

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