Q: What is important in measuring public services performance?
A: Measuring performance in public sector organizations has many benefits. It allows managers to set up mechanisms to evaluate, control, budget, motivate, promote, celebrate, and improve their strategic decision-making.
The core use and benefit of setting up performance measurement systems in public sector organizations are: Prognosis, Diagnosis, Motivation, Legitimation, and Learning and Improvement.
In layman’s terms, public sector key performance indicators (KPIs) serve two important purposes: 1. Report important information to citizens. 2. Provide information that directly describes the government’s activities.
Therefore, without understanding and evaluating KPIs, governments cannot fulfill their commitment to responsible spending and transparency, and the public cannot verify if the required services are being adequately performed.
In most organizational structures, KPIs have two notable attributes: 1. They determine what is important to the success of the organization. 2. They indicate the expected level of performance by attaching a target to each metric.
Last but not least, how do we identify the most meaningful public sector KPIs?
Identify the key value drivers (research studies). This refers to identifying all stakeholders categories properly (internal and external) and conducting a stakeholders analysis to reveal what aspects are of interest. What matters most for citizens in terms of public transportation? Is it the arrival on time? The frequency of arrivals? How about the employees–what do they think is critical for the operations? What data is needed for optimizing processes and adjusting working flows to deliver the best customer experience?
Choose a balanced set of KPIs (efficiency versus effectiveness, process versus impact measurement, quality versus quantity). KPIs should be used in context and in correlation. For this reason, a successful scorecard or dashboard looks into performance from various perspectives.
Balance between simple and complex measurements. While many KPIs that capture impact may be survey-based and require significant resources for data collection and reporting, some KPIs can be tracked in real-life with the help of digitalization and enable proactive management.
Solid background in working with process and performance management.
Former consultant for the public sector – Ministry of Community Development – UAE
Former business excellence and process reengineer at Zain telecom – Jordan
Passion for knowledge sharing and supporting the growth and improvement of organizations and individuals.
***
This feature was first published in the Ask Our Experts section of Performance Magazine Issue No. 24, 2023—Public Sector Edition. It offers deep dives and practical insights into the public sector’s performance in the post-pandemic era. To download the free digital copy, visit the TKI Marketplace. You can also purchase an additional printed copy via Amazon.
Imagine a manufacturing plant aiming to maintain operational excellence while facing potential safety hazards every day. In such a scenario, tracking key performance indicators (KPIs) such as production efficiency and output is needed for assessing performance. However, without considering key risk indicators (KRIs) like workplace incidents or equipment failure rates, the plant may overlook critical safety concerns until they become costly disruptions or accidents.
Integrating KPIs and KRIs enables the plant to proactively manage both performance and risk and ensure smooth operations while prioritizing employee safety. Overall, this integration is essential for promoting ongoing improvement and awareness of risks within the organization.
The KPI Institute defines KPI as a measurable expression for the achievement of a desired level of results in an area relevant to the evaluated entity’s activity. KRI is a measure used to evaluate the likelihood of an event’s probability and consequences that could exceed the organization’s risk appetite and significantly harm the success of the organization.
While most organizations rely heavily on KPIs, rooted in historical data, these may offer limited insight into future threats. KRIs modify the narrative by beginning with a proactive framework for risk management and developing measurements around prospective pitfalls in the future.
Improving risk management
Utilizing both KPIs and KRIs would provide a more systematic approach to risk management compared to relying solely on KPIs. For instance, within the supply chain context, KRIs may cover aspects, such as supplier performance, reporting accuracy, and emerging industry trends. This gives the organization a clear picture of all possible hazards and enables it to foresee and handle issues before they have an adverse effect on operations. Here are the overarching benefits of using KRIs in risk management:
Proactive identification: With KRIs, organizations can proactively detect potential risks before they occur. For example, by monitoring supplier performance to anticipate supply chain disruptions or analyzing industry trends to predict market shifts, organizations can minimize possible harm. This proactive approach enables early intervention and allows the organization to implement preventive measures.
Root cause analysis: KRIs encourage delving deeper than immediate events to identify the underlying root causes behind potential risks. For example, rather than simply reacting to a decrease in supplier performance, KRIs can signal organizations to uncover the reasons behind it, whether due to internal issues, external market forces, or other factors. By addressing root causes, organizations can develop more effective risk management strategies and prevent similar issues from recurring in the future.
Decisions based on data: Integrating risk assessment into current data streams allows organizations to make informed decisions in real-time. By leveraging KRIs and building alerts or other KRI-based solutions, organizations can access timely and pertinent information to guide decision-making processes. For instance, by monitoring relevant data points, such as financial indicators, organizations can quickly identify emerging risks and take appropriate actions to manage them. This allows organizations to be resilient and agile in the face of uncertainty.
Implementing KRIs
Organizations must understand the relationship between risk and performance to improve cross-functional collaboration and incorporate risk concerns into business decisions. For the integration to be successful, KRIs should be reported and communicated effectively. To create KRIs and corresponding mitigation plans, the individual who oversees the Enterprise Risk Management (ERM) process should work with the risk owners. The “risk owners,” who can effectively oversee their business units in line with their individual units’ risk goals, are the main benefactors of KRIs.
Risk owners must evaluate KRI data pertaining to risks that impact their units on a frequent basis. It is important to acknowledge that the different methods for reviewing KRI data also depend on an organization’s functions. In addition, successful identification and implementation of KRIs also requires a structured approach with the following key steps: identifying key metrics, assessing gaps, improving metrics, validating and setting trigger levels, and establishing a risk control plan.
Harnessing the power of KRIs alongside KPIs emphasizes the link between successful risk management and successful organization outcomes. This encourages a proactive attitude to risk, in which mitigating risk is viewed as an investment in accomplishing corporate objectives rather than as a cost.
Nawaf Al Omari boasts over a decade of experience in optimizing teams and driving project management success. He excels at forecasting staffing needs, resource management, and fostering collaborations, with a 40% increase in stakeholder satisfaction. Prioritizing data-driven decision-making, he is adept at mitigating risks, tracking KPIs, and achieving cost reductions. Nawaf is strongly committed to delivering results and operational excellence.
The popularity of sustainability has surged in recent years, causing organizations to grapple with balancing short-term profits with long-term sustainable practices. This has led to concepts like shared value and corporate social responsibility, with companies aiming to create economic and social value while reducing their environmental impact. The movement has sparked active efforts, with social innovators, policymakers, investors, and academics all striving to measure sustainability.
In today’s world, companies must move beyond outdated economic metrics and adopt KPIs that consider the triple bottom line, including social, economic, and environmental aspects of their operations, all while promoting sustainable human well-being.
However, sustainability is a constantly evolving concept that adapts to context and cannot be measured with a single yardstick. The balance between social, economic, and environmental considerations is crucial to achieving sustainability. It is like walking on a tightrope, requiring constant adjustments to maintain equilibrium in a changing world. Each context requires a unique approach, with varying weights and measures for different factors. Customized solutions are needed that address stakeholder needs while maintaining long-term balance, as a one-size-fits-all formula won’t work.
About the Expert
• As a Managing Director, Teodora leads development initiatives to support and enhance the organization’s strategic plan and manages the development and growth of the MENA branch of The KPI Institute.
• An expert researcher, consultant and practitioner with six years of experience in the deployment and implementation of KPI Management Frameworks.
• Pursuing a PhD. in Management on the topic: Rethinking the Performance Management Systems to ensure organizational sustainability, Lucian Blaga University, Romania
• Postgraduate Program in Entrepreneurship and Venture Creation, ISCTE Business School Lisbon, Portugal
• Master’s Degree in Project Management, Romanian-German University, Romania
Key performance indicators (KPIs) have been the north star guiding business strategy for decades. These criteria measure not only sales and revenue but also customer satisfaction as well as employee engagement.However, as the business landscape continues to evolve at an unprecedented pace, the need for deeper insights and more agile measurement arises. This is where the potential of generative artificial intelligence (GenAI) shines, opening doors to a new era of KPI innovation.
GenAI goes beyond automation to produce entirely novel content. It is a creative catalyst, opening up unprecedented possibilities for KPI innovation. Forget rigid, one-dimensional metrics. Powered by GenAI, KPIs become fluent, adaptive, and poetic, capturing not only the whats but also the whys and what-ifs.
Reimagining KPIs for exponential growth
From static to dynamic: GenAI is capable of integrating dynamic KPIs, meaning they can evolve alongside the company that uses them. KPIs also fit seamlessly into a changing market, with trends and strategies naturally shifting along the way.
Unveiling the unseen: Traditional KPIs often fail to hit the nail on the head by overlooking key, intangible factors that could affect performance. GenAI, however, can delve much deeper. With the help of GenAI, it is possible to determine brand sentiment before a particular campaign is launched, anticipate employee engagement within remote teams, or even predict customer turnover before it happens.
Personalized insights, enhanced action: Data mountains no longer need to be intimidating.GenAI transforms data into personalized narratives, crafting stories tailored to individual stakeholders. Sales teams can access actionable insights, marketing managers can monitor real-time customer sentiment, and CEOs can explore what-if scenarios for strategic foresight. This data-driven storytelling fosters informed decision-making and ignites action across the organization.
A practical guide to unlocking GenAI’s potential for KPI innovation
To effectively utilize GenAI tools like Gemini and ChatGPT for KPI innovation, follow these guidelines:
Define goals and challenges: Clearly articulate objectives, whether uncovering customer sentiment or anticipating market shifts.
Frame specific prompts: Use concise prompts such as “generate potential KPIs for measuring brand sentiment on social media.”
Provide relevant context: Enhance responses by furnishing background information about your industry, business model, and existing KPIs.
Experiment and refine: Iterate prompts, rephrase questions, and provide feedback to improve AI understanding.
Collaborate with experts: Involve human expertise in evaluating and implementing AI-generated insights.
While GenAI’s potential for KPI innovation is undeniable, it thrives on synergy, not substitution. The point is this: human guidance is essential. Act now, invest in your future, and become a master of the new KPI era by enrolling in The KPI Institute’sCertified KPI Professional course.
The Global Government Forum’s Responsive Government Survey shone a light on the different perspectives that leaders and other members of government organizations have about their performance. Compared to 2021, recent research found that public and civil servants have lost confidence in government responsiveness. Despite this, there is a high percentage of respondents—most notably belonging to those in leadership positions—who believe that their agency is more than capable of learning and responding rapidly.
This positive outlook is present across the board among those in leadership roles, 73% of whom agreed that leaders were open to adopting new methods to better serve the public. This is in contrast to just 56% of managers and non-managers who agreed when asked the same question. Things are no different regarding morale, as 64% of leaders agree that it was high, in contrast to the overall response score of 54%.
Former cabinet secretary of Canada and current Jarislowsky chair of public sector management at the University of Ottawa Michael Wernick said, “It’s really important [for leaders] to develop [an] awareness of how their workforce is perceiving things—to take the pulse of their organization regularly and to deliver proof points to them.” Source: Global Government Forum
Stay ahead and empowered! Dive into the dynamic world of government strategy and performance management with the PERFORMANCE Magazine Issue 27, 2023 – Government edition. Download the magazine’s digital version at the TKI Marketplace and via Amazon for printed copies.
