Pursuing value: Regular check-ups or major surgery?

MartinJenkins Partner Richard Tait looks at ways organisations can make monitoring their value-for-money performance part of their regular practice. Rather than a once-a-decade burst of VfM work in response to some external driver, Richard suggests that public-sector leaders make a habit of it.

The effort across government to cut costs is in full swing. From what we’re seeing, agencies of all types are using a range of ways to take costs out and drive more value. These include stopping programmes that are less well aligned with government priorities, tightening up on the use of contractors and consultants, cashing up vacancies, and reducing permanent staff numbers.

Looking beyond the immediate savings challenge

Leaders are now under a lot of pressure to realise savings in a short time. History suggests we often tend to rely on an external driver – like a directive from a new government – to ignite this work. This creates cycles of intensity and calm that repeat every decade or so, with each big new VfM exercise tending to be discrete and disconnected from the last one – and the next.

It’s a bit like cramming for exams. When the pressure comes on, everyone scrambles to assess value, make their work programmes as efficient as possible, and achieve savings. But then, once the external pressure is relieved (the exam is done and school’s out), attention shifts to different priorities until the next external driver comes along some years later and this intensive process is repeated.

This reflects the natural tendency for people to give more attention to the “important” that is also “urgent”. But rather than an intense sprint every decade – to borrow a different metaphor – it would be better to approach this work as the proverbial marathon, run at a regular, sustainable pace.

Ongoing monitoring of your organisation’s performance and making adjustments when needed should become embedded in how a public-sector organisation works. Among other things, this is likely to avoid the extremes of the walk–walk–sprint–walk–walk–sprint cycle.

Richard Tait, MartinJenkins Partner

Under the current Government, there’s a greater expectation that governance and management in the public sector includes ongoing work to improve value, supported by better and more regular performance monitoring and reporting to reinforce accountability. That expectation is closely aligned with the idea of social investment, which relies on using evidence to redirect spending to where it produces the best results.

So what does a regular, ongoing pursuit of value look like?

A steady performance-monitoring marathon requires a more systematic, programmed approach, where insights into performance come to leaders regularly, accompanied by advice and analysis on where to focus efforts and why. It isn’t enough to simply provide data and graphs, and then expect decision makers to know exactly what to do with it.

From our experience, more focus on building your monitoring and analysis of performance into a regular rhythm will help you identify where to look for course corrections and more value. It will also build the confidence of ministers, governors, and the public.

By regularly lifting up rocks you’ll identify and address issues early, and you can proactively give tune-ups to policies and programmes as circumstances change.

Where to look: Rolling reviews vs a risk-based, intelligence-led approach

Public-sector agencies apply different approaches to scrutinising activities and interventions, ranging from a rolling programme of reviews and checks over several years, through to more risk-based, intelligence-led approaches.

The latter approach will ensure that your efforts are being targeted to where they’re most needed, through focussing mainly on areas where there are early signs of some strategic risks – areas where, for example, your agency is underperforming or inefficient, where your work is out of step with your strategy, or where your data raises questions about the impact you’re having.

Decisions about where to look, and in what kind of depth, need to be informed by good insights from your performance monitoring. You can source these from a range of places, including recent evaluations, performance metrics at organisational and service/programme level, audit and assurance, post-implementation reviews, and continuous improvement activities.

Most importantly, regular performance monitoring needs to look beyond “widget counting” and be used to generate insights and advice on where to delve deeper.

What to look for: Looking through different lenses

Your understanding of your organisation’s value-for-money performance can be informed by looking at its work through different lenses – including functions, services, customers, and policies.

As an illustration, a look through a functional lens might mean asking:

“Are our functions – for example, policy, or service delivery – effective and efficient across our services and customer types?”

Similarly, a customer lens might involve asking:

“Are our policies, programmes, and services fit for purpose as a suite when seen through the eyes of different types of users?”

How to look: Different types of evaluation

Once the early signals are revealed by performance monitoring and you’ve discussed and agreed on what should be the priority areas, we tend to find that there are several possible next steps, each involving some form of evaluation.

Sometimes the signals from your performance monitoring will tell you it’s time for a deep dive into one of your work areas

At the most basic level, a desk-based review provides a light health check. We find this useful where there are no strong signals of problems to address, but you know the relevant interventions and functions haven’t been checked in some time.

At the other end of the spectrum, the insights from monitoring might suggest you need a “deep dive” evaluation into a specific issue or topic.

In some cases a review could start with a light health check, and then progress to a deeper dive if needed.

Who to do the looking: Ownership by the leadership team

All of this assumes someone is responsible for developing and maintaining a programme of work to keep the approach alive and focussed where it needs to be, well-informed by looking regularly at a range of performance insights.

The point is that simply reporting on performance metrics isn’t enough; these metrics provide information about where to shine the torch more intently. This should be an activity owned by the leadership team as part of the annual strategy and planning processes, and refined based on insights from quarterly operating performance monitoring. While we expect the Government to put clear performance measures in place for the core public service, this approach is also directly relevant for Crown entities.

The programme of work would ideally be visible to – as well as informed by and agreed by – the executive team, so that it has the necessary buy-in to drive follow-up action to improve value. Insights from the work would also need to be visible to the executive team, so it can prioritise follow-up effort and decisions about improvements.

How to make pursuing value feel less like pulling teeth

The approach I’ve been talking about echoes aspects of what the new Ministry for Regulation will be responsible for at the level of the whole public service.

The key challenge is to build this kind of thinking into regular practice within organisations, so it becomes more a matter of regular check-ups and small fillings than major root-canal work once a decade.

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