Data-driven decision making: To value or not to value – that is the question
The topic of performance measurement is on everyone’s mind these days. Government departments are being asked to adopt data-driven decision making, and in response I bear witness to organizations striving to respond to this call for action. I also see those same organizations struggling to understand how to respond.
What does data-driven decision making mean? A glimpse into the mandate letters uncovers the following phrases:
- “deliver real results”
- “assess the effectiveness of our work”
- “align our resources with priorities”
It sounds to me like an attempt to move the public sector culture closer to the private sector culture. Now you’re talking my language. My 13 years in the private sector gave me a front row seat at the “deliver real results” matinee each and every day. In fact I learned two absolute truths:
- Not every hour of work is created equal: Measuring work activities as value-added or non-value added is required in order to have the data to “assess the effectiveness of our work”. The value of a work activity is tied to the extent to which an artifact or output is being used to achieve outcomes. This type of information enables better decision-making and continually reminds an organization that not every hour of work is created equally.
- Remember why your business exists: Measuring work activities as direct or indirect provides you with the data required to “align your resources with priorities”. Both direct and indirect efforts are required, but to what extent, and what is the optimal relationship between the levels of indirect work required to effectively deliver the direct work. This type of information enables better decision-making and continually reminds an organization that they are in business to deliver services to citizens.
I’m sure my digression back in time has already lost me a few readers. Simply because I am no longer speaking the language of our federal government. Which was exactly my point. Two entirely different cultures.
The public sector primarily receives its mandates/marching papers and required timelines from Parliament. Given the lack of internal performance measures that exist within the policy and program areas about their own work performance, Parliament can only presume that they have endless capacity to deliver upon their priorities. So the expectations flow continuously and the timelines are always too tight.
If we currently only measure front line service delivery, what exactly will change if we adopt data-driven decision making? In the private sector, I learned first-hand the importance of embedding quality monitoring throughout the supply chain. In other words, if policy and program areas do not have defined and measured processes, there’s no chance of improving front line service delivery.
Back to the two concepts described above: the distinction between direct / indirect efforts and the difference between value added / non-value added activities.
Personally I believe that measuring direct / indirect efforts would be easy enough to do. There is already awareness about whether a function is strategic, enabling, etc. versus operational front line service delivery. More work could be done to understand the relationships between these different types of efforts (e.g. optimal % indirect effort, optimal ratio of indirect to direct efforts).
As for identifying value added / non-value added activities, that is a bit more complex.
For functions that create information value may be linked to the use/re-use of the information itself. Information that is created and not accessed or used probably does not add any value to the organization.
(e.g. number of different stakeholders accessing the artifact, number of times the information is reused by different stakeholders across the organization).
Delivering real results may not be realistic unless the Government of Canada undergoes a significant culture change and starts thinking very differently about performance measurement.
Please leave your comments, I’d love to hear your point of view.
Kathy Roy has implemented business transformation and change management projects in complex organizations for over two decades. She has worked with major companies, both public and private, and with numerous business sectors in both Canada and the United States. She is part of Systemscope's Strategic Business Consulting practice.