RESULTS BASED MANAGEMENT FOUNDATIONAL SEMINAR

Athens,October 8–10 , 2014

Getting to know each other with two assignments

• Culture assessment• Learning style

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• “Culture eats strategy for breakfast”

Peter Drucker

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Bureaucracy, laws and rules are very important to make the world a safer place to live in

In individualist societies people are only supposed to look after themselves and their direct family. In collectivist societies people belong to “in groups” that take care of them in exchange for unquestioning loyalty.

Many tools and approaches exist because they fit well with the culture! E.g. individual annual performance appraisals have been demonstrated by research to be

destructive of performance, but individualist societies like them!

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We have different ways how we like to enter into a learning experience. However, the best learning experiences go through the entire cycle.

Note: when we present systems thinking, “check, plan, do” should not be a mystery anymore!

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Activists

ReflectorsTheorists

Pragmatists

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Activists

ReflectorsTheorists

Pragmatists

HEALTH NOTICE: reflectors are in for a treat! Theorists will also survive. For the two other learning styles, we take no responsibility for any physical or emotional

damage.

Objectives of the seminar

• Help participants think about how they can do to help sustain and improve the well-being of European citizens, within the scope of their Structural Funds programmes.

• Open up the discussion on what is needed, what obstacles may exist and how these can be tackled.

• Provide ideas on starting points and possible routes to better performance.

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Limits to the seminar

• The seminar will not offer ready-made solutions that will improve performance by decree

• Ultimately, further action needs to be properly resourced and supported by leadership if any fruitful change is to occur

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• As we are in Greece,… • …, let us dive into ancient Greek wisdom

that is still (or even more) relevant today

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Aristotle still has something to tell us about leadership and about well-being

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Aristotle’s point of view -1• For Aristotle, leadership of the community was reserved for those of

who advanced most in “Gnothi Seauton” (inscribed at the Oracle of Delphi”- know thyself)

• Self-knowledge refers to understanding whether one has too little or too much of virtues such as wisdom: not abstract “sofia”, but practical “phronesis”, responding

appropriately to the situation courage being just temperance (moderation),…

• When there is lack of balance in our virtues, we will do “evil” that will affect also the community

• Hence “hubrys” –overestimation of oneself- is the worst kind of behaviour

Aristotle’s point of view -2

• Aristotle also has something to say about “well-being”• For him, every organism has “telos”, a fundamental

purpose that it tries to realise as well as possible = self-realisation of what is already always present as a seed, as

potential, but did not blossom yet realising our human potential is inherently good for Aristotle, success depends on both the organism as the

environment

• Human beings are also “zoön politikon”, “social creatures”: When we realise ourselves, we become full members of society,

and in doing so, also realise ourselves When we do good / evil, we automatically do it also for the group He was a systems thinker!

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Aristotle’s point of view -3• Aristotle’s view is to be contrasted with a view of human

nature being “evil” hence we require self-denial… … and correction through “education” and “control” from outside …linked often to punishment this is accompanied by “fear of ourselves”

• It is logical that for Aristotle, human “well-being” also requires distinguishing… “…between those needs (desires) that are only subjectively felt

and whose satisfation leads to momentary pleasure, and those needs that are rooted in human nature and whose realisation is conducive to human growth and produces eudaimonia*”

the former, referred to as “hedonic happiness”, was considered by Aristotle as a vulgar ideal, making us slavish followers of desires

*daimon = true self

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Aristotle’s point of view -4• Hedonistic well-being:

Preferences and pleasures of the mind and body (vs pain) Kahneman (Nobel prize) is as a famous proponent of hedonism

• Life satisfaction• Presence of positive mood• Absence of negative mood

Linked to behavioural theories of reward and punishment and cognitive expectations concerning such outcomes (eg expectancy-valence approach)

Economists also like this view as it is easily amenable to utility calculation, maximising reward, optimising inputs associated with pleasure…

• Eudaimonia: not all desires (outcomes a person might value for pleasure) lead to well-being when fulfilled…

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Aristotle’s point of view -4• Hedonistic well-being:

Preferences and pleasures of the mind and body (vs pain) Kahneman (Nobel prize) is as a famous proponent of hedonism

• Life satisfaction• Presence of positive mood• Absence of negative mood

Linked to behavioural theories of reward and punishment and cognitive expectations concerning such outcomes (eg expectancy-valence approach)

Economists also like this view as it is easily amenable to utility calculation, maximising reward, optimising inputs associated with pleasure…

• Eudaimonia: not all desires (outcomes a person might value for pleasure) lead to well-being when fulfilled…

• which brings us to another Nobel prize winner….

In measurement, both are highly

correlated!

Most interesting is when they

diverge.

which brings us to another Nobel prize winner….

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Amyarta Sen and well-being -1• Imagine you dream of becoming an excellent architect…• Do you have the real choice to become one?

there needs to be a university that offers the study… you need to be able to pay the fees… you need approval from your parents… you may have a handicap…

• Realising your dream may involve “sacrificing” other choices for doings/beings you have reason to value e.g. to to enjoy your family (the nearest university may be far away) to enjoy the natural environment of your rural village …

• If your dream is not a real choice, you may want to strive towards making it real by organising a public movement to lower school fees by creating a public debate concerning the right to pursue another career than

your parents…

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Amyarta Sen and well-being -1• Imagine you dream of becoming an excellent architect…• Do you have the real choice to become one?

there needs to be a university that offers the study… you need to be able to pay the fees… you need approval from your parents… you may have a handicap…

• Realising your dream may involve “sacrificing” other choices for doings/beings you have reason to value e.g. to to enjoy your family (the nearest university may be far away) to enjoy the natural environment of your rural village …

• If your dream is not a real choice, you may want to strive towards making it real by organising a public movement to lower school fees by creating a public debate concerning the right to pursue another career than

your parents…

FUNCTIONING

CAPABILITY

AGENCY

Amyarta Sen and well-being -2

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Well-being: aspects of people’s lives that they value and have reason to value (functionings)

In various “dimensions” e.g.:• Life/health/security• Understanding• Excellence in work and play• Self-direction (practical reason)• Friendship and affiliation• Inner peace / self-integration• Creative expression• Spirituality / harmony with sources of meaning

and value• Harmony with the natural world

AgencyPeople’s ability to act on behalf of what matters to them not just as individuals agency, but as a member of a group, collectivity or political community

An activity or situation “counts” as a functioning for that person only if that person values it intrinsically as and “end” (not a means) while it could also be used (instrumental value) to cause positive changes in other aspects

Our disagreements about what we value (which could include functionings that are harmful to others or even ourselves) as individuals, require a social process.

EmpowermentA sub-set of agency from the perspective of its instrumental value through:-access to information-participation/inclusion (incl. via democracy)-local capacity -accountability

Amyarta Sen and well-being -2

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Well-being: aspects of people’s lives that they value and have reason to value (functionings)

In various “dimensions” e.g.:• Life/health/security• Understanding• Excellence in work and play• Self-direction (practical reason)• Friendship and affiliation• Inner peace / self-integration• Creative expression• Spirituality / harmony with sources of meaning

and value• Harmony with the natural world

AgencyPeople’s ability to act on behalf of what matters to them not just as individuals agency, but as a member of a group, collectivity or political community

An activity or situation “counts” as a functioning for that person only if that person values it intrinsically as and “end” (not a means) while it could also be used (instrumental value) to cause positive changes in other aspects

Our disagreements about what we value (which could include functionings that are harmful to others or even ourselves) as individuals, require a social process.

EmpowermentA sub-set of agency from the perspective of its instrumental value through:-access to information-participation/inclusion (incl. via democracy)-local capacity -accountability

Focus of self-determinationmotivation theory

Amyarta Sen and well-being -3

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“Capabilities” are the freedom to enjoy valuable functionings: a person with many capabilities can choose between many different functioningsand pursue a variety of different life paths.

If we would only focus on expanding functionings, we could do so by force, coercion or domination!

The struggle for increased well-being is referred to by the UN as of 1990 as “Human Development”:“a process of enlarging people’s choices. The most critical ones are to leada long and healthy life, to be educated and to enjoy a decent standard of living. Additional choices include political freedom, guaranteed human rights and self-respect…”

• The Agence FSE in Belgium uses Sen’s framework to evaluate their ESF programme!

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Let us move to the policy context…

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April, 2009: Independent report “An Agenda for a Reformed Cohesion Policy” delivered at the request of Commissioner for Regional Policy, Ms Hübner

• “The most evident weaknesses which indicate the need for reform of cohesion policy are:A remarkable lack of political and policy

debate on results in terms of the well-being of people, at both local and EU level, most of the attention being focused on financial absorption and irregularities.”

• European Commission’s DG REGIO:

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“The intended result is the specific dimension of well-

being and progress for people that motivates

policy action…”. …an assessment of needs is required to identify the

results!

the decision on which unmet needs should be tackled is the result of a deliberative social

process (a "political decision")!

Challenges for the public sector

• From… closed to open systems

• silo thinking unable to create cross-cutting responses to issues that do not fit in these silos

resistance to change versus innovation• consensus based approaches that are suitable for processing and delivering

on already known, agreed and well-defined issues within the comfort zone…• …create rigidity in the face of ever-faster change and not easily definable

policy issues that require exploration government “to you” to “with you”

• helpless, incapable service users versus co-producing political citizens accountability lies only with government versus shared with others:

• from direct public service delivery to indirect tools (grants, loans, insurance, transfers to other levels of government, tax credits)

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Challenges for the public sector

• From… closed to open systems

• silo thinking unable to create cross-cutting responses to issues that do not fit in these silos

resistance to change versus innovation• consensus based approaches that are suitable for processing and delivering

on already known, agreed and well-defined issues within the comfort zone…• …create rigidity in the face of ever-faster change and not easily definable

policy issues that require exploration government “to you” to “with you”

• helpless, incapable service users versus co-producing political citizens accountability lies only with government versus shared with others:

• from direct public service delivery to indirect tools (grants, loans, insurance, transfers to other levels of government, tax credits)

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…and all of that combined with fiscal austerity!

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Problem: Perceived lack of•Performance•Responsibility•Accountability•Transparency•Control•Policy capacity to guarantee results

Another new solution?

• Re-establish Trust (especially WITHIN the public sector)

• Re-equilibrate Trust and Performance

• Performance governance approach

Weberian bureaucracy

Solution

• Creation of agencies• More autonomy• More specialisation• Increase of single policy

capacity• Performance

Measurement Systems introduced

New Public Management

New solution

• Reinvent coordination (or introduce brand new):• Hierarchy mechanisms• Market mechanisms• Network mechanisms

• Guarantee effective policy capacity

• Increase of Audit capacity

Discussion after the NPM

New problem

•Dysfunctional autonomy•Centrifugal agencies•Suboptimal focus on agency outputs, not on policy outcomes

•Considerable transaction costs•"Silos" - disconnected single policy capacities

•Perverse effects of Performance Measurement Systems (gaming and cheating)

Another new problem

•Hierarchical coordination mechanisms lead to pure recentralization

•Market based coordination leads to private monopolies

•Network based coordination mechanisms lead to only symbolic policies and weak networks

•Audit tsunami•New performance approaches triggered Red Tape

•Rise of deep distrust within the public sector

Coming problems

• ?

Adapted from G. Bouckaert

Agility?

OECD, 2012

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BETTERPROGRAMMEMANAGEMENTORGANISATIONS

BETTER PROJECTS

The COP RBM: key tools

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Strategy focused organisation(Palladium)

LEAN for services(Vanguard)

Hofstede Model - on strategy, culture and change(Hofstede Centre)

Human Centered Design(IDEO)

Outcome Mapping (International Centre for Development Research)

Output based subsidies (World Bank)

New Synthesisfor public

administration(J. Bourgeon)

BETTERDATA

Concept mapping(Concept Systems)

Sensemaker(Cognitive Edge)

BETTERDATA

SCIENCE BASEDAPPROACH

CULTURALANTROPOLOGY

SOCIOLOGYDEVELOPMENTAL / SOCIAL PSYCHOLOGY

SYSTEMS THINKINGAPPROACH

ECON-OMICS

Biology/ ecology

• System and sub-systems in a hierarchy

• Interactions give rise to emergent properties

• Interactions define boundaries with wider systems

• Wider systems represent the environment

• Systems must develop productive relations with their environment

• Resilience of systems

Control engineering

(quality)

• Negative feed-back: dampening divergence of behaviour from a goal

• Positive feed-back: amplifying deviation from a goal (for better or worse)

• The many relations between the part of a system give rise to interacting positive and negative feed-back loops leading to unpredictabilty

• Requisite variety

Complexity theory

• Attractors• Non-linearity• Self-organisation• Emergence• Path dependency

RBM Tools

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Rational choice theory

NPM approachRBM

»plus »

Behavioral economics

Institutional/ evolutionary economics

• Routines (collective), habits (individual), rules norms

• Power• Biases

CULTURALANTROPOLOGY

SOCIOLOGYDEVELOPMENTAL / SOCIAL PSYCHOLOGY

SYSTEMS THINKINGAPPROACH

ECON-OMICS

Biology/ ecology

• System and sub-systems in a hierarchy

• Interactions give rise to emergent properties

• Interactions define boundaries with wider systems

• Wider systems represent the environment

• Systems must develop productive relations with their environment

• Resilience of systems

Control engineering

(quality)

• Negative feed-back: dampening divergence of behaviour from a goal

• Positive feed-back: amplifying deviation from a goal (for better or worse)

• The many relations between the part of a system give rise to interacting positive and negative feed-back loops leading to unpredictabilty

• Requisite variety

Complexity theory

• Attractors• Non-linearity• Self-organisation• Emergence• Path dependency

RBM Tools

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Rational choice theory

Behavioral economics

NPM approach

Institutional/ evolutionary economics

RBM »plus »

• Routines (collective), habits (individual), rules norms

• Power• Biases

• Now, let us tackle a fundamental issue that relates to “how” we, as public servants, are supposed to support the quest for well-being

• It was present under the header “empowerment”, which is the way citizen “agency” can be supported

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Accountability

• Do you remember the three dimensions of accountability discussed in the e-learning?

Different concepts of accountability

• “honest and fair”: traditional view dating back to Weberian bureaucracy focus is on preventing distortion, bias, abuse of office

and inequityproper discharge of duties in terms of procedures

AND substance is of prime importance:• “how the job gets done” rather than just “getting the job

done with the least possible input”

emanations: • process controls (rather than output)• words like transparency, prevention and detection of fraud,

compliance with rules, etc. fit here

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Different concepts of accountability

• “lean and purposeful”: This view rises with New Public Management match narrowly defined tasks and circumstances with resources

(time and money) as tightly as possible, cutting any slack it is very important to have “checkable” objectives that are not

overlapping hence the focus on outputs, ideally to be provided by

independent departments emanations:

• words like effectiveness, efficiency, impact, value for money, achieving targets

• approaches like payment by results, just in time delivery and zero based budgeting

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Different concepts of accountability

• “robust, resilient, adaptive”: „post – NPM“ redirection of attention to complex

nature of society focus is on being able to withstand shocks, to keep

operating even under the most dire circumstances and to adapt rapidly in a crisis

emanations:• back-up systems, maintaining adequate diversity to avoid

widespread common failure (including in the social sense e.g. avoiding groupthink) and building in safety margins (e.g. in planning work or using materials)

• words like diversity, empowerment, sustainability etc.

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What happens if we do not find a balance?

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Private sector examples of overemphasising lean and purposeful (facilitated by public policy) with wider repercussions

Accountability- balancing

• “the way people give an account of what they have done

and why, rather than describing in a more limited way if they

have hit a target or not” (Chris Mowles)

• “…be accountable for demonstrating that they ask the

difficult questions, that they explicitly identify problems and

limitations as well as what is going well, that they have in

place appropriate monitoring systems, and that they carry out

evaluations looking at challenging questions and issues” (Burt

Perrin)

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The common understanding of how to improve performance

• Projects, programmes, organisations need to have clear objectives to guide their efforts.

• In order to achieve this clarity, they should use indicators that provide for a quantitative measure of these objectives.

• In addition, to motivate staff, targets should be set for these indicators at a realistic, yet “challenging” level.

• Performance (or the lack of it) is therefore defined as the degree to which the targets are achieved (or not).

• Punishment and reward are dished out accordingly• A very narrow idea of performance, as ‘”lean and

purposeful” indeed!

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OECD, 2011

Criticism on a narrow focus on performance is mounting, even at the level of the OECD…

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Where does performance really come from?

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Performance happens when needs are being satisfied in a sustainable way.

To use some economic jargon: when supply meets demand in a satisfactory way for both sides.

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Demand and supply

• Demand, derived from needs, wants to be serviced well (high quality) and at low cost (minimal effort, convenient), while taking into account its specificity

• Supply has to be able to deal well and without waste with predictable variation, both frequent and infrequent, as well as with the uncertain and unforseeable (surprise!) which requires: capacity for organisational performance to deal with reasonably

predictable (in/frequent) demands, that may exhibit great variation capacity for innovation to deal with a range of as yet uncertain but

plausible demands capacity to adapt in order to be able to respond as quickly as possible to

anything as yet unforeseeable

• Demand also wants to be treated fairly which means supply needs to have the capacity to “comply”

New Synthesis approach

• Public management is a balancing act: in terms of

performance:• “traditional” results

(outputs, outcomes)• civic results

in terms of the use of power:

• government• collective

J. Bourgon, A new synthesis for public administration

New Synthesis approach

• Public management is a balancing act: in terms of

performance:• “traditional” results

(outputs, outcomes)• civic results

in terms of the use of power:

• government• collective

J. Bourgon, A new synthesis for public administration

As Sen would say, producing functionings is not sufficient! People must also have freedom to choose and they must have agency to create new freedoms.

New Synthesis approach

• Public management is a balancing act: in terms of

performance:• “traditional” results

(outputs, outcomes)• civic results

in terms of the use of power:

• government• collective

• …underpinned by the three notions of accountability

J. Bourgon, A new synthesis for public administration

Honest and fair

Lean and purposeful

Robust, resilient,..

Performance and accountability are two faces

of the same coin!

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capacity for organisational performance to deal with reasonably predictable (in/frequent) demands,

that may exhibit great variation

capacity for innovation to deal

with a range of as yet uncertain but

plausible demands

capacity to adapt in order to be able to respond as

quickly as possible to anything as yet unforeseeable

capacity to comply to ensure fairness

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capacity for organisational performance to deal with reasonably predictable (in/frequent) demands,

that may exhibit great variation

capacity for innovation to deal

with a range of as yet uncertain but

plausible demands

capacity to adapt in order to be able to respond as

quickly as possible to anything as yet unforeseeable

capacity to comply to ensure fairness

LEAN AND PURPOSEFUL

=

=HONEST AND FAIR

= ROBUST, RESILIENT, ADAPTIVE =

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capacity for organisational performance to deal with reasonably predictable (in/frequent) demands,

that may exhibit great variation

capacity for innovation to deal

with a range of as yet uncertain but

plausible demands

capacity to adapt in order to be able to respond as

quickly as possible to anything as yet unforeseeable

capacity to comply to ensure fairness

LEAN AND PURPOSEFUL

=

=HONEST AND FAIR

= ROBUST, RESILIENT, ADAPTIVE =

Practical wisdom

Temperance

Being just

Courage

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A closer look at supply

• On the supply side, the various capacities are embodied in…People who provide the servicesHow the work is being organised: the system of work

• Systems of work cannot provide the service, you need people, driven by motivation, for that…

• …but systems of work DO determine: the performance the people in it CAN achieve the kind of motivation people draw on to achieve it

• Let us first look at motivation and then at systems…