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What’s the Bottom Line in Government?

The views expressed are those of the author and do not necessarily reflect the views of ASPA as an organization. 

By Tim Dodd
February 10, 2019

Recently at a goal setting workshop, a group of city leaders struggling to select 3-6 priority goals from a list of 14 possibilities called me over for assistance. All 14 goals, plus several not on the list, were things that any city should focus on such as safety, infrastructure and public health. My advice was to say, “Imagine this was a business. There would be one thing on this list: The bottom line. What are the items that make up our bottom line?” That analogy lead to the group quickly choosing five items they believed were key for a city to deliver. Governments do quite a bit, and narrowing those things down into a set number of priority focus areas can be a challenge. But this challenge is necessary to bring clarity, focus and organization to a government’s priorities. After all, to quote an unattributed source, “What gets measured gets done.”

What separates government from business is of course the fact that there is not the same bottom line. Governments can, and often do, make decisions based on a variety of reasons, but these decisions are always made with a reason. Often, the reason is a common sense one such as protecting infrastructure or keeping the city safe. Sometimes, the reason is driven by the politics of a situation or the strong lobbying of an interest group. Making these decisions can be a challenge if the government has not identified its key focus areas to help ensure actions drive towards a stated purpose.

While governments do not need to spend the time and funding required to develop a comprehensive strategic plan, defining outcomes is critical to defining what a government needs to do. In most cities this typically starts with engaging the community in developing mission and vision statements. These are short statements that outline the mission of the city and what it hopes to achieve. The next step is to develop outcomes, themes or goals which allow a government to categorize the key reasons why it exists.

Outcomes will vary from city to city based on their areas of focus and the needs of their community members, but city governments of course serve similar purposes. As a result, outcomes related to themes like public safety, good governance and health are common. The most successful outcomes, themes and goals are those that are all-encompassing. What makes this a challenge, of course, is that governments do a lot of things. Narrowing their function to six or so categories can be a challenge. Broad high-level outcomes can be broken down and categorized into more specific goals and objectives, to which departmental work efforts are mapped.

These bottom lines allow governments to define the reasons why they exist. This allows for governments to then use bottoms lines as decision filters, much as the bottom line in a business drives decisionmaking. In the private sector, boards of directors make decisions to open new restaurants, design new cars or move sales online based on why the company exists: To make money and increase the company’s bottom line. Once bottom lines are defined in government, governments can make decisions in a similar way. Put simply, if one of a city’s bottom lines is, “A safe place for all,” decisions regarding public safety should be made through this decision filter. If a new program supports this bottom line, funding should be prioritized. If it doesn’t, the program should be scaled down or eliminated.

The fact that governments are not businesses and do not have the same bottom line is the reason why performance management is not as common in the public sector as in the private sector. Convincing government leaders to start a performance management program can be difficult if they do not see the purpose behind it. Businesses live off of using data to make business decisions because they have to do so. Governments, on the other hand, are used to making decisions based on a variety of reasons. For performance management to be used seriously, governments must have stated outcomes that they want to achieve. Then, performance management can then be an effective vehicle to achieve those outcomes.

Author:Tim Dodd is the Chief Performance Officer for the City of Santa Monica, CA, previously serving as the Performance Manager for the City of Baltimore and Director of Performance Management for the Commonwealth of Massachusetts. [email protected]

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