ABSTRACT
Most public and third sector organisations – both within and beyond Europe – are struggling with two major problems: improving outcomes for service users and other key stakeholders without increasing overall cost; and developing measures of performance that help them improve and assure quality without motivating staff to achieve arbitrary targets at the expense of poor service to the public. Operations management has a key role to play in addressing both of these problems.This chapter describes with examples how the outcome-focussed Public Sector Scorecard, an integrated service improvement and performance management framework for the public and third sectors, can be used to improve both quality and performance,while keeping costs under control. Many organisations in all sectors have impressive looking strategy documents.
However the majority of these bear little relationship to what the organisation is actually doing.They are typically updated once or twice a year, few people in the organisation know what the strategy is or where it came from, and budgets and incentives are not linked to the strategy (Niven, 2003:11-13). In addition many public sector organisations have their strategy changed before the previous one has had a chance to be implemented! Similarly there are many glossy brochures, dashboards and spreadsheets showing
progress on a myriad of measures,which also look very impressive.However typically they will have been developed by brainstorming what measures might be useful or easy to measure with little consideration of what the organisation needs to achieve. Alternatively, they may simply reflect the information required by head office or central government. What is needed is an integrated system to link strategy and performance measure-
ment to address both of these issues.This is important for operations management, as an effective operations strategy needs to be consistent with the organisation’s overall strategy and achieving that strategy requires appropriate performance measures to monitor progress effectively and understand cause and effect.This link between strategy and performance measures is an important feature of the two frameworks discussed in this chapter: the Balanced Scorecard and the Public Sector
Scorecard.The Balanced Scorecard (BSC) is an integrated strategy and performance measurement framework developed initially for the private sector,while the Public Sector Scorecard (PSS) extends and adapts the BSC to fit the culture and values of the public and third sectors.The PSS is even more relevant for operations managers, as it goes further than the BSC by linking strategy, service improvement, and performance measurement and not just the first and third of these. This chapter describes both of these frameworks and their application to the
public and third sectors. It also includes two case studies illustrating the use of the PSS across organisational boundaries – a central government task force and a project led jointly by the NHS and a city council to address child obesity. Some key features of the PSS are then discussed – service user and stakeholder
involvement, focussing on outcomes, emphasis on service improvement, integrating risk management, use of performance targets, and last but not least developing a culture of improvement, innovation and learning rather than a top-down blame culture. Each of these features is important to effective operations management in the public and third sectors and the chapter concludes that the PSS has much to offer in improving and monitoring quality and performance of public and third sector organisations.
