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Management Case Study
Outcome-Based Performance Management:
Christchurch City Council Drives Toward a
Long-Term Strategic Horizon
For more information please see: www.ap-institute.com
Outcome-Based Performance Management: Christchurch City Council API Case Study
Outcome-Based Performance Management: Christchurch City
Council Drives Toward a Long-Term Strategic Horizon
By
Bernard Marr* and James Creelman
Abstract: Many organisations, especially in the government sector, are aiming to
create more outcome-based performance management systems. The aim of these
systems is to prioritise strategic objectives, clearly articulate the intended impacts,
and to focus management attention onto the things that matter the most. This
management case study outlines how Christchurch City Council has put this into
practice using the Balanced Scorecard approach with strategy maps, long-term
community council plans, the Malcolm Baldrige framework, and an intranet-based
performance management software tool.
Version: 8 September 2008 * corresponding author
Bernard Marr is the Chief Executive and Director of Research at the Advanced Performance Institute. E-mail:
bernard.marr@ap-institute.com
James Creelman is a Fellow of the Advanced Performance Institute
The Advanced Performance Institute (API) is a world-leading independent research and advisory
organisation specialising in organisational performance. It provides expert knowledge, research, consulting
and training to performance orientated companies, governments and not-for-profit organisations across the
globe. For more reading material or information on how the API might be able to help your organisation please
visit: www.ap-institute.com
How to reference this case study:
Marr, B. and Creelman, J. (2008) Outcome-Based Performance Management: Christchurch City Council
Drives Toward a Long-Term Strategic Horizon, Management Case Study, The Advanced Performance
Institute (www.ap-institute.com).
© 2008 Advanced Performance Institute, BWMC Ltd. (All rights reserved) www.ap-institute.com Page 2
Outcome-Based Performance Management: Christchurch City Council API Case Study
Outcome-Based Performance Management: Christchurch City Council
Drives Toward a Long-Term Strategic Horizon
Introduction
About Christchurch City Council
New Zealand has one of the most advanced
Located on the east coast of New Zealand’s South
approaches in the world for ensuring outcome-
Island, the City of Christchurch has a population of
based public sector performance management.
about 350,000, making it the nation’s second
Each of the nation’s 85 local authorities must create
biggest city after Auckland. Internationally
Long Term Community Council Plans that set
recognized as ‘a garden city’ due to its expansive
performance goals over a 10-year horizon. At the
parks and public gardens, Christchurch was
core of these plans are a set of community
designated an International Safe Community in
outcomes that are identified through an extensive,
October 2008 by the World Health Organization.
heavily participative and legally mandated
This designation was based on criteria such as
consultation programme with local residents and
accident prevention, road safety and crime
other groups.
prevention. The region is technologically advanced
by international standards and is the main
This management case study outlines how
distribution centre for the South Island and is also
Christchurch City Council has implemented a
considered the gateway to the Antarctic. With two
performance management system to better
universities and 16 research institutions it boasts a
operationalise its long term-goals. Their approach
stable and well-educated workforce.
includes a Strategy Map (which it calls ‘Plan on a
Page’) that focuses on a critical few strategic
Christchurch City Council covers an area of 152,837
objectives. This is supported by a comprehensive
hectares. This area includes highly urbanized city
intranet-based system performance management
areas as well as extensive agriculture and areas of
and measurement system called Horizon that
natural beauty, including Banks Peninsula. The
collocates and tracks a large number of operating
Council has an annual budget of about M $670 and
measures and improvement initiatives. Importantly,
about 2,700 employees. It has a fast growing
the Horizon metrics etc aggregate up to the Plan on
population that increased by nearly 12% between
the Page objectives. As a further mechanism for
1991 and 2001 and is projected to grow by another
driving forward performance Christchurch City
16% by 2026.
Council assesses performance to the criteria of the
Malcolm Baldrige framework. Recently the council Community Outcomes
was a recipient of the New Zealand version of the
The New Zealand Local Government Act of 2002 is
Baldrige award.
one of the most progressive approaches to public
sector performance management in the world. Peter
Ryan, Manager, Planning and Performance at
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Outcome-Based Performance Management: Christchurch City Council API Case Study
Christchurch City Council, believes that it has made • Stock-take of existing services and funding
best-practice planning and delivery mandatory for from the Council and government
local government. For instance, as a legal • agencies;
requirement each authority must, and in • Interviews with key stakeholders;
consultation with residents and community groups, • Interviews and workshops with elected
identify community outcomes, with a robust set of members;
supporting metrics. Ryan who achieved significant • Research with key groups such as people
successes in improving public sector performance with disabilities, Maori and Pacific people;
in non-New Zealand agencies (in particular the City • Discussion papers developed with external
of Brisbane, where he spearheaded the building stakeholders and reference groups;
and implementation of a Balanced Scorecard that • Feedback on the 2004 to 2014 LTCCP and
led to the city’s induction into the Balanced the Community Outcomes developed in
Scorecard Hall of Fame) has been instrumental in 2004;
Christchurch City Council’s performance
• Feedback from a specially designed
management implementation.
section on the Council’s website.
Community outcomes are reviewed every six years. Long-term Council Community Plan
The present outcomes for Christchurch City
How the Christchurch City Council delivers these
Council, which take the city to 2012, are a safe city;
community outcomes is described in great detail
a city of people who value and protect the natural
within the Long-Term Council Community plan
environment; a well-governed city; a prosperous
(LTCCP). This is the council’s ‘contract with the
city; and a healthy city. These are shown with
community’ describing how it intends to deliver to
supporting performance indicators in Figures 1.1
achieve the outcomes as well as the other long-term
and 1.2. These outcome objectives were arrived at
goals of the city. “The shift from community
through a number of participative processes that
outcomes to the LTCCP means a move from the
were conducted during a year period, including:
conceptual to the highly concrete,” explains Ryan.
• Results from monitoring trends and other
The LTCCP covers a period of 10 consecutive
information (more than 500 measures);
financial years, though it is reviewed every three
• Reviews of prior consultations (5000 years; the most recent preparation being in 2008 for
submissions, 54 reports); the 2009-2019 period. This allows the Council to
• Reviews of reports and literature (300 take a long-term view while enabling it to adjust for
reports); constantly changing financial and other factors and
• Reviews of government strategies (187 keep its accounting and budgets up-to-date.
strategies);
• Review of existing Council strategies and
Community Board statements;
© 2008 Advanced Performance Institute, BWMC Ltd. (All rights reserved) www.ap-institute.com Page 4
Outcome-Based Performance Management: Christchurch City Council API Case Study
The Balanced Scorecard coordinating and managing its strategy
Given the size and multi-level complexity of its implementation efforts. Christchurch City Council
planning exercises, the council has introduced the has a full suite of cascaded scorecards from the
Balanced Scorecard as a core framework for executive management to team levels.
Figure 1.1: Community Outcomes and Performance Indicators
We will know we are using Progress will be measured
Community Outcome
these key indicators Using these key indicators
A Safe City
We live free from crime, • Rates of crime and injury • Hospital treatment for
violence, abuse and injury. We decline. • accidents
are safe at home and in the • Total offences
community. Risks from hazards • People feel safe at all times in • Notifications to CYF
are managed and mitigated. Christchurch. • Perceptions of safety
• Road casualty statistics
• We have excellent safety
networks, support people and
services.
A City of Inclusive and
Diverse Communities
Our diversity is seen, heard, • Our city is built on strong • New Zealand Deprivation Index
valued and celebrated. All communities. • Income gap between low and
people feel a sense of belonging • high income earners
and participate in the • A diverse range of people feel • Perceptions of ethnic diversity
community. at home in Christchurch. • Maori language speakers
• Perceptions of quality of life
• Everybody is able to • Perceptions of community
participate, particularly those • Support
who are most vulnerable.
A City of people who value and
protect the natural environment
Our lifestyles reflect our • Everybody takes responsibility • Tonnes of waste to landfill
commitment to guardianship of for their impact on the natural • Liquid waste
the natural environment inland environment. • Total ground water use
around Christchurch. • Renewable versus nonrenewable
• Biodiversity is restored, energy consumption
We actively work to protect, protected and enhanced. • Waste recycling
enhance and restore our • Recreational water quality
environment for future • We manage our city to • Number and area of ecological
generations. minimise damage to the heritage sites
environment.
© 2008 Advanced Performance Institute, BWMC Ltd. (All rights reserved) www.ap-institute.com Page 5Outcome-Based Performance Management: Christchurch City Council API Case Study
However, Christchurch City Council does not use compliance and of a report card. It doesn’t do
the term Balanced Scorecard or indeed Strategy justice to the aim of the methodology.”
Map. They are simply known as ‘Plan on a Page’.
According to Ryan this was a deliberate ploy to help Plan on a Page
secure buy-in: “The problem is that the term Figure 2 shows the Plan on a Page for the
Balanced Scorecard conjures up an image of Executive Team. As befitting the priorities of a
Figure 1.2: Community Outcomes and Performance Indicators
We will know we are using Progress will be measured
Community Outcome
these key indicators Using these key indicators
A well governed city
Our values and ideas are • Everybody actively participates • Confidence in council decision-
reflected in the actions of our in public decision-making. making
decision-makers. Our • Representation on school
decision-makers manage • Everybody feels represented by boards of trustees
public funds responsibly, their decision-makers. • Census response rates
respond to current needs and • Voter turnout at council elections
plan for the future. • Our decision-makers plan for a • Voter turnout at general
sustainable Christchurch. Elections
A prosperous city
We have a strong economy that is • Christchurch has a strong, • Economic Activity Index
based on a range of successful healthy economy. • Full and part time employment
and innovative businesses. rates
• Standards of living improve for • Unemployment rate
We value sustainable wealth everyone. • Personal, family and household
creation, invest in ourselves and income
in our future. • Our economic development • Volume of commercial waste
prioritizes future well-being. • Recycling
A healthy city
We live long, healthy and • We all have access to affordable • Self reported health status
Happy lives. health services that meet our • Life expectancy
needs. • Frequency of physical activity
• Type 2 diabetes rates
• More people in Christchurch live • Barriers to accessing GPs
healthy lifestyles. • Number of days exceeding air
quality guidelines
• Our city environment supports
the health of the community.
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Figure 2: Plan on a Page – Executive Team
public sector organization, the top perspective is Finance: Deliver services and projects to
customer rather than financial, as the ultimate goal budget
is to deliver value to the community rather than Process: ‘Create the long-term council
shareholders. In the Appendix we show the key community plan for 2009-19’, plus ‘Instill customer-
metrics, targets and initiatives (or Balanced centric processes’
Scorecard that support the Executive Team Plan on People: Implement organizational workforce
the Page. Note that CEO Tony Marryatt is principles planning (‘right people, right place, right time’) and
owner of the measures. ‘Increase staff engagement’ (measured via
international Hewitt methodology).
Common Objectives
Each Plan on a Page, from the executive team Figures 3 and 4 show the Plan on the Page
through general managers and down into units, Strategy Maps for City Environment and the
carry a core of ‘vital few’ objectives (with supporting Strategy and Planning Group.
measures and targets). These align all the
scorecard levels. These objectives are: As examples of common measures and targets the
customer objective ‘deliver long term plan levels of
Customer: Deliver long term plan levels of service’ is measured by the overall percentage of
service and projects levels of service being achieved.
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Figure 3: Plan on a Page – City Environment
Figure 4: Plan on a Page – Strategy and Planning Group
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At the organizational level, this target means all the service’ objective, this means the report summary
levels of service for the organization. In a provides a single result against the target (say 83%
department, it will mean those levels of service for of levels of service achieved) but it also means
which the department is responsible. ”This achieves seeing a list of any services that are not on track,
alignment,” claims Ryan. “These half dozen ‘vital who is running them and what that officer
few’ measures and targets tie and align all the recommends going forward.” It’s summary reporting
scorecards by operating as a cascade.” at the strategic level and exception based reporting
Ryan stresses that as well as viewing the vital few at operational level,” explains Ryan.
metrics leaders must be able to drill down and see Figure 5 is a screenshot of the Horizon online front-
performance to metrics and targets to many page, which provides employees with a navigational
performance dimensions. “At any one time we are aid for going to any of the organizational scorecards
tracking perhaps 250 levels of service across such and viewing performance to any of the perspectives
diverse services as libraries, water, child care, or indeed individual performance areas. Using City
economic development or roading,” says Ryan. “We Environment as an illustration, Figure 6 provides an
are also tracking maybe a thousand capital projects overview of actual performance against designated
around the city.” He continues that executives targets, with the responsible manager clearly
clearly need a summary in their scorecard but they identified.
also need to know where to intervene where a
contributing factor is driving an objective off track. Figure 7 provides information on which people are
assisting with the delivery of a particular initiative.
Horizon Scorecard “It is not possible for the accountable manager to
This is enabled though Horizon, which is an in- throw the light on the measure without looking at
house developed software system that contains the how the supporting initiatives are performing,”
city’s comprehensive collection of metrics, targets explains Ryan.
and initiatives “Horizon combines the key features
of an executive information system with project The system also enables the loading and tracking of
management and value analysis, providing a clear the individual's performance plan for the year and
line of sight from strategy to operational tasks,” for monitoring how an individual is performing any
Ryan says. Moreover, it is fully transparent and can point in time. Accountability for measures and their
be accessed by anyone in the organization. “Such supporting initiatives is therefore very clear and
openness helps create a performance-oriented cascaded to individuals on a methodical basis.
culture as everyone can see how everyone else is
performing.” Incentive Compensation
Unusually for a public sector organization
Horizon provides both the summary view against Christchurch City Council uses incentive
the Plan on a Page targets, as well as any compensation as a key mechanism for ensuring that
exceptions. In the case of the ‘deliver levels of people focus in performance to scorecard goals.
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Figure 5: Horizon Screenshot
Introduced in July 2007, fully 450 people (covering The compensation link works this way. The
all the management layers and forming about 1/8 of performance assessment is weighted to highlight
the workforce) have the major portion of their the council’s scorecard priorities. Therefore in 2007
remuneration tied to scorecard results. 35% of the bonus was dependent on performance
Figure 6: Performance Overview - Horizon
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to the customer perspective, 20% was allocated to management reporting is that it provides either too
the financial perspective, people 15% and process little detail by being strategic or too much detail by
10%. The remaining 20% of the bonus is linked to being operational,” says Ryan. “By focusing on the
individual development targets. “This review and ‘vital few’ objectives and their results in our
compensation link is based on performance to scorecards, we have sharpened up reporting while
clearly defined measures and targets,” says Ryan. keeping it strategic. He continues that by adding
“It is a lot more scientific that the ad-hoc discussion operational detail around those objectives only
that often informs public sector performance where action is required, the council has reduced
reviews.” report volume while still providing the right level of
detail to make fixes possible.
Horizon Update
The online Horizon tool is updated monthly (by the Measures of Success
aforementioned 450 accountable managers). This With Christchurch City Council inculcating such
update triggers a report for each Plan on a Page / robust and comprehensive performance
Horizon scorecard. A high level one page overview management and measurement systems the million
is supplied for each of the four perspectives, dollar question is how successful is it proving to be
followed by a detailed list of exceptions (results in driving up performance. As an indication of their
flagged as amber or red). When exceptions are successes, annual residents’ surveys show that
signaled the responsible manager must outline 70% of Christchurch residents are “very satisfied”
options and a next-step solution, in addition to any with Christchurch as a place to work, live and play,
explanation of performance variance. and also with the way the city looks and feels.
Customer satisfaction with service at first point of
“The most common complaint leveled at any form of contact is consistently over 95%. Moreover, in
Figure 7: Initiative Tracking - Horizon
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delivering these results the city council has unusual for an organization to receive this award in
maintained a Standard and Poors AA+ rating. This its first year of entry. However the council has
shows its commitment to return an annual operating earned the accolade. It is a highly competent,
surplus each year and manage its level of debt. mature organization with many strengths, including
sophisticated leadership and a clear focus on
Malcolm Baldrige Framework customer interests. The development of
As another powerful indicator of the success of the organization-wide competencies, including
organization, Christchurch City Council is advanced analysis, integration and learning and
recognized as an exemplary user of the Malcolm alignment, indicates organizational ability which is
Baldrige Model. Launched in 1987 as a sought after by higher performing organisations
methodology with which to improve the performance internationally.”
of US companies, the Baldrige model assesses
performance to seven performance categories: Business Results
Leadership, Strategic Planning, Customer and ‘Business Results’ is the seventh and by far the
Market Focus, Information and Analysis, Human most important set of criteria in the Malcolm
Resource Focus, Process Management and Baldrige framework focusing on service, customer
Results. Such has been the model’s success that it and financial results. Working backwards from this
has now spawned international awards, for instance point will provide snapshot examples of
the Performance Excellence Study Award (PESA) in performance management within Christchurch City
New Zealand. Council, and so gain an insight into what the
independent assessors saw, as well as an
PESA is open to organizations from the public and understanding what drives the organization’s
private and there are three categories to the award business results.
(health/education, private sector and public sector)
with entries being independently audited against the Process Management
Baldrige quality criteria. Many entries are posted We start with criteria six, Process Management. A
each year by large health, defence, manufacturing primary focus here is managing the organization’s
and other organizations. However in 2006 only one key value creation processes. These are the high
organization in New Zealand (in any category) was level processes that are essential to delivery of the
assessed as meeting the strict criteria of the LTCCP. Key value processes are determined by the
Baldrige framework – Christchurch City Council. Executive Team and Business Excellence Team
The council participated in the award to gain an (comprising 45 people who lead improvement plans
external assessment of how the organization is under the seven Baldrige categories).
managed. At the time of announcing the award
PESA (the organizers of the award) spokesman Human Resources
Errol Slyfield says that Christchurch City Council As an example for criteria five (Human Resources)
can be justifiably proud of its achievements: “It is in 2005 the council introduced a new methodology
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used internationally to measure staff engagement Balanced Scorecard work well together,” says
and satisfaction. This looks at environment, health Ryan. “The first is a macro-level assessment of how
and safety, customer focus and communications. As an organization is managed, an overall health check
cited, improving staff engagement is an objective that is pretty stringent. If something in our
within each organizational Plan on a Page. management is not working well the independent
Business Excellence assessment will pick this up
Measurement, Analysis and Knowledge and provide feedback, which can then be built into
Management the scorecard for action. The two are
The Plan on a Page / Balanced Scorecard is itself a complementary if used this way to create a great
powerful example of Christchurch City Council’s feedback loop.”
delivery to Baldrige criteria four (Measurement,
Analysis and Knowledge Management). As an example of an improvement initative that has
come out of the Baldrige assessment process, the
Customer and Market Focus council has launched a ‘better financial reporting’
As an example of criteria three, Customer and programme that includes a revamp of budgeting
Market Focus, this council has developed a new and forecasting processes. It has become an
approach to resident survey methodology in objective in the Corporate Services scorecard.
conjunction with international market research
company, AC Neilsen. Strategic Planning
Baldrige criteria 2 is strategic planning. As stressed
The survey tests resident satisfaction across the full throughout this case study, Christchurch City
range of services twice each year, probing into the Council has a robust strategic planning process.
root cause of very high or very low satisfaction The strategy development and deployment process
responses. ensures close alignment between short term
operational plans with longer-term strategic
Note how ‘delight customers’ is an objective within objectives and outcomes for the city.
the executive team’s strategy map and, as cited,
instill customer-centric processes is an objective in Leadership
every Christchurch City Council Strategy Map. Criteria one of the Baldrige framework is
That there is a close alignment between Leadership. It is of course the quality of leadership
Christchurch’s performance focus for the Baldrige that transforms any performance management
criteria (which is commonly known as Business framework from a nice idea into a practical solution
Excellence in New Zealand) and for the scorecard is that delivers change. Ryan says that the leadership
not coincidental, as Ryan explains. of the council has been instrumental in driving
performance success, and is crucial for succeeding
“Unlike a lot of management systems the Malcolm with the Balanced Scorecard.
Baldrige business excellence model and the
© 2008 Advanced Performance Institute, BWMC Ltd. (All rights reserved) www.ap-institute.com Page 13Outcome-Based Performance Management: Christchurch City Council API Case Study
Scorecard Success Factors put another way, where it is difficult to fail it is
“There’s no point even thinking about putting a equally difficult to succeed, which often leads to
scorecard in place if you do not have the CEO on inertia and an embracement of the status quo.”
board,” he comments. “Having a committed CFO Overcoming these performance barriers, he says, is
and head of HR is also critical as they have a usually through the appointment of a new CEO with
hugely important role in creating an environment a clear performance agenda. “In this scenario those
where people are encouraged to look at strategy inert managers who favour the stays quo should
using non-financial as well as financial information. realize that they are probably standing on a burning
These individuals, plus the executive team, must be platform.”
actively looking for a game plan and a means to
implement it, if the scorecard is to succeed.” Complexity
With regard to complexity he says that local
He continues that it is also important that an authorities have to successfully deliver a lot of
organization has reached a stage of maturity where services that often conflict, such as protecting the
it is ready for the scorecard. “For instance the environment while needing to grow the economy by
finance function must be ready to look at more than encouraging development, which makes it difficult to
the financials and the HR department must be ready prioritize performance. “It’s not like a company
to think about more than administrative or personnel where you’re pitching for profit, which has a hard
functions,” he says. edge to it but is easy enough to understand as a
prime directive,” he comments. “Some public sector
Key Performance Management Challenges organizations – local government being a notable
More broadly, and looking across his work for example - have so many things that they’re seeking
Christchurch, Brisbane and other public sector to deliver that they end up not knowing what they’re
organizations, Ryan states that there are a number supposed to do first.”
of key challenges in putting in place effective public
sector performance management and measurement This ‘not knowing’ often leads to the creation of
frameworks. He categorizes these as tradition and enormously complex Balanced Scorecards. “Too
complexity. often in the public sector we see ‘spaghetti and
meatballs’ Strategy Maps that try to capture
Tradition everything the organization has to do,” says Ryan.
“Tradition can be a barrier because many in senior “Such maps and accompanying scorecards become
positions might not see the point of expending the difficult to manage, confuse the organization and
effort to significantly improve performance,” he invariably run out steam.”
says. “Few public sector organizations fail in the
commercial sense so there is not always a Ryan states that a successful public sector
compelling requirement to figure out how to scorecard should not have too many objectives
significantly improve performance,” he says. “To (Christchurch averages 12 or less for each of Plan
© 2008 Advanced Performance Institute, BWMC Ltd. (All rights reserved) www.ap-institute.com Page 14Outcome-Based Performance Management: Christchurch City Council API Case Study
on a Page). Moreover, in creating the scorecard and effect arrows all over them when we
managers should not be too focused on excessively communicate the maps.”
documenting cause and effect relationships. “There
is usually a many-to-many relationship in our Ryan concludes that there is a point in strategy
strategies, which makes the documenting of cause development where a balance must be struck
and effect problematic,” he says. between the academic correctness of the game
plan and the ability to communicate that plan.
He provides the relationship between staff ”Finding that point – where the strategy has integrity
engagement and service delivery as one example. but is also appealing and comprehensible to staff –
“This relationship alone could generate twenty is what makes for a good implementation,” he says.
cause and effect arrows on the Strategy Map, which
would be confusing,” he says. “So we test for these www.ap-institute.com
For more case studies, reports and
cause and effect relationships when building the articles visit www.ap-institute.com
scorecards, but we don’t plaster dozens of cause
Endnotes, References & Further Reading
Marr, Bernard (2010), “The Intelligent Company: Five Steps to Success with Evidence-Based
Management”, Wiley, Oxford.
Marr, Bernard (2009), Managing and Delivering Performance: How Government, Public Sector
and Not-for-profit Organizations can Measure and Manage what Really Matters, Butterworth-
Heinemann, Oxford.
Marr, Bernard (2006), “Strategic Performance Management”, Butterworth-Heinemann, Oxford
The API resources library:
Our Resource and Research Library offers a selection of relevant
downloads and links to books, articles and case studies. These have
been selected as useful information sources for further reading and to
illustrate best practice and leading thinking.
To read more just click: http://www.ap-institute.com/resources.htm
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Appendix: Illustrative Example of Scorecard
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