Councils take up benchmarking with performance excellence program

By David Donaldson

June 9, 2017

Tape measure lined up against performance handwritten on a chalkboard

Being able to benchmark your performance against similar organisations can be incredibly valuable, but there aren’t many sectors where entities will share their data.

Local government is, however, one place where there are lots of organisations facing similar problems without being in competition. This opens up the opportunity to learn from each other, realised Annalisa Haskell, CEO of peak body LG Professionals NSW.

“The sector is amazingly powerful because it’s collaborative, not competitive,” Haskell told The Mandarin. “If you are prepared to step forward together and contribute your real data you can get back a reflective outcome.”

Now in its fifth year, LG Professionals’ Australasian local government performance excellence program does just this. The annual survey measures seven key areas of performance — workforce, finance, operations, risk, leadership, asset management and service delivery — providing councils with information on how they compare to the average, and to similar local government areas. Analysis is undertaken by PwC, to ensure it’s independent.

Starting from a pilot of 15 in New South Wales, there are 144 member councils signed up across NSW, South Australia, Western Australia, Queensland and New Zealand — a number that continues to grow. Haskell says that as far as she knows it’s the only empirical performance measurement of its type in the world.

One of the reasons councils are keen to jump on board is that while they can see how they compare on a range of measures, statistics about individual councils are not made public.

“What sets this program apart is that it’s not threatening,” says Willoughby City Council general manager Debra Just. “When there’s a big league table published sometimes people can fudge data.”

This way they can decide which areas need to be improved without being pushed into arbitrary changes just to make certain numbers look better. Given the diversity in council structures and functions — some run water services, for example, and some outsource certain activities that others keep in-house — an external measurement wouldn’t necessarily give an accurate understanding of performance.

Willoughby has now been participating for three years, and it’s helped them identify a range of things to improve on. Initially the benchmarking was used by management to show staff where changes needed to happen, but over time employees have come to use it to make their own proposals.

“We are having the wrong conversation … why are local government not positioned as a vibrant place to work compared to other Australian sectors?”

“We have groups that have formed around each of the areas,” explains Just. “We’ve given them training and access to the data, and then we ask them to look at it and tell us what trends they notice, how council sits relative to other groups, and which ones should we focus on. They can brainstorm strategies to address the issues.”

One of the interesting unforeseen consequences of the survey is that it will provide a record of what happens as NSW councils undergo amalgamations, with nine mergers currently being tracked. Whereas there have been surveys of what happens after an amalgamation, it’s rare to have good data from beforehand.

“The merged councils will know if they have improved through the merger process,” says Haskell.

Ageing workforce

One of the clearest trends identified in the data is that the NSW local government workforce is ageing, with baby boomers retiring and few younger people sticking around.

Although Just says she was aware of the problem in her own organisation, the program has demonstrated it’s a problem for the entire sector.

This has prompted concern that a combination of high baby-boomer workforce, low Gen Y and high turnover of the new to council staff might lead to shortages in qualified people in a few years’ time. Councils who picked up on the data early have begun implementing programs for change that can be measured year on year.

“We are having the wrong conversation,” says Haskell. “We need to move from having the structure debate of mergers to understanding why local government is not positioned as a vibrant place to work compared to other Australian sectors, nor the place to invest in a career.”

The data also shows the New Zealand councils do much better at diversity than their counterparts in NSW, giving those pursuing change a place to look for assistance.

Comparisons help build a case

One of the key advantages of having the comparative data is that it can bolster arguments for change — whether with the state government or within the organisation.

Discovering that Willoughby’s workforce span of control sat a full FTE above the NSW average meant there was an evidence base to argue for reform, Just tells The Mandarin.

“One FTE might not sound like a lot, but if you’re sitting on 3.6 as opposed to 2.6 you’ve got a very top heavy structure. So I was able to use that in the argument for a restructure.”

The program can help understand where problems lie in organisational processes too. Willoughby redesigned their budget preparation activities based on the data, cutting the timeline from 120 days for each financial year down to 74. And that was from a starting point below the NSW average of 134 days.

“The budgeting process is quite complex. You need to not just work out projects and capital works, but usually everyone over-bids, so it takes a couple of cuts to get it down. Then you need to find staff information, assess risks, so usually that’s handled over a long period of time through multiple emails to lots of people. Now we’re able to bring people together and do it much more quickly,” says Just.

Willoughby has made progress on the important metric of how many staff have more than 8 weeks annual leave owing. “It’s an individual health issue, but also a fraud and corruption prevention measure,” Just explains. People engaging in corruption don’t go on leave because they worry the person filling in for them might figure out what’s going on. “In the first year we were 8% above average, our staff had much more leave than others. But we’ve been managing that down over three years. We’re still sitting 3% above average, but we’re on track to close it completely in financial year 2017,” she notes.

“The benchmarking tells us where we need to improve, then also we’re able to check if we have improved,” says Just.

“It also creates a subject matter focus. If we say staff with more than eight weeks leave is a problem, it reinforces reforms we bring in. Particularly if the staff feel like they own the data, if they can see it’s an issue.”

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