What profit do we measure?
Wednesday night in our house is Apprentice night, when it’s time to snuggle up on the sofa and revel in the personality switches which take place as colleagues working together for success turn on each other to protect their own backsides.
This fight for survival may be worthy of a post in its own right, but what’s interesting me at the moment is one element of how the unlucky victim and recipient of the dreaded catchphrase is chosen. Throughout the current series it’s been a simple target; profit. When running a business (as the contestants all do here) this seems fair enough, as that is after all one of their ultimate goals.
Profit, especially as it is simplified nicely on the show, separates the succesful from the failures, acts as a clear line between who has achieved the highest goals and who hasn’t and provides a clear barometer of meeting targets. It often doesn’t matter so much how they get there, how much is spent on the way or the feelings of those involved; it’s cold, hard profit which rules the roost.
In the world of local government, things are nowhere near as straightforward. Profit is not a goal which is desirable, and indeed can be seen by many as a sign that something is not being done properly. Money is assigned to service areas based on real or perceived needs, political whims or historical inertia, rather than on the basis of which investment offers the greatest potential return on investment for the balance sheets.
We in local government under this administration measure our success otherwise. In the old days of Local Area Agreements we were measured against literally hundreds of targets and goals, which in turn were measured against perceptions from the public or centrally set figures. Both of these were to a greater or lesser extent based on what one group of people or another thought success looked like, or at least what failure was.
These targets took up a significant amount of officer time collating evidence against, justifying and proving we have achieved what we agreed to aim for and if not then explaining why.
Now the only measure of whether we are actally doing a good job ultimately boils down to whether or not the members of our various political parties are voted in again. Of course we still measure things; most councils have entire teams dedicated solely to performance management and the maintainence of RAG reports and Gantt charts. We run regular surveys gathering the perceptions of our residents, and set ourselves targets big and small which we then aim to meet.
We then move our finite financial resources around to help make all of this happen, effectively playing a zero sum game (which has become a negative sum game over recent years). We don’t have the opportunity to increase the amount of money coming in if we see an area which needs additional resource; we have to find savings from somewhere else. I think of it as having a blown up balloon; you can squeeze it in one place to make another part bigger, but ultimately the baloon is the same size. Squeeze too hard though and sooner or later the balloon will burst.
The middle ground between the worlds of private and public is that of social enterprises, organisations who live in the world of finance and business but who put the needs of people on par with, or sometimes above, the needs of their bank balances. They can grow and shrink in size, but pump their profits back into the game of improving lives (in theory at least). Some choose to boast about the money coming through their accounts and the size of the work they are then able to do, whilst others concentrate on the quality rather than quantity.
So how can we measure whether or not we really do make a difference? Measuring profit will never be an option, and boasting about the size of our bank balances always seems ridiculous to me when we have little say over this.
Balance scorecards are often used in an attempt to square this circle, which measure a range of areas and aim to provide a balanced overview of what success looks like. In business profit plays a significant role; for local government it’s more about quality of life, continuation of service and reputation.
As times change, as councils begin to look at bringing local business rates back to themselves and grapple with the increased levels of power and independance that the Localism Act is providing we will need to continue evolving how we measure what success is. Creating an industry to measure everything down to the nth degree is perhaps not the answer, but we do need to consider how we impartially measure whether what we do is working and whether we are doing all we could and should be.
After all, there is no Lord Sugar to point a finger and fire a council; we shouldn’t need to wait for years to see if elections tell us that local people would do the same.
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