Benchmarking with Context for Improving Local Government Efficiencies

ARTICLE | Oct 17, 2016

From population size and demographics to vision and priorities, no two local governments are alike. Yet as different as local governments are, it is often helpful to compare them within the context of seeking opportunities for improvement. Because while no two are alike, comparing what local governments do and how they perform is a useful exercise in determining what they do well and where they could improve.

When we work with a local government on an improvement project, we often use benchmarking, or peer comparisons, to identify where an agency stands compared with similar organizations. Peer comparisons are inherently imprecise, since every municipal organization has different needs and environments, and varies in how data are tracked and reported.

Regardless of these limitations, comparing a department on a range of factors helps provide a general overview of what and how different services are being provided and can suggest areas for further study and analysis. The intent of benchmarking is not to quantify or rate where a department (or entire city government) should be, but rather to examine where there are significant differences as a source of learning. This is especially useful in flagging differences worthy of explanation.

Recent projects have provided a wide range of examples that show the power of comparing a local government to its peers.

  • A large urban fire department assessing operations found through peer analysis that it had significantly higher workers’ compensation payments, more days lost to injuries, a higher number of personnel out on disability, and a higher number of disability retirements than the peer group average, even though the other departments responded, on average, to more calls for service and fires than the department in question. In response, the department introduced initiatives to reduce the impact of workers’ compensation and disability claims, including reforms for disability retirements, new light duty protocols, and command staff assignments to monitoring disability and workers’ compensation claims.
  • A mid-sized California city in financial distress was able to avoid significant cuts to its police department after peer analysis showed its rates of both violent and property crime were well above its peers, while police expenditures and staffing were at or below peer averages. The results suggested to city leaders that the police department could not afford additional cuts to its budget, and they looked elsewhere for solutions to their fiscal challenges.
  • A large library system was concerned that some low-income residents and their children were avoiding using libraries because of late fees and fines.  A study found that library system’s fines were well above peer agencies and other policies were also more punitive. As a result of the study, the policies were changed to cut daily late fees in half, reduce the maximum overdue fines, eliminate fees for users who fail to pick up a reserved item, cut processing fees for lost items, and increase the amount of debt required to block a library card.
  • A mid-sized Florida city conducted a high-level review comparing its operations across the entire government to peer agencies to assess the health of its departments and determine whether service levels were acceptable. Among the results: the city had a much higher number of employees in a deferred retirement program than its peers, which suggested a need for succession planning and a way to capture knowledge from employees eligible for retirement; the city had the highest rate of structure fires per engine company of its peers, which indicated a need for more research about why these were occurring; and the city had a lower rate of Part 1 crimes but also a lower clearance rate than its peers. At the conclusion of the project, the city had a list ways to improve performance, and areas that would benefit from additional warranted further inquiry.
  • After interviewing peers of a county parks department and documenting their organizational structure, a series of organizational changes were implemented to streamline operations, such as centralizing volunteer management as well as concessions and special permits, creating a project manager for capital projects, and creating a business services division to handle functions such as budget, payroll and human resources.

Choosing the right peer agencies for benchmarking is an important step. Just as no two local governments are alike, each peer analysis depends on the aims of the study underway and the particular details of the agency being studied. Population size and demographics are often relevant, as is geographical location. It is important to look at the spectrum of services provided by the city and how they are delivered as well as funding sources. If a city has large enterprise funds, it makes sense to compare with others that also have such funds.

Many officials resist the idea of comparing a local government to its peers. Some agencies will always end up at the bottom of the list, and it’s hard to achieve consistency in the data. Benchmarking requires context; maybe there’s a good reason for what at first looks like a deficiency. For instance, a government that spends much more on its parks than peers do may be wasteful, but it may also be a community that prizes its park system and perhaps even gains significant economic benefit from it.

Benchmarking can be a powerful tool, if the effort focuses on opportunities for improvement and views comparisons as the first step in a process toward better service. In most cases, an agency discovers what it is doing well, where it could do better, and which functions would benefit from further organizational analysis. Taken in conjunction with interviews, background data and documents, benchmarking helps local governments understand their operations and chart a path to increased efficiency and effectiveness.

Founded in 1994, Management Partners is a professional management consulting firm specializing in helping government leaders improve their operations by identifying problems and revealing best practices that improve operations efficiencies.  With a team of leaders and managers, located throughout the United States, with practical experience in all aspects of local government operations, Management Partners commit to first-rate staff for every single engagement.  See www.managementpartners.com to learn more and contact the office nearest you.

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