performance-eye

Brash claims for voter support are just that - they don't add up

2011-04-26T21:20:00.000+12:00

A classic case of misrepresentation of polling statistics for political manipulation and self-advancement has surfaced in New Zealand . Former New Zealand National (Conservative) Party leader Don Brash has leaked some very suspect polling results as part of his attempt to take over the leadership of the ACT Party (Right Wing), which he is not even a member of. In fact he is still a member of the National Party!

The ACT party is in coalition with the National party, the Maori party, and the United Future party, forming the current New Zealand government, headed by National leader and Prime Minister John Key. Key rolled Brash after Brash failed to unseat the previous Labour government.

ACT has one electorate seat, Epsom, held by ACT leader Rodney Hide, and under the New Zealand proportional representation system has a total of just five out of the total of 122 seats in Parliament.

Brash has been gathering support for his leadership bid, including failed Auckland Supercity mayoral candidate John Banks (also a former National party Cabinet Minister). Specifically they have been targeting Hide and his Epsom seat.

Three polls of the electorate (no sample data available, nor the polling organisation) "commissioned by a long-standing admirer of former National leader Dr Brash" have been conducted to date, though this is the first data released.

The poll asked "If a candidate were standing in Epsom with the aim of being a coalition partner for National would you prefer that candidate to be?" The options were John Banks, Rodney Hide (sitting member and leader of the ACT party) or "would not vote for either".

First problem - the question asks who the respondent would "prefer that candidate to be". Not who they would vote for, but who should be on the ballot paper. But the choices include an option "would not vote for either".

Now enter the dodgy results of the latest poll: Banks 35%, Hide 14%, "Don't knows" 24%. Total of 73%. What happened to the other 27%? Are they actually those who responded "would not vote for either"?

Clearly 51% don't want either Banks or Hide!

And who are the 24% "Don't knows"? They weren't an option in the question!

Wonderfully accurate - or is that woefully (in)accurate - polling and disclosure for a man who wishes to lead a party he doesn't belong to, and who has pretentions to be Minister of Finance.

The Merriam-Webster online dictionary defines Brash as:

heedless of the consequences
done in haste without regard for consequences
lacking restraint and discernment
aggressively self-assertive

As the Moody Blues once said:
"And we decide which the fact, and which the illusion"

The disconnect between our measures of national income—and how people feel about their lives

2011-04-16T19:55:00.011+12:00

The Sarkozy-Stiglitz Commission's Quest to Get Beyond GDP

The Commission's aim was to identify the limits of GDP as an indicator of economic performance and social progress, to consider additional information required for the production of a more relevant picture, to discuss how to present this information in the most appropriate way, and to check the feasibility of measurement tools proposed by the Commission. The Commission's work was not focused on France, nor on developed countries, and its output has been made public, providing a template for every interested country or group of countries.

Economists Joseph Stiglitz, Amartya Sen and Jean-Paul Fitoussi argue in their recent book, Mismeasuring Our Lives: Why GDP Doesn’t Add Up, GDP is a deeply flawed indicator of well-being. Their book is a streamlined version of the final report produced by the Commission to identify the limits of GDP and to outline new metrics that take things like education, gender equality and environmental sustainability into account.

The political reaction has been interesting. In the United Kingdom, Prime Minister David Cameron directed the Office for National Statistics to conduct a nationwide survey asking citizens what they believe should be used to measure happiness, with the goal of formulating policy “focused not just on the bottom line, but on all those things that make life worthwhile.”

In Germany, the Bundestag has established a commission on “Growth, Prosperity, Quality of Life” to develop a more holistic measure of progress.

Reforms are under way in Italy, Australia, South Korea, Canada and the United States, where a project called State of the USA, supported by the National Academy of Sciences and numerous prominent foundations, has begun to track some alternative indicators of progress, which will eventually be accessible to citizens online.

A focused comment has come from Alan Krueger, an economist at Princeton who recently stepped down as assistant treasury secretary in the Obama administration: “I think the disconnect between our measures of national income—which have been growing for eighteen months—and how people feel about their lives is raising interest in broader measures of society’s well-being”.

Joint author Jean-Paul Fitoussi, a French economist who served as coordinator of the Sarkozy commission has commented: "One thing that hasn’t happened is the creation of a permanent commission at the Organization for Economic Cooperation and Development (OECD) to develop a set of common standards, which was promised at the time and [is] crucial to lending any alternative system credibility. Assume you design a good measurement system for one country—how can you compare what is happening in another country? If you have a system, it has to be common; otherwise it has no validity. Invited to Britain for the unveiling of the Cameron initiative on measuring happiness, Fitoussi declined out of frustration. “I was invited, but I said no, because it’s a bit ridiculous: we will end this adventure with fifty systems of national accounting and measurement.”

The American Reinvestment and Recovery Plan – By the Numbers

2009-04-01T21:23:00.024+13:00

President Obama's American Reinvestment and Recovery Plan , launched after much backroom bargaining and a huge public fanfare, has the appearance of a well-structured performance plan. Its 6 socially focused themes:

Spurring a Clean Energy Economy

Lowering Health Care Costs and Ensuring Broader Health Care Coverage

Preparing Our Children for the 21st Century Economy

Rebuilding America’s Roads and Bridges and Investing in 21st Century Infrastructure

Supporting America’s Working Families

Changing the Way Washington Does Business

have 5 main goals:

Double renewable energy generating capacity over three years – enough to power 6 million American homes.

Undertake the largest weatherization program in history, modernizing 75% of federal buildings and two million homes.

Computerize every American’s health record in five years, reducing medical errors and saving billions of dollars in health care costs.

Launch the most ambitious school modernization program on record, sufficient to upgrade 10,000 schools and improve learning environments for approximately 5 million children.

Enact the largest investment increase in our nation’s roads, bridges and mass transit systems since the creation of the national highway system in the 1950s.

At the next level he has some apparently hard performance measures (or benchmarks as he calls them). They are the specific outcomes he is hoping for:

Spurring a Clean Energy Economy

Double renewable energy generating capacity over three years – enough to power 6 million American homes
More than 3,000 miles of new or modernized transmission lines and 40 million “Smart Meters” in American homes
Weatherizing at least two million homes to save low-income families on average $350 per year
Modernizing more than 75% of federal building space, saving taxpayers $2 billion per year in lower federal energy bills
Clean Energy Finance Initiative to leverage $100 billion in private sector clean energy investments over three years.

Lowering Health Care Costs and Ensuring Broader Health Care Coverage

Accelerating adoption of health IT systems to modernize the health care system, save billions of dollars, reduce medical errors and improve quality
Protecting health care coverage for 20 million Americans during this recession
Providing health care coverage for nearly 8.5 million Americans
Oensures that no American will lack immunizations due to costs - more than 156 million
Americans.

Preparing our Children for the 21st Century Economy

Renovate and modernize10,000 schools - will improve learning environments for about 5 million students
Increasing college affordability for 7 million students
One-fifth of high school seniors who receive no tax credit under the current system will receive a tax cut to make college affordable for the first time
Tripling the number of undergraduate and graduate fellowships in science, to help spur the next generation of home grown scientific innovation
Provide an additional 350,000 children access to quality pre-k services, but will create at least 15,000 new teaching and teaching assistant jobs, as well as new supervisory and support positions
Preventing teacher layoffs and education cuts in every state.

Rebuilding America’s Roads and Bridges and Investing in 21st Century Infrastructure

Repair and modernize thousands of miles of roadways in the U.S. and providing new mass transit options for millions of Americans
Enhancing the security of 90 major ports
Funding to support 1,300 new wastewater projects, 380 new drinking water projects and construction of 1000 rural water and sewer systems, ensuring that 1.5 million people have new or improved service
Making much-needed repairs to military housing units and accelerating modernization of VA medical facilities

Supporting America’s Working Families

Providing a $1,000 Making Work Pay tax cut for 95% of workers and their families
Cutting taxes for more than 16 million children
Increasing food stamp benefits for over 30 million Americans who currently receive food stamp benefits
Providing 7.5 million blind, disabled and aged Americans an immediate $450
Extending and expanding unemployment insurance (UI) benefits.

Changing the Way Washington Does Business

No earmarks for any proposal in the American Recovery and Reinvestment Plan
When the plan is enacted, all citizens will have the ability to see how recovery funds are spent on a new website, http://www.recovery.gov/
Strict oversight with independent review
New public-private partnerships to support innovation
Fundamentally reform the nation’s unemployment insurance system to more efficiently address the challenges and realities of the 21st century workforce.

The hard question is:

Will President Obama actually know if he achieves his goals?

Some of the outcomes are quite specific, particularly when he is talking about physical activities. However the social change outcome targets are vague and ill-defined. These offer the opportunity for bureaucratic capture of the funding, minimising the desired impacts, and constraining the flow of money which is the real purpose of this plan.

Will it work?

More importantly, will the USA be in a better position as a result? The rest of the world depends on it.

Smart investment requires more data for Evaluation and decision-making

2009-04-01T20:42:00.007+13:00

"Lean times = Lean research. But no one can do less research. We have to do more, with less, and the key tools to help us deal with this will be around data and analytics. More data will be needed for evaluation and decision-making at every level of the academic institution."

Jay Katzen of Elsevier hit the nail on the head yesterday:

LiveSerials: Data Analysis Will Drive Decision-Making in Research – Jay Katzen, Elsevier

Pointing out that while world leaders such as Gordon Brown (innovation is the way out of the economic crisis) are making grand statements about continuing to invest in R&D he notes the leaner times are here: hiring freezes at most universities in the USA (e.g. Harvard); there is a drop in funding levels (Stanford is basing their budget on a 5% decrease); and private institutions such as the Wellcome Trust plan to decrease their endowments.

And the lean future has already hit UK Universitites. The UK’s Research Assessment Exercise (RAE) 2008 analysis reveals there are fourteen universities in the UK getting less investment than the previous year, and forty institutions receiving funding that is below inflation. So there are more than fifty UK universities that have had to begin making cutbacks somewhere. These include University College London, Kings College, Imperial College, and University of Cambridge.

The solution is complex yet simple. "...More data will be needed for evaluation and decision-making"

We were warned in February 2006...why did we not act?

2008-10-24T21:33:00.042+13:00

On Sunday, February 05, 2006, when some US media commentators began thinking about their own economy, Why The Economy Is A Lot Stronger Than You Think, I challenged their perspective:

"...Are we measuring the right aspects of our individual economies?"

The commentators were talking about missing data...I was talking about measuring the right things...measuring behaviours not activity.

Twenty months later the same problem has reared its very ugly head again...in the form of the current global financial mayhem.

Because of our personal short-term financial hells, many of us have been blinded to the core issue - the behaviours that have caused the problem - instead focusing on our perceived losses.

Former US Federal Reserved Chairman Greenspan said (October 23) that he had made a "mistake" in believing that banks in operating in their self-interest would be sufficient to protect their shareholders and the equity in their institutions.

Greenspan called this "a flaw in the model that I perceived is the critical functioning structure that defines how the world works."

Greenspan seems to have been unaware that the world is made up of humans. Countries are collections of humans in the same space, Teams are groups of humans with a supposed common interest (though we doubt this when they lose). Banks are structures employing humans with particular and common personal interests.

When we incentivise those humans in the banks with personal gain targets (otherwise known as bonuses and commissions) what do we expect will happen? That they will think of the national interest?

Any performance professional worth their salt will tell you that it is the aspects of a role that are measured that will drive the performance of the individual concerned. If we measure the profit the bank makes from the activities of an individual, in order that the bank can share that profit with them, guess what is going to happen?

Recapitalising, or offering guarantees, might stop the bleeding. It is only by changing the model that we can be sure the same problem will not occur again in the future.

Measuring Outcomes - Down-under Doubts

2008-08-14T20:59:00.025+12:00

Tourism Australia has no bloody idea: report

...screamed the Sydney Morning Herald headline...with a pointed play on a key Australian Tourism marketing slogan.

A report by the Australian Federal Auditor-General's office, has found that the indicators used to measure Tourism Australia's performance are flawed. "They are primarily for the industry as a whole, rather than the success or otherwise of Tourism Australia's marketing activities," the report says.

In 2006–07, tourism accounted for 3.7percent ($38.9billion) of Australia's total Gross Domestic Product (GDP). To achieve that the tourism industry employed 482,800 people, 4.7 percent of Australian workforce.

The 5.6 million international tourists that year spent $A22.4 billion, just one quarter of the total $85billion on goods and services.

To put this all inperspective however, this was less than one percent of the world’s international tourists.

Tourism Australia, the prime tourism promoter best-known for its controversial "Where the bloody hell are you?" advertising campaign of 2006 featuring bikini-clad model Lara Bingle, has no accurate way of measuring the impact of its promotions., according to the audit. While that campaign was credited with higher tourist spending, visitor numbers dropped in the months following its launch.

Further, the Auditor-General's office says the indicators used to measure Tourism Australia's performance are flawed. "They are primarily for the industry as a whole, rather than the success or otherwise of Tourism Australia's marketing activities," the report says.

"Evaluating the impact of its projects ... would place Tourism Australia in a better position to measure its own effectiveness and impact."

On the operational performance front four internal audits and four external reviews into the awarding of creative development and media placement contracts in 2005 - worth $184 million - "did not include an assessment of whether the objectives of the contract had been achieved or the various projects undertaken within the contracts were effective", the report says.

But wait there's more! The AG's office found that Tourism Australia's Board did not adhere to its own charter for managing potential conflicts of interest.

So to pro-actively solve the problem the Board "revised the charter to reflect its practices".

The AG recommended the agency revise its conflict of interest procedures and review its performance management framework.

Tourism Australia has said it has accepted the recommendations and says it's taking steps to implement them.

But how does Tourism Australia actually plan and monitor its performance?

Well they have a strategy map! - page 6

Which includes a set of Outcomes and Key Strategies for Core Marketing Platforms:

Increased intention and actual travel to and throughout Australia.

Consumers are able to access and buy Australian travel experiences more easily.

Australia stands out for its compelling experiences and is more competitive as a destination

Focused and somewhat measureable you might say.

Then they have a set of Outcomes for Core Enabling Platforms...and it all goes soft:

People and Culture - Tourism Australia has a motivated, skilled and cohesive global team

Insights and Planning - Tourism Australia staff, partners and stakeholders are able to make informed tourism and investment decisions. Stakeholders can assess how Tourism Australia is meeting its core objectives...

The performance-eye challenge (the pec challenge) - how are you going to know?

Their Corporate plan states:

"Tourism Australia has established a Performance Management Framework (PMF) through which it evaluates the performance of Australia as a visitor destination as well as our specific platforms and programs".

And how does it work? The structure, with one example is:

Key Performance Indicator: Ensure Australia is thought of when considering travel
Measured by: Brand Tracking
Performance measure: Ranking for Australia on preference
Base level (Year ended Jun 2006): UK: 5th, Japan: 6th, NZ: 1st, USA: 6th, Korea: 7th, China: 3rd, Germany: 7th
Target Level (Year ended Jun 2008): Rank up 1: UK, Japan, USA, Korea, Germany Maintain top 3 rank: All others

And no, performance-eye has not changed anything...it is word for word! At the next level the performance measures? are even more interesting.

Key Performance Indicator: Tourism Australia complies with Government standards, regulations, internal policies and procedures
Measured by: KPMG Internal Audit Reporting
Performance measure: Corporate Governance audit ratings
Base level (Year ended Jun 2006): Compliance Recommendation Category 1 – Issues of concern from an external audit viewpoint
Target Level (Year ended Jun 2008): Compliance Recommendation Category 2 – No major issues which require management attention

And how does that link with their strategy?

And how did Tourism Australia respond? A search of their website for media statements = 0

"Where the bloody hell are you Tourism Australia?"

Your are not alone!

2006-02-05T20:12:00.000+13:00

How many times in the last twelve months have you been told your country's economy has a poor investment return, you have a growing current account deficit, and your savings record is 'pathetic'!

How often recently have your central bankers, your investment advisors, your Treasury, and of course, your politicians lectured you on how you should change your habits?

How many times have these media-labelled experts told you that your country faces a perilous economic future unless you cut back on your spending now! And you were repeatedly told this was just a problem in our country.

Good news for you! The USA has the same problem as the rest of the western world (WW), and the WW thinks it is a giant problem!

The fundmental question is: Are we measuring the right aspects of our individual economies?

Let us take the USA situation.
"...what if we told you that the doomsayers, while not definitively wrong, aren't seeing the whole picture? What if we told you that businesses are investing about $1 trillion a year more than the official numbers show? Or that the savings rate, far from being negative, is actually positive? Or, for that matter, that our deficit with the rest of the world is much smaller than advertised, and that gross domestic product may be growing faster than the latest gloomy numbers show?..."

BusinnessWeek Online further reports that:"The statistical wizards at the Bureau of Economic Analysis in Washington can whip up a spreadsheet showing how much the railroads spend on furniture ($39 million in 2004, to be exact). But they have no way of tracking the billions of dollars companies spend each year on innovation and product design, brand-building, employee training, or any of the other intangible investments required to compete in today's global economy. That means that the resources put into creating such world-beating innovations as the anticancer drug Avastin, inhaled insulin, Starbuck's (SBUX ), exchange-traded funds, and yes, even the iPod, don't show up in the official numbers."

Need we say more?

BusinnessWeek Online
Why The Economy Is A Lot Stronger Than You Think

Hype versus Life?

2006-01-05T21:57:00.000+13:00

In what appears to be a life-threatening version of the Wikipedia vs Encyclopedia Britannica debate, Yahoo has launched its 'Yahoo! Answers'. The service allows users to:

Ask questions;
Answer them; and
Discover and browse through all of the answered questions that others have posed.

And that's not all! The service is free, questions are grouped into categories, and there’s a search function.

But wait, there's more...the 'service' has a rating system built in....and how does that work? Well the person who asks the question rates the answers! Experts evaluating experts of course...why would you think any differently?

Does this sound like an internet version of over-the fence gossip?

Are there questions that are beginning to nag at you? Like what constraints (such as no medical or legal advice) apply? A quick (and truly random) search of the website revealed the following question:

"Is it safe to give a young child an immunization when they're already sick?".

The 'Asker' had a serious medical ethics and practice question.

Two answers (at the time of writing) - neither from a registered medical practitioner, but one respondent claims to be a nurse with twenty years experience.

And the rating system? Well the 'Asker' rates the non-nurse as 5-star...the nurse did not even get measured!

Confidence building?

Competitor Google has its 'Answers' which uses "More than 500 carefully screened Researchers" to reply to questions. Their second difference is that the 'Asker' pays a fee for the inquiry.

Specialty sites are also available. But they avoid the problem areas. Guru, for instance, sticks to business and public sector advice.

Storm-in-a-Browser?

It might appear on the surface that this is no different to old-wives-tales vs visiting the doctor? Not so!

Performance-Eye's attention was drawn to this situation by Charlene Li, a principal analyst on the Devices, Media, & Marketing team of Forrester Research, a (Nasdaq: FORR) listed independent technology and market research company. Charlene is a former strategy consultant for Monitor Company, a magna cum laude graduate of Harvard University, and holds an M.B.A. from Harvard Business School. She is a leading blogger in the IT sector.

And this is the scarey bit!

She has concerns about the Google researcher approach because "...it is a lot more cumbersome to use and also raises the stakes for both the asker and the answerer".

And she clearly favours Yahoo..."By keeping it free, Yahoo! keeps it light but also pretty darn useful. Also, the universe expands tremendously with Yahoo’s service. Two other ways Yahoo! benefits: 1) It encourages users to become active, participating Yahoo! community members; and 2) it creates new content that can be indexed and searched by Yahoo! (as well as other search engines)."

So it all boils down to the almighty dollar...!

"How will Yahoo! benefit?" Charlene asks..."Well, I don’t think they were leaving much money on the table by foregoing the ability to charge. In fact, there’s probably quite a bit more opportunity in the form of advertising, especially since advertisers could potentially buy ad inventory in specific categories or target ads by specific keywords".

Cashing in on crisis?

And the stinger is in the tail!

"One key area to watch: local advice. This has the potential of causing a huge dent in start-ups like Insider’s Guide or Judy’s Book, primarily because it’s so easy to use and doesn’t require forming a formal social network.

So financial leverage from the internet appears to be the primary purpose, and legal and social accountability are key elements to be avoided?

I wonder who cares about the life of the two-year old child in the serious 'immunization' question?

new year resolutions

2005-12-31T14:30:00.000+13:00

Lets make our New year resolutions outcomes rather than actions...so we can measure what we have achieved rather than just tracking what we have done.

may I borrow your mirror?

2005-12-31T11:44:00.000+13:00

The task today is to create a mock case-study that demonstrates the dos and don'ts of monitoring performance...no, let's be more specific, monitoring compliance...we all have compliance obligations.

So what do we need to include in our case-study?

Do we have a clear purpose? Perhaps the protection of investors would be a good example. So how can we do that? Well a stock exchange with regulatory powers granted under statute would be a good robust structure. The governance role of the Board of such an exchange "can be considered in four areas: policy setting; discipline; crisis response; and monitoring and oversight of the [exchange's] performance of its regulatory functions".

What tests could we use to examine the Board's performance? Has it been extensively involved in setting regulatory policy? Is it active in crisis response, and does it demonstrate that action? Has it created an independent body to hear and determine cases of suspected breaches of its conduct rules?

The fourth area, monitoring and oversight of the exchange's executive's performance of their regulatory functions is perhaps a little more complex. We need to test if the exchange board's policy fully recognises the exchange's role under the regulatory framework. As the exchange involves sharebrokers, is the board maintaining appropriate strategic oversight of the sharebroker compliance programme? Are they ensuring they are fully informed on the ongoing performance of that programme against the strategic plan?

So we need a strategic plan, to map the direction the exchange executives need to take to achieve the board's objectives. And we need regular informed monitoring and reporting of both the participant sharebrokers and the monitors themselves.

To carry out its stautory and regulatory obligations the exchange will also need:

documentation and guidance on inspection procedures;
record keeping and recording of inspection procedures;
clearly defined roles for supervisors within the exchange;
clarity about the the role of the board itself, as this relates to ongoing oversight of the exchange's performance of its regulatory functions;
rules about the use and security of client's funds; and
clearly defined obligations in the event of non-performance.

Then there is the capability side:

the capacity of the exchange to carry out its obligations, defined as sufficient capable people;
clear internal responsibilities and accountabilities; and
good internal and external communications.

And finally on the behavioural side:

exceutive responsibility to address matters referred to them by staff;
accountability rather than the blame-game; and
accepting responsibility for failures, then identifying and addressing the causes of that failure.

In essence driving performance rather than following it.

Perhaps we could use a real example for our case-study. Like the NZX (New Zealand Stock Exchange)!

The Securities Commission New Zealand has carried out "An Inquiry Into the Performance by NZX of its Regulatory Functions as a Registered Exchange During 2003 and 2004 Prior to the Collapse of Access Brokerage".

In essence it found that the Board had set policy and had responded directly and quicky to the crisis occassioned by the collapse of Access Brokerage. However the Inquiry found that in all of the other aspects noted above, the NZX fell short of its obligations, in some cases to a significant degree.

How often do we find, as did the Inquiry by Securities Commission New Zealand, that "...there were shortcomings in the development and early operation of the compliance programme. While the broker compliance plan was put to the CEO and Board for approval, implementation of broker inspection procedures was largely left to NZX staff who were relatively inexperienced in broker compliance programmes. We acknowledge that NZX had difficulty finding such experienced staff at that time. Supervision of the compliance team was inadequate. Issues elevated to the team supervisor and other executive management at times received little response".

And who watches the watchers?

The Securities Commission New Zealand states, in its report, "The Commission has not at this time undertaken a detailed review of NZX's current broker compliance programme".

Should we give the Securities Commission New Zealand a mirror of their own?

...beginning our journey...

2005-12-29T20:37:00.000+13:00

Welcome to the performance-eye blog...

Our purpose is to enable you to better understand performance issues, triggered by our perspectives, enhanced by expert discussion on and off-line, and realised by developing and implementing proven solutions ...

...and all done with a smile!

Look forward to engaging with you...

Michael Ross

CEO
Performance Resources International Ltd.