A new performance model has been used in a study of the new Defence Logistics Organisation (DLO).Its author hopes that the description of the performance model on which the study is based, as well as the review of the DLO itself, will be of interest to everyone in the public sector working in organisational improvement.
The DLO has been recently pulled together as a single logistics operation for all of the armed forces. With a budget of over 4.5 billion pounds, and employing 43,000 people across the UK, it covers everything from missiles to mail delivery.
The report, Targeting Improved Performance, is the latest published by the Public Services Productivity Panel, set up to identify ways to improve productivity and efficiency across the public sector.
On performance, the DLO has been found to be making good progress on reaching its target of cutting costs by 20 per cent by 2005.
Its performance management system was reviewed by John Dowdy of McKinsey. The model used in his study has been adopted by the Civil Service Management Board for use throughout the Civil Service.
The model sets out five building blocks for a performance management system which will drive improved performance: an aspiration to stretch and motivate the organisation, a coherent set of performance measures, and a demanding set of targets based on these, clear accountability for these targets at an appropriate level, rigorous performance review process, and meaningful incentives to motivate individuals to deliver.
The DLO has made good progress in developing a balanced set of performance measures, conducting a structured dialogue with its internal customers, articulation of a really stretching performance aspiration for the organisation, and progress in delegating accountability and authority down the organisation.