Six Highly Effective Habits of High Performing Municipalities

Commentary, Municipal Government, Peter Holle

Only five years ago, the New Zealand municipal governments of Christchurch (pop. 338,000) and Hutt City (pop. 95,000) were the weakest links in their local communities. Taxes were inciting tax revolts, services were notoriously poor and morale was low. Today, Hutt City is winning business excellence awards against private sector organizations and Christchurch is so efficient that other municipalities look to it for guidance. Considering the huge economic and social responsibilities of Canadian municipalities, our Municipalities adopting some of their habits would benefit all Canadians, too.

Here are six highly effective habits that turned these cities from zeros to heroes:

Real change takes real change. Without internal change, there will be no external change. It has to start with the, mayor, councillors, and senior management. In Hutt and Christchurch, it became obvious to the leadership that the situation could not be allowed to deteriorate further, so they set audacious goals for improvement. No organization can turn itself around without leadership, so the first ingredient is a lift in the horizons of those at the top. However, the leadership team cannot drive change alone.

The next step was the aggressive recruitment of senior managers and not just from within the island nation’s narrow borders, but also from the likes of Australia and South Africa. The only criterion that mattered was being an expert in his or her field. However, good people do not automatically do good work.

If one aims at nothing, one will hit it, so the leadership created clear goals and measurements. These were not just Thursday afternoon team-building exercises, either. Every activity of every person and every resource is linked to a goal, and these goals have hierarchies. For example, the goal of creating a healthy environment begets (among others) a clean water goal, which begets a water treatment goal, which begets a water quality testing goal. Christchurch has a “traffic light” system for ensuring its goals are met. If the water fails a test, a red light is lit, and the water treatment people are responsible for making it green again. If they fail, their light goes red, and so on until the person with the ability to solve the problem does so.

At Christchurch, custom-built software makes this possible. All staff feed their results into the system so that all activities can be monitored at a one-stop shop for the entire organization. Wise IT investment is a mundane but vital habit.

So far, we have attitudes, people, pervasive goal setting and wise investment, but there is more. Staff are motivated by performance pay. At Hutt and Christchurch, good performance according to the goal-setting program can earn bonuses that are 30 per cent above base salary. This does not apply to senior management only. A hierarchy of goals means that everyone’s performance is measured and rewarded. Productivity is high because every staff member is recognized for the difference he or she makes.

The sixth and final habit is complete openness and transparency. The public can read a breakdown of goals, measurements and results in the annual report. The municipality monitors its own outcomes through public satisfaction surveys. Not content to be its own night watchmen, Hutt City recruited external management-quality personnel from the private sector (based on ISO and Baldridge models). Once a culture of transparency is in place, celebrated success and honestly reported failure become natural expectations on all sides.

All this is in stark contrast to the culture of most Canadian municipalities. A Frontier Centre study of Canadian municipal annual reports found that only a handful of our largest cities (mainly in B.C.) are producing reports on goals and achievements in a structured way. For the most part, they continue to focus on inputs: what they spent rather than what they produced.

Are potholes fixed in a timely manner? Is garbage collected promptly and tidily? What civic events are taking place, and how many people go to them? Often, there is no complete answer anywhere to any of these questions.

In contrast, this excerpt from Christchurch’s 2007 Annual Report shows what a result-focused organization looks like:

The 2,300 Council staff work together as one team to achieve [our] goals. …

We can be proud that as an organization we have achieved 80 percent of our targets – an increase of 5 percent on last year’s business result when we delivered on 75 percent of our targets. … More than nine out of 10 (91 percent) residents say their overall quality of life is good or extremely good.

[emphasis added]

Is there any reason Canadian municipalities should not become high performers, too? Perhaps it is time to insist that they do.

Peter Holle is president of the Frontier Centre for Public Policy and Larry Mitchell is its Senior Fellow in Local Government Policy. The 2008 Local Government Performance Index will be released in November.