2. Meta-messages All NZ Depts: enhanced outcome focus by 2003 Outcomes: ultimate goal (Holy Grail?) Pathfinder (collective action, individual solutions) Outcomes driving strategy and output mix Evidence-based approach to enhancing outcomes / achieving Millenium Development Goals (MDGs) Maximising outcomes from development proposals (prioritise, assess & assist roles for development banks?) An Incremental Approach to Capability Building

3. Focus on Outcomes Goal: Build NZ Capability at Agency, Sector and ‘Joined Up’ Levels

4. Why Pathfinder? After 10+ yrs, output funding has delivered Quantum gains requires modified approach Keep what works (output mgmt), but … Complete public sector management model Link inputs (through outputs) to outcomes Meet requirements of legislation, parliament, etc Ensure we deliver to stakeholders, taxpayers Start: Limited capability & management tools

5. 8 Agencies, Supported by Centre Building capability to enhance outcomes Goal: Better results for NZ communities Assumes performance feedback (outcomes) is a key factor in further improving performance Define outcomes; Prioritise; Measure; Manage –Performance of whole agencies / business units –Maximise outcomes from the output mix / $ –Accentuate the positive; eliminate the negative Outcomes / MDGs core to strategy, prioritising funding (macro) and proposals, assessing impact Is the approach helpful in implementing Milennium Development Goals?

6. PATHFINDER Better Results, Stronger Communities

7. Three Basic Approaches to Improving Results Top Down (Pathfinder emphasis / SOI / MDG focus?) Hierarchical (evolutionary direction for Pathfinder) Bottom Up, practitioner driven (opportunity) SOI: Statement of Intent – a forward looking strategic plan deriving outputs from outcomes, and identifying capability needs

8. Pathfinder ‘Building Blocks’ 1.Define & measure ‘mission critical’ outcomes (using ‘state’ or ‘situation’ outcome indicators) 2.Map causal logic linking outcomes to outputs 3.Assess impact of interventions 4.Assess cost-effectiveness 5.Management to maximise outcomes 6.Benchmarking with outcomes (business units / nations) 7.Focus strategic / annual plans on improving o/c 8.Redesign planning & operations to maximise o/c (incl. feedback & continuous improvement) 9.Improving outcomes across agencies / sectors Building Blocks being documented on io.ssc.govt.nz/pathfinder

9. First Steps towards Real Results Mission, Measures, Management (M 3 ) From aspirational outcomes (‘safer communities’) To the ‘Vital Few’ – focus on business actions Tight Outcome Definitions (‘% re-offending in 24 months’) Outcome Indicators (‘28% re-imprisonment rate for Maori’) Impact Measures (‘12% reduction in reimprisonment rate’) Outcomes as Inputs into Management Systems Delivery-based measures can substitute for Impact Measures where local factors can be managed (e.g. drugs work, but delivery factors critical)

10. Levers for Improving Outcomes Status quo outcome (client /service groups) Risk, Need & Likely Change (individuals / cases) Improvement in outcome (‘treated’ groups) Situation Report Benchmarking Crude targeting Priority setting Demand analysis Risk manage mnt Continue? Modify? Grow? Kill? MeasureApplicationsOutcome Type

11. Screening for Risk: Validation Social Costs (Justice + Community) Risk of Imprisonment (decile) Societal Cost Top (Squares): Community-based Offenders Bottom (Diamonds): Prison Inmates

12. Results Chains (After OAG Canada) Simple tools for reviewing funding proposals? Inputs Activities Outputs Immediate Results Intermediate Outcomes End/Final Outcomes Outputs Activities Inputs End/Final Outcomes Intermediate Outcomes Immediate Results O2O2 A2A2 I2I2 O3O3 A3A3 I3I3 O4O4 A4A4 I4I4 IO IR Etc Technical EfficiencyAllocative Efficiency

13. MANAGEMENT SYSTEMS & CAPABILITY

14. Ex Ante

15. Focus on Systems, Not Measures (lessons from the NZ Experience) Build management, not o/c measurement, systems End game is outcomes – but output results important Conceptual approaches give ‘one-off’ gains … Significant technical challenge to measure impact (management stuff is easy (?) with good measures) Ongoing gains in outcomes needs impact feedback? Risk-based targeting an important lever for gains Stretching the capability of first world nation(s) Capability development for 3 rd world required? Outcome-based allocative tools for the funder

17. Success is more a function of consistent common sense than it is of genius - Success is not a place at which one arrives, but the spirit with which one undertakes and continues the journey Most advanced NZ agencies have several things in common: Committed senior management; Long-term focus; Clear outcomes; Strong analytical capability & MIS in support; Incremental development to vision rather than ‘big bang’ Will require cultural & capability changes of all managers; Outcomes subversive – managers will not like all answers; No quick fixes – requires effort over multiple years

18. Office of the Controller and Auditor-General Te Mana Arotake

19. Robust Impact Measures: Challenging Output / quality measures good surrogates where outcomes not strongly influenced by local factors (e.g. Drugs; Engineering)

20. Accountability: High Demands Management (SOI) Logical story of how outputs enhance outcomes Selective use of indicator and impact measures to ‘tell story’ & set priorities Some discretion on external reporting Accountability Robust model linking outputs to outcomes Precise, timely and comprehensive impact measures for each output Mandated external reporting of outcomes In a ‘perfect world’ managers would have all the information required by an outcome-based accountability regime

21. Outputs and Outcomes After: HM Treasury (UK) Value for Money Better healthMore treatmentsMore nursesMore money External influences BudgetInputsOutput Outcome EconomyEfficiencyEffectiveness

22. Which Outcome? Example

24. Managing for Better Outcomes Broad focus (strategy, priorities, output mix, business systems) Decision making, better outcomes (evaluation just a tool) Measure outcomes (different outcome measures & groups) Work with (& test) clear intervention logic Integrate with resource allocation systems Focus business strategy on improving outcomes Focus business processes on improving outcomes Improve outcomes over multiple business cycles, and across business units / agencies / sectors Goal: maximise social benefit from finite resources