Benchmarking: Finding Out How Your Community Measures Up
(from Maine Townsman, May 1997)
By Michael L. Starn, Editor, Maine Townsman

How does your municipality stack up against other Maine municipalities? Are you providing services as efficiently and cost-effectively as your neighboring communities? What is the appropriate level of service for your municipality?

These questions are always on the minds of conscientious local elected officials. They are an integral part of governing. Faced with hard, often unpopular choices regarding the cost, quality and level of services that their municipality provides, most local officials would agree that making decisions about municipal services with factual and relevant information is preferable to a "by the seat of the pants" approach.

In the private sector, benchmarking has been used for some time to enable business managers to analyze the practices and methods of the competition and emulate the top performing companies to make improvements to their own company. Recently, the idea of benchmarking in the public sector has started to gain acceptance.

Benchmarking is a comparative process whereby an organization’s performance is measured against the performance of other organizations to identify "best practices" and ways to improve. Private sector benchmarking is a survival tool. If businesses are not able to keep up with the competition, they fail. For the public sector, benchmarking is more a sign of the times with citizen pressure to hold the line on property taxes and to be "more businesslike" in the way government is run.

From the book, Benchmarking: A Method for Achieving Superior Performance in Law Enforcement Services, published by the National League of Cities, author William Gay says that public sector benchmarking is "a surrogate for the competitive forces that continually push businesses to achieve higher levels of quality and productivity - productivity that serves the business, its employees and its customers."

While municipalities may not perceive themselves as facing the same competitive pressures as businesses, making government more accountable is a worthwhile goal, if not a citizen mandate. Moreover, benchmarking may be ideally suited for the public sector because of the rights of access to governmental information and the willingness with which public officials share information.

Measuring performance and changing service delivery in the local government arena, however, can be a daunting task. Making comparisons amongst municipalities will result in the perception of winners and losers - high-performing municipalities pitted against low-performing ones. The intent of benchmarking is not to belittle the low-performing municipalities or to glorify the high-performing ones. Instead, through comparative analysis, benchmarking attempts to identify the practices and processes that make high-performing municipalities that way and to translate that information into reports that will allow local officials and citizens to make informed judgments about the level, quality and cost of the services they receive.

Using comparative data is nothing particularly new to Maine municipal officials. Unfortunately, the comparisons that often surface in public forums are sometimes neither accurate nor appropriate. In other words, the comparisons that people make either lack a factual basis or are not "apples to apples."

How many times at town meeting have you heard a resident point out that a neighboring community provides "a better service at a lower cost than we do." Or, how often have you heard a resident complain that "so and so in community X only gets paid this much so why are we paying our town official more?"

Comparative data analysis done inappropriately or out of context can do more harm than good. For example, salary comparisons based on the job title as opposed to job responsibilities would be unfair. Even comparing individuals with the same job title and responsibilities may not account for the intensity of positions in larger organizations versus smaller ones.

Benchmarking provides a powerful fact-based data collection and analysis process that allows a municipality to better itself by setting goals and implementing activities aimed at achieving those goals. However, this organizational management tool requires careful and thoughtful implementation to be successful. In the end, everyone should be a winner. The municipality should have better services, citizens should get more bang for their tax dollar, and municipal employees and managers will be involved in a process of continuous self-improvement.

THE BENCHMARKING PROCESS

"Benchmarking is a continuing process and quest for best practices that leads to superior performance [in law enforcement services] through the implementation of innovations," says William Gay in the NLC publication on benchmarking. Much of what follows in this article is the benchmarking process that Mr. Gay outlines for municipal law enforcement. That process seems applicable to other municipal services.

Gay says the ultimate goal of benchmarking is improvement. A benchmarking study should reveal performance gaps between how your municipality is providing services and how other municipalities are providing those services. A municipality that discovers it doesn’t meet the highest performance standards set by its peers should not be disheartened. Rather, municipal officials and employees should look at the higher performance standards as goals, as something to work towards.

Not every basketball team in the NBA is as good as the Chicago Bulls. Right now, it’s probably fair to say that no NBA team is as good as the Bulls. But, that doesn’t keep the other teams from trying, from emulating those things about the Chicago Bulls that make them the best. This is benchmarking in its basic form.

The benchmarking process is made up of three component processes: benchmark metrics, process benchmarking, and program management. Author William Gay outlines a 10-step benchmarking process: steps 1-4 are part of benchmark metrics; steps 5-7 are process benchmarking; and steps 8-10 are program management.

Identify What To Benchmark. Benchmarking is the process of collecting and analyzing performance information. The first step is identifying what should be measured.

Effective benchmarking must focus carefully on measurement. Generally, three types of measures are used.

• Process measures break down the activities or services provided by other municipalities. For example, within an assessing department you might want to know how much of the department’s work is in the field, how much is administrative or office work, and how much is public relations.

• Effectiveness measures gauge the successful achievement of a department’s or activity’s goals and objectives. In municipal law enforcement, effectiveness measures might include arrests, tickets issued, disputes settled, and customer satisfaction.

• Productivity measures calculate the unit cost of achieving objectives. For example, solid waste collection or disposal can be priced by the ton. How much does it cost the municipality per ton to collect and/or dispose of its solid waste? How much is recycling costing, per ton?

Identify Benchmark Partners. With whom do you compare your municipality? The answer to this question may not be as easy as you think. Three types of benchmarking partnerships are generally recognized.

• Internal benchmarking compares services within the municipality, e.g., your public safety department to your public works department.

• External benchmarking with other municipalities is what most local officials think of when they talk of benchmarking. While this type of comparison may give you your best performance measurement data, it also presents the greatest danger for making inappropriate comparisons. It is very important that the municipalities you select for benchmark partners be similar to yours. For example, paper mill towns may want to look at other paper mill towns as opposed to selecting municipalities based on population or valuation. Many municipalities will prefer to stay within their region or county, but there may not be a large enough group of comparable municipalities within the region to do a good benchmarking study.

• External benchmarking with non-municipal entities should be considered.

Benchmarking with other municipalities will only bring you to the municipal level of competition. Don’t overlook private sector organizations that have developed practices that might have applicability to processes in your municipality (e.g., solid waste collection).

Collect Information. The starting point for data collection is a written plan that outlines the key issues about which you need information and how you will go about collecting that information. You don’t need to reinvent the wheel. Much of the information you will be looking for may already have been collected.

For example, Maine Municipal Association has published a number of books and reports that provide comparative data on Maine municipalities. MMA’s Annual Salary Survey, which has been published for over 20 years, is a compilation of municipal wage and employee benefit data. For the past five years, MMA has collected and reported fiscal data comparing revenues, expenditures, debt and fund balances in over 250 Maine communities. MMA regularly issues property tax study reports, including Full Value Tax Rates and Property Tax Burden Indicators.

Various national, state and regional agencies collect data that may also be useful. For example, the Maine Fire Chiefs Association collects fire incident reports (see article in last month’s TOWNSMAN) that could prove valuable in making fire department comparisons.

At some point, it will be necessary to construct a data collection survey for the needed information that can not be found elsewhere. Whether telephone or mail surveys are used, keep it simple and limit the amount of staff time used to develop and process the survey as well as the time required to respond to the survey.

Determine Performance Gaps. Once you have collected the data, the next step in the process is to determine a performance gap. How does your municipality measure up? A performance gap is the difference between the cost, quality and level of service provided by your municipality and those provided by your benchmarking partners. The objective of benchmarking is not only to identify the gap but also to find ways to close the gap.

For the most part, we are dealing with collecting quantitative data followed by cost analysis and quality rating. The performance measurement is not only the number of parcels handled by each assessing department but also how much the assessing function costs and the quality level of the assessing.

The more specific the analysis the more useful the data becomes. For example, breaking down the assessing data into residential, commercial and industrial parcels is preferable to just comparing total number of parcels. Similarly, you should look not only at the number of calls handled by your local police department, but also the different types of calls - vandalism, domestic violence, rape, murder, etc.

Municipal officials do not need to select the largest gap (their municipality to the highest performing municipality) as the standard for improvement. Trying to do too much at one time to catch up to the performance leaders may be more change than your municipal employees can handle. If the gap is great, it may be best to focus on a single, small improvement rather than to fail at or partially implement several major changes.

Communicate Findings. Communications is a very critical part of the benchmarking process. The findings of the benchmarking study should be presented clearly to all stakeholders (those affected by potential changes). Clear and open communications will be necessary to gain acceptance from those affected by any changes.

Communications should document the benchmark process, present the findings, make recommendations based on those findings, and project how performance will improve from the recommended changes.

Changes to municipal government services will involve a number of different groups of people, including the elected and appointed officials, the municipal employees and the citizenry. All of these groups should be represented in the process.

Establish Improvement Goals. Since benchmarking is about improvement, goals that are established from this process should increase productivity. For example, a municipality may find its per capita costs for law enforcement are high relative to other municipalities. One approach to increasing productivity would be to calculate the number of calls handled by each police officer and establish goals that would increase those numbers to work steadily toward the calls-handled-per-officer in the higher-performing departments.

Benchmarking is about variation - the difference between your municipal service and the high-performing organizations - and it is about optimization - working to achieve a higher level of performance. Goals that are established will identify the causes of variation and, through a process of change, reduce the amount of that variation.

Develop Action Plans. Having goals will be of no value unless you have a plan to achieve them. Action planning is the preparation of a detailed road map of tasks to be accomplished that will enable the municipality to meet its benchmarking goals.

Monitor Implementation. Change does not happen very well on its own. People and organizations are creatures of habit and employees are generally reluctant to abandon tried and true ways of doing things, even though change may offer a better future.

Monitoring the change process is necessary to ensure that resistance to change is overcome and that action plans and schedules are met. In other words, "Did we do what we planned?"

Evaluate Results. Unless activities and outcomes are recorded and analyzed, the results of the change are nearly impossible to determine. Evaluation is designed to document these improvements, or, in some cases, the failure of the change to achieve expected results.

Recalibrate Benchmarks. Recalibration is the periodic review of benchmarks. Recalibration needs to be done for two reasons: (1) the municipality may not achieve the best practices during their first benchmarking initiative; (2) at some point, you may have to "raise the bar" to keep pace with a changing world.

RESOURCES

To order a copy of William Gay’s Benchmarking: A Method for Achieving Superior Performance in Law Enforcement Services, contact: Publication Sales, National League of Cities, 1301 Pennsylvania Ave., N.W., Washington, DC 20004. (202) 626-3000.