June 29, 1998
Sunny Lessons from Sunnyvale
If you want better results in any field of endeavor, you need to measure where you are right now. That's how you create excellence in your organization.
Take Sunnyvale, California (population 130,000). The city's name may sound gratingly pleasant in the manner of cemeteries or retirement homes, but we have something to learn from its municipal arrangements. From top to bottom, Sunnyvale's high-performance government has learned to evaluate every service its 750 employees perform. The results speak for themselves: high-quality services delivered at low cost to customers, financial stability and a satisfied electorate. All of this without cutting programs or eliminating staff.
Right off, the process starts with elected officials whose primary functions are setting long-range goals and striking budgets, not tangling with administrative minutiae.
The next step brings in the program managers and department heads, led by an appointed city manager. Their job is to translate the long-range goals into quantifiable service objectives. This means breaking each objective down into specific tasks, setting the service levels to be delivered, and establishing maximum allowable costs.
Under this setup, the managers have clear indicators that will tell them if they are on track. "The budget has hundreds of ... such specific service targets," says a Sunnyvale spokesman. "Our operations are measurable. Managers are held accountable. If they do not meet these goals, explanations are necessary."
Here are some concrete examples:
Let's go a little deeper. How, for instance, does the California city handle road repairs? Workers regularly assess the condition of the streets (number of surface cracks, bumpiness, etc.). Every day, maintenance crews record hours and work performed on their time cards. Every month, the city manager and public works director determine if costs are in line. Occasionally, they send out an auditor to guarantee accurate reporting.
Because all city workers report how their hours relate to tasks performed, line managers soon know if the city is paying too much to reach a specified level of service. The process makes them results-oriented and cost-conscious: they have to make their numbers. As former City Manager Thomas Lewcock says, "We give our department heads lots of freedom to marshal their forces to get the best result. A typical government organization controls how people do the job, but doesn't hold them accountable for results. We've reversed that."
Annual budgets are calculated on the basis of 10-year projections. These are constantly being revised through the expense-tracking practices that are built into the system. The price tag for each task includes not just salaries, but also office space and supplies, fringe benefits and equipment use. By fully allocating all costs associated with delivering a particular service, it is easier to make objective decisions about contracting out.
So what happens when a city measures performance instead of just spending money like most places?
In 1990, when it compared its own costs to those of cities of similar size and type, Sunnyvale found that it was employing 45% fewer people to deliver most services. It was paying its workers more, but its operating budget and per capita taxes were still near the low end of comparable cities. Not surprisingly, Sunnyvale consistently rates as one of the best places to do business in the U.S.
Successful businesses regularly use a variety of methods to assess employee output. Their goal, of course, is profit and happy customers. Sunnyvale points the way to attaining a similar level of efficiency in public administration. It shows that public sector workers can be just as productive as their private sector counterparts --- given the right system.
The Frontier Centre for Public Policy
is an independent public policy think tank whose mission is "to broaden the debate on our future through public policy research and education and to explore positive changes within our public institutions that support economic growth and opportunity."