Performance Measurement an Management of PACA and LED: The Compass of Local Competitiveness Jörg Meyer-Stamer [email protected].

Performance Measurement an Performance Measurement an Management of PACA and Management of PACA and LED: The Compass of Local LED: The Compass of Local Competitiveness Competitiveness

Jörg [email protected]

Financialperspective

Learning andgrowth perspective

Customers’perspective

Internal business processes perspective

A methodology for monitoring A methodology for monitoring and evaluation: The Balanced and evaluation: The Balanced Scorecard approachScorecard approach

Key ideas involved in Balanced Key ideas involved in Balanced Scorecard (1) Scorecard (1)

BSC is not an ex-post evaluation tool, but a performance management tool– it forces actors to agree on goals and priorities

• You allow no more than 3 - 4 Critical Success Factors (CSF) per quadrant

• You allow no more than 2 - 3 Key Performance Indicators (KPI) per CSF

– BSC creates a concurrent process of action and of reflection, leading to adjustment

Key ideas involved in Balanced Key ideas involved in Balanced Scorecard (2)Scorecard (2)

BSC is organised in a hierarchically structured way – a top-level BSC at a programme / policy level– more specific BSCs for initiatives that feed into the

programme– even more specific BSCs for individual projects

and interventions

Economic impact:* business retention* creation of jobs and income* generation of start-ups

LED learning:* LED skills accumulation * alignment of goals and objectives* systematic M+E

External perspective:* distinctive locational profile* improved locational marketing* better standing with funders* stakeholder relationships

LED Process: * competent public service * membership-driven Chamber and business associations * effective communication between key players

Adapting the Balanced Scorecard to PACAAdapting the Balanced Scorecard to PACA

The Compass of Local The Compass of Local Competitiveness: An Example Competitiveness: An Example

Economic impact:* business retention* creation of jobs and income* generation of start-ups

LED learning:* LED skills accumulation * alignment of goals and objectives* systematic M+E

External perspective:* distinctive locational profile* improved locational marketing* better standing with funders* stakeholder relationships

LED Process: * competent public service * membership-driven Chamber and business associations * effective communication between key players

Possible quick-wins with PACAPossible quick-wins with PACA

Context and purposeContext and purpose

Assess the overall progress and impact of a PACA Project or another LED initiative

Create an occasion to discuss goals and achieve goal alignment– define indicators for each of the four quadrants in

a participatory way• define critical success factors (CSFs) • define key performance indicators (KPIs)

Create an occasion for exchange of experience between different subsector / cluster / value chain initiatives.

How to do it practically? How to do it practically? Top-level workshop Top-level workshop

Workshop during first PACA follow-up Repeat the scoring exercise on a bi-monthly basisStart to collect hard data on OVIs as they become

available.

Sequence of activities in a Sequence of activities in a Compass WorkshopCompass Workshop

1 Framing: What exactly are we talking about?

2 Look back: What have we achieved so far?

3 Visioning: What are the overall objectives of the object of the Compass?

4 Define Critical Success Factors

– organise CSFs into four quadrants

– prioritise them (Pareto)

5 Option 1: Define 2 - 3 KPIs for each CSF

– obtain a first score for each indicator

6 Option 2: Go directly into definition of activities to address CSFs (with participants with little experience in formulation of indicators

Economic impact:* business growth* level of investment, rate of return * creation of jobs and income

Innovation and learning:* understanding the 5 forces* skills development* R&D* linkages with support orgs. * market intelligence

Customers’ perspective:* what are the CSFs in creating and maintaining customer interest (price, quality, timely delivery, brand, lifestyle, ...)

Business Process: * productivity, quality, design, upstream and downstream, technology, market channels, flexibility, responsiveness, compliance with standards, ...

A possible Cluster / value chain / A possible Cluster / value chain / subsector PACA Compasssubsector PACA Compass

Economic impact:* value chain integration* product diversification* market-driven demand* availability of funding

Knowledge and learning:* effective transfer of skills* extension* market analysis* capacity building in quality control

Relationship:* access to agricultural product markets* partnership btw. commercial and emerging farmers* coop. public/private sector

Internal organisation: * land reform* agri BEE objectives internalised* effective process management

The Ilembe Agriprocessing The Ilembe Agriprocessing CompassCompass

Context and purposeContext and purpose

Assess the overall progress and impact of a value chain / cluster / subsector initiative

Create an occasion to discuss goals and achieve goal alignment– define indicators for each of the four quadrants in

a participatory way• define critical success factors• define key performance indicators

– more customer-focused exercise

Create an occasion for interaction between private and public sector

How to do it practically? How to do it practically?

Workshop during first PACA follow-up Repeat the scoring exercise on a monthly or bi-

monthly basisStart to collect hard data as they become available

Some lessons learnt in Ilembe Some lessons learnt in Ilembe pilot exercise (October 2004), 1pilot exercise (October 2004), 1

Crucial to exactly define what the Compass is about (limits of the system, insider / outsider, territory, sector / value chain, LED / local development at large)

Build in iterations to check wording and alignment of understanding

Some lessons learnt in Ilembe Some lessons learnt in Ilembe pilot exercise (October 2004), 2pilot exercise (October 2004), 2

The exercise involves an assessment of the overall strategy -- to the surprise of the participants – in locations with incipient LED activities, a

Compass workshop is a possible alternative to an “LED Awareness Workshop”

– Option: use Compass for strategy formulation, use Paper Computer for prioritisation

The earlier you can introduce the Compass in an LED initiative, the better (baseline data)

Thank you for your attention!Thank you for your attention!