Financial Viability Bond Ratings Current Bond Rating
(Has it changed recently?)
look around and see where one is starting.
Performance management is no different.
Most likely the organization has set some
strategic goals to pursue and has some
business objectives it would like to achieve.
For example, the agency may want to better
its financial standing, reduce operating
costs, and improve customer satisfaction.
Those are pretty general in nature and in
order to manage will require more specificity.
An effective option to drill down to a
meaningful level and determine where you
are, is to use the relevant KPIs associated
with the EUM model that was highlighted
earlier. For example, if we were to pick a
specific metric to illustrate the financial goal
it might look like Figure 2.
A recommended approach is to start slowly
with a manageable amount of KPIs, and
to select the ones that will truly drive the
organizational behavior and improvement
desired. It is important to remember that
organizations will respond to what they
are being measured on, and normally find
ways to meet the goals. Consequently it is
important to select the right set that provides
the correct balance of indicators to give a
Where Are You Going?
Where is the point on that map that you
want to go, or where you want to be? The
EUM leadership success element of “Measurement”
is an integral element at this
point. The old adage that you can’t improve
what you don’t measure is true. The management
team needs to establish a clear
goal. They need to identify an ambitious,
but realistic, target to hit (in our example we
identified the Bond Rating KPI). Ideally the
KPIs should be calculated timely and routinely,
analyzed regularly, and visible to the
leadership of the organization. Many utilities
today use dashboards or shared reporting
to accomplish this.
It is also important to regularly review the
KPIs the organization has been monitoring
in order to appropriately adjust to the
changing business dynamics of the utilities
How Do You Get There?
Continuing the analogy of taking a trip,
one will typically decide whether to fly to
a location on the map, or drive, or maybe
even both. Answering this question and
Continued on page 27
Effective Utility Management (EUM )
Attribute Component KPI