Her Majesty's Revenue and Customs, or HMRC for short, is a non-ministerial department of the UK Government responsible for the collection of taxes, the payment of some forms of state support, and the administration of other regulatory regimes including the national minimum wage.
HMRC was formed by the merger of the Inland Revenue and Her Majesty's Customs and Excise which took effect on 18 April 2005. Today, HMRC has about 56,000 employees and an annual budget of £4 billion.
In this case study I look at how HMRC made performance management work within its Information Management Services (IMS) group, which employs about 1300 people and comprises 7 business units (BUs).
Before I started working with HMRC, their performance regime within IMS wasn’t good. Their original attempt to develop performance indicators, which was done by another external consultant, wasn’t successful. "All that was created was a random bunch of metrics that the organisation tried to group together," he says. "There was no structure to the metrics and no strategy map. It was a bottom-up exercise and the scorecard did not help IMS move its performance forward", explains IMS’s Head of Performance Improvement, Finance & Performance.
Improving Performance Management
HMRC hired me to help IMS improve their performance management processes. The first thing I did was run some in-house training sessions in which I introduced the concept of strategy maps and other best practice performance management tools.
"The idea of the Strategy Map was a real "lights on" experience for me," recalls the Head of the function. "A few days after completing the training course, I attended the IMS board meeting that was held to start the 2008 planning process. The then CIO [Chief Information Officer] was leading a discussion on the latest strategic thinking of HMRC and how we could support those strategic goals. During that meeting I drew the first IMS Strategy Map."
He says that final Strategy Map that appeared in the business plan wasn't that dissimilar to the first draft. "But I cannot emphasize enough how the process of reviewing it, discussing it with colleagues, changing it, putting in more links and changing back again was extremely useful for the management team to collectively agree on and understanding our objectives and KPIs [key performance indicators]," he says.
The IMS Strategy Map
In the figure below you can see the IMS Strategy Map. The map is designed to shows how the IMS strategic objectives support those of HMRC.Creating a strategy map that effectively shows the linkages to the HMRC objectives is of value to the whole IMS organisation and not just the Board, explains IMS's Head of Performance Improvement, Finance & Performance: "Before building and rolling out the map we were a very siloed organisation," she says. "People were almost wholly focused on their own work with little real understanding of how what they did impacted others functions within IMS or the relationship with the overall objectives of HMRC."
She adds that the strategy map has been instrumental in enabling staff to see and appreciate the wider context of their work. Indeed, a recent IMS survey found that about 65% of staff had a good line-of-sight from their personal objectives to what HMRC was trying to achieve. This, says the Head of Performance Improvement, is substantially higher than it would have been pre the strategy map.
The IMS Strategy Map is supported by a scorecard of Key Performance Indicators to help IMS measure and monitor their performance. Increasing Awareness The IMS Financial Director, who sponsored the performance management initiative, recognized that some further training was necessary in order to create a truly performance-driven culture in which the KPIs were used by everyone to inform day-to-day decision-making. I therefore designed and delivered a customized training programme which we used to communicate the current performance framework and best practices around managing performance. The Head of Performance and Planning comments: “It’s important to note that a wide range of people went through this training. This went from a member of the IMS Board, through members of the performance sub-committees to the planning and performance coordinators to every member of the planning and performance team” he says, adding that: “They have all gone through the same course and have all found something to help them understand how their work impacts our strategic objectives.”
Head of Performance Improvement adds her own perspective of the value of the course. “Along with some of my colleagues I attended a two-day national training course on performance management,” she says. “Although we gained benefits from that course, we found that what Bernard Marr delivered in one day was much simpler, easier and valuable. The templates and analogies he used made it all very accessible and made it remarkably easy to translate the theoretical learnings back to the workforce in a practical manner.”
Training Program Overview
As a brief overview, the one-day performance management training program delivered to IMS involved sessions that broadly introduced the concept of measuring and managing performance; creating meaningful public sector strategy maps; designing and testing performance indicators and key performance questions; and performance management as an enabler of learning and improvement.
Creating Devolved Strategy Maps and Scorecards
Not only did my facilitation and training catalyse the creation of the high-level IMS strategy map and scorecard but it also provided much of the learning required to create devolved performance frameworks. “Each of our Business Units has its own scorecard which is owned by the unit director,” explains the Head of Performance Improvement. “These devolved scorecards directly support the IMS map and so we now have a direct and causal line-of-sight form BU performance all the way up to the HMRC objectives and vision.”
Ideas and insights you can steal
Like so many other organisations, HMRC’s IMS had lots of irrelevant and poorly developed performance indicators that didn’t provide any relevant insights and actually contributed to an significant adversity to measurement. However, with expert facilitation and the right training this can be changed very quickly and one of the most important management processes can be brought back on track, which is helping organisations to measure and manage performance in a simple and effective manner.
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Bernard Marr is a bestselling author, keynote speaker, and advisor to companies and governments. He has worked with and advised many of the world's best-known organisations. LinkedIn has recently ranked Bernard as one of the top 10 Business Influencers in the world (in fact, No 5 - just behind Bill Gates and Richard Branson). He writes on the topics of intelligent business performance for various publications including Forbes, HuffPost, and LinkedIn Pulse. His blogs and SlideShare presentation have millions of readers.