Local Government Studies Developing Benchmarks

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Developing Benchmarks for Guiding CAO Performance a

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Erika Gunn , J. Barton Cunningham & James N. MacGregor a

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St. Francis Xavier University , Nova Scotia , Canada

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University of Victoria , Nova Scotia , Canada Published online: 28 Aug 2013.

To cite this article: Erika Gunn , J. Barton Cunningham & James N. MacGregor (2013): Developing Benchmarks for Guiding CAO Performance, Local Government Studies, DOI: 10.1080/03003930.2013.815614 To link to this article: http://dx.doi.org/10.1080/03003930.2013.815614

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Local Government Studies, 2013 http://dx.doi.org/10.1080/03003930.2013.815614

Developing Benchmarks for Guiding CAO Performance ERIKA GUNN*, J. BARTON CUNNINGHAM** & JAMES N. MACGREGOR**

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*St. Francis Xavier University, Nova Scotia, Canada, **University of Victoria, Nova Scotia, Canada

ABSTRACT This article reviews a research study on developing performance benchmarks to guide Chief Administrative Officer performance in Nova Scotia. The study collected examples of excellent and substandard performance from 22 individuals who were CAOs, members of Council, or provincial advisors. The information was content analysed, revealing 13 competency areas, illustrating four types of competencies. A practical aspect of this study is the suggestion that the competencies might be arranged in a semicausal logic model (or Competency Scorecard, similar to the Balanced Scorecard) and that performance measures might include outcome and activity measures. The framework might guide researchers in calibrating the linkage between competencies and organisational performance measures. KEY WORDS: Chief Administrative Officer, organisational management, performance, benchmarks, competencies Introduction The increased pressures to assess Chief Administrative Officer (CAO) performance has been partially shaped by management reforms that began in the early 1990s, emphasising accountability and results. Results-oriented philosophies, such as reinventing government and the new public management, have encouraged public organisations to adopt business-like systems to tie incentives and tenure to performance (LeRoux and Wright 2010, Weibel et al. 2009). Executive effectiveness is often measured in terms of accomplishments that the community appreciates (for example, delivering new services or improving financial performance). However, a CAO’s performance is typically difficult to assess reliably as it is often moderated by many unpredictable and uncontrollable factors, such as shifts in economic and political climate. Some executives may be challenged by major crises during their tenure, whereas others may not. This problem is as real for CAOs in municipal government as it is for private sector executives, where financial performance measures such as share prices and return

Correspondence Address: Professor J. Barton Cunningham, University of Victoria, Victoria, British Columbia, V8W2Y2, Canada. Email: [email protected] © 2013 Taylor & Francis

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on rates of investment might result more from market conditions than the work of the executive. One main problem with appraising a CAO, as with evaluating any executive, is in clarifying expectations and setting benchmarks of what effective performance actually means. To complicate matters further, there are often differences of expectations. A number of these differences come from the varying, and sometimes contrasting, roles and objectives that can be found in the public sector. For example, politicians are typically responsive to those who elect them and work to change organisational rules, norms and legal standards. Chief Administrative Officers (and city officials, on the other hand, work to establish and administer fair administrative procedures that represent different stakeholder interests within the strategic plan and organisational policies as set forth by these politicians. For example, a mayor might want to respond to a land developer and encourage construction in a certain area of a city, whereas the CAO and city officials are focused on making sure development occurs within an agreed upon community plan (Klinger et al. 2002). To identify evaluation criteria, some leadership and management theorists have tried to define a range of characteristics which are more universally reliable and take into account this variability in context and situation. These characteristics have been called management dimensions (Bray et al. 1974), executive dimensions (Dunnette 1971, Hemphill 1959), assessment dimensions (Thornton and Byham 1982), competencies (McClelland 1975, Boyatzis 1982) and global executive competencies (Hollenbeck et al. 2006, Kets de Vries 1999, McCall and Hollenbeck 2002) (See, for example, Hollenbeck et al. 2006). Over the years, the word ‘competency’ has become attractive to HR practitioners and leadership and management theorists to describe the knowledge, skills, abilities and other characteristics (KSAOs) that are linked to effective performance. As such, models that comprise key competencies are now often used as a common set of benchmarks that politicians and HR practitioners can select from to assess CAO performance (McClelland 1975, Boyatzis 1982). These competency models also often provide a basis for developing and communicating a common set of expectations for what is important for the CAO to accomplish. Competency models have become increasingly popular partially because they emphasise executive potential and include people oriented competencies that many managers believe to be essential drivers of performance. Unfortunately, there is little evidence that such general competencies are related to organisation performance in the form of meeting strategic and performance objectives or responding to stakeholder needs (Hollenbeck et al. 2006). The KSAOs that typically comprise competency models have a long history of theoretical and empirical support (McClelland 1975, Boyatzis 1982), but there is less known about whether and how some general leadership and management competencies lead to increases in strategic performance in the public sector (Levenson et al. 2006). This article summarises the development of a competency model intended to provide a more direct link between competencies and strategic objectives. In

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developing the competencies, we used the Balanced Scorecard (Kaplan and Norton 1996, 2001) as a framework and interviewed CAOs and former CAOs. The interviews asked respondents to identify examples of excellent and substandard performance and the competencies that they did or did not illustrate. Although the present research did not implement the Balanced Scorecard, but only used it as a framework for developing competencies, it may be worth noting that a Balanced Scorecard approach to performance measurement and strategic management is being used increasingly in public sector contexts. Applications have been reported in government (Atkinson and McCrindell 1997), including local government (Chan 2004, Kloot and Martin 2000), and in public healthcare (Chan and Ho 2000). Although the Balanced Scorecard approach was developed in a private sector context, the fact that it goes beyond the ‘bottom line’ in measuring performance may more readily allow its application in not-for-profit settings (Kaplan 2001). At the same time, we recognise that performance measurement in the public sector poses challenges beyond those experienced in the private sector (Greatbanks and Tapp 2007, Kravchuk and Schack 1996). Organisational context The research was carried out in Nova Scotia, Canada for the Association of Municipal Administrators of Nova Scotia and the Union of Nova Scotia Municipalities, as part of a student Masters of Public Administration capstone professional project. The motivating issues were reported problems of CAO performance and lack of communication of performance expectations. The aim of the project was to develop a set of benchmarks for CAO performance which could be used by municipalities for communicating and appraising performance expectations. General framework Competency advocates often point to McClelland’s classical research which used a critical incident technique (Flanagan 1954) to identify characteristics differentiating outstanding performers from their mediocre peers. McClelland’s goal was to develop performance characteristics to replace traditional aptitude tests which were unable to predict ‘on the job’ effectiveness of junior diplomats. McClelland was able to identify critical competencies that more reliably predicted performance of outstanding officers than many of the attributes previously identified through traditional job analysis methods (McClelland 1973). McClelland and his colleagues continued to develop the Job Competence Assessment method, which used the critical incident technique, into the late 1970s and 1980s. Richard Boyatzis used the data collected by McClelland and colleagues to develop a competency model, which identified 12 competencies underlying effective managerial performance. The model also summarised seven threshold competencies that, while essential to a manager, are not causally related to superior performance (Boyatzis 1982). This competency model and the use of

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the critical incident technique revolutionised traditional job analysis methods by defining competencies that were linked to job performance and organisational priorities (Rodriquez et al. 2002). Over the last 30 years, researchers and practitioners have advocated a wide range of competency models and competencies to improve recruitment, selection, training and development, and performance management (Boyatzis 1982, Goleman et al. 2002, Zenger and Folkman 2002). Posner and Kouzes’ (1988, 1993), for example, identified five competencies and behaviours for implementing them: challenging the process, inspiring a vision, enabling others to act, modelling the way and encouraging the heart. For the competency of ‘challenging the way’, associated behaviours are: (1) ‘search out challenging opportunities to change, grow, innovate, and improve’ and (2) ‘experiment, take risks, learn from the accompanying mistakes’ (Kouzes and Posner 1996, p. 10). The model has high construct validity based on evidence from their Leadership Practices Inventory with samples of 2,168 and 30,913. The measures of the competencies are highly reliable and the authors report that those who are rated higher performers by their subordinates demonstrate these competencies. Nevertheless, the results have been criticised on methodological grounds (Russell 2001). Given the wide range of competencies in the various models, it is difficult to pinpoint those which are more important to CAO performance. Also, only a few studies show that managers who execute certain competencies are more effective in improving the overall performance of an organisation (Russell 2001, Levenson et al. 2006). More often, competencies have been found to relate to individual performance (Spreitzer et al. 1997) and career advancement (Bray et al. 1974, Dulewicz and Herbert 1996), and are less clearly linked to improved organisational performance (Hollenbeck and McCall 1997, Levenson et al. 2006, DeNisi 2000, Schneider et al. 2000). Some of the ambiguity inherent in the effectiveness of different leadership competencies may be due to the varying issues and contexts that CAOs typically face, along with the time it takes for issues to be resolved. Different executive competencies often serve different purposes for improving organisational performance, all with varying timelines. Although the impact of competencies on short-term results might be immediately apparent, the impact on longer term outcomes may be more difficult to establish. In fact, some research suggests that different competencies may be associated with short-term versus long-term outcomes, as illustrated in Russell’s (2001) study of general managers. The study examined the relationship of nine competencies to different performance outcomes. The competencies comprised: (1) understanding, analysing and setting direction for a business, (2) staffing, (3) short-term business execution, (4) financial analysis, (5) communication and climate setting, (6) strategic planning, (7) customer and other external relations, (8) product planning and development and (9) organisational acumen. Russell’s results (2001) suggested that different groups of competencies are correlated with initial versus subsequent performance trends. For example,

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resource problem-solving competencies (such as financial analysis, understanding the business and short-term business execution ratings) predicted initial performance levels, whereas people-related dimensions (such as staffing, climate setting, communications and customer interaction) contributed to subsequent long-term performance trends.

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Using the Balanced Scorecard logic in developing a Competency Scorecard Russell’s study (2001) suggested that different competencies may be involved in initial versus long-term performance. A similar distinction arises in the Balanced Scorecard framework, where organisational objectives and initiatives are arranged in the form of a logic model which differentiates between leading and lagging measures of performance (Kaplan and Norton 1993). Examples of measures that might lag or that might change many months after a CAO’s actions would include those in municipalities that relate to improved quality of life and community satisfaction with services. For instance, a CAO’s efforts in developing a strategic plan might only affect customers later on when the activities of the plan are implemented by motivated staff. Within the logic of the Balanced Scorecard, planning and employee motivation are inputs that may first impact efficiencies and financial performance before they are felt by external customers and clients. When Kaplan and Norton first introduced the ‘Balanced Scorecard’ in 1993, they saw it as a way of creating a ‘comprehensive system for strategy implementation’, especially as it relates to elevating the role of nonfinancial measures (Kaplan and Norton 1993, pp. 134, 87). More specifically, it recognises the importance of four distinct perspectives – financial, customer, internal process and employee learning and growth – in implementing strategic objectives and measuring strategic performance. To that end, the Balanced Scorecard encourages organisations to systematically define the semicausal linkage between different perspectives, for both short- and long-term effectiveness (Kaplan and Norton 1996, 2001). Drawing from this logic, and building on Russell’s research (2001), the present research considered that different competencies may be linked to different types of performance in the strategic domains of the Balanced Scorecard. Further, in those domains where results take longer to actualise (such as learning and growth) connecting competencies with outcomes may be more equivocal and take longer to evaluate. In contrast, competencies that have a more immediate impact on outputs and activities (for example, finance and process-oriented) may be open to more timely and less equivocal evaluation. In Figure 1, the suggested relationships between these leading and lagging indicators and the domains of the Balanced Scorecard are illustrated. Building upon this framework, the intent of the present project was to define competencies a CAO might use to add value to each of the four domains of the Balanced Scorecard (i.e. responding to customer, financial performance, internal business process, and learning and growth). We sought to develop a Competency

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VISION Lagging Indicators external to the organisation illustrating change

Final Outcomes

Client Perspective Intermediate Outcomes

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STRATEGIC OBJECTIVES

Customer and other external relations

Financial Perspective Outputs Financial analysis

Internal Business Process Activities Short-term business execution Product planning and development Organisational acumen Leading Indicators internal to the organisation that are possible predictors of change

Inputs

Learning and Growth Perspective Understanding, analysing and setting direction for a business Staffing Communication and climate setting Strategic planning

Figure 1. Quasi-cause and effect linkages

Scorecard (see Figure 1) to further define each of these competencies in relation to whether they are a leading or lagging predictors of performance in their respective Balanced Scorecard domains. Finally, the project takes tentative steps towards theorising potential causal relationships between these leading/lagging predictors and short-term/long-term organisational performance in public sector municipalities, along with suggestions for competency prioritisation and evaluation. Method Nova Scotia has 55 municipalities; three are regional, 21 are rural and 31 are towns. To help identify a useful sample of respondents, a senior advisor with

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Service Nova Scotia and Municipal Relations and the Executive Director of the Association of Municipal Administrators of Nova Scotia provided a list of 34 potential interviewees, each with at least 10 years’ experience of different types. The list included CAOs, Members of Council and Senior Municipal Advisors with the province of Nova Scotia. In total, 22 of the 34 (65%) participated, three from regional municipalities, eight each from rural municipalities and towns, and three from central agencies concerned with municipal affairs. The respondents included nine current CAOs, three recently retired CAOs, seven current or recently retired Member of Council and three municipal advisors.

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Interview questions The interviews used 15 questions designed to collect examples of excellent and poor performance from CAOs and Members of Council in key areas such as: responding to clients, financial management, internal process efficiencies and human resource management, and two learning and growth areas: leadership and strategic planning. The initial questions sought to understand the role of the CAO and the challenges in the position, and the majority of questions were based on an adaptation of Flanagan’s (1954) critical incident technique (CIT). We asked each participant to provide examples of excellent and substandard CAO performance that they had experienced or observed. We then asked for examples of excellent and nonstandard performance specifically in each area of the Balanced Scorecard framework. Other questions asked participants to identify training and competencies that they would suggest to improve performance in each area. There was one question where respondents were asked to rank the importance of specific competencies. Analysis The interviewer provided the participants with the questions in advance to maximise the likelihood of thoughtful responses. With one exception, all interview participants gave consent to be recorded by tape recorder. Recorded interviews and hand written notes were transcribed into electronic format. Data were then categorised using the Echo Sorting and Content Analysis approach (Cunningham 2001). The responses to each question were typed on separate sheets and sorted in piles, based on the question. The researcher reviewed all of the responses to each question and categorised themes together. The client performed the same task independently, resulting in approximately 95% agreement. The few discrepancies were discussed until agreement was reached. Case application Table 1 summarises the key competencies identified from our interviews, and reports them within each of the areas of the Balanced Scorecard framework.

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Table 1. Competencies for CAO performance (with number of respondents identifying in parentheses) Responding to Client • Building and foster relationships: builds relationships with peers from other municipal units, other levels of government; seeks out advisors/experts when appropriate. (18) • Instills customer service culture: creates standards of performance for key customer service processes and communicates them; encourages employees to take an organisational view; promotes citizen participation on various boards and committees. (16) Financial Management • Advocates for fiscally sustainable practices: ensures municipality has long term financial plan; advises Council on fiscally sustainable practices. (19) • Is a steward of financial resources: produces balanced budgets; informs Council of consequences of decisions now and in the future; has an effective budget process that allows. (21) • Builds relationships of influence: external relationships – leverages funds from other sources of government; internal relationships – politically aware and bridges the gap between staff and Council interests. (14) Administrative and HR Processes • Conducts policy, programme procedure reviews and instilling quality management procedures: maps mission critical processes to find bottlenecks and redundancies; streamlines processes to provide efficiencies (time, money, i.e. budget process, development process); instills quality management procedures by performing organisational reviews to determine if staff resources are being used effectively in reaching organisational goals. (18) • Balancing the efficiencies of internal service delivery vs. contracting out: determines when it is appropriate to perform a service within the municipality or contract out to a third party with expertise; ensures staff are well trained and/or experts used when appropriate. (6) • Ensures efficiencies and active use of human resource systems and tools: has performance management system that recognises and rewards staff, holds employees accountable and provides training and development plans for all employees to reach their goals. (22) Strategic Planning and Leadership Strategic Planning • Builds strategic plan with Council, listens to Council and understands their priorities: has a longterm, futuristic vision for the municipality and provides direction/guidance to Council; coaches Council through the strategic planning process. (11) • Administers and implements the strategic plan: communicates with and engages staff on strategic vision; reviews operations to ensure the organisational structure/employee roles will be effective for accomplishing goals. (11) Leadership • Provides direction and guidance to employees and Council: performs analysis of challenging problems and makes recommendations to Council; bridges gap between interests of Council and staff. (17) • Develops and implement the strategic vision: performs organisational review; willing to make significant changes in the organisation when necessary; knowledgeable about change management; has futuristic vision. (11) • Participates in and encourages training and development for employees and Council: encourages employees and Council members to participate in training programmes, courses; participates in professional associations, attending conferences, training sessions. (6) • Developing an engaged culture for the organisation: ensures perception of equity and fairness in organisation; recognises and rewards employees and provides staff with the tools and skills to do their jobs well. (18)

Responding to clients The interviews highlighted two competencies related to responding to clients and customers: building and fostering relations and partnerships, and instilling a customer service culture in the organisation.

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Respondents emphasised the importance of relationships and partnerships with different stakeholders: council, employees, community groups, business groups, the general public, other levels of government and fellow CAOs in Nova Scotia. ‘One CAO had relationships in a number of sectors and, when she had an issue, she could pick up the phone and get input from a wide-range of people, in business, academia or in the province.’ Several municipalities had an expectation that their CAOs be well-known and active members of the community in building strategic relationships. They didn’t want the CAO to be the face of the municipality, but they wanted people in the community to be aware of who was the head of the organisation. As most municipalities do not have resources to do all of the things they need to, building partnerships with other municipalities makes sense economically. Many respondents discussed the importance of intermunicipal agreements to meet the needs of the municipality. They felt that intermunicipal agreements rely on the competencies of the CAO and councils to develop such strategic linkages. According to interviewees, the CAO, as the leader of the municipal unit, plays a significant role in establishing a culture that promotes excellent customer service. Many respondents cited not-so-positive examples of employees hiding behind their official job descriptions and not being committed to providing the best service possible. Others gave positive examples illustrating a culture of service where the CAO was visible in engaging and receiving feedback from citizens, Council and employees. Many interviewees provided examples of naming citizens to municipal boards, commissions and agencies as a way to create a customer service culture and in being transparent in the process. One of the customer service challenges facing many municipalities relates to requests for information from the public. One Councillor described his municipality’s struggles to be transparent with Freedom of Information requests in the following way: We’re finally at a point where we only keep something closed if it is absolutely necessary. Our default position was, ‘Well why do you want to know?’ It’s a bureaucratic protection mechanism, and I understand that all too well. I also understand that unless you have a really good legal reason for not revealing information, then you should probably reveal it. Otherwise, it creates suspicion of wrongdoing, and can create antagonising relationships. One of the issues to overcome is the resources that you have. Openness and transparency comes at a cost. Financial management Financial management is seen as one of the core areas defining municipal administration as decision-makers wrestle with the competing financial challenges to deliver services yet hold the tax rate to a reasonable level. Respondents highlighted three competencies, including being a steward of

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financial resources, advocating for fiscally sustainable practices and building relationships of influence. Almost all respondents agreed that financial planning and producing balanced budgets was a clear measure of a CAO’s performance. Although CAOs are not often responsible for the day-to-day financial management of a municipality, unless it is very small, they are ultimately accountable for the financial performance. It is the CAO’s responsibility to ensure that the budget is balanced each year. As one CAO stated, ‘Anytime the annual budget is exceeded, it is a sign of unsatisfactory performance as the CAO has the responsibility of bringing any problems with the budget to Council’s attention in a timely manner and recommending options to address the gap.’ Members of Council expressed the need for CAOs to provide analysis of the impacts of their decisions so they can make informed decisions. Many interviewees also agreed that the CAO’s role is to ensure that there is an effective budget process in place that allows Council to focus on the key points in the budget. As a CAO, I add value to the financial management process by providing analysis of the numbers in the budget and keeping Council focused on the important indicators. It’s not an effective use of Council’s time to be reviewing line items. Respondents provided examples of excellence where CAO’s advocated for practices or made decisions that were in the best interest of the municipality now and in the future. These were examples where the CAO focused on needs that reflected a 5-, 10- or even 20-year time horizon. On the other hand, there were not-so-positive examples about CAOs ignoring long-term consequences. There’s one CAO who used to brag about how much money they could borrow. I always used to say, do you operate that way with your credit card? I mean, absolute madness. They’re spending beyond their means. They’re spending wildly, not on basics like water, sewer, streets. It’s usually the frills. Let me give you another example. Let’s use the debt service ratio as an example. They know that they have serious problems coming down the road with their water or sewer and they are getting close to their debt limit. So what they’ll do is come through with major borrowing projects on recreation facilities to get that through knowing full well that when they come around the following year with requests to upgrade water and sewer, we can’t say no because it’s an essential service. But it is really crippling that municipality. I find that totally irresponsible from a CAO and Council.

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The importance of relationship building with all levels of government and other partners was stressed in being a successful financial management. As one CAO stated:

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CAOs need to be creative financial thinkers to make projects happen. Most municipalities have very limited funds so they need to be skilled networkers in developing partnerships with all levels of government, NGOs and the business community to tap into other funding opportunities. Many interviewees provided examples of the importance of cultivating a relationship with Council that allows the CAO and Council to have frank and open discussions where both parties are comfortable expressing their views. There were also examples of the CAO understanding the priorities of Council and being able to respond to the issues that staff see as priorities. Administrative and HR processes Key internal business process competencies related to administrative and HR processes included: conducting policy, programme and procedure reviews, instilling quality management procedures, balancing internal service delivery and contracting out, and ensuring the efficiencies of human resource systems. The interviewees emphasised that excellent CAOs are regularly monitoring and evaluating the effectiveness of the municipality’s policies, programmes and procedures. They encourage and/or train staff to map their mission critical processes to find bottlenecks or redundancies. They support changes to the processes that will improve customer service, provide better value to citizens, reduce the time required to complete and/or provide cost savings. Respondents provided examples of CAOs with a philosophy for instilling quality management procedures and continuous improvement, which one person highlighted as an emphasis on ‘continuously reviewing policies, procedures and practices on a fairly regular basis … We have mission critical processes and let’s make sure we look at them annually.’ Respondents were clear that, for the organisation to be effective, staff must be well-trained, and that it is the CAO’s responsibility to ensure that happens. In providing examples of services that might be contracted out, it was noted that CAOs need to evaluate whether it makes sense to perform the function in-house. Excellent CAO performance is also illustrated by examples recognising the importance of staff development so that services did not need to be contracted out unnecessarily. All interview participants acknowledged the need for human resource systems and tools in municipal units. The capacity to develop and implement these systems often depended on the CAO’s understanding and comfort with human resource management and the existence of an HR position in the municipality. Interviewees provided examples where a CAO’s support for human resource

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management systems was critical to encouraging a workplace culture where employees were motivated and where they perceived some degree of equity and fairness. Many municipalities without human resource support often had the basics such as job descriptions; however, interviewees indicated that they lacked more formalised systems such as performance management, succession planning, human resource manuals and employee engagement programmes.

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Strategic planning and thinking During the interviews, strategic planning was not a distinct theme area; however, the respondents highlighted its importance in being successful as a CAO. We present it here as a distinct theme area relating to building and implementing a strategic plan. Interviewees reported examples of a strategic planning process involving actively listening to Council and employees to understand their priorities and concerns and then translating these, along with their own ideas, into a realistic long-term vision for the municipality. Many respondents offered examples of strategic planning processes involving outside facilitators and a high level of staff and Council involvement. Overall, these examples illustrate the CAO’s ability to work with Council to develop a cohesive strategic plan and then align the organisation to move in a direction that meets the goals. Implementation of the strategic plan was key for respondents. In this regard, there were examples of the CAO’s role directing and engaging senior staff to operationalise the plan. Excellent CAO performance was illustrated by examples of holding regular meetings with the management team to ensure they are focused on achieving the strategic priorities. Respondents also discussed examples of the CAO’s influence being helpful in adapting the organisational structure and roles of employees to ensure resources produced results. Leadership The learning and growth processes describe leadership processes such as: providing direction and guidance to employees and Council, having a strategic vision for the municipality, encouraging training and development for employees and Council, and developing an engaged culture in the organisation. Respondents emphasised that the role of the CAO is to provide advice to Council; this role involved developing a relationship with the Council and earning their respect and trust by being able to analyse challenging problems and make useful recommendations. Interview participants highlighted that building trust and earning respect goes beyond the Council and extends to bridging a relationship with employees. As one CAO stated, Poor leadership is taking an issue to Council and asking them for their guidance. Leadership is carrying out a careful analysis and coming up with recommendations which are politically sensitive to the needs of Council and employees.

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If you’re just pushing paper and making sure the cheques are signed and the grass is mowed, Council is not getting what they’re paying you for. They’re paying you for some combination of your experience, education, common sense and confidence and you’ve got to give them that. Interviewees stressed that CAOs need to demonstrate leadership by having a strategic vision for the municipality and bringing people onto their vision. Excellent CAOs were able to develop a vision for their municipalities or had a vision that galvanised the interests of people in the municipality. The best CAOs were exemplified by ‘being able to look into the future and reasonably anticipate any potential opportunities or threats and respond accordingly’. When asked about leadership, one former CAO stated, ‘A good leader is someone who provides or cultivates a direction to go in and organises people to go in that direction and understands the value in going that direction.’ They could bring disparate interests together. Training and development was also discussed as an indicator of leadership. Excellent CAOs were described as being able to recognize the need for their own training and development as well as for all employees and Members of Council. As one CAO stated, ‘You want to attract and develop people who want your job. The CAO needs to create an atmosphere that promotes that mentality.’ This was supported with examples of CAOs being involved in their own training, attending conferences, or participating in their professional local government organisation. Participants agreed that a CAO plays a significant role in establishing the culture for their organisations. Their leadership style influences whether the organisation is hierarchical with an emphasis on formal authority or if employees at all levels are recognised as valuable members of the team. Interviewees offered examples of how CAOs improved employee performance and overall employee satisfaction by leading by example, mentoring senior staff and communicating regularly with staff about the goals and the values of the organisation. As one respondent pointed out, Quite often the CAO is the HR person and even in situations where there is an HR person, the CAO is the mentor, coach and nurturer, particularly with senior staff. They report to the CAO and look to him or her for guidance and direction. The CAO’s relationship with senior staff influences how senior staff behave and the management style they adopt with their own staff. Discussion This study’s findings provide a perspective on CAO performance in 15 competencies within the four general areas of the Balanced Scorecard: responding to clients, financial management, internal (public sector administrative and HR) processes, and learning and growth (strategic planning and leadership). Some

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of the management competencies identified in this project were similar to those found by Boyatzis (1982); however, the results identified additional financial competencies related to advocating for fiscally sustainable practices, acting as a steward of financial resources and building relationships of influence. The addition of these competencies might be explained by the financial pressures municipalities often face and the requirement to ensure adequate financing and a balanced budget. Also, in keeping with the strategic focus of the Balanced Scorecard approach, and reflecting many comments offered by participants, strategic planning emerged as a competency area in its own right. Nevertheless, in spite of the apparent importance invested in it by our sample of CAOs, strategic planning, in the narrow sense, is not without limitations (Mintzberg 1994). In going beyond Boyatzis (1982), the findings also highlight the importance of responding to clients (citizens, businesses, Council etc. …) in being a successful CAO. Perhaps, because CAO’s work under the supervision of elected officials, they are encouraged to build a customer service culture to ensure the public is satisfied with the level of service they receive for their tax dollars. In addition to the competencies determined through interviews, we suggest that the competencies can be grouped in a semicausal way, where one set enables or is an input to others. Built on the idea of a Balanced Scorecard strategy map where each box illustrates objectives to implement strategic themes, Figure 2

Vision

To be a sustainable community where a healthy natural environment is recognised as paramount for ensuring social well-being and economic vibrancy, for current and future generations.

Mission

To enhance the quality of life for citizens, visitors and future generations in our municipality and the region. We strive to live in harmony with each other and our environment and further our citizens’economic, physical and social well-being.

Strategic Themes

COMPETENCIES

Responding To clients

Financial Management Internal Business Process (Administrative & HR Processes) Strategic Planning & Leadership Learning & Growth)

Figure 2. CAO Competency Scorecard

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portrays a CAO Competency Scorecard where the competencies are focused within strategic theme areas. For example, ‘building and fostering relationships and partners’ and ‘instilling a customer service culture’ are the key competencies that drive performance for CAOs in achieving the organisation’s vision and strategic themes. They are to respond to the service delivery needs of clients. In the set of semicausal links on the left of Figure 2, illustrating value for clients is enabled by three financial competencies which include advocating for sustainable practices, being a steward of financial resources and building external relationships of influence. These are enabled by internal administrative competencies related to conducting policy, programme and procedure reviews, instilling quality management procedures, and balancing the efficiencies of delivering services internally with contracting out. In continuing this logic line, these processes have more value if they implement the strategic plan and illustrate the competencies related to developing a vision and provide direction and guidance to employees and Council. The semicausal set of links on the right of Figure 2, focusing on instilling a customer service culture, rely on a CAO competencies for building internal relationships of influence and build on competencies to implement and using internal HR systems and tools. They are also reliant on competencies related to implementing the strategic plan and competencies that implement the vision, guide employees, encourage training and develop an engaged culture. What is suggested in Figure 2 is that leadership competencies are important in enabling or providing input to performance in other competency areas – they are inputs to a strategic planning process, developing efficient systems, financial management, building and fostering relationships, and instilling a customer service culture. The implication is that these leadership competencies are enablers to other competencies. As with using the Balanced Scorecard for strategic planning, a next step in using the Competency Scorecard is to define the measures of performance and initiatives that are important for the CAO to work on. It is also possible to provide detail to each competency and articulate levels of performance using tools such as the Behavioural Anchored Rating Scales (BARS), which defines various level of performance in each area. However, it should also be recognised that executive and managerial performance is difficult to assess as it may result from factors that are unpredictable and uncontrollable, such as shifts in the economic and political climate. For this reason, BARS and other tools might be more useful initially in communicating expectations or as a process of formative evaluation. Conclusion The study suggests that a Competency Scorecard might be a useful way of defining and measuring CAO performance. It builds on the causal relationships suggested within the Balanced Scorecard logic, and further suggests that performance of organisations should take into account leading and lagging measures.

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In using the Balanced Scorecard framework to guide our questioning, the competencies identified here go beyond those identified by Boyatzis (1982) by adding competencies related to: advocating for fiscally sustainable practices, acting as a steward of financial resources, building relationships of influence (in addition to customer-related competencies of the findings), building relationships and partners, and building a customer relations culture. These competencies might be unique to the CAOs in this area but they might also reflect the recent emphasis on customer relations and responding to clients that are key to the new public management philosophy. This study provides a set of competencies that might be appropriate as benchmarks for CAOs in Nova Scotia. However, because of the geographical limits of the sample, generalisability of the findings may be limited and they may only serve as a general guide to CAOs elsewhere. In addition, the sampling method might have inherent biases as individuals who participated in this project were targeted at the suggestion of the client, the Association of Municipal Administrators of Nova Scotia and the Union of Nova Scotia Municipalities. On the other hand, the sample provided interview data from 22 participants from various regions in the province and included people representing different perspectives, either as a politician or as an administrator in small and large municipalities. A key research implication is to use the framework to investigate links between competencies and organisational performance. This would be consistent with current research, which suggests that different groups of competencies are correlated with initial versus subsequent performance trends, whereas other competencies are related to other aspects of executive performance (Russell 2001). Acknowledgement The authors would like to thank Dr Richard Marcy for his useful comments in drafting this article. Notes on contributors Erika Gunn received a Master of Public Administration from the University of Victoria. She currently works as a Fund Development Officer with the Coady International Institute at St. Francis Xavier University, Nova Scotia. Bart Cunningham is Professor of Management in the School of Public Administration at the University of Victoria. His research interests relate to human resource management issues, insight problem-solving and organisational stress. In addition to papers in international journals, his publications include the books Researching organizational values and beliefs: the echo approach (Quorum Books 2001), and The stress management sourcebook (McGraw-Hill 2000). Jim MacGregor is Professor in the School of Public Administration at the University of Victoria. He specialises in pure and applied research in organisational psychology, cognitive psychology and human factors, and has developed methodologies for measurement,

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rating, and classification in various contexts. He has published in journals including Psychological Review, Journal of Experimental Psychology: Learning, Memory, and Cognition, Human Relations, Canadian Journal of Administration, and Journal of Management Studies.

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