Value-Based Management in Government

Value-Based Management in Government

by Douglas W. Webster, Gary Cokins
Released January 2020
Publisher(s): Wiley
ISBN: 9781119658672

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Book description

Provides step-by-step guidance on implementing and using a value-based management system within the government 

Countless books on proposed management practices have been written and published over the past century. Some of these have focused on specific management practices for government. In more recent decades, the topics of strategic planning, performance management, cost management and risk management have been extensively covered. However, little has been offered as an approach to integrate these and numerous other management methods and practices in a manner that maximizes the delivery of value to the organization’s key stakeholders. A general management framework is presented in this book in a manner particularly applicable to government organizations. 

Value-Based Management in Government introduces a new, integrating framework for management practices that optimizes the balancing of results sought; resources supplied and allocated; and risks accepted. These considerations are all balanced for the purpose of delivering maximum stakeholder value. The book offers guidance on how strategic planning, performance management, cost/resource management, and risk management must all be integrated as part of a portfolio management framework across the organization. The book also discusses the role of information technology (IT) in providing data for insights and decision-making, and the importance of organizational change management to implement the needed organizational and behavioral changes.

Beginning by explaining the concept of Value-Based Management for the public sector and government, the text goes on to explore topics such as the evolutionary stages of maturity of management accounting, the benefit of attributes (e.g., value-add versus nonvalue-add) in cost data, predictive planning with expense projections, risk management, and various performance measurements (e.g., key performance indicators [KPIs] ). This authoritative book:

  • Discusses a framework for balancing and integrating cost, performance, and risk
  • Explains IT systems integration issues related to activity-based cost management (ABC/M)
  • Addresses why some ABC/M implementation projects fail to meet expectations
  • Describes how quality management efforts can be measured in financial terms
  • Explores the wider uses of predictive accounting (e.g., driver-based budgeting, what-if scenario analysis)
  • Provides organizational change management insights and recommendations needed to achieve the required changes in management decision-making.

Value-Based Management in Government is an important source of information for leaders, executives, managers, and employee teams working within or with government organizations.

Table of contents

  1. Cover
  2. About the Authors
  3. Acknowledgments
  4. Foreword
  5. Preface
    1. HISTORY AND THE AUTHORS' BROADER VIEW OF VBM
    2. SOME THOUGHTS ABOUT “VALUE”
    3. OVERVIEW OF THE BOOK
    4. BALANCED VBM BUT AN UNBALANCED BOOK
    5. CONCLUDING REMARKS
    6. NOTES
  6. PART ONE: Value-Based Management in Government Concepts and Components
    1. CHAPTER ONE: Challenges and Solutions to Address Dissatisfaction of Citizens and Taxpayers
      1. THE US'S ACCOUNTABLE GOVERNMENT INITIATIVE
      2. FROM PERFORMANCE-BASED MANAGEMENT TO VALUE-BASED MANAGEMENT
      3. WHAT DO GOVERNMENTS HOPE TO GAIN FROM VBM?
      4. NOTES
    2. CHAPTER TWO: Generating Value in a World of Uncertainty
      1. DEFINING VALUE
      2. MAXIMIZING VALUE
      3. BUILDING AN ORGANIZATIONAL STRATEGY TO DELIVER VALUE
      4. BUILDING UPON A STRATEGY
      5. SUPPORTING THE DECISION-MAKING PROCESS WITHIN APPROPRIATE LIMITATIONS
      6. PROVIDING REQUIRED DATA FOR APPROPRIATE DECISION-MAKING
      7. MANAGING THE ORGANIZATIONAL CHANGE
      8. GOVERNING THE VALUE-BASED MANAGEMENT FRAMEWORK
      9. PUTTING IT ALL TOGETHER
      10. NOTE
  7. PART TWO: Strategy Management and Governance
    1. CHAPTER THREE: Strategy Setting and Execution
      1. MANAGING CHANGE AS A PREREQUISITE TO MANAGING VALUE
      2. PLAYING TO WHERE THE PUCK IS GOING TO BE
      3. STRATEGIC PLANNING: AN ESSENTIAL ELEMENT OF NAVIGATING CHANGE
      4. LINKING STRATEGIC AND OPERATIONAL PLANNING
      5. THE QUEST TO OPTIMIZE STAKEHOLDER VALUE
      6. NOTES
    2. CHAPTER FOUR: The Strategy Map and Its Balanced Scorecard
      1. LACK OF CONSENSUS
      2. IMPLEMENTING TOO FAST AND SKIPPING KEY STEPS
      3. MEASUREMENTS ARE BOTH SOCIAL AND TECHNICAL
      4. SCORECARD OR REPORT CARD? THE IMPACT OF SENIOR MANAGEMENT'S ATTITUDE
      5. A DIFFERENCE BETWEEN VBM AND THE BALANCED SCORECARD
      6. WHY NOT AN AUTOMOBILE GPS NAVIGATOR FOR AN ORGANIZATION?
      7. FAILURES DUE TO ARROGANCE, IGNORANCE, OR INEXPERIENCE?
      8. HOW ARE BALANCED SCORECARDS AND DASHBOARDS DIFFERENT?
      9. VITAL FEW VERSUS THE TRIVIAL MANY
      10. SCORECARDS AND DASHBOARDS SERVE DIFFERENT PURPOSES
      11. SCORECARDS LINK THE EXECUTIVES' STRATEGY TO OPERATIONS AND TO THE BUDGET
      12. DASHBOARDS MOVE THE SCORECARD'S DIALS
      13. STRATEGY IS MORE THAN PERFORMING BETTER: IT INVOLVES DOING DIFFERENT THINGS
      14. GETTING PAST THE SPEED BUMPS
      15. NOTES
  8. PART THREE: Enterprise Performance Management
    1. CHAPTER FIVE: Exceptional EPM Systems Are an Exception
      1. MANAGEMENTS' DELUSION THAT THEY HAVE EPM METHODS
      2. EPM METHODS ARE LIKE MUSICAL INSTRUMENTS IN AN ORCHESTRA
      3. ENTERPRISE PERFORMANCE MANAGEMENT (EPM) METHODS IN GOVERNMENT
      4. SEAMLESS INTEGRATION OF EPM METHODS AND IT SYSTEMS AS AN ASPIRATION
      5. THE THREE Rs OF VBM
  9. PART FOUR: The Three Rs: Risk, Results, and Resources
    1. CHAPTER SIX: Risk Management
      1. THE EVOLUTION OF RISK MANAGEMENT
      2. TRADITIONAL RISK MANAGEMENT
      3. THE RISK MANAGEMENT PROCESS
      4. THE ROLE OF INTERNAL CONTROLS
      5. THE EVOLUTION OF ENTERPRISE RISK MANAGEMENT
      6. PRINCIPLES AND PRACTICES OF ENTERPRISE RISK MANAGEMENT
      7. RISK AND MORE
    2. CHAPTER SEVEN: Results Management
      1. MANAGING RESULTS WITHIN EPM
      2. FROM PROPOSED RESULTS TO RESULTS ACCOMPLISHED
      3. OPTIMIZING RESULTS IN VALUE-BASED MANAGEMENT
      4. PROCESS IMPROVEMENT: A RESULT SOUGHT OR PART OF RESULTS MANAGEMENT?
      5. LEAN, QUALITY, AND BUSINESS PROCESS MANAGEMENT
    3. CHAPTER EIGHT: Resource and Cost Management
      1. COMPLIANCE WITH COSTING'S “CAUSALITY PRINCIPLE”
      2. PROJECT ACCOUNTING AND WORK ORDERS
      3. ACTIVITY-BASED COST MANAGEMENT (ABC/M)
      4. THE UTILITY AND BENEFITS FROM ABC/M IN GOVERNMENT
      5. POLITICAL PRESSURES TO HOLD DOWN COSTS
      6. AN EXCESSIVE FOCUS ON FUNCTIONS
      7. THE EVOLUTION OF ANNUAL BUDGETS
      8. REMOVING THE BLINDFOLD: OUTPUTS, NOT JUST RESOURCE EXPENSES
      9. BUT OUR DEPARTMENT DOES NOT HAVE OUTPUTS
      10. ABC/M USES (AND SOME PITFALLS)
      11. COST INFORMATION IS EMPOWERING
      12. DEALING WITH THE DARK SIDE: DOWNSIZING PUBLIC SECTOR EMPLOYEES
      13. WHY CHANGE NOW
  10. PART FIVE: Management Accounting in Government
    1. CHAPTER NINE: Understanding ABC/M: A Few Basic Truths
      1. THE NEED FOR MORE QUANTITATIVE AND FACT-BASED FINANCIAL INFORMATION
      2. WHAT IS ABC/M?
      3. WHAT ABC/M IS NOT
      4. LET THE “HOW” AND “WHY” DRIVE THE EFFORT
      5. COMMERCIAL BUSINESSES VERSUS GOVERNMENT ENTITIES
      6. SERVICE-BASED VERSUS PRODUCT-BASED ORGANIZATIONS
    2. CHAPTER TEN: If ABC/M Is the Answer, What Is the Question?
      1. SO, WHAT IS THE BIG PROBLEM?
      2. HOW DO COST DRIVERS WORK?
      3. WHAT ARE COSTS?
      4. HOW DOES ABC/M INTERSECT WITH TRADITIONAL COST ACCOUNTING?
      5. WHY THE INCREASED INTEREST IN ABC/M?
      6. HOW DOES ABC/M YIELD MORE ACCURACY?
      7. WHAT ARE DRIVERS?
      8. WHY IS MINIMIZING THE SIZE OF THE ABC/M SYSTEM IMPORTANT?
    3. CHAPTER ELEVEN: Fundamentals: What Is ABC/M?
      1. EXPANDING THE TWO-STAGE ABC/M CROSS MODEL
      2. IDENTIFICATION AND TREATMENT OF ORGANIZATIONAL SUSTAINING COSTS
      3. THE TWO VIEWS OF COST: COST OBJECT AND PROCESS VIEWS
      4. LEVELING OR DISAGGREGATION BRINGS ABOUT A THREE-DIMENSIONAL ABC CROSS
      5. THE IMPACT OF THE REPEATABILITY OF WORK
    4. CHAPTER TWELVE: Using ABC/M Attributes to Assess Quality and Value-Add
      1. ATTRIBUTES ENERGIZE ABC/M COST DATA
      2. THE ANALYST'S DREAM
      3. A POPULAR ATTRIBUTE
      4. ABC/M REVEALS THE COST OF QUALITY (COQ)
      5. QUANTIFYING THE MAGNITUDE OF THE COSTS OF QUALITY
      6. COST OF QUALITY CLASSIFICATION SCHEME
      7. HOW DO YOU CATEGORIZE DIFFERENT QUALITY COSTS?
      8. DECOMPOSING COQ CATEGORIES
      9. COQ: BOTH GOOD AND POOR QUALITY
      10. GOALS AND USES FOR THE COQ INFORMATION
      11. COQ MEASUREMENT SYSTEM
    5. CHAPTER THIRTEEN: Driver-Based Budgeting and Rolling Financial Forecasts
      1. BUDGETING: USER DISCONTENT AND REBELLION
      2. WHAT'S BROKEN ABOUT BUDGETING?
      3. THE FINANCIAL MANAGEMENT INTEGRATED INFORMATION DELIVERY PORTAL
      4. A RADICAL IDEA: STOP BUDGETING!
      5. PREDICTIVE ACCOUNTING AND BUDGETING WITH MARGINAL EXPENSE ANALYSIS
      6. WHAT IS THE PURPOSE OF MANAGEMENT ACCOUNTING?
      7. DESCRIPTIVE VERSUS PREDICTIVE ACCOUNTING
      8. WHAT TYPES OF DECISIONS ARE MADE WITH MANAGERIAL ACCOUNTING INFORMATION?
      9. ACTIVITY-BASED COST MANAGEMENT AS A FOUNDATION FOR PREDICTIVE ACCOUNTING
      10. MAJOR CLUE: CAPACITY ONLY EXISTS AS A RESOURCE
      11. PREDICTIVE ACCOUNTING INVOLVES MARGINAL EXPENSE CALCULATIONS
      12. PREDICTIVE COSTING IS MODELING
      13. PUT YOUR MONEY WHERE YOUR STRATEGY IS
      14. A SEA CHANGE IN ACCOUNTING AND FINANCE
      15. A PROBLEM WITH BUDGETING
      16. VALUE IS CREATED FROM PROJECTS AND INITIATIVES, NOT THE STRATEGIC OBJECTIVES
      17. DRIVER-BASED RESOURCE CAPACITY AND SPENDING PLANNING
      18. INCLUDING RISK MITIGATION WITH A RISK ASSESSMENT GRID
      19. FOUR TYPES OF BUDGET SPENDING: OPERATIONAL, CAPITAL, STRATEGIC, AND RISK
      20. FROM A STATIC ANNUAL BUDGET TO ROLLING FINANCIAL FORECASTS
      21. MANAGING STRATEGY IS LEARNABLE
      22. NOTES
    6. CHAPTER FOURTEEN: Implementing ABC/M with Rapid Prototyping
      1. AFTER MODEL 0
      2. ABC/M IS PERFECTLY OBVIOUS – AFTER THE FACT!
      3. ITERATIVE ABC/M MODELING
      4. RAPID PROTOTYPING: EIGHTEEN HOLES OF GOLF ON A POLO HORSE
      5. BUILDING THE FIRST ABC/M MODEL 0: TAP DANCE NOW, WALTZ LATER
      6. COST OBJECT PROFILING: A KEY TO GETTING DESIRED RESULTS
      7. TEACH THEM TO FISH, AND THEY CAN FISH ON THEIR OWN
      8. CONSTRUCTING AND POPULATING ABC/M MODEL 0: THE STARTING POINT
      9. ANALYZING MODEL 0 TO GET BUY-IN
      10. SECURING AND PROPAGATING THE LEARNING: A COMMUNICATION PLAN
      11. TIME-PHASING ABC INTO ABM
      12. HOW ABOUT THE FUTURE OF ABC/M?
  11. PART SIX: How Information Technology Impacts VBM
    1. CHAPTER FIFTEEN: Information Technology as an Enabler
      1. INFORMATION TECHNOLOGY TO ACHIEVE RESULTS
      2. DATA MANAGEMENT
      3. BUSINESS INTELLIGENCE AND ANALYTICS
  12. PART SEVEN: Influencing Behavior for VBM
    1. CHAPTER SIXTEEN: Organizational Change Management
      1. CULTURAL RESISTANCE TO CHANGE
      2. GREAT LEADERSHIP VERSUS GOOD MANAGEMENT
      3. HOW TO ACCELERATE THE ADOPTION RATE OF VBM
      4. THE QUEST TO GET BUY-IN FOR IDEAS
      5. WHAT ARE BARRIERS THAT SLOW THE ADOPTION OF NEW IDEAS LIKE VBM?
      6. REMOVAL OF THE BARRIERS
      7. EARLY ADOPTERS AND LAGGARDS
      8. WHERE TO BEGIN?
      9. HOW TO MOVE FORWARD?
      10. MOVING FORWARD
      11. NOTES
  13. PART EIGHT: The Future
    1. CHAPTER SEVENTEEN: The Future of Public Sector VBM
      1. A POTENTIAL FUTURE FOR VBM
      2. MOVING FORWARD
      3. A FINAL THOUGHT
      4. NOTES
  14. Index
  15. End User License Agreement

Product information

  • Title: Value-Based Management in Government
  • Author(s): Douglas W. Webster, Gary Cokins
  • Release date: January 2020
  • Publisher(s): Wiley
  • ISBN: 9781119658672