Results-Based Management: Are You Focusing on That?
Practices in RBM
Results-Based Management (RBM) is partly one of the principles of the rational model that came to be called New Public Management in the late 1980s but has also developed into its management model. It is a management model composed of a combination of practical steering tools and mechanisms. Peter Drucker, an Austrian management professor and management consultant, presented the foundation of the contemporary ideas of RBM. In “The practices of management,” he focused on a management approach called Management by Objectives. The manager’s focus on their corporation’s past and current activities is a potential problem. He argued that there is a significant risk of not achieving the corporation’s goals if the corporation’s purposes do not guide the work. Figuratively, Drucker compared the objectives, or goals, with a compass showing a ship at sea. It is a participatory working tool designed to focus people’s minds on what matters-performance in terms of results. Drucker insists on successful results orientation as a mindset and a perspective on management rather than a precise set of instructions.
Since the 1990s, the RBM term plays a vital role as a well-established management strategy or tool for development. Different organizations, multilateral agencies, donor agencies, etc., have been using the RBM approach for enhancing and improving the development results. Hatten and Schroeder (2007) highlighted RBM on defining, managing, and measuring results. Inputs, outputs, outcomes, and impacts have become a familiar catchphrase. Some development practitioners consider it part of the problem, a requirement that consumes time, energy, and resources and obstructs the actual development work. There is no common understanding that all organizations already have management systems in place. However, RBM tries to mainstream the philosophy, policies, principles, practices, goals, and objectives of managing results into existing management and institutional mechanisms. Variations in semantics and language applied to RBM and the various definitions among different organizations suggest a certain degree of confusion or dissonance over what RBM is.
In particular, RBM emphasizes the importance of defining expected results with the involvement of key stakeholders, assessing the risks that may impede anticipated results, monitoring programs designed to achieve these results through the use of appropriate indicators, reporting on performance. A ‘result chain’ is at the core of this process: human and financial resources (inputs) generate activities that produce results in the short term (outputs); in the medium, end-of-project, term (outcomes); and in the long term (impacts). At its heart, RBM, therefore, guides all management activities towards the ultimate achievement of defined results. It represents a fundamental reorientation away from previous management approaches dominated by an emphasis on inputs and activities. The assumption is that results would follow if the inputs and activities were appropriately dynamic.
In RBM, management functions consist of planning, organizing, leading, and controlling are to be focused on the achievement of results in performance target. Arif, Jubair, and Ahsan (2015) discussed that RBM is one of the excellent management systems in which all efforts focus on optimum result achievement under the basis of norms of good governance. They have further pointed out that RBM’s framework results in better findings than this moment’s monitoring practice executed in public sectors. RBM’s framework monitors project purpose directly, which is in line with long-term purpose assessment. Meanwhile, different scholars have identified that RBM effectively increases performance as demonstrated by customer care, the ability to meet performance targets, and producing qualified products. It shows that the RBM implementation may hold organizational performance.
The Puzzle in Outputs and Outcomes
Outputs, outcomes, and impact are terms used to describe change at different levels. As illustrated in the forerunning discussion of this discussion, outputs are the products, goods, and services that result from a development intervention. These development projects are for producing outcomes – the short-to-medium-term effects of an intervention – and eventually impacts. There is a significant inconsistency in concepts interpretations. As per OECD’s (2011) definitions of the different terms when it comes to RBM in development cooperation, the explanations are as follows;
Input: The financial, human, and material resources used for the development intervention.
Activity: Actions taken or work performed through which inputs, such as funds, technical assistance, and other types of resources, are mobilized to produce specific outputs (Related term: development intervention).
Output: The products, capital goods, and services that result from a development intervention; may also include changes resulting from the intervention which are relevant to the achievement of outcomes.
Outcome: The likely or achieved short-term and medium-term effects of an intervention’s outputs.
Impact: Positive and negative, primary and secondary long-term effects produced by a development intervention, directly or indirectly, intended or unintended.”
According to the problem at hand, ‘output’ and ‘outcome’ are abstract terms and vary in their meaning. It tends to see both outputs and outcomes as impacts of policies and decisions and take their importance for granted. However, researchers use the terms results, consequences, and outcomes interchangeably. Three terms describe the effects of a program or activity, particularly its achievement or progress toward established goals. In most cases, outputs and outcomes have been explicitly distinguished outputs from outcomes and impacts. Table 1 depicts a greater clarity of the two.
Table 1: The Seven Dimensions of Outputs versus Outcomes
| Outputs | Outcomes |
| System dynamics: Decisions and policies delivered by the system | System dynamics: Changes in demands to and support for (input) the system |
| Cause: All purposeful action seen as a means to achieve goals | Effect: All intended and unintended consequences related to such output |
| System-oriented: All decisions and policies delivered by the system | Context-oriented: All developments in the context of the system are either related or unrelated to the output |
| Time frame: The immediate effects | Time frame: Intermediate and long term effects |
| Descriptive: What is done | Normative: The evaluation of what is done. |
| Nature: Intentions, words, the broad decision or policy definition | Nature: Actual changes in behavior, actual
implementation (micro-output) |
| Concrete: Easily measurable | Abstract: Fuzzy and hard to measure |
Source: Johan A. M. de Kruijf & Michiel S. de Vries (2018).
RBM: Future Direction
Results-based management is a management strategy, or set of management principles, aimed at achieving essential changes in the way organizations operate, with improved performance in terms of results as the central orientation. The primary purpose of this thinking and practicing model is to improve efficiency and effectiveness through organizational learning and, secondly, to fulfill accountability obligations through performance reporting. It also underscores control over outputs, which creates a need for measuring performance through regular follow-up, evaluations, and audits. Ideally, one of the basic assumptions is that politics and administration should separate, as they have different agendas. However, one can’t execute without the blessings of leadership. Once the goals formulate, it is up to the executing power to shape the operations towards reaching the goals by achieving objectives.
In future decision-making, the results and evaluations are also supposed to be analyzed and used both and to increase accountability and possible changes in financial means if the goals are not achieving. The reporting of results and performance increases the demand for well-defined goals and indicators, and the plans are also supposed to be quite detailed. The purposes are specific, measurable, achievable/accepted, realistic, and time-bound (SMART). The goals for broader directions and objectives are for achieving within that particular period.
The RBM model characterizes a shift in focus, from processes through inputs and activities to the outputs and effects, i.e., results. In addition, this implies a change from previous governance focus on detailed instructions on how the resources use. Generally, it is without a tangible link to the expected results or objectives of the organization irrespective of the level. The increased focus on RBM is instead viewed as more critical than organizations can produce reports connected to quality, expected results, efficiency, and cost-effectiveness. It is apparent execution of results first thinking and engaging deeper understanding of the problem/s, root causes, and clarity in project components.
Management by Objectives used the term “objective,” but the question remains whether the term objective adequately defines well. With RBM, the terms inputs, activities, outputs, short-term outcomes, medium-term outcomes, and long-term impacts are well-defined and separate, which means they are all distinguishable from each other. RBM creates a more significant focus shift for the future, inviting us to be more practical in our endeavors. We prefer to discuss problems and analysis of the situation in detail. We hardly look at the results in a systematic way and work out backward for genuinely effective results. That is RBM.
Dr. Samantha Rathnayake, Ph.D., Faculty Member, Postgraduate Institute of Management, University of Sri Jayewardenepura (samantha@pim.sjp.ac.lk).