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Chapter 1: Results Management Context and Evolution

Overview and Purpose of the Guide

The Asian Development Bank (ADB) has made a commitment to enhance its results orientation—its development effectiveness—by implementing "managing for development results" (MfDR). While MfDR is a new term primarily used within the development community, the core concept is well established and has been applied in public and private organizations in the last two decades. These other organizations have used terms such as "results-based management," "performance management" and "managing for outcomes." The core of these diverse concepts is basically the same and can for simplicity be referred to as "results management."

Results management has its roots in business management theories, applied social research, program evaluation, and expenditure management. The approach, initially applied in private sector organizations, moved quickly to the public sector as part of reform efforts in the 1980s and 1990s. Over the last decade, it has increasingly been implemented in development agencies and multilateral organizations. Results management implies a new way of doing business and a fundamentally different approach to management than has traditionally been used in public sector and development organizations.

The purpose of this guide is to explain the main principles of results management and the implications of implementing it in an organization. This introductory chapter gives a brief historical overview of results management and its adaptation in the development community. Chapter 2 discusses the basic principles and logic behind results management, Chapter 3 sets out a step-by-step method for applying the approach, and Chapter 4 discusses challenges and success factors for implementation. The list of references identifies useful resources on results management, while the two appendixes describe how the concept is being applied to project management and country strategies in the Asian Development Bank (ADB).

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Historical Context and Evolution

Traditional public sector management. Public sector organizations are preoccupied with rules and procedures, with an emphasis on delivering services in compliance with specific guidelines and business processes. As such, there has been limited attention to clients’ needs and customizing services for specific circumstances. Public sector organizations have in many ways traditionally been more supply than demand driven. Similarly, in development organizations, the emphasis has typically been on processing and implementing projects according to prescribed procedures. In other words, the concern in many organizations has been to “do things right” rather than to “do the right things.”

This approach—the old way of doing business—began to change during the late 1960s. Planning, programming, and budgeting systems were developed to improve the quality of financial planning and cost accounting and, more fundamentally, to ensure accountability. These systems allowed management to exercise unprecedented control over inputs such as human resources and operating and capital expenses.

Management by objectives (MBO) was introduced in public sector organizations in the mid-1970s, with many managers learning to set objectives and identify good performance indicators; this significantly improved their ability to manage effectively and delegate responsibility appropriately. During the 1970s and 1980s, “program management by activity” methods were developed. Among the productivity tools that emerged were the work breakdown structure, Gantt charts, the critical path method, and the program evaluation and review technique (PERT). These tools provided relatively strict blueprints for executing programs and projects, reflecting their origins in disciplines such as engineering and systems management.

By the end of the 1980s, governments in many developed countries (especially Organisation for Economic Co-operation and Development members) had reoriented themselves to focus more on clients and services. They learned from various management trends—quality control/quality assurance, ISO accreditation, total quality management (TQM)—generally related to continuously improving service quality and standards.

The 1990s saw a series of extensive public sector reforms in many European and North American countries and in Australia and New Zealand in response to growing economic, social, and political pressures. Governments were almost uniformly experiencing ballooning fiscal and budgetary deficits, the competitive pressures of globalization, growing public demands for cost-effective government services, and calls for accountability. As a consequence, they were forced to respond to public discontent and to the need for more transparent and accountable governance at all levels in the public sector.

The development sector. The 1990s in the development sector can be described as an era of reform and of reformulation. Disparities between rich and poor were growing, and aid agencies were increasingly concerned about the impact of globalization on poor people in developing countries. At the same time, there was a realization that the concrete results of traditional development assistance were not living up to expectations, i.e., that intended or desired results were not being achieved. There was also great concern that development assistance funds be used more equitably and effectively.

The “results revolution” came to the development sector in part as a result of “aid fatigue,” a generalized perception among influential publics, government decision makers, and donors that aid programs were not particularly effective in attaining the development objectives they were created to achieve. At the same time, agencies’ budgets were declining, and governments themselves were undergoing major organizational reforms. By 2000, there was growing pressure for institutional reform and a rethinking of the traditional way of doing business.

The results revolution was also fueled by the development of powerful tools based on systematic analysis of logical cause and effect. Logical frameworks (logframes) were quickly accepted as valuable tools for improving planning and implementation. Experiences from public sector reforms gradually trickled into development organizations, and new approaches and tools were developed.

The transition to results orientation was implicit in the Millennium Development Goals (MDGs) adopted by 189 countries in 2000. The MDGs set clear targets for eradicating poverty and other sources of human deprivation. The Monterrey Consensus* [PDF] stressed the need to mobilize financial resources more efficiently and emphasized development effectiveness as a core operational principle. Subsequently, the Joint Marrakech Memorandum signaled a renewed emphasis on aid effectiveness, with particular emphasis on the harmonization and alignment of programming, monitoring, and evaluation activities.

More recently, the Paris Declaration* identified the five principles of country ownership, alignment, harmonization, managing for results, and mutual accountability as the core of the global development agenda. In other words, the push towards results management has gained momentum and there is now a broad consensus regarding the importance of achieving measurable results.

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Chapter 2: What Results Management Is and Why It's Important