Managing the complexity of outcomes: a new approach to performance measurement and management

Governments, philanthropic agencies and public sector organisations have given increasing primacy to outcomes across their operations in recent years, particularly within the domain of performance management. We argue that societal outcomes challenge public agencies to respond to four specific forms of complexity - compositional, experiential, dynamic and governance complexities - which taken together confound the conceptual basis of traditional performance management systems. We adopt this understanding of complexity in a constructive capacity to consider the design parameters of a complexity-appropriate performance management system. We conclude that two theoretical transitions are necessary in a complexity-appropriate performance management approach: a shift from principal-agent theory to stewardship theory, and from technical to social management control theory. We explore the characteristics which such a model of performance management might take in practice, and conclude by outlining a research agenda to explore the potential applications of this new approach.