Fostering the “Performativity” of Performance Information Use by Decision-Makers through Dynamic Performance Management: Evidence from Action Research in a Local Area

Abstract

A local area configures a socio-economic system in which several institutions interact. As stakeholders hold different values and perhaps conflicting interests, managing local area performance is a dynamic and complex issue. In these inter-institutional settings, performance management may help address such complexity. Traditional performance management approaches, mostly based on static and linear analysis, fail to capture the dynamic complexity of local-area performance, bounding decision-makers’ mindsets to an organizational view of performance. Overcoming such limitations requires methods oriented to grasp a better understanding of the social reality in which their institutions operate. This contribution aims to illustrate how the Dynamic Performance Management (DPM) approach may foster a “performative” use of performance information by decision-makers in inter-institutional settings. To this end, the article highlights the importance of designing conducive learning settings (i.e., action research enhanced by a system dynamics-based interactive learning environment) to support decision-makers make such a cognitive leap. Drawing from empirical evidence on destination governance studies, the article shows that enriching performance management with system dynamics modeling may help decision-makers to reflect on key issues impacting local area development, sparking a discussion on potential actions to balance economic, social, and competitive dimensions of performance. Findings reveal that DPM insight modeling holds explanatory and communicative potential in real forums by providing decision-makers with an understanding of the means-end relationships linking strategic resources to outcomes through value drivers. The use of such performance information can help local area stakeholders to (re)conceptualize the social reality in which their institutions operate. By acting as a “maieutic machine”, DPM fosters a shift from an organizational and static to an inter-organizational and dynamic view of local area performance. Implications of the study include the opportunity to provide training to strengthen the active use of performance information by decision-makers in inter-institutional settings.