Innovation from the ground up: How state and local leaders are shaping the future of performance management

We’ve known for a long time the best ideas in government performance don’t always start in Washington. They come from state capitols, city halls and county offices, places where leaders are solving real problems for real people and showing that performance management can be a driver of impact, not just a reporting requirement.

At the 2025 Performance Counts Summit, hosted by AGA, we saw this creativity and innovation on full display. Leaders from across the country shared how they’re using evidence, data, and collaboration to improve outcomes for their communities. These aren’t theoretical frameworks. They’re practical, adaptable approaches that can — and should — inspire performance management at every level of government.

In Tennessee, for example, the Department of Finance and Administration has built a statewide learning agenda and a complete program inventory mapping every state program to its outcomes and level of evidence. This gives policymakers a clear, data-driven picture of where investments are working and where adjustments are needed. By linking performance metrics directly to budget requests, Tennessee ensures that funding decisions are grounded in results, not just tradition.

Colorado offered another standout example. Faced with the challenge of deploying more than $3 billion in federal recovery funds, the state aligned those resources with community priorities and built a public-facing performance dashboard. Residents can see in near real time how investments from the American Rescue Plan Act and Infrastructure Investment and Jobs Act are affecting their neighborhoods. That kind of transparency doesn’t just build trust — it builds momentum.

Cities are leading, too. In Alexandria, Va., department heads’ performance contracts are tied directly to the city’s strategic plan. Metrics are designed to be meaningful not only to officials but to residents, making the connection between city services and community outcomes clear.

These examples share a common thread: performance management is embedded in decision-making, resource allocation, and communication. It’s not a one-time exercise or a compliance requirement. It’s part of how these governments operate every day.

We also heard about the power of experimentation. Jon Baron of the Coalition for Evidence-Based Policy highlighted how targeted pilot programs and tiered funding models allow governments to test new ideas before scaling them. This approach recognizes that what works in one community may not work in another — and that the smartest investments are informed by real-world results.

Importantly, state and local innovation is happening in partnership with strong data governance. Leaders in Arkansas and the Coleridge Initiative are building secure, privacy-aware data-sharing systems that enable agencies to work together while protecting sensitive information. This kind of infrastructure ensures that innovation rests on a solid foundation of trust.

Taken together, these stories point to a clear future for performance management: one that is proactive, integrated, and people-focused. By aligning budgets with outcomes, using data to anticipate needs, and making results visible to the public, governments can deliver more effective services and strengthen public confidence.

The federal government has much to learn from these examples. The creativity, agility, and problem-solving we saw at the state and local levels show what’s possible when performance management is treated as a tool for innovation. Scaling these practices nationally and adapting them to the unique needs of federal agencies could transform how we measure and deliver results.

The 2025 Performance Counts Summit reminded us that the path to better government isn’t just about new policies or new systems. It’s about leaders willing to try new approaches, share what they learn, and keep improving. That’s happening right now in communities across the country.

The challenge, and the opportunity, is to take these ideas and make them the norm, not the exception. If we follow the lead of the innovators in Tennessee, Colorado, Alexandria and beyond, performance management can become what it was always meant to be: a driver of better outcomes for the people we serve.

Sarah Cunningham is a Partner at Summit. Mary Goldsmith is National Federal Sector Director at RSM. Robert Shea is CEO of GovNavigators.