Berkshire and US Department of Education

The purpose of a performance report is to provide stakeholders in the organization with a view as to the overall performance the organization for a particular timeframe. The intended audience can range from employees of the organization to stakeholders such as shareholders, administrators, community members, etc. Because public companies such as Berkshire-Hathaway must report to shareholders, their performance reports are written to explain certain steps taken by the company in both a short-term and long-term view. Governmental organizations are no different since they too are entities that are determined and shaped by public input (citizens vote for representatives who determine who will be posted to what position -- as is the case in the Department of Education, for instance). Thus, government organizations should also be responsible for publishing an annual performance report as they are accountable to the public for their performance, long-term and short-term objectives, and strategic decisions.

Similarities between the two reports are discernible in the way both reports highlight successes and setbacks or failures. Berkshire's report points out that a few good decisions have been made in the past, such as the acquisition of GEICO, and that the company's intrinsic value is much higher than its book value. Likewise, the Department of Education notes that dropout rates have fallen and that more blacks and Latinos are enrolling in college, signaling that the Department has had some success in promoting education among the population.

Differences between the two reports were also apparent. Berkshire's report spends much of its introduction in attempting to justify to shareholders why they should continue to stay invested in the company even though profits may be "random" (p. 5) -- which is not a particularly compelling term that promotes confidence (instead it suggests that the company has no idea where profits are going to come from). The report highlights "the economy" (p. 4) as a factor in the company's poor performance at times and includes no metrics or guidance or goals in its first initial pages. The Department of Education, on the other, is very upfront about goals and objectives and provides a number of metrics and graphs to show how goals are set and to be achieved. Berkshire shows profit charts for its top companies, but such charts do not discuss goals or outcomes that are being pursued.

These differences exist because the two organizations are fundamentally different: the Department of Education exists as way to steer public schooling in America. It has strategies and plans and these are what it discusses in its report. Berkshire is a holding company that specializes in acquisitions: it owns various businesses and to provide goals and objectives for each one would cause the report to balloon to enormous proportions -- thus, the report focuses on the bigger picture in an attempt to shore up confidence in shareholders.

In spite of these differences, Berkshire actually is more effective in communicating performance results because there are actually results. The Department of Education report spends most of the time discussing goals and objectives. The few statistics it mentions (dropout rates and college enrollment rates) appear to be the extent of any evidence of impact the Department can point to. Berkshire, on the other hand, has a long list of wins and losses in can discuss in general terms, which it does.

Ultimately, I do not think it is possible for the Department of Education performance report to be more similar to the Berkshire report because the Department of Education is run by bureaucrats whereas Berkshire is run by businessmen. Businessmen are more adept at producing results, generally speaking, (even if those results are negative); bureaucrats are more adept at talking about what they are going to do, and then leaving their posts before anything is really ever effectively accomplished.

References

Berkshire-Hathaway. (2016). Performance Report.

U.S. Department of Education. (2015). Performance plan summary.