new brunswick's public service: pursuing performance excellence

Pursuing Excellence at GNB

1. Context

2. Integrated “Formal Management System”

3. Public Reporting

Initiative

Management

Process

Management

Strategy

Management

Performance

Management

New Brunswick

• 751,151 citizens (2011 census)

• public service ~45,000 employees

• 7.9 billion dollar budget

• 2014-15 deficit budgeted at $391 million

Economic Slowdown Brings Change

in Fiscal Reality ($ millions)

04-05 05-06 06-07 07-08 08-09 09-10 10-11 11-12 12-13R 13-14B

Revenue Expense

2011: Government Renewal

To ensure the Government of New Brunswick is able to provide appropriate and

affordable services to citizens on a sustainable basis.

History

Office of Strategy Management

2012-2013

GNB and Pilot Departments

2013-2014

Wave 2 Departments 2014-2015

Wave 3 Departments

Government Renewal

pre 2011

NB Liquor NB Power Service New Brunswick Department of Natural Resources

Office of Strategy Management (OSM)

…responsible for developing the principles, methods and tools by which NB Government leaders can:

– enhance alignment and execution of strategy,

– drive improvement results,

– build a sustainable continuous improvement culture.

GNB Change Agenda from Economic Growth to

Declining position Competitive position

Public sector driven Private sector driven

Job focused Innovation focused

Quality of Life

Government dependency Self-reliance

Treatment Wellness

Skill/need imbalance Ready workforce

Living within Means

Deficit Balanced Budget

More services Service improvements

GNB Culture

Working in silos Working together

Budget centered Performance centered

Cut and Control Continuous improvement

The Strategic Change Journey

“In the majority of failures – we estimate 70% – the real problem isn’t bad strategy…. It’s bad execution.”

“Why CEO’s Fail”, Fortune Magazine

“Less than 10% of strategies effectively formulated are effectively executed”

Fortune Magazine

Principles of High Performance:

1. Purpose is customer driven…

…solve their problems.

2. 85% of problems are process (not people)…

…deliver faster, better, cheaper;

…leadership is a process.

3. Engage people…

…involve employees, differentiate

performance, develop leaders.

Initiative

Management

Process

Management

Strategy

Management

Performance

Management

GNB Formal Management System

Strategy Management Priorities and speed!

Strategy Map

Balanced Scorecard

Strategy Map

Balanced Scorecard

Vision

Objective

Objective Stra

3 Year Vision

Strategy Map

Balanced Scorecard

Vision

Objective

Measures

Dollars saved per continuous improvement

Performance Excellence Maturity Index

Base Target

StretchTarget

Plan Target

Objectives Measures Q1 Q2 Q3 Q4

"Provide value for my tax dollars"

Cost of GNB/capita (inflation adjusted)

Achieve sustainable budget

Ratio of actual to budgeted expenditures

Ratio of actual to budgeted revenue l x x

Prioritize, optimize and improve processes

Dollars saved per: continuous improvement

Positions reduced and savings achieved through attrition - Parts I, II and III

Procurement savings across Parts I and II

Balanced Scorecard “Living within our means” Theme

Spending measures have kept deficit from

worsening ($ millions)

2005-06 2006-07 2007-08 2008-09 2009-10 2010-11 2011-12 2012-13 2013-14

Expense (actual) Expense (growing at inflation) Revenue

$300 M

Initiative Management

Priority initiatives and projects!

S O M I A

Strategy Map

Balanced Scorecard

Vision

Measures

Objective

Initiative

Action Plans Action Plans

Action Plans Action Plans Action Plans

S I M O A

SOMIA 2013 - 2014

a stronger economy 7

enhanced quality of life 12

living within our means 11

“Theme Team” Priority Initiatives:

Initiatives: 180 Action Plans: 856

Deputy Minister Theme Teams

Priority Initiatives Q1 Q2 Q3 Q4

1. Health Reduction Targets 2. Social Development Reduction Targets 3. Education and Early Childhood

Development Reduction Targets

4. DTI Reduction Targets 5. Pension 6. Procurement 7. Attendance Management 8. Attrition 9. Back Office /PMO 10. Collections 11. Continuous Improvement through

Lean Six Sigma

Summary of Priority Initiatives: “Living within our means” Theme

Vision

Measures

Objective

Initiative

S I M O A

“Better, faster, cheaper”

Projects

Full Project

Kaizen

Waste Walks

Projects

155+ projects

2000+ involved

Top $ project $999,487

Hard Cost Savings Actual vs. Target

$218,480 $952,988

$2,521,380

$3,997,565

$6,176,282

$10,781,651

$12,050,711

$15,304,091

$11,198,333

$14,750,000

$2,000,000

$4,000,000

$6,000,000

$8,000,000

$10,000,000

$12,000,000

$14,000,000

$16,000,000

$18,000,000

Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4

Actual

Stretch Target

Target

FY 2012-13 FY 2013-14

Reduce

Complexity

Eliminate

Lean & Six Sigma – Together

Reduce

Variability

Eliminate

Defects

Customer

Focused

Team Approach

Data Driven

Decision

Making

A well designed process should flow like a river.

“Before” Process

81 steps to complete process!

“After” Process

56 steps to complete process!

Standards?

Variation?

Defects?

How good is good enough?

99% Performance Six Sigma Performance (~2.4 Sigma)

• No telephone service or TV

transmission for nearly 2 hours

per week

• Unsafe drinking water 7 ½

hours each month

• 10,000 plane crashes every

1,000,000 flights

• 5000 incorrect surgical

operations per week

• 200,000 wrong drug

prescriptions per year

• No telephone service or TV

transmission for 5 minutes

every 3 years

• Unsafe drinking water for 1

minute every 7 months

• 3.4 plane crashes every

1,000,000 flights

• 1.2 incorrect surgical

operations per week

• 60 wrong drug prescriptions

per year

Vehicle Management Agency Inventory Management Process

Problem statement:

Cost of Inventory: Stockrooms are working in silos, considerable effort is spent on managing inventory, and inventory levels are inadequately maintained

Purchase and implement bar code scanning technology

Reduce inventory management effort by 20%, to right-size inventory levels, and to reduce purchasing costs by 5.5%

Vehicle Management Agency: Inventory Management Process

Potential Cause:

It was taking too long to key part numbers on a PO (when ordering and receiving parts) and on a requisition (when issuing parts and returning them to stock).

Potential Solution:

Purchase and implement bar

code scanning technology

X2: Time keying POs, receipts, and requisitions is a factor Ho It is not a factor Ha It is a factor

Test : Regression

Test Results: Only 5.4% of Stockroom Lead Time is explained by keying effort

Regression Statistics

Multiple R 0.25

R Square 0.0623

Adjusted R Square 0.0535 Not a significant factor

Standard Error 143.16

Observations 108.00

df SS MS F Significance F

Regression 1.00 144,419.50 144,419.50 7.05 0.01

Residual 106.00 2,172,339.41 20,493.77 Strong model

Total 107.00 2,316,758.92

Coefficients Standard Error t Stat P-value Lower 95% Upper 95% Lower 95.0% Upper 95.0%

Intercept 51.45 17.84 2.88 0.00 16.09 86.81 16.09 86.81

Time procuring/issuing 1.91 0.72 2.65 0.01 0.48 3.33 0.48 3.33

Time procuring/issuing parts is a factor

y = 1.9087x + 51.45 R² = 0.0623

- 20 40 60 80 100 120 140 160

Time procuring/issuing parts

Stockroom Lead Time Time Procuring/Issuing

Stockroom Lead Time 1.00

Time procuring/issuing 0.25 1.00

Moderate Correlation

Slow Moving Inventory – Turnover Ratio

$1,000,000

$2,000,000

$3,000,000

$4,000,000

$5,000,000

$6,000,000

1 2 3 4 5 6 7 8 9 10 11 12

TURNS PER YEAR

per Year

Average

Inventory On

Annual

Interest Costs

(0.95%)

Total Annual

Inventory

Savings

2 5,020,828$ 47,698$ 5,068,526$ 0%

3 3,347,219$ 31,799$ 3,379,017$ 33%

4 2,510,414$ 23,849$ 2,534,263$ 50%

5 2,008,331$ 19,079$ 2,027,410$ 60%

6 1,673,609$ 15,899$ 1,689,509$ 67%

7 1,434,522$ 13,628$ 1,448,150$ 71%

8 1,255,207$ 11,924$ 1,267,131$ 75%

9 1,115,740$ 10,600$ 1,126,339$ 78%

10 1,004,166$ 9,540$ 1,013,705$ 80%

11 912,878$ 8,672$ 921,550$ 82%

12 836,805$ 7,950$ 844,754$ 83%

Currently 2X

Target 6X

Reduction: 67% One-time: $2.6m Annually: $30,000

Average Inventory On Hand

Annual Interest Costs (0.95%)

High ROI

Lower risk

Lower ROI

Higher risk

Vehicle Management Agency Inventory Management Process

Problem statement:

Stockrooms are working in silos, considerable effort is spent on managing inventory, and inventory levels are inadequately maintained

Purchase and implement bar code scanning technology Reduce inventory management effort by 20%, to right-size inventory levels, and to reduce purchasing costs by 5.5%

Results:

• Purchasing cost savings $641,849 (5%)

• Inventory levels reduced by $455,164 (10%)

Success through Lean Six Sigma projects…

Reduced travel costs

$999,487 savings year 1

Routine ECG wait times

22 weeks to < 4 weeks

Success through Lean Six Sigma projects…

Asphalt Leveling

Work completed in 2 months instead of 3. $453,259 savings

Reduced bank interest costs

$719,900 savings year 1

Waste Walk

Transportation

Inventory

Motion

Waiting

Overproduction Overprocessing

Defects

People's Knowledge/Skills

Unevenness

Overburden

• High inventories

• Wasted materials

• Absenteeism

• Late deliveries

• Rework

• Invoices

• Returns to Suppliers

• Repackaging

• Inspecting

• Expediting

• Moving

• Counting

• Sorting

• Loading / Unloading

• Receiving Report

12-person approval process for

contract documents

Excess cost of mail delivery

Computers & monitors left on

after hours

Executive Flight Service map subscription

Improper removal of light bar on

trucks

VPNs not being used

Phone lines not required

Printing of daily reports

Storage of disposable records

Excess printing of annual reports

Improper storage of tools

30% of violation reports contained

errors

Excess motion within the lab

Renting of storage units

Excess of shred boxes

Production of both digital & paper

copies of reports

Excess motion for delivering

interoffice mail

Personal files stored on shared

Frequency of meetings

Redundancy in data entry

“Waste Walks” 600 walks…$2,000,000+ savings

S O M I A

Daily Management

Hold the gains!

Standard Operating Procedures (SOP)

Standard work!

Strategy Map

Balanced Scorecard

Process Management

Operational KPI Dashboard

Standard Operating Procedures

S O M I A

Daily Management

Hold the gains!

Performance Management Align and engage teams and people

Standard work!

Strategy Map

Balanced Scorecard

Process Management

Karl Moore is an Associate Professor at McGill University, Montreal, Canada. The winter 2005 issue of Business Strategy Review, published by the London Business School, identified Karl Moore among a group of world’s greatest business thinkers.

Initiative

Management

Process

Management

Strategy

Management

Performance

Management

“IN”

“ON”

Strategy versus Operations

Working “IN” the business (day-to-day operations)

Initiatives

Action Plans

“improve, add or delete processes”

REVIEW RESULTS Calendar of Commitments

Measure for IMPROVEMENT:

Measure for process CONTROL:

Working “ON” the business (prioritized improvement)

MISSIO

Value Stream

Processes

“individual responsibilities” (process owners)

Operating Plan

Balanced Scorecard DASHBOARD: Key Process Indicators (KPI)

Strategy Map

Balanced Scorecard Measures: • Percent of Calendar of Commitments on track • Employee engagement survey results • Percent performance reviews complete • Percent of SOMIA on track • Employee attendance • Percent of senior leaders developed in formal

management system/business improvement

GNB Quarterly Performance Review

Theme Teams

Wave I

• Environment & Local Government

• Natural Resources

• Service New Brunswick

• Transportation & Infrastructure

• Horizon Health Network

• Finance

Wave II

• Justice & Attorney General

• Education and Early Childhood Development

• Agriculture, Aquaculture & Fisheries

• Public Safety

• Post-Secondary Training, Education & Labour

• Social Development

• New Brunswick Internal Services Agency

Wave III

• Health

• Facilicorp NB

• Executive Council Office

• Economic Development

• Invest NB

• Healthy & Inclusive Communities

• Efficiency NB

• Human Resources

• Tourism, Heritage & Culture

• Energy & Mines

Departments

Balanced Scorecard Measures: • Percent of Calendar of Commitments on track • Employee engagement survey results • Percent performance reviews complete • Percent of SOMIA on track • Employee attendance • Percent of senior leaders developed in formal

management system/business improvement

Information Readiness

Internal Processes

Grow leadership

capacity

Customers: GNB/Dept Leadership Teams and Employees

DHR Mission: Human resource leadership to enable a high performing GNB workforce.

NB Public Service Values: competence – impartiality – integrity – respect – service

2014-2015 DHR Strategy Map

A stronger economy and an enhanced quality of life, while living within our means.

People Readiness

Align leadership talent to drive

Execution of GNB Strategy

Enable GNB

Community

People Readiness Performance Excellence Culture

Provide relevant, timely and

quality HR information

VISION 2015

Align employee

performance to the

GNB formal

management system

Align HR leadership to drive

execution of GNB strategy

Access relevant, timely

and quality information

Culture Readiness

Align department performance

to GNB Strategy

Build mutually

beneficial employee-

employer solutions

Achieve sustainable

budget.

Build HR continuous

improvement competencies

Financial

Prioritize, standardize, and improve HR

processes

Improve

attendance

Building Improvement Leaders

Improvement Roles Operational Roles

Individual Contributors

Managers

Directors

Assistant Deputy

Ministers

Deputy Ministers

Lean Six Sigma Black Belt (2yrs)

Change Champion lead significant

organizational change

Build Capacity for Sustainability

Future Leader?

Personal Attributes

Cognitive Ability

Leadership Potential

Knowledge & Experience

www.gnb.ca/excellence

“Employees Making a Difference” www.gnb.ca/excellence

http://digital.progressmedia.ca/

Canadian Government Executive Leadership Award 2014

“providing improved public service at lower cost”

Thank you!

S O M I A

Daily Management

Hold the gains!

Standard work!

Strategy Map

Balanced Scorecard

Process Management

new brunswick's public service: pursuing performance excellence

strategy management

strategy managementpriorities

execution of strategy

real problem isnt bad

reduction targets5

controlcontinuous improvement

means theme

nb government leaders

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