new brunswick's public service: pursuing performance excellence
DESCRIPTION
Full slide deck for fmi*igf webinar from 2014-05-22TRANSCRIPT
Pursuing Excellence at GNB
1. Context
2. Integrated “Formal Management System”
3. Public Reporting
Initiative
Management
Daily
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)
5,800
6,300
6,800
7,300
7,800
8,300
8,800
04-05 05-06 06-07 07-08 08-09 09-10 10-11 11-12 12-13R 13-14B
Revenue Expense
4
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
2011
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
Daily
Management
Process
Management
Strategy
Management
Performance
Management
GNB Formal Management System
`
Strategy Management Priorities and speed!
GNB Formal Management System
Strategy Map
Balanced Scorecard
`
Strategy Management Priorities and speed!
GNB Formal Management System
Strategy Map
Balanced Scorecard
Vision
Objective
Objective
Objective Stra
tegi
c Th
emes
3 Year Vision
`
Strategy Management Priorities and speed!
GNB Formal Management System
Strategy Map
Balanced Scorecard
Vision
Objective
Objective
Objective
Measures
Measures
Measures
Stra
tegi
c Th
emes
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)
6,000
6,500
7,000
7,500
8,000
8,500
9,000
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
Strategy Management Priorities and speed!
Initiative Management
Priority initiatives and projects!
S O M I A
GNB Formal Management System
Strategy Map
Balanced Scorecard
GNB Formal Management System
Vision
Measures
Measures
Measures
Stra
tegi
c Th
emes
Objective
Objective
Objective
Initiative
Initiative
Initiative
Initiative
Initiative
Initiative
Action Plans Action Plans
Action Plans Action Plans Action Plans
Action Plans Action Plans
Action Plans Action Plans Action Plans
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
GNB Formal Management System
Vision
Measures
Measures
Measures
Stra
tegi
c Th
emes
Objective
Objective
Objective
Initiative
Initiative
Initiative
Initiative
Initiative
Initiative
Action Plans Action Plans
Action Plans Action Plans Action Plans
Action Plans Action Plans
Action Plans Action Plans Action Plans
Action Plans Action Plans
Action Plans Action Plans Action Plans
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
$0
$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
Waste
Speed
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
Goal:
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
ANOVA
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
-
100
200
300
400
500
600
700
800
900
- 20 40 60 80 100 120 140 160
Sto
ckro
om
Lea
d T
ime
(min
ute
s)
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
INV
ENTO
RY
$ O
N H
AN
D
TURNS PER YEAR
Turns
per Year
Average
Inventory On
Hand
Annual
Interest Costs
(0.95%)
Total Annual
Inventory
Costs
Total
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
Goal:
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
drive
Frequency of meetings
Redundancy in data entry
“Waste Walks” 600 walks…$2,000,000+ savings
Strategy Management Priorities and speed!
Initiative Management
Priority initiatives and projects!
S O M I A
Daily Management
Hold the gains!
GNB Formal Management System
Standard Operating Procedures (SOP)
Standard work!
Strategy Map
Balanced Scorecard
Process Management
Operational KPI Dashboard
Standard Operating Procedures
Strategy Management Priorities and speed!
Initiative Management
Priority initiatives and projects!
S O M I A
Daily Management
Hold the gains!
GNB Formal Management System
Standard Operating Procedures (SOP)
Performance Management Align and engage teams and people
Standard work!
Strategy Map
Balanced Scorecard
Process Management
Operational KPI Dashboard
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
Daily
Management
Process
Management
Strategy
Management
Performance
Management
GNB Formal Management System
“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
N
SOMIA
VIS
ION
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
Performance Management Align and engage teams and people
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
Performance Management Align and engage teams and people
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
HR
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
Information Readiness
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
Information Readiness
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!
Strategy Management Priorities and speed!
Initiative Management
Priority initiatives and projects!
S O M I A
Daily Management
Hold the gains!
GNB Formal Management System
Standard Operating Procedures (SOP)
Performance Management Align and engage teams and people
Standard work!
Strategy Map
Balanced Scorecard
Process Management
Operational KPI Dashboard