Knowledge-Based Leadership or “Six Sigma Light”: Can Government Compete with the Private Sector?

1. KNOWLEDGE BASED LEADERSHIP OR “SIX SIGMA LIGHT”: CAN GOVERNMENT COMPETE WITH THE PRIVATE SECTOR? DALE WEEKS SENIOR EXECUTIVE OFFICER AUGUST 25, 2005 Philadelphia, PA Trends in Lean, Six Sigma and Process Excellence: From Early Adopters to Agile Innovators

2. TODAY’S LEARNING PROCESS: • YOUR ISSUES AND YOUR INVOLVEMENT • Expect Participation and Involvement • Think Outside Your “Comfort Zone” • Try on the “Boots” of Our Customer or Taxpayer

3. YOUR CUSTOMER NEEDS: • WHO HOLDS THE “MARKET SHARE” ON PERFORMANCE EXCELLENCE - THE PUBLIC OR PRIVATE SECTOR? • NOTE: CONSIDER FORTUNE 500 FIRMS SINCE 197O COMPARED TO TO ANY CITY, COUNTY, STATE, OR FEDERAL AGENCY – GLOBALLY?

4. A QUICK CUSTOMER SURVEY: YOUR INVOLVEMENT WITH A TAX AGENCY? • 1. How Many Would Report a Success Story - • A Truly Satisfied Customer Where Your Expectations Were Exceeded? • OR • 2. How Many Would Report a SOB Story - • A Very Dissatisfied Customer Where Your Expectations Were Rarely Considered ?

5. TODAY’S 50 MINUTE ADVENTURE • OUR WORLD-CLASS COMPETITIVE VISION – FL DOR- WHO WE ARE & WHY • OUR KNOWLEDGE BASED LEADERSHIP (KBL) OR “SIX SIGMA LIGHT” INITIATIVE With Sample Project. • OUR BALDRIGE CONTEXT – THE STRATEGIC LEADERSHIP SYSTEM (SLS) AND BUSINESS PROCESS MGMT. • OUR BUSINESS RESULTS & WHAT WE HAVE LEARNED – 14 YEARS+ OF CONTINUAL IMPROVEMENT

7. OUR VALUES • OF CHARACTER - Integrity, Honesty, Trustworthy, Fairness, Respect, Concern for Others • OF PERFORMANCE - Service, Excellence, Innovation, Commitment, Communication, Teamwork, Knowledge • OUR GUIDING PRINCIPLES: As Employees We Will • Increase voluntary compliance. • Reduce the burden on those we serve. • Increase Productivity, Reduce Costs, Improve Service

8. Our Customers, Stakeholders, Beneficiaries, and Suppliers • Policymakers - The Florida Legislature • Federal Gov’t - O.C.S.E. • State and Local Governments • Property Tax Appraisers and Tax Collectors • Governor and Cabinet • Businesses and Individuals • Our Delivery Partners - D.M.S., D.C.F., Legal Service Providers - Many Others

9. WE ARE LARGE • 5,300 People, 700+ Leaders; $400 M Budget • 6th Largest State of Florida Agency • Extensive Service Center Network (Florida and Beyond) • Major Programs: General Tax (GTA), Child Support (CSE), and Property Tax (PTA) • Total Taxes Collected = $ 30 Billion/F.Y. • Total CSE Collections - $ 1 Billion++

10. II. OUR “SIX SIGMA LIGHT” MODEL • Knowledge Based Leadership – Fact Based Decision-Making (“Denial is a River in Egypt”) • Real World, Action Learning, (Define, Validate, Analyze, Improve, Control) • 20 DOR SMS/SES Leaders / Class, Nominated by Program Directors, $2,000 Cost Per Student • 4 Month Program, Seven Integrated Modules – Intro thru Project Presentation • Team Approach, Structured Methodology, Focus On Improved Performance (Productivity/Efficiency, Increased Revenue and/or Collection) • 6 Classes Since 2003, 120+ Leaders, 200-300 Team Members, 130+ Projects

11. GTA Call CenterWorkforce Management Team “Improving Customer Service” Sample “Best Practices” FL DOR KBL PROJECT

12. Problem Statement • Over the past 18 months, abandonment and blockage rates have increased while the call center’s Grade of Service has declined. Outbound collection calls have remained below goal. Define

13. Desired Outcomes • Improvement in service levels to match Top Performing call centers. • Increase the number of outbound collections calls per month. • Reduce the turn around time to complete incoming correspondence Define

14. Validating the Problem Statement • Abandonment Rate • From Fiscal Year 2000/01 to Fiscal Year 2002/03 the abandonment rate has risen from 1.08% to 3.09% • Grade of Service • The Grade of Service for incoming calls has dropped from 92% in Fiscal Year 2000/01 to 78% in Fiscal Year 2002/03 • Blockage Rate • Beginning in February 2002 Taxpayer Services began to see dramatic increases in it’s blockage rate. • Outbound Calls • Have consistently been 40% under goal for the past three Fiscal Years Validate

15. Data Charts Good Good Validate Validate

16. High Level Causes • Reduced Level of Available Staff • 12% reduction in staff since FY 2001/02 • Increased Call and Correspondence Volume. • 18% increase in workload from FY 2000/01 to FY 2002/03 • Time to Update in SAP • In a recent survey, 67% of staff believed it took an extra 3 minutes to complete an account Analyze

17. O O 3 36 7 18 36 36 Weak 1 Medium 3 Strong 9 Analyze

18. Root Causes Critical Few • The limited ability to consistently and accurately predict inbound call volumes along ACD lines. • The limited ability to coordinate and move staff to workload timely and accurately. Analyze

19. Staff Forecast Business Process Map“As Is” Approve Generate Active Forecast (WFM) Review Forecast Release Resource needs Begin Review Corr and Mosaix needs Develop additional coverage Identify gaps in staffing Review for Impacts (mailings, etc) Open Schedule on system Identify available Resources to fill gaps Supervisor develops Staffing plans Monitor Adherence of staff End Improve

20. Staff Forecast Business Process Map“Ideal” – TO BE VISION Establish Workload priorities Management meeting Review prior performance Review targets for priorities Send to Management Team for review Review Historical data and expected impacts Generate Active WFM forecasts Identify leave, Training, Meetings, etc Identify Staffing availability Identify Potential workloads Begin Approve Initiate the plan Adjust based on feedback Release weekly Plan on WFM Inform Employees of Weekly schedule Schedule to Supervisor Generate Schedule On system Priorities met Run Adherence and forecast data Thru control charts Feedback to Management team Generate Results data Monitor Adherence of the plan Employees not Adhering to plan Inaccurate Forecasts Improve Contact Supervisor For adjustments Adjust Staffing

21. Key Targets By January 1, 2004 • Full roll out of ideal process. By June 30,2004 • Full system reviews completed in April 2004 and June 2004. • Improve all inbound phone measures by 25% from baseline measure. • Improve number of outbound right party contacts by 25% from baseline measure. • Average 7.5 days from Bonham back door receipt to completion of correspondence. Improve

22. Key Targets For Fiscal Years 2004 -2006 • > 80% Grade of Service. • < 2% abandonment rate. • < 2% blockage rate. • > 85% Customer satisfaction rate. • > 75% first call resolution rate. • Average 25,000 outbound right party contacts per month. • Average no more than a 5 day turnaround on correspondence. Improve

23. Action Plan Improve

24. You have three options for effective problem resolution: You can change the system, You can distort the system, or You can distort the data. E. Deming Control

25. Staffing Forecasts September 9 2003 September 30, 2003 Control

26. Customer SatisfactionEnsure Quality Service • Transactional survey conducted weekly. • Based on customer contact with the 1-800 line within the last 48 hrs. • 5 point Likard scale. • Measures cycle time, quality of service, satisfaction, and 1st contact resolution. Control

27. Strategic Leadership System

28. SEE HANDOUT COPIES

29. OUR S.L.S. & B.P.M. STRATEGIC INITIATIVE (Baldrige Category 6) • Seven BPM Team Deliverables (HANDOUTS) • Info graphic – Our Vision – to 2007 and Beyond • Business Relationship Diagrams by Program • Business Process Outlines by Core Process, Business Process, Sub-Process, Activity, and Task within Program • Business Process Descriptions for Core Process, Business Process and Sub-Process • BPM Measurement Guidelines • Balanced Scorecard Measures by Program/Process • Leader Roles and Responsibilities Matrix – Focus on Transition to Horizontal Management

30. DEPT-WIDE BUSINESS PROCESS SUMMARY • Program Core BP BP SubBP Totals • GTA 6 10 15 31 • CSE 6 8 23 37 • PTA 4 14 18 36 • Admin 5 12 23 40 • Exec 1 3 9 13 • ISP 4 6 10 20 • GRAND • TOTAL 26 53 98 177 • Source: DOR BPM DESCRIPTION BOOK.

31. III.BUSINESS RESULTS • GTA: $31 Billion Collected: Annual Growth 10.6%, 4 Year Growth 22.7%; Overall Services Customer Sat. + 93% ; 4 to 1 ROI on SUNTAX; Vision = Best Tax Agency in the World; • CSE: 03-04 Collections Exceeds $1 Billion; 3rd Consecutive Year of Double Digit Collection Increases; Goal = Top 5 Nationally by 2010. • PTA: Property Value Assessed = $1.3 Trillion; TPP Value = $121 Billion; Stronger Analysis, Quality Local Aid and Assistance • SOURCE: 2004 DOR ANNUAL REPORT

32. III. LESSONS LEARNED • Rely on Your People - They Have Your Solutions Over Time - Teams, Sub-Teams - Not a Top-Down Thing. • Build on Small Success Stories: Voluntary Compliance Results Create Your Momentum and Growth, Not Senior Leader Directive. • Keep YourStrategic Perspective and Vision Constantly in Mind - This Will Take 3 - 5 Years to Fully Deploy Across The Department

33. Communication - Continuous Flow Among Each Team and Multiple Channels for Sharing. • Listen to Your Employees and Move Forward Even on the Tough People Issues. • Do Not Micro-Manage. Trust Your People Based on Your Dept-Wide Values. • LESSONS LEARNED (CONT’D) • Communication - Continuous Flow Among Each Team and Multiple Channels for Sharing. • Listen to Your Employees Even on the Tough Issues – Reward and Recognize (Quarterly Leadership Strategic Planning Sessions). • Do Not Micro-Manage. Trust Your People Based on Your Dept-Wide Values.

34. THE CHALLENGE TO US ALL: • Let Persistence, Perseverance, Passion, and Humility Drive Your Commitment to Sustaining The Journey Over the Long Haul. • “Ask Not What Your Country Can Do For You -- Ask What You Can Do For Your Country” JFK, January 20, 1961

35. OPEN FORUM • YOUR QUESTIONS AND ANSWERS • WE ENGAGE ALL MESSENGERS • FILL MY E-MAIL BOX WITH YOUR IDEAS!! WEEKSD@DOR.STATE.FL.US THANK YOU