Thomas B. Wegener, PMP Director, MIS\Research NYS Workers’ Compensation Board

1. Case Study : Implementing Performance Measures • Thomas B. Wegener, PMP • Director, MIS\Research • NYS Workers’ Compensation Board • tom.wegener@wcb.ny.state.us

2. Case Study: Implementing Performance Measures • INTRODUCTION • Background • Our Problem • Our Solution

3. Case Study: Implementing Performance Measures • BACKGROUND • Introduction • Our Problem • Our Solution As part of a comprehensive Business Process Improvement initiative, the Board recognized the need to measure performance.

4. Case Study: Implementing Performance Measures • BACKGROUND • Introduction • Our Problem • Our Solution The traditional approach to measuring performance in the public sector is to count the volume of work performed.

5. Case Study: Implementing Performance Measures • BACKGROUND • Introduction • Our Problem • Our Solution Deemed inadequate, the Board elected to replace the “volumetric” focus with a Balanced Scorecard approach to measuring performance.

6. Case Study: Implementing Performance Measures • BACKGROUND • Introduction • Our Problem • Our Solution Approach was based on: • “The Balanced Scorecard – Strategic Measures that Drive Performance” -Robert S. Kaplan & David P. Norton • “Database of Best Practices” -PriceWaterhouseCoopers • NYS Workers’ Comp. Board • -Office of MIS\Research • -Office of Continuous Improvement

7. Case Study: Implementing Performance Measures The Board’s Business Process Improvement initiative -“OPTICS” - was changing the workplace for: • Over 100 Indexers • Over 200 Claims Examiners • Over 30 Conciliators • Over 100 Law Judges • Over 40 Appeals Writers • Over 100 Team Leaders, Mentors & Managers • Our Problem • Introduction • Background • Our Solution

8. Case Study: Implementing Performance Measures How do you identify, develop and implement performance measures for: • Executive Management • Program Management • District Management • Team Leadership • Individual Employees • Our Problem • Introduction • Background • Our Solution

9. Case Study: Implementing Performance Measures Project Initiation included a number of “pre-launch” tasks: • Define Performance Measures • Formulate Scope of Project • Formulate Team(s) Proposal • Develop a High Level Schedule • Identify Barriers • Evaluate Best Practices • Our Solution • Introduction • Background • Our Problem Get Ready…

10. Case Study: Implementing Performance Measures • Develop a Phase Level Plan • Phase 1 • Form Teams & Launch • Phase 2 • Conceptual Measures* • Data Assessment • Design Delivery System • Phase 3 • Detail Measures* • Develop Targets* • Identify Reports* • Our Solution • Introduction • Background • Our Problem *Formal Deliverable/Briefing for Executive Sponsor

11. Case Study: Implementing Performance Measures • Develop a Phase Level Plan • Phase 4 • Design Report Standards • Verify Data Availability • Develop Implementation Plan* • Phase 5 • Develop First Reports • Train Staff • Phase 6 • Deliver Reports and transition into management programs • Close Out • Our Solution • Introduction • Background • Our Problem *Formal Deliverable/Briefing for Executive Sponsor

12. Case Study: Implementing Performance Measures For governance, the project leveraged two teams: >Strategy Team Conduit for frequent contact with Executive Sponsorship >Measures Team Responsible for developing measures and deliverables • Our Solution • Introduction • Background • Our Problem

13. Case Study: Implementing Performance Measures The committee members recognized that many processes were inter-dependent and measures would span across “business units”. • Mini-teams were based on components which span units: • Durations • Managing Change • Maximizing Technology • Our Solution • Introduction • Background • Our Problem

14. Case Study: Implementing Performance Measures • Risks were managed as barriers to success: • Inertia • Fear • Culture • Funding • Geography • Available Data • Available Technology • Long Lead Times • Lack of Right Skills • Our Solution • Introduction • Background • Our Problem

15. Case Study: Implementing Performance Measures Basic research is what I’m doing when I don’t know what I am doing. -Wernher von Braun

16. Case Study: Implementing Performance Measures OPTICS* was implemented statewide from May 1998 through February 1999. As of March 1, 1999 there were 363,678 cases pending before the Board. Six months later, as of September 1, 1999, the pending count had been reduced to 329,157…a 10% reduction. • Introduction • Background • Our Problem • Our Solution Results! *The Board’s reengineering project

17. Case Study: Implementing Performance Measures ...and from September 1, 1999 when the performance reporting began thru September 1, 2000 the pending count dropped to 263,832...a 20% reduction. The pending count has continued to drop; by March 1, 2003 there were only 156,000 cases pending...half the number at the start of measuring performance! • Introduction • Background • Our Problem • Our Solution Results!

18. Case Study: Implementing Performance Measures • After the implementation of the “OPTICS” business process improvements, the average time required to index a case dropped to 16.5 days…and stayed there. • One month after the rollout of a performance report, the average dropped to 6.7 days. • After Continuous Improvement efforts, the average is now 3.4. • Introduction • Background • Our Problem • Our Solution Results!

19. Case Study: Implementing Performance Measures • After the implementation of “OPTICS”, the number of cases resolved informally increased to 3750 each month…and stayed there. • One month after the rollout of performance reports, the number increased to 5,000 each month... ….and 1600 other cases now have interim findings each month. • Introduction • Background • Our Problem • Our Solution Results!

20. Case Study: Implementing Performance Measures • Despite a 300% increase in the volume of Administrative Determinations produced by Claims Examiners, with a balancing measure to ensure quality, the approval rate for Administrative Determinations remains above 95%… …You get what you measure! • Introduction • Background • Our Problem • Our Solution Results!

21. Case Study: Implementing Performance Measures Measurable improvements in every area covered by the performance measures project... Indexing Claims Examining Conciliation Hearing Process/Appeals Team Leadership ...while areas not yet measured continue to provide opportunities for improvement. Results!

22. Case Study: Implementing Performance Measures • The “Gotcha” • When implementing a Balanced Scorecard you should only have a “few” measures….. • …..but public sector entities will always have more measures than the guru’s suggest. • Our Solution • Introduction • Background • Our Problem

23. Case Study: Implementing Performance Measures • The “Gotcha” • Our 50 measures, when • Leveled • Trended • Sliced • Diced, translated into • 300 Reports!! • Our Solution • Introduction • Background • Our Problem

24. Case Study: Implementing Performance Measures Not everything that counts can be counted, and not everything that can be counted counts. -Albert Einstein

25. Case Study: Implementing Performance Measures Myth, Maybe or Mantra? Performance Measures should be developed by a small committee of your ‘best and brightest’.

26. Case Study: Implementing Performance Measures Performance Measures should be developed by a small committee of your ‘best and brightest’. Myth! Over 50 Board employees with varying skills, experiences and education contributed to our project.

27. Case Study: Implementing Performance Measures Myth, Maybe or Mantra? Performance Measures projects must be owned by a business unit, not by an Information Technology unit.

28. Case Study: Implementing Performance Measures Performance Measures projects must be owned by a business unit, not an Information Technology unit. Maybe! Our project was driven and managed by the IT shop.

29. Case Study: Implementing Performance Measures Myth, Maybe or Mantra? You, too, can have a Balanced Scorecard in just 16 weeks.

30. Case Study: Implementing Performance Measures You, too, can have a Balanced Scorecard in just 16 weeks. Myth! Our project took over 2 years to go from concept to content.

31. Case Study: Implementing Performance Measures Myth, Maybe or Mantra? It’s too expensive to report more frequently. A Balanced Scorecard should be published as an ‘Annual Report’ on the performance of your organization.

32. Case Study: Implementing Performance Measures A Balanced Scorecard should be published as an ‘Annual Report’ on the performance of your organization. Myth! Performance measures are a management tool that must be available to the right people, at the right time and at the right level of detail.

33. Case Study: Implementing Performance Measures Myth, Maybe or Mantra? Resources are scarce. You should only measure under-performing functional areas of your enterprise.

34. Case Study: Implementing Performance Measures Resources are scarce. You should only measure under-performing functional areas of your enterprise. Myth! Despite the many opportunities for improving performance, our project prioritized measuring a few ‘good news’ areas along with problem areas.

35. Case Study: Implementing Performance Measures Myth, Maybe or Mantra? Measure the process, not the people.

36. Case Study: Implementing Performance Measures Measure the process, not the people. Maybe! Stop at the ‘process level’ only if your data systems do not yet allow for the drilling down to individual performance. Improve your data systems, over time, to get to the staff level.

37. Case Study: Implementing Performance Measures Myth, Maybe or Mantra? Don’t focus on the data, focus on the outcomes.

38. Case Study: Implementing Performance Measures Don’t focus on the data, focus on the outcomes. Myth! If you don’t have viable, accurate and timely data how do you know the outcomes?

39. Case Study: Implementing Performance Measures Myth, Maybe or Mantra? You should present data in many different ways for visual interest.

40. Case Study: Implementing Performance Measures You should present data in many different ways for visual interest. Myth! Our performance reports are delivered with only a dozen templates. Standard report layouts improve rigor, reliability and readability.

41. Case Study: Implementing Performance Measures Myth, Maybe or Mantra? When you set targets, you should demand Six Sigma performance.

42. Case Study: Implementing Performance Measures When you set targets, you should demand Six Sigma performance. Myth! Targets must be pragmatic. While your ‘vision’ might be perfection, targets must be attainable today and grow toward the vision.

43. Case Study: Implementing Performance Measures Myth, Maybe or Mantra? The newly hired junior clerk in the ‘Cyan Paper Sorting Unit’ would make a good project sponsor.

44. Case Study: Implementing Performance Measures The newly hired junior clerk in the ‘Cyan Paper Sorting Unit’ would make a good project sponsor. Myth! Performance measures projects are strategic and will draw resources from other priorities. The project must have a sponsor at the highest level of your organization.

45. Case Study: Implementing Performance Measures Myth, Maybe or Mantra? You need to build a (multi-million dollar) data warehouse to implement an enterprise-wide Balanced Scorecard.

46. Case Study: Implementing Performance Measures You need to build a (multi-million dollar) data warehouse to implement an enterprise-wide Balanced Scorecard. Myth! Our project borrowed from the data warehousing discipline in creating an ‘information architecture’ but we did not build a data warehouse nor did we spend millions.

47. Case Study: Implementing Performance Measures Myth, Maybe or Mantra? Performance measures drive behavior.

48. Case Study: Implementing Performance Measures Performance measures drive behavior. Mantra! It’s axiomatic. You get what you measure.

49. Case Study: Implementing Performance Measures Myth, Maybe or Mantra? Performance measures are the single most important tool in communication change within an organization.

50. Case Study: Implementing Performance Measures Performance measures are the single most important tool in communicating change within an organization. Mantra! Don’t expect a successful business process improvement (reengineering) without them.