2016 TOCICO International Conference

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The TOC Transformation of Texas Workforce Commission

CulturalChangeandBreakthroughResults:aCaseStudy

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DavidOsborne&TedGaebler

•  Reinven&ngGovernment:HowtheEntrepreneurialSpiritIsTransformingthePublicSector,1992.–  “BothtakeenormousprideinReinvenJngGovernment.Bothbelieveitchangedthewaythepublicsectorworks.

Yetbothrecognizethatitdidnotachievetheirlargergoal.”

•  Reinven&ngGovernmentnever sparked a revolution.– Gaeblerispuzzled:“Whydidn’tmoreofmycolleaguespickitupandrunwithit?”Publicmanagerstoorisk-averse?

Realinnova/onsarethosethataltercoretasks.--JamesQ.Wilson,Bureaucracy,1989

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2016 TOCICO International Conference

Eternal or Ephemeral?

•  Riddle:WhyhasTOCproventobesopowerfulingovernment?

•  FOCUSiskey;builtintoTOC

• WhatcanbelearnedfromTWCapplicaJonofTOC?

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2016 TOCICO International Conference

Transformation of TWC Agenda

•  Results!Itworks!!!•  Whyitworks!

–  Culturechange–  Tenets–  TheoryofConstraints(TOC)–thebigfour:

•  5focusingsteps•  Avoidbad-mulJtasking•  Useconceptoffullkit•  Anewbo_om-lineforgovernment.

•  People,structure,andparJcipaJon•  Thenutsandbolts--Howwepursueimprovement•  ThemagicofWIN,WIN,WINingovernment•  QuesJonsanddiscussion

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2016 TOCICO International Conference

Texas State Legislature in 2011: Pilot Operational Improvement in an Agency

•  KristenCox’sTesJmony:FoundaJonmethodologymustbeTOC.

•  Pilotsuccessful•  BusinessTransformaJonoffice•  34majorimprovementiniJaJveswith

breakthroughresults.–  TWChasincreasedthevalueproducedpertaxpayerdollarspent.

– ↑OperaJonalcapacitywithnoincreasedstaff.•  TWCtransformedculture,performanceand

effecJvenessviaTOC

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2016 TOCICO International Conference

RESULTS!! Work Opportunity Tax Credit Days to Issue Tax Credit

•  ProblemStatement:Paper-intensiveprocessnotprocessingJmely&qualitydeterminaJons.

•  OldProcess/Issues:§  194-dayaveragewait/me•  NewProcess/Results:§  36-dayaveragewait/me§  <30daybacklog(nearzero)§  Reducedcostperdetermina/on

from$3.51to$1.47

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2016 TOCICO International Conference

WOTC Days to Issue Tax Credit

WOTC–DollarValuetotheCustomers–(InAddiJontoTimelyandResponsive)

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2016 TOCICO International Conference

ROI

$3.51→$1.47

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2016 TOCICO International Conference

ROI $3.51→$1.47

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2016 TOCICO International Conference

Major IT Vendor Procurement (Capital Projects)

•  ProblemStatement:ITRFPstooktoolongtoputoutforbidandselectcontractors–

439dayaverage.

•  OldProcess/Issues:o  Took62weekstoprocureo  Noworkflowtrackingsystemo  Manycirculartouchpointso  Nomeasures

•  NewProcess/Results:FocusedonConstraint(S.O.W.)o  Takes36weekstoprocure(252days)PROVEN:most

recent240daystoprocuremajorITsystem.

o  Nowusescontractmanagement(workflow)toolo  Reducedtouchpointso  SOPDocumentaJono  Dashboardtracksmeasures

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2016 TOCICO International Conference

Tax Adjustments Backlog: Great RPI results w/o a consultant or RPI Director

•  Oldprocess:–  Backloginventorywas10,276

inMay2013.–  Took5monthstocompletea

taxadjustment.

•  NewProcess–  Backloginventoryfellto4940in

1year.A52%reducJon.–  Takeslessthanonemonthto

completeataxadjustment.

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2016 TOCICO International Conference

Commission Appeals

•  OldProcess/Issues:54-dayaveragetomake&mailadecision.•  NewProcess/Results:39-dayaveragetomake&mailadecision.

P.S.TWCCommissionAppealsteam,forthefirstJmeinover10years,accomplishedtheDepartmentofLabor’s40daystandardforcaseageaverages.

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2016 TOCICO International Conference

Fraud Determination •  Oldprocess:

–  SimilarfuncJonsindifferentorganizaJonsdriuedoverJme•  InconsistencyininvesJgaJonsperformed

–  Someprocessesprovidednovalue•  Newprocess:

–  FraudCriteriaMandateisunifiedandconsistent.–  Commoncoretools,check-sheets,andquesJons.–  Legalbridgedocument.–  Commontrainingcourse.

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Fraud Determination

WAS:84daysNOW:4days

Backlogeliminated

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2016 TOCICO International Conference

142 day Equal Opportunity Office Investigation Cycle Time Reduced to 92 days

NewProcess/Results:•  RouJnelyclose80/monthwith

99%passrate(44/mo.=oldrate)•  Backlogeliminated.•  Createdadashboardtogauge

success

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2016 TOCICO International Conference

Other Improvements •  Openrecordsrequests37to10days(2200backlogto0backlog)•  ↓Time-to-hirefrom45businessdaysto24

–  3.8customerquality(2014)raJngupto4.3(2015).–  HR↑40%gainedcapacitywithnoaddiJonalstaffin2014-2015.

•  CareerSchoolsapplicaJons:126to86days↓•  Between23and52reducJonofstaff(with↑throughput&

↑quality&↓Time)•  MajorinnovaJoncontracts:312daysto252•  LaborLaw:backlogfrom2150downto80•  SunsetLegislature’sAuditors:“Fireproofedtheiragency”

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2016 TOCICO International Conference

One Project (1/34) may not be a success

•  ComplianceMonitors:82dayreportsbeforeproject;now116dayreports.

But...•  Quality↑becauseteamsarewell-

trained•  Removedoverlapbetweenmonitors

andprogram’stechnicalassistance•  Riskassessment:nowcollaboraJve&

effecJveAndweareinaprocessofongoingimprovement!

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Doyoubelievemeyet?Breakthroughresults&sustainedcon/nuousimprovementarenotananomaly!•  IntroatorientaJon•  8hourcourse(1/3employees)•  Weeklyexeccurriculum•  Managementseminars•  61PracJJoners(quarterlytraining)•  Themethodofchoiceforchange

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2016 TOCICO International Conference

Transformation of our Managers

•  Overwhelmed→Confident•  Datamaelstrom→Informeddecisions•  Fearofmeasurement→Pride•  Financialpuzzlement→Stewardship•  AtWIP’swhim→ConstraintsManagement

•  ReacJve(hair-on-fire)→Timetoreflect

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ThroughputOpera/ngStrategy←

WorkModel→

Dashboard→

ValueStreamMap/Flowchart←

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2016 TOCICO International Conference

TOC is TWC’s foundational methodology

•  TOCmethodsensure:–  Effortstargetconstraintsineachsystem–  Effortsproducerapidandsubstan/alresults–  TOS’sinviteustousethethinkingprocessestoachievecommongoals.

•  ThroughputOperaJngStrategies(TOS)–  TOS’sare“whatgoodlookslike”–  IDbohlenecksandfocusimprovement.–  Gainorganiza/onalalignment–  Fosterasenseofmission–dis/nc/vecompetence–essenceoforganiza/on

–  TOSsarephysicalmanifesta/onsofthe5focusingsteps

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Validate & Hire

HiringProcessEnterpriseMeasures:•  HiringManagersurveyofqualityoftheirapplicant

poolwitha0-5survey(5=bestw/5ormorefullyqualifiedapplicantsplusa_ributes,0=nofullyqualifiedapplicants)

•  TimefromvacancytoposJng•  TimefromposJngtohire•  CombinedJme(vacancytohire)

•  HiringProcessEnterpriseNecessaryCondi/ons:opencommunicaJonchannelswithinTWC

Determine Disposition

Control Point (WGLL):The Hiring Manager has pools of candidates that get better and better. The pools have rich and adequate number of candidates to evaluate. The Hiring Manager already knows what skills and attributes are required to perform the job duties of the positions. The Hiring Manager has “full kit” to screen, evaluate, and rank the candidates.

FeedingControlPoint:HR/HiringProcessteamprovidesapplicaJonstwodaysauerclosingtotheHiringManager(HM)thatmeethis/herexpectaJons(ontheiniJalHMchecklist).Forexamplenottoomanyand/ormeeJngbasicscreeningcriteria(e.g.5outof5onthesurvey).

Hiring Process TOS March 27, 2014

GoalofEnterpriseHiringProcessHirethebestpeopleintheleastamountofJme.

Facilitate HM Action Search

Levers:Commonchecklist(HR-HM:whohastheball?)

Interview and select

Vacancy

•  Analysiselement•  Whatarewegoing

todoaboutit?

•  Paperwork•  PosJngorP-30

Cull TWCEmployee

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2016 TOCICO International Conference

The Tenets of TWC RPI 1.   KnowourBlueLight2.   “Thinkbig”grandgoals3.   Realizehiddencapacity4.   Constraintfocus5.   TOS’sfocusandalignus6.   Usethinkingtoolsandbestprac/ces7.   Peoplewhodotheworkcanimprovethework.8.   Dashboardsmeasure:

9.   QT/OEtrackscon/nuousimprovement10.   Improvewithdetermina/on,commitmentandvigor

A.Throughput D.Cycle/me

B.Bluelightprocesses E.Cost

C.Quality F.CustomerSa/sfac/on

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What improvement models and methodologies does TWC use and why? •  FoundaJonisTOC,butLeantoo.•  SixSigmaismoreusefulaswegathertrue

performancedata.–  rootcauseanalysis–  staJsJcalsampling.

•  Automatedwork-flowsystemsreprogramedtocollect–  “reasonsforlate”–  “reasonsfordefect”

•  Projectteamsarequalitycircles•  Thehurtleofmeasurement:

–  managersmeasureperformance–  Dashboardshelpthem

•  achievetheirgoals•  makesoundfinancialdecisions•  brag

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2016 TOCICO International Conference

↓Decisions↓OpCosts↑Cust.Sat.

Layer1:Product/Service&CustomerAnalysis

BenchmarkResearch

RPI Continuous Improvement Methodology for Government

Layer2:Stakeholder&communica/on

analysis•  Problem

Statement

Funds&fundingsource

requirements

Boards(Subrecipients),

State&customer

requirementsetc.

≈

Charter

Gov’tService

↓Cycle↓Effort↓Steps↓Hands↑Capacity

Goal/CommonObjec/ve

Layer3:Map

CurrentState

Exploit,Elevate&/orBreakConstraint

Iden/fy&Analyze

Constraint

BuildaTOS

Layer4:PerformSync/GapAnalysis

ThroughputRounds

MeasuresforThroughput&ImprovementSIPOC

Layer5:MapFutureState

Levers&Dashboards

Measure&Improve

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2016 TOCICO International Conference

RIDDLE: Why does TOC have tremendous transformative power in government?

•  ConstraintfocusidenJfiestheonepointwhereANYimprovementwillhaveaposiJveimpactontheenJreteam’sthroughput.

•  GovernmentimprovementteamshavelimitedJmeandefforttobringtobearbeforeinterrupJonbypressingissuesandurgentcallsforacJon.

•  TOC&TOSmaintainfocuson(constraint//heartbeat//controlpoint)and↓short-termfocusingovernment.

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2016 TOCICO International Conference

Our Achievement

•  GovernmentImprovementisnotenough!Adver/se!

•  BroaderuseofthinkingtoolsliketheCRTandFRT•  Dataanalysis:beherdeploylimitedresources•  Interagencysubcommihee:“Quality,ProcessImprovement,andInnova/on”(started)

•  Moreagenciesonthebandwagon•  Prac//onercurriculumvenues

NextSteps

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Questions and Discussion